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Ponzi Schemes Taking Over YouTube

by Terrence O'Brien on April 15, 2009 at 08:01 AM

Pyramid Schemes Taking Over YouTube
Apparently the shame and incredibly long jail sentence facing Bernie Madoff aren't enough to discourage scores of imitators from taking to the Internet and launching their own Ponzi, or pyramid, schemes. According to a report by the Better Business Bureau, YouTube has been flooded with videos from would-be scam artists. According to the report, analysts at the firm TubeMogul have identified nearly 23,000 videos encouraging viewers to sign up for "cash gifting programs" or "gifting clubs" on the video streaming site.

In a pyramid scheme, scammers persuade potential participants to pay money into a program, promising them easy money for each person they, in turn, persuade to join. As more people are enlisted, the money is simply funneled to the top of the pyramid, enriching the scam artist and leaving the victims at the bottom of the pyramid broke and embarrassed.

The YouTube videos in question are often misleading and confusing; many make references to supposed IRS codes that make the "gifting clubs" legal, and some claim to benefit good causes or churches.

Just remember; if anyone tries to convince you to buy into a "gifting program," or a similar scheme that requires you to recruit more members, steer clear. Even if the person trying to sell you on it is your own flesh and blood. [From: Better Business Bureau, Via: SlashDot]

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Tags: ponzi scheme, PonziScheme, pyramid scheme, PyramidScheme, scam, scheme, security, securityalert, video, web, web video, WebVideo, youtube

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