Chain Letter Schemes - The Scam in your (E)mail Box

Chain letters have been around for a long time. Everyone has heard of them and probably received at least one in their lifetime, either in the mail or its new 21st Century format, the email. Regardless of the way you received it, they all promise the same thing. The promise of riches, just by investing a small amount of money and following the simple plan outlined in the letter. Tempting as they may seem, reader BEWARE!

The typical chain letter claims that if you follow the steps exactly as shown in the letter, you too can make a lot of money in just a short period of time. All you have to do is send money to one person or a group of people on the list provided, remove the top name from the list and add your name to the bottom of the list. Next, send this new letter out to as many people as you can. Then just sit back and watch your mail box fill with money. No risk involved.

Many people who read these letters think it’s the answer to all their problems. Unfortunately, they usually end up being victims of this scam. Not only do they lose their money but if they are reported to the United States Postal Service or the Federal Trade Commission, they could face serious legal problems. In addition, if they use unsolicited emails (spam) to promote their chain letter, they can be banned by their Internet Service Provider (ISP) and face charges regarding spam complaints.

Did you know that chain letters are illegal if they request money or other items of value and promise the participants a substantial return? According to the United States Postal Inspection Service, “Chain letters are a form of gambling, and sending them through the mail (or delivering them in person or by computer, but mailing the money to participate) violates Title 18, United States Code, Section 1302, the Postal Lottery Statute.”
http://www.usps.com/websites/depart/inspect/chainlet.htm

In recent years, the chain letter has evolved with the new technology available and people now use the internet to reach a new audience with the use of email, chat rooms and websites. Some letters even claim that the U.S. Postal Service or U.S. Postal Inspection Service has declared the letter is legal. Or they may state that because you are receiving a report or mailing list, they are not violating Title 18. These are just clever tricks to mislead people into parting with their money. Just remember:

1. If the mail is used in any way to participate in the chain letter, it is illegal.

2. The goal of a chain letter is to get your money, not sell information. The reports and mailing lists are usually worthless and are just a way to make their scheme appear legal.

3. Neither the U.S. Postal Service nor the U.S. Postal Inspection Service gives prior approval to any chain letter. If a chain letter claims that a government agency has declared it legal, do not participate. Report it to the Federal Trade Commission or United States Postal Service.

4. Beware of testimonials from people claiming to have made large sums of money by participating. You have no way to verify these stories and more often they are just made up by the original writer of the letter to make you believe you can earn a fortune just like them.

Chain letters attract people because they target the one thing we can all identify with. Money. In a time when more people are struggling with high levels of debt, lack of job security and a sluggish economy, the chain letter preys on people’s weaknesses, by appearing to offer the solution to all their problems.

According to the Federal Trade Commission (FTC), chances are you will receive little or no money back on your investment. Instead you may find yourself in trouble if you are reported for participating in a chain letter scheme. The FTC launched a crackdown on “Deceptive Junk E-mail” in February, 2002, which includes illegal chain letter spam. Many chain letters teach their participants how to start their own chain letter schemes using spam to recruit others to participate. http://www.ftc.gov/opa/2002/02/eileenspam1.htm

So how can you help to fight against chain letter scams and “break the chain”. Do not respond to the letter. You have several options to report people who send you chain letters, either by mail or email.

The United States Postal Service provides a website with information regarding chain letters, http://www.usps.com/websites/depart/inspect/chainlet.htm . They advise that if you receive a chain letter that asks for money or other items of value, you should place it in an envelope and turn it over to your local postmaster or nearest Postal Inspector. Write on the front of the envelope, “I received this in the mail and believe it may be illegal.”

Another resource available to the public is the Federal Trade Commission (FTC) website, http://www.ftc.gov . They provide a wealth of information on how to identify chain letter scams and how you can help the FTC by reporting incidences and through public awareness. You can find articles about chain letter schemes here: http://www.ftc.gov/bcp/conline/edcams/chainmail/index.html

If you receive a chain letter by email you should report it to your Internet Service Provider (ISP) and they may be able to trace the source of the email. Other resources available to you are your local consumer protection agency and/or your state Attorney General. To report your letters to the Federal Trade Commission, you can report it online at http://www.ftc.gov or by calling the FTC Helpline, toll free, at 1-877-FTC-HELP (1-877-382-4357). The FTC Helpline is also available to consumers to answer any questions about chain letters or other illegal schemes.