YouTube A Breeding Ground For Ponzi Schemes
Google might be struggling to make money off YouTube, but pyramid schemers are apparently doing just fine. They’re doing so well, the Better Business Bureau has issued an alert warning of “little Bernie Madoffs” running all around the video site Call it user-generated scamming. .
A search for “cash gifting” on YouTube brings back over 25,000 videos and, at the rate they were going last week, the videos have been viewed over 60 million times.
Now, for people familiar with business at all, the phrase “cash gifting” sounds incredibly stupid and scammy from the outset and they are immediately suspicious how giving away money can possibly make money. For sharper guys like that they use the phrase “cash leveraging” instead, which is much more appropriately Wall Street sounding.
Short definition of cash gifting: You give a dude some money, he takes it, kind of like betting on horses without the horses, and more like a mugging.
Long definition of cash gifting: You give a dude some money to earn your position in a special pay-it-forward program dedicated to a cause—saving the Norwegian aardvark, or whatever you’re into. The dude takes your money and you now have a job as a member of the special club. Your job is to go find more club members and convince them to give you money to help save the Norwegian aardvark. You keep a little for your effort and give the rest to the dude who gave you your job, who keeps a little more, and presumably gives the rest to the organization.
If you smell a rat then you’re smarter than the folks convinced all that pay-it-forward karma will come home to roost in their mattresses, where the President has made very clear you’re not supposed to be keeping your money. This is a classic pyramid/Ponzi scheme without the pretense of crappy products or imaginary investments, cash straight to some bald dude in a tank top you know only through YouTube. And in that sense, for Tank Top Dude, it’s very efficient and cost effective.
He might even call it a stupidity tax.
The BBB calls it a friggin scam. “Bernie Madoff isn’t the only guy with a ponzi scheme; money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with today’s economy,” said Steve Cox, BBB spokesperson. “Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme.”
To take part in the YouTube pyramid schemes, victims shell out anywhere from $150 to $5,000. Though recruiters claim scams like this are legal because of IRS laws regarding gifting, it’s highly unlikely any money ever makes it to where it will actually benefit a Norwegian aardvark, and that makes it a scam illegal in most states. Be advised, steer clear.