Autosurf MLM Ponzi
Article regarding illegal Ponzi schemes that take the guise of an autosurf scheme.A relatively new type of Internet scam comes in the form of the “investment autosurf” Ponzi scheme, which scammers are now using to make money illegally. This type of scam is on the rise especially in the US and Europe.
The Ponzi scheme in itself has been around for a while. Coined by a fraudster called Charles Ponzi in the early 1900s it involves a scheme where people will sign up and invest in a service or product. However the service or product is either non-existent or so poor in quality it will never generate any real profit by itself, so the only profit the scheme makes is in the signing up fees that new recruits pay when they first sign up or upgrade. Members are also highly encouraged (either by free “gifts” or higher pay) to recruit new members, hence the structure is similar to a pyramid scheme, with the earlier members earning more money than the later newer recruits. Since the product or service makes no money, the (only) money coming in from signing up fees is distributed top heavy to all the members (i.e. early top level members getting more) – but of course simple math will tell you that the payout of the structure is always going to be less than the pay-in amount since early investors and the program creator take more money, ergo it is impossible for people at the lower end of the scheme to make money. These schemes are doomed to fail eventually when the system is unable to pay out to the majority of its members and people will leave the program. Ponzi schemes are illegal yet are still prolific on the Internet.
And one such popular example is the now infamous “investment autosurf” scam.
First let us look at autosurf works.
The legitimate autosurf business model is as follows –
1. Online businesses pay autosurf program creator money to get traffic to their site.
2. Autosurf program creator hires individuals to visit those websites. Autosurfing means the individual is automatically given a list of sites that come and go after a certain time period.
3. The more sites the individual looks at, the more money they will earn from the money given to the program creator via the businesses.
4. The businesses website gets more traffic, the individual gets paid, the program creator takes a small percentage for the trouble.
It is similar in methodology to the legitimate survey taking programs you can do.
It sounds like a sound business plan, and when properly regulated, it can be. However, this business structure has recently been the target of scammers who take gross advantage, and the following explains how they do it –
First off – and this is usually a massive red flag – the individuals who join the scheme are required to pay a “register” fee, or they will soon be required to pay an “upgrade” fee (hence the term investment autosurf). A lot of legitimate autosurf programs do not require this, so finding yourself forking over money is a big sign that you are being duped. The scammer motivates people to pay this fee by promising an “out of this world” turnover for your investment – some schemes claim you can profit on your registering/upgrade fee within weeks, and within a year the profit margin would be huge. Often schemes that promise a massive profit are also referred to as HYIP schemes. (high yield investment programs)
Secondly – and this is another red flag – the scheme will place a lot of attention on recruiting new people to view ads with you. They motivate people to do this with promises of more money as your new recruits will be “under” you and the scheme will often claim you can take a commission for all the sites your “protégées” visit as well. This effectively renders the investment autosurf a pyramid scheme, with people at the top theoretically earning more money than those at the bottom. Also this motivation of more money makes the scheme legally dubious – it is this sort of commission incentive of recruiting new members, in the eyes of the law, which differentiates between MLM schemes which are legal, to pyramid schemes, which are not.
Now another problem with autosurfing is that it is not particularly profitable by nature. Unlike popular online advertising techniques, like Google Adwords or AdBrite - autosurfing does not generate a lot of sales, since the people visiting the sites are not a targeted audience, more over they are merely people just visiting the site to earn themselves money. It is for this reason businesses will not pay the program creator a great deal of money to promote their sites.
So the question begs – other than the registering fees from new recruits – if the service the autosurf program isn’t in itself generating much money, how does the program creator guarantee the high turnover in profit originally promised to people when signing them up? This and many programs have been criticised for not even getting money from advertising businesses, just making up this fact to prompt people to sign up.
Therein lies the scam – as we mentioned before the majority (or all) of the income of a Ponzi scheme comes from registering new members, and it is these fees that go to pay the earlier members, as opposed to the profits made from the service. This effectively renders the investment autosurf a Ponzi scheme doomed to fail from the very start. It is impossible for newer recruits to make a profit since their money goes to people higher up the scheme, and the fact they are visiting websites isn’t really making any real money at all, so the scheme will eventually collapse in on itself.
The scheme is doomed to fail, and eventually the majority of the members who join will not make more money than what they originally invested.
Many specific autosurf scams attempt to confuse the matter by placing attention on delayed upgrades, and website "credits" but the principle remains the same. It is a Ponzi scheme with no real income other than signing up fees, and most people will ultimately pay the price.
A notorious examples of an investment autosurf is the AdSurfDaily scheme, ran by Andy Bowdoin, which has (very) recently come to a head when it was shut down by law enforcement officials, making this subject a very hot one indeed on the Internet and on various Internet forums.
There are many more points that need to be covered when looking at autosurfs and Ponzi schemes in general, but this serves as a basic guide to investment autosurfs, and things to look out for if you are ever impelled to sign up for one.