🚀 go-pugleaf

Subject: Re: "Make Money" Schemes *are* Illegal

Date: Sat Dec 28 02:07:09 1996



Despite what the posters of "make money fast" that are making the

rounds of the newsgroups may claim, these schemes *are* ILLEGAL

(see below vis-a-vis Canada and the U.S.).  Don't participate,

distribute or copy them!

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You may be interested in the following that I have only recently

come across.  Unfortunately, it only pertains to the USA. One can

only hope that Industry Canada, RCMP and other agnecise can get

together for a day or few of fun surfing the Net:

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FEDERAL-STATE SURFING CATCHES A WAVE OF POTENTIAL INTERNET SCAMS 



             OVER 500 PYRAMID OPERATIONS PUT ON NOTICE



Four federal agencies and 70 state and local law enforcement

officials from 24 states have notified  operators of over 500

websites that they may be promoting illegal pyramid schemes in

violation of state and federal laws. 



Were putting scam artists on notice," said Jodie Bernstein,

Director of the Federal Trade Commissions Bureau of Consumer

Protection, at a press conference where she unveiled the results

of Internet Pyramid Surf Day. "The Internet is not going to be a

new marketplace where scam artists roam free. We've sent the

message, 'Clean up your act or close down your site. And we plan

to follow up to see that they do," Bernstein said. 



The law enforcement surveillance was coordinated by the FTC and

announced during the �Fourth Annual Fall Internet World '96

Conference in New York City. On Monday, December 9, the federal,

state and local law enforcement officials surfed the Internet to

locate those sites posting possible pyramid scams. Participants 

preserved the information found at each site for possible future

law enforcement action. 



  Various law enforcers identified Internet sites that contained

the telltale signs that they may be pyramid operations. Site

operators were sent e-mail messages warning them that pyramid

schemes were illegal, describing the characteristics of illegal

pyramids and providing the FTC's home page address to help

entrepreneurs and consumers distinguish between illegal pyramids

and legal multi-level marketing plans. The web-sites will be

revisited in the future, and if evidence suggests that they are

illegal operations, further actions may be taken.



"In just one day, we identified over 500 web sites that make

offers which may involve illegal pyramid schemes. These schemes

now constitute the fastest growing type of Internet scams by some

accounts," Bernstein said. "And there�s an alarming irony in

this. Ten years ago, pyramid scams were all but a thing of the

past. Today, we have a new marketplace, the Internet, which is

hot and high-tech. And here come the pyramid scams again, as old

as Methuselah, disguised in high-tech electronic garb and new-age

jargon, trying to make a comeback.



Internet Pyramid Surf Day� was intended to complement the

existing law enforcement work of the government agencies. The FTC

has brought 15 cases against on- line scams in the past. The

efforts objective is to educate businesses using the Internet

about the law on pyramids and deter those who are violating the

law from continuing to do so. 



The Securities and Exchange Commission, Federal Communications 

Commission, U.S. Postal Inspection Service, 20 state Attorneys

General, five state securities regulators and four District

Attorneys, participated in Surf Day.



"At SEC Enforcement, our Internet program entails aggressive 

surveillance, investigation and prosecution of Internet conduct

that violates the federal securities laws," said John Stark,

Special Counsel for Internet Projects at the SEC Enforcement

Division. "We also encourage self-policing through our

Enforcement Complaint Center <www.sec.gov>, and in conjunction

with the Commission�s Office of Investor Education and

Assistance, we emphasize education and cooperative efforts with

federal, state, self-regulatory and industry organizations. Joint

operations like Surf day increase the effectiveness of our

Internet program to make the Internet safer for all investors." 



"Promoting chain letters on the Internet is simply putting old

wine in new bottles, " says Chief Postal Inspector Kenneth

Hunter. "Even though communicated via the latest

telecommunications medium, electronic chain letters are identical

to old fashioned scams, in that they are likely to profit only

the originator," warns Mr. Hunter. "Further, they run the risk of

violating the federal lottery statutes if they cause others to

perpetuate the chain through the U.S. Mail."  



Bernstein said that the agency has also developed education

messages for consumers. "We hope to help consumers avoid these

pyramid schemes by offering tips on what to watch for --

especially money making schemes that claim that you will make

money by recruiting new members or 'distributors.



The consumer education campaign is being promoted by the

Interactive Services Association, primarily through Project OPEN

(the Online Public Education Network). The effort is supported by

America Online, AT&T, CompuServe, Microsoft and NETCOM who will

be incorporating hyperlinks to the FTC web site. The FTC web site

will offer the following advice for consumers: 



Beware of plans that ask new distributors to spend money on

high-priced inventory. These  plans can collapse quickly -- and

may be illegal pyramids in disguise; 



Be cautious of plans that claim you'll make money through

continued growth of your  'downline' -- the commissions on sales

made by new distributors you recruit -- instead of through sales

you make yourself; 



Beware of plans that promise enormous earnings or claim to sell

miracle products;  Don't pay or sign any contracts in an

"opportunity meeting" or any other high- pressure situation; 



Do your homework. Check out any plan you intend to invest in with

the local Better Business Bureau and state Attorney General. 



The Better Business Bureau (BBB) system is distributing

educational materials through its BBB Web Page

(http://www.bbb.org) and network of Better Business Bureaus to

advise consumers how to identify pyramid schemes and other online

scams. Local BBBs will also include tips on avoiding online fraud

in their monthly newsletter mailings to 240,000 businesses. In

addition to helping educate consumers on how to avoid potential

scams, the BBB is launching a program to assist consumers in 

separating the legitimate online offer from the dubious one. The

new BBB OnLine program, which will be operational in early 1997,

will assist consumers in identifying ethical businesses on the

Internet, and provide businesses with a means to demonstrate

their commitment to ethical standards in the online marketplace. 



Copies of the consumer and business education materials are

vailable on the FTC's web site at  http://www.ftc.gov/pyramid (no

period). 



Copies also are available from the FTC's Public Reference 

Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W.,

Washington, D.C. 

20580;  202-326-2222; TTY for the hearing impaired 202-326- 2502.



To find out the latest news as it is announced, call the FTC

NewsPhone recording at 202-326-2710. FTC news releases and other 

materials also are available on the Internet at the FTC's World

Wide Web site at: http://www.ftc.gov 





                      

  MEDIA CONTACT: 



  Victoria Streitfeld or Claudia Bourne Farrell

  Office of Public Affairs

  202-326-2718 or 202-326-2181



  STAFF CONTACT: 



  Eileen Harrington

  Division of Marketing Practices

  202-326-3127 



Karl Pollak <kpollak@portal.ca>

Richmond, British Columbia

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