little madoffs

A Slashdot reader picked up on this news item from the Better Business Bureau (BBB) about the little Bernie Madoff's that have sprung up on YouTube.

Online video promotions promising fast cash - called cash gifting programs - are nothing more than ponzi schemes, writes the BBB. According to video analytics, there are nearly 23,000 cash gifting videos on YouTube with a staggering 59,192,963 views. Must be the bad economy.

The videos never ask for money directly. Instead, they send you to a site where you sign up for a gifting program with a fee anywhere from $150 to $5,000. To entice you, the schemes are touted as fundraisers for a "good cause" or "to help people help themselves." Once you "donate" your money, you're then asked to convince others to join because the more people join, the more money for you.

The worse part about these schemes is they target women's clubs, community groups or church congregations. Or, worse yet, they target the people - in this tough economy - who are struggling the most.

The BBB offers some tips on how to steer clear of those nasty little Madoff's. If you think you've encountered a dubious gifting scheme, ask yourself these questions:

• Do I have to make an “investment” or give money to obtain the right to recruit others into the program?

• When I recruit another person into the program, will I receive what the law calls “consideration” (that usually means money) as a result?

• Will the person I recruit have to make an “investment” or give money to obtain the right to recruit and receive “consideration” for getting other people to join?

If you answer "yes" to any of the above - chances are you've just caught a dandelion.