PayPal chain scheme

Malc 44 · 15 Jun 2005, 11:14 PM

I recently received an email from an ebay contact asking me to participate in one of those chain letter schemes. This one was using PayPal, i.e. pay the person at the top of the list, add your name to the bottom, and send the email to all of your PayPal contacts (usual format).

Of course, I'm always sceptical of these "get rich quick" schemes, I know they can't really work (not everyone is going to get rich!) but they always facinate me. I'm not 100% sure why they don't work and was wondering if some of you bright sparks might shed some light on this.

Malc

JRobert · 16 Jun 2005, 10:49 AM

It's a variation of a pyramid scheme - one in which the population of players grows geometrically. If there were an infinite pool of potential new players, the game could go on forever, but of course, that's not the case, nor even possible.

It works for a while because a large pool looks like an inifinite one ... for a while! So for a few weeks it does work, but it's bound to run out of new people sooner or later. What usually seems to happen is that the game gets so popular that it attracts media attention with attendant warnings about illegality, potential losses, etc. People start to lose their taste for quick money and fewer are willing to enter the game, which brings about it's quick demise, since to continue, the game needs rapidly increasing numbers of entering players.

When the game stops:[list=1][*]People (few) who have finished the game (been paid off) are holding more money than they spent;[*]People at or close to the top have spent some money, maybe received some;[*]People just entering (relatively many) have spent some money (the money that 1.) and 2.) are holding!)[/list=1]Keep your mouse-hand on your wallet instead, and pass this one up.

-jeff-

Malc 44 · 16 Jun 2005, 11:10 PM

Good advice! thank you Jeff.

Out of curiosity, I emailed the person at the top of the list and enquired if they had made any money. He replied, telling me that he had only received 5 payments so far, so although he had a "4 times" gain on his investment, he was unlikely to make any serious money. That doesn't bode well for people further down the list when looking at your explanation.

These kind of schemes have been kicking around for years, it's not surprising I guess that there are not going to be many takers.

Ah well, I will just have to continue working for a living

_Malc

DrStrabismus · 17 Jun 2005, 04:32 AM

Given that there is list of name, you have to ask yourself how these start. Presumably the initiator put down a list of his own aliases, and if the list is long enough, he gets all the money.

Malc 44 · 17 Jun 2005, 07:16 AM

Yes, good point Doc. I was wondering about that too.

Malc 44 · 18 Jun 2005, 07:41 AM

If you do a search on ebay for "paypal" it's amazing how many scams are being advertised!

DrStrabismus · 19 Jun 2005, 01:43 AM

I wonder if anyone has ever tried that scam in Lock, Stock and Two Smoking Barrels, - the one with the returned cheques.

teacher · 26 Jun 2005, 06:56 PM

All illegal stuff that PayPal has no part of, but on the over hand try getting money out of PayPal when they have made the error!

15 Jun 2005, 11:14 PM	#1
Malc 44 Essential Contributor Join Date: Jul 2002 Location: London, UK Posts: 365	PayPal chain scheme I recently received an email from an ebay contact asking me to participate in one of those chain letter schemes. This one was using PayPal, i.e. pay the person at the top of the list, add your name to the bottom, and send the email to all of your PayPal contacts (usual format). Of course, I'm always sceptical of these "get rich quick" schemes, I know they can't really work (not everyone is going to get rich!) but they always facinate me. I'm not 100% sure why they don't work and was wondering if some of you bright sparks might shed some light on this. Malc

16 Jun 2005, 10:49 AM	#2
JRobert Master of the @ Join Date: Feb 2004 Location: New Hampshire, USA Posts: 1,561	It's a variation of a pyramid scheme - one in which the population of players grows geometrically. If there were an infinite pool of potential new players, the game could go on forever, but of course, that's not the case, nor even possible. It works for a while because a large pool looks like an inifinite one ... for a while! So for a few weeks it does work, but it's bound to run out of new people sooner or later. What usually seems to happen is that the game gets so popular that it attracts media attention with attendant warnings about illegality, potential losses, etc. People start to lose their taste for quick money and fewer are willing to enter the game, which brings about it's quick demise, since to continue, the game needs rapidly increasing numbers of entering players. When the game stops:[list=1][]People (few) who have finished the game (been paid off) are holding more money than they spent;[]People at or close to the top have spent some money, maybe received some;[*]People just entering (relatively many) have spent some money (the money that 1.) and 2.) are holding!)[/list=1]Keep your mouse-hand on your wallet instead, and pass this one up. -jeff-

16 Jun 2005, 11:10 PM	#3
Malc 44 Essential Contributor Join Date: Jul 2002 Location: London, UK Posts: 365	Good advice! thank you Jeff. Out of curiosity, I emailed the person at the top of the list and enquired if they had made any money. He replied, telling me that he had only received 5 payments so far, so although he had a "4 times" gain on his investment, he was unlikely to make any serious money. That doesn't bode well for people further down the list when looking at your explanation. These kind of schemes have been kicking around for years, it's not surprising I guess that there are not going to be many takers. Ah well, I will just have to continue working for a living _Malc

17 Jun 2005, 04:32 AM	#4
DrStrabismus The "e" in e-mail Join Date: May 2002 Posts: 2,804	Given that there is list of name, you have to ask yourself how these start. Presumably the initiator put down a list of his own aliases, and if the list is long enough, he gets all the money.

17 Jun 2005, 07:16 AM	#5
Malc 44 Essential Contributor Join Date: Jul 2002 Location: London, UK Posts: 365	Yes, good point Doc. I was wondering about that too.

18 Jun 2005, 07:41 AM	#6
Malc 44 Essential Contributor Join Date: Jul 2002 Location: London, UK Posts: 365	If you do a search on ebay for "paypal" it's amazing how many scams are being advertised!

19 Jun 2005, 01:43 AM	#7
DrStrabismus The "e" in e-mail Join Date: May 2002 Posts: 2,804	I wonder if anyone has ever tried that scam in Lock, Stock and Two Smoking Barrels, - the one with the returned cheques.

26 Jun 2005, 06:56 PM	#8
teacher Master of the @ Join Date: Feb 2003 Location: UK Posts: 1,167	All illegal stuff that PayPal has no part of, but on the over hand try getting money out of PayPal when they have made the error!