Friday, October 13, 2006

Scam Alert: Group Pyramid scheme

Affects: Anyone who might be invited to join a group ( so pretty much everyone)

Modus Operandi: Scammer creates a group and requires a fee to join. They promise easy money to people who recruit other people to join the group and pay the fee by paying them a cut of the fee. However, this is practically the definition of a pyramid scheme. I'll get to that in a bit.

How it goes down: The group or people in the group send out random invites or spam to "people to get them to join the group and pay the 10L fee. In doing this they get the other people to recruit people and so on down the line. Nothing is really gained, only money changes hands.

Seeing through the Scam: First thing is first, to define a pyramid scheme, I'm going to just quote the wikipedia:

The essential idea behind each (pyramid) scam is that the individual makes only one payment, but are promised to somehow receive exponential benefits from other people as a reward. A common example might be an offer that, for a fee, allows the victim to sell the same offer to other people. Each sale includes a fee to the original seller.

Clearly, the fundamental flaw is that there is no end benefit; the money simply travels up the chain, and only the originator (or at best a very few) wins in swindling his followers. Of course, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to recruit any followers themselves.

Damage control: Of course in this instance, the best way to prevent it is to be aware of it and not get involved. Politely decline the invitation to such groups. Be sure to have a look at the groups mandate before joining. Chances are if it sounds too good to be true, it probably is. The only person who really benefits from this sort of thing is the one person at the top.

An example of such a group(yes this is a real group):

Share Investments inc

"Want to Make Money? Pay 10 Linden and Join this group, then Invite 5 More people to Join it, The More people that Join the More $$ WE will make. All Proceeds made from Joining is Split Equally to US, So hop on board the MONEY TRAIN, and HELP SPREAD THE WORD!. Its Easy to Join and Only 10L. Think 10000 People Join SL daily, This Can EXPAND Greatly. and, WE get a cut of that 50000L daily if they all joined this. So Join and invite ALL of your friends lets all get this money together....... Have fun...."

As you can see, its pretty clearly a pyramid type scheme. Pay money for the promise of money IF you swindle your friends out of their 10L. As the group grows the payments would be small anyway, if they actually go to the members at all.

These sort of scams have been around in one form or another for a long time, its best that we don't waste our L$ on scams like this.

If you'd like more information on Pyramid schemes, check out the entire wikipedia article.

Tuesday, October 10, 2006

Scam Alert: Fake SLExchange terminals

Affects: Anyone who uses SLExchange terminals to deposit funds or who has one on their land

Modus Operandi: A scammer creates a fake SLExchange terminal and places it ever so slightly over the real one. This is a variation of the old 'invisiprim over vendor' scam, but specifically targetting SLExchange terminals.

How it goes down: The fake terminal is placed over the actual SLExchange terminal by the scammer. The unsuspecting victim comes along and attempts to deposit money into the terminal. The money is deposited, but not in their SLExchange account, but rather into the scammer's wallet. Victim becomes aware of the scam after their money never shows up in their SLExchange account.

Seeing through the Scam: Its very important to careful to take a moment to check objects before using them. Hovering your mouse over an object for a moment just to verify that it is actually owned by the right person can save you a world of trouble later. In this particular instance you should verify that the terminal is owned by either Exchange Street or SLXTerminal Bigwig, or it is NOT an SLExchange terminal. The name could be similar, but if it is not one of the above, do not pay it.

Damage control: For people with SLexchange terminals on their land, they should probably have a look and make sure that their terminal isn't affected and keep an eye out on their land's prim usage for names they don't recognize. Obviously if you have everything set to groups and have autoreturn enabled, that helps a lot. But some of us can't or don't want to use the autoreturn, so you just have to be vigilant. For users of SLexchange terminals, don't take it for granted that the terminal is legit. Always hover your mouse for a moment and check the owner before paying the terminal. A little caution will save you losing your hard earned linden.

Further information on this scam can be found here: