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You may have seen ads for Randomizers all over. Do you really understand them, however?
The way a randomizer works is you pay in a certain amount of money. Part goes to the administrator (the only person guaranteed to make money from this nonsense), part goes to a random member.
The first thing you need to understand is that they are not legitimate. In order to continue, they need to recruit new members, in other words, a pyramid scheme! Think about it... no products, no services, just money exchanging hands.
Now, my usual favorite source for information on scams, the FTC website, doesn’t have anything on randomizers specifically just yet. However, take a look at what they say about gifting programs, which are essentially the same thing, except offline: http://www.ftc.gov/bcp/conline/pubs/alerts/giftalrt.htm.
Now, pretty much every randomizer is going to say that it is legal, it’s not a scam, etc. Most will insist that they are not a pyramid scheme, so let’s take a look at the definition of a pyramid scheme, then at a randomizer payment plan.
A pyramid scheme relies on recruitment to bring in money, and that is its primary method of earning money. There may be few or no product or service sales. Yes, I said this earlier in this same article. It bears repeating. If all you do to earn money is recruit (or have someone recruit for you), it is a pyramid scheme! A legal program requires a product or service.
Now, take a look at any randomizer. No products. No services. Just money exchanging hands, and an administrator somewhere getting lots of money. Do you really want to get involved with that?
But what about all the people making money? They had all kinds of endorsements from happy members on their site! Are you sure about that, or are these simply claims from shills?
No matter how you slice it, randomizers have all the hallmarks of illegal pyramid schemes. If you don’t want to get burned, avoid them.
Chain Letters and Randomizers
Chain letters long predate the Internet while randomizers are newer. Are they safe to participate in?
Reshipping
Recieve a package someone else bought, then forward it on. What could possibly be wrong with that? Plenty!
Payment Processing
Cash a check or money order while keeping your share. So easy, could it be true?
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