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A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
A confidence trick is an attempt to defraud a person or group after first gaining their trust. Confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, confidence, irresponsibility, and greed. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators at the expense of their victims ".
Internet fraud is a type of cybercrime fraud or deception which makes use of the Internet and could involve hiding of information or providing incorrect information for the purpose of tricking victims out of money, property, and inheritance. Internet fraud is not considered a single, distinctive crime but covers a range of illegal and illicit actions that are committed in cyberspace. It is, however, differentiated from theft since, in this case, the victim voluntarily and knowingly provides the information, money or property to the perpetrator. It is also distinguished by the way it involves temporally and spatially separated offenders.
A high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors.
myWorld, formerly Lyoness, is a multi-level marketing company established in Austria in 2003. According to Lyoness, the company was active in more than 40 countries, spread over six continents, and their shopping community consisted of more than five million members as of 2016. In several countries Lyoness is suspected as being, or ruled as being, a pyramid scheme.
The United Kingdom is home to a widespread and diverse co-operative movement, with over 7,000 registered co-operatives owned by 17 million individual members and which contribute £34bn a year to the British economy. Modern co-operation started with the Rochdale Pioneers' shop in the northern English town of Rochdale in 1844, though the history of co-operation in Britain can be traced back to before 1800. The British co-operative movement is most commonly associated with The Co-operative brand which has been adopted by several large consumers' co-operative societies; however, there are many thousands of registered co-operative businesses operating in the UK. Alongside these consumers' co-operatives, there exist many prominent agricultural co-operatives (621), co-operative housing providers (619), health and social care cooperatives (111), cooperative schools (834), retail co-operatives, co-operatively run community energy projects, football supporters' trusts, credit unions, and worker-owned businesses.
Vertrue Incorporated, headquartered in Norwalk, Connecticut, is an American consumer services marketing company. The company again received an "F" from the Better Business Bureau for making unauthorized charges to its customers' credit cards. In 2007 it was acquired by a trio of investment firms, including Rho Ventures. In 2010, Vertrue and two of its subsidiaries were found guilty of defrauding nearly 500,000 of their customers in Iowa.
Streetcar was the largest carsharing/car club company in the United Kingdom, established in 2004, which merged with the American company Zipcar in 2010, following a period of investment by Smedvig Capital.
Employment fraud is the attempt to defraud people seeking employment by giving them false hope of better employment, offering better working hours, more respectable tasks, future opportunities, or higher wages. They often advertise at the same locations as genuine employers and may ask for money in exchange for the opportunity to apply for a job.
Land banking is the practice of aggregating parcels of land for future sale or development.
Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud not involving selling.
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.
Lars Johan Magnus Staël von Holstein is a Swedish entrepreneur, venture capitalist and author who co-founded dot-com companies such as Icon Medialab and LetsBuyIt during the early dot-com boom in Sweden. He has been the CEO of the multi-level marketing company Crowd1, which has been identified as an illegal pyramid scheme in a number of countries. As of December 2020 he claims to have left Crowd1.
A susu or sou-sou or osusu or asue is a form of rotating savings and credit association, a type of informal savings club arrangement between a small group of people who take turns by "throwing hand", as the partners call it. The name is used in Africa and the Caribbean. The basic principle is that each member of the group makes a standard contribution to a common fund once per some time period. Then each period the total contributions are disbursed to a single member of the group. The recipient changes each period in a rotating fashion such that all the members of the group are eventually recipients. Participants of a susu do not make a profit, but receive their contributions as a lump sum and is a forms of savings clubs.
The Asprox botnet, also known by its aliases Badsrc and Aseljo, is a botnet mostly involved in phishing scams and performing SQL injections into websites in order to spread malware. It is a highly infectious malware which spreads through an email or through a clone website. It can be used to trace any kind of personal or financial information and activities online.
Qnet Ltd, formerly known as QuestNet and GoldQuest, is a Hong Kong-based multi-level marketing (MLM) company owned by the QI Group. QNet was founded in 1998 by Vijay Eswaran and Joseph Bismark. The company's products include energy, weight management, nutrition, personal care, home care and fashion accessories on an e-commerce platform.
A vanity award is an award in which the recipient purchases the award and/or marketing services to give the false appearance of a legitimate honor. Pitches for Who's Who-type publications, biographies or nominations for awards or special memberships can have a catch to them in which the honoree is required to pay for recognition.
Mass-marketing fraud is a scheme that uses mass-communication media – including telephones, the Internet, mass mailings, television, radio, and personal contact – to contact, solicit, and obtain money, funds, or other items of value from multiple victims in one or more jurisdictions. The frauds where victims part with their money by promising cash, prizes, and services and high returns on investment are part of mass market fraud.
References
- ↑ Taylor, Jon M. "Serious Problems with the FTC's Revised Business Opportunity Rule". Federal Trade Commission. p. 9. Retrieved 2009-04-10.
- 1 2 "Mmegi Online :: Consumer Watchdog". Mmegi.bw. 2009-01-16. Retrieved 2009-04-10.
- 1 2 3 "University scheme looks like a pyramid scam". mirror.co.uk. Retrieved 2009-04-10.
- 1 2 "Success University fail". mirror.co.uk. Retrieved 2009-04-10.
- 1 2 "Namibia: BoN Warns Against Pyramid Scheme (Page 1 of 1)". allAfrica.com. 2008-10-14. Retrieved 2009-05-27.
- ↑ "Igennex, Perfect4U and One-Vision Buying Club Scam Pyramid Scheme". Crimes-of-persuasion.com. Retrieved 2009-04-10.
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