A common get-rich-quick scam is the pyramid scheme. Though there are many variations of this scam, the usual design is for investors to recruit other investors, for which the recruiters receive a commission.b Chain letters work in the same way by asking you to send money to people at the top of a list. The assurance is that you will receive thousands of dollars when your name reaches the top.

Pyramid schemes always collapse because it is impossible to keep on recruiting new members. Consider the math. If five people launch a pyramid and each one recruits five more, the number of new recruits becomes 25. If they, in turn, each recruit 5, that would mean 125 more. When recruitment reaches the ninth level, there will be close to two million people who would have to recruit more than nine million others! Promoters of pyramid schemes well know that there is a saturation point. When they suspect that point is near, they take the money and run. You will probably lose your money, and those whom you have recruited will now be trying to recover their lost money from you. Remember, for you to make money in a pyramid scheme, someone else has to lose money.

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Spam Scams​—Six Common E-mail Scams

1. Pyramid schemes: These often masquerade as opportunities to make a lot of money with little work and cash outlay. One scheme offers you a computer or some other electronic item if you pay to join a club and then recruit other participants. Another variation is the chain letter. Chain letters are almost always illegal. Most of those who invest in them lose their money.