REALISTIC INCIDENT:
Gina DeJoy used to take people at their word. At her Maine antiques store, customers could ask for things to be put aside, on hold, no deposit necessary. These days, DeJoy would like to be paid in full first, thank you very much. After what she's been through, it's hard to blame her. Lets take a look…
Three years ago, Gina DeJoy, then 43, said an acquaintance that she was financially unstable at the moment, since she had to travel to Virginia every week to take care of her ailing mother, trying to save her through Chemotherapy. Every time, she had to miss her work as she had no one else to take care of the store. Her husband was owning a small business. Her credit cards were maxed out, but she couldn't bear to let her mother suffer alone. DeJoy's friend said she had a solution.
There was a local group there which was offering help to women just like Gina, called A Woman's Project. It was a "gifting circle” since, if one pays $5000 at the beginning, in a short span, it would multiple to as much as eight times, that is, till $40,000. The logic is simple: by more women being inducted into the group. The groups, usually 15 in one, are formed in ‘circles’, but best understood as “Pyramids”. Eight women at the bottom layer, four above them, further two above them, and one at the top. When each pays the money at the starting, the topmost member gets a maximum of $40,000 and then, moves out. The next two now become the senior most members. Thus the chain continued…
A Woman's Project seemed heaven-sent to DeJoy. At her first meeting -- a potluck lunch held at a local hairdresser's house -- she felt as if she'd been invited to join a secret sorority. Among the 40 or so attendees, most were known women, including her bank tellers and grocery-store cashier, but nobody used their last name, and she also advised to, which made her feel both intimate and mysterious about the group. The idea was that everyone had gathered for a charitable purpose -- to raise money for a good cause. Many of the women had brought donations for a local food bank, and the pile of canned goods sat in the middle of the crowded living room, a symbol of A Woman's Project's good intentions.
There were two parts of the hook—one, donating money for a charitable cause and two, earning some bucks for oneself. These two were completely unconnected ideas, but for DeJoy, it was a double advantage. These two parts merged to form a persuasive and tantalizing fantasy.
So DeJoy got permission from her husband, borrowed $5000 from bank and deposited it. Though she had to pay her debts off, she felt relieved by the fact of the advantageous money offered, with which, she may be able to close her transactions and also hire a private nurse for her mother.
Instead, within a week, things began falling apart. The newspaper read, “The gifting circle--an illegal pyramid scheme”. Terrified and frantic, DeJoy called the woman to whom she had deposited her money. “I don’t have it”, was the reply. Her friends’ reply was "just as mean and cold and heartless as could be".
So all the hard earned money of DeJoy and 7 other people of the circle was spent for the company boss’ "necessities" like a new car and a Caribbean cruise!
Soon she began victim for her debts. Her mother’s condition worsened and eventually, she died. Her husband tried to hang on to the antiques business while she took a job in a bakery -- on top of teaching art, weeding gardens and cleaning houses, almost anything to catch up on her bills.
These Pyramid schemes have been there for a long time. Till these kind of people are there, the gulliable persons will always survive. In 1920’s there was an Italian-American called Charles Ponzi. He promised an eye-popping 400 percent interest on the cash that the Boston residents "invested" with him. Before he was arrested for subsequent fraudulence, he had managed a whopping $15 million from the people!! But unfortunately, it seems that Ponzi’s spirit is still existing in the world..
The people who get affected are not only the poor and financially naïve, but also some intelligent ones. While DeJoy was running a business, another lady, Holly DeIaco, who lost $2,500 to a similar scheme, has had a master's degree. It was an even worst case, as Holly started writing a book on the worths of these “gifts”!
If those numbers seem big, here's why: By its very nature, a pyramid scheme must grow exponentially as people at the top are going to get paid. “But, this large balloon will burst one time”, alerts Susan Grant, director of the National Fraud Information Center/Internet Fraud Watch. “Also, nine out of ten people will get affected from these”, she insists.
Some people may be fortunate to get their money back, but most of them are not. Also, it seems, women are the people who are most affected by these kinds of schemes, due to the seductive kind of speeches given to them.
DeJoy, then got back $1000 from the Maine authorities who caught the illegal women. Whatever happens, she had claimed at least a modicum of revenge. She was heartened by the response from other women in her area. "It was nice to have people come out and say, 'Yeah, we almost did it. You weren't a complete nitwit.' "
So, if someone is cheated in these kinds of things, don’t be embarrassed. Be bold and speak up. And for averting these kinds of problems:
Ø When you have to send money to make money, think about it: If someone really owed you thousands but needed you to pay some up-front fees, why wouldn't he just deduct the fees from your check?
Ø Do not respond to any e-mails asking for your personal information, however formal, they may look, and never click on a link from an e-mail sender you don't know.
Ø If it sounds too good to be true, it really is. Some people may get benefits, but you may not. Think about it, before any investments.
Ø The only time you may invest is when you initiate a call and you completely know the worth of the organization.
