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�1996 by Mark Edward Taylor. Except as permitted under the Copyright Act of 1976, no part of this may be reproduced in any form or by an electronic or mechanical means, including the use of information storage and retrieval systems without permission in writing from the copyright owner. (Brought to you by the Online Fraud Newsletter.  No advertising/No Endorsements. Send e-mail for details.)

CHAIN LETTER FAQ


   There have been numerous postings to various newsgroups promoting how to make quick money by using stamps and mailing money to people on a list.  Almost all of the ads say that it is a legal program under the law.  Unfortunately it is not and is considered a chain letter and gambling, both of which are illegal and can lead to a fine if you are caught promoting the program.

   The reason so many people fall for this is that it is simple.  You take 5 stamps and put money in each envelope and send it to the people on the list.  Then you copy this list and add your name and then, voila, the money starts rolling.  Usually you never make any money doing this.  The promoters of this scheme make sure that their name stays on the list so that they will get the most money.
If you receive such a solicitation on the internet or through the U.S. Mail, turn it over to your postmaster or local postal inspector.  Here is what the United States Post Office actually says about chain letters.  This information comes directly from their web site:

Chain Letters
   A chain letter is a "get rich quick" scheme that promises that your mailbox will soon be stuffed full of cash if you decide to participate. You're told you can make thousands of dollars every month if you follow the detailed instructions in the letter.
A typical chain letter includes names and addresses of several
individuals whom you may or may not know. You are instructed to send acertain amount of money--usually $5--to the person at the top of the list, and then eliminate that name and add yours to the bottom. You are then instructed to mail copies of the letter to a few more individuals who will hopefully repeat the entire process. The letter promises that if they follow the same procedure, your name will gradually move to the top of the list and you'll receive money -- lots of it.

   There's at least one problem with chain letters. They're illegal if they request money or other items of value and promise a substantial return to the participants. Chain letters are a form of gambling, and sending them through the mail (or delivering them in person or by computer, but mailing money to participate) violates Title 18, United States Code,Section 1302, the Postal Lottery Statute. (Chain letters that ask for
items of minor value, like picture postcards or recipes, may be mailed,since such items are not things of value within the meaning of the law.)
Recently, high-tech chain letters have begun surfacing. They may be disseminated over the Internet, or may require the copying and mailing of computer disks rather than paper. Regardless of what technology is used to advance the scheme, if the mail is used at any step along the way, it is still illegal.


   The main thing to remember is that a chain letter is simply a bad investment. You certainly won't get rich. You will receive little or no money. The few dollars you may get will probably not be as much as you spend making and mailing copies of the chain letter.
   Chain letters don't work because the promise that all participants in a chain letter will be winners is mathematically impossible. Also, many people participate, but do not send money to the person at the top of the list. Some others create a chain letter that lists their name numerous times--in various forms with different addressee. So, in reality, all the money in a chain is going to one person.

   Do not be fooled if the chain letter is used to sell inexpensive reports on credit, mail order sales, mailing lists, or other topics. The primarypurpose is to take your money, not to sell information. "Selling" aproduct does not ensure legality. Be doubly suspicious if there's aclaim that the U.S. Postal Service or U.S. Postal Inspection Service has declared the letter legal. This is said only to mislead you. Neither the Postal Service nor Postal Inspectors give prior approval to any chain letter.

Participating in a chain letter is a losing proposition. Turn over any chain letter you receive that asks for money or other items of value to your local postmaster or nearest Postal Inspector. Write on the mailing envelope of the letter or in a separate transmittal letter, "I received
this in the mail and believe it may be illegal."


THE SHAREWARE SCAM
   One of the items alluded to in the USPS warning is that some promoters will use electronic media to make the scam look legitimate.  What they do is put a so-called �shareware� program on a disk with a �business opportunity�program.  Sometimes the business opportunity can only be accessed by paying a fee to five people for unlock codes or sometimes this is free.  When you unlock this business opportunity, a list of 5 names appears and a description of the program that is very similar to an illegal chain letter scheme.
   You are asked to distribute the disk and promised that you will make money as your name is on the list in that �business opportunity� program.  You pay for the disks and promotion.  But is illegal in the same manner as the chain mail.  You are asked to send cash or a check through the U.S. Mail and promised big bucks as the money rolls in.  Don�t be fooled by the con.  It is just more sophisticated than the average chain letter scam.

Remember this maxim: IF IT IS TOO GOOD TO BE TRUE, IT PROBABLY IS. Walk away from such schemes.  You will only end up loosing in the end.

-- 
Mark Edward Taylor
Editor
Online Fraud Newsletter