`
Gina DeJoy used to take people at their word. At her Maine antiques store, customers could ask for things to be put aside, on hold, no deposit necessary. These days, DeJoy would like to be paid in full first, thank you very much. After what she's been through, it's hard to blame her. Lets take a look…
Three years ago, Gina DeJoy, then 43, said an acquaintance that she was financially unstable at the moment, since she had to travel to Virginia every week to take care of her ailing mother, trying to save her through Chemotherapy. Every time, she had to miss her work as she had no one else to take care of the store. Her husband was owning a small business. Her credit cards were maxed out, but she couldn't bear to let her mother suffer alone. DeJoy's friend said she had a solution.
There was a local group there which was offering help to women just like Gina, called A Woman's Project. It was a "gifting circle” since, if one pays $5000 at the beginning, in a short span, it would multiple to as much as eight times, that is, till $40,000. The logic is simple: by more women being inducted into the group. The groups, usually 15 in one, are formed in ‘circles’, but best understood as “Pyramids”. Eight women at the bottom layer, four above them, further two above them, and one at the top. When each pays the money at the starting, the topmost member gets a maximum of $40,000 and then, moves out. The next two now become the senior most members. Thus the chain continued…
A Woman's Project seemed heaven-sent to DeJoy. At her first meeting -- a potluck lunch held at a local hairdresser's house -- she felt as if she'd been invited to join a secret sorority. Among the 40 or so attendees, most were known women, including her bank tellers and grocery-store cashier, but nobody used their last name, and she also advised to, which made her feel both intimate and mysterious about the group. The idea was that everyone had gathered for a charitable purpose -- to raise money for a good cause. Many of the women had brought donations for a local food bank, and the pile of canned goods sat in the middle of the crowded living room, a symbol of A Woman's Project's good intentions.
There were two parts of the hook—one, donating money for a charitable cause and two, earning some bucks for oneself. These two were completely unconnected ideas, but for DeJoy, it was a double advantage. These two parts merged to form a persuasive and tantalizing fantasy.
So DeJoy got permission from her husband, borrowed $5000 from bank and deposited it. Though she had to pay her debts off, she felt relieved by the fact of the advantageous money offered, with which, she may be able to close her transactions and also hire a private nurse for her mother.
Instead, within a week, things began falling apart. The newspaper read, “The gifting circle--an illegal pyramid scheme”. Terrified and frantic, DeJoy called the woman to whom she had deposited her money. “I don’t have it”, was the reply. Her friends’ reply was "just as mean and cold and heartless as could be".
So all the hard earned money of DeJoy and 7 other people of the circle was spent for the company boss’ "necessities" like a new car and a Caribbean cruise!
Soon she began victim for her debts. Her mother’s condition worsened and eventually, she died. Her husband tried to hang on to the antiques business while she took a job in a bakery -- on top of teaching art, weeding gardens and cleaning houses, almost anything to catch up on her bills.
These Pyramid schemes have been there for a long time. Till these kind of people are there, the gulliable persons will always survive. In 1920’s there was an Italian-American called Charles Ponzi. He promised an eye-popping 400 percent interest on the cash that the Boston residents "invested" with him. Before he was arrested for subsequent fraudulence, he had managed a whopping $15 million from the people!! But unfortunately, it seems that Ponzi’s spirit is still existing in the world..
The people who get affected are not only the poor and financially naïve, but also some intelligent ones. While DeJoy was running a business, another lady, Holly DeIaco, who lost $2,500 to a similar scheme, has had a master's degree. It was an even worst case, as Holly started writing a book on the worths of these “gifts”!
If those numbers seem big, here's why: By its very nature, a pyramid scheme must grow exponentially as people at the top are going to get paid. “But, this large balloon will burst one time”, alerts Susan Grant, director of the National Fraud Information Center/Internet Fraud Watch. “Also, nine out of ten people will get affected from these”, she insists.
Some people may be fortunate to get their money back, but most of them are not. Also, it seems, women are the people who are most affected by these kinds of schemes, due to the seductive kind of speeches given to them.
DeJoy, then got back $1000 from the Maine authorities who caught the illegal women. Whatever happens, she had claimed at least a modicum of revenge. She was heartened by the response from other women in her area. "It was nice to have people come out and say, 'Yeah, we almost did it. You weren't a complete nitwit.' "
So, if someone is cheated in these kinds of things, don’t be embarrassed. Be bold and speak up. And for averting these kinds of problems:
Ø When you have to send money to make money, think about it: If someone really owed you thousands but needed you to pay some up-front fees, why wouldn't he just deduct the fees from your check?
Ø Do not respond to any e-mails asking for your personal information, however formal, they may look, and never click on a link from an e-mail sender you don't know.
Ø If it sounds too good to be true, it really is. Some people may get benefits, but you may not. Think about it, before any investments.
Ø The only time you may invest is when you initiate a call and you completely know the worth of the organization.
`