Blatant Scams Way Too Many People Fall For
Everybody's got troubles. It doesn't matter if you're President of the United States or a kid in high school — human nature requires that something be bothering you. And unfortunately, for every bother, there's someone looking to make money off it. True, sometimes problems inspire great and useful innovations, but all too often — especially when it comes to issues of the body or wallet — the innovation is a scam aimed at the naive and desperate. Here are a few blatant scams that way too many people fell (and in some cases, still fall) for.
"Multi-level marketing"
Multi-level marketing is a system that relies upon an ever-increasing pool of salespeople to deliver on its promises. Basically, you're recruited into a company to sell a product. When you sell the product, you receive a cut, and are offered bonuses for hitting sales targets. However, you don't start to make any "real money" until you hire your own salespeople, because then you receive a cut of their sales too. Sound familiar? It should, since this is a (just barely legal) type of pyramid scheme. The kind people go to jail over.
Quixtar is a company that is famous for its "multi-level marketing" structure, and as the internet face of Amway (now rebranded as Amway North America), it theoretically offered people the opportunity to start a business and make a lot of money. Unfortunately, according to a 2004 investigation by NBC News, most people who get sucked in are lucky to escape with a meager profit, because as part of the recruitment pitch they also sell you books, DVDs, and tickets to seminars to (theoretically, again) help you sell more product to your customers—except the real products are the books, DVDs, and seminars, and you are the customer. In fact, despite offering the dream of freedom from the 9-to-5 grind, according to Quixtar's own numbers, the average ANNUAL income of a Quixtar distributor was a mere $1400 at the time of the NBC investigation. Despite the rebrand, and a decade to become better, that figure hasn't increased much. According to Amway's own promotional video, the current average monthly income of an "active" so-called "independent business owner" is a mere $183 per month, or $2196 per year. Clearly a gold mine.
Tapeworms: a "personal trainer" with a difference
It is the dream of everyone struggling with their weight: to find a solution that requires no effort. Just keep eating what you want and the magic pill/product/potion will make the pounds drop away. And in some ways, that product already exists, and has actually been on the market for over a hundred years ... but you might not like it very much. It's your own special little helper, who prevents you from absorbing the calories and nutrients from, oh, everything you eat, and then you inevitably lose weight. But there's a catch: your "helper" is a dangerous, 30-foot-long tapeworm, and it could kill you.
Understandably, this so-called diet is illegal in the United States, but where there's money there's a way, so clinics have opened up across the border in Mexico, offering to infest your intestine for a "very reasonable" fee of $1500. It's amazing that people would rather drop several months' rent to risk their lives, just to avoid the work of exercising and eating sensibly. This diet is almost literally snake oil, except nobody bothered to do the extra processing, and just decided to sell the snake instead.
"The Greatest Vitamin in the World"
"The Greatest Vitamin in the World" was a double scam, because it scammed both the people who bought it, and the people who sold it. Don Lapre was the mastermind behind "TGVITW" (as the cool kids called it), who made all sorts of wild claims that were challenged by the FDA, including suggesting it as a treatment for diabetes and cancer. Despite its "red flag" of a name, you can understand why someone might have given it a try, with that claim ringing in their ears.
What's less understandable is the people that were recruited to sell it. People paid $35 for the privilege of becoming "independent advertisers," and would be provided with their own website (and sold extra marketing material), which would supposedly do all the hard work for them. All they needed to do was direct people to their website, and then sit back and watch the money roll in. Bonuses of $1000 were available every time they could convince 20 new people to try the product, which sounds great until you learn that 20 sales of "TGVITW" didn't even add up to $1000, which probably should have been a clue.
Another issue is the sheer number of competing websites trying to sell the same product. There's a reason successful online companies tend to have a single website with many products: because the other way around doesn't actually work. Nevertheless, the scam convinced over 220,000 people to become "independent advertisers," and they spent over $50 million in the process. Needless to say, Lapre was subsequently arrested on various charges, but chose to kill himself in his cell two days before he was scheduled to stand trial. So, in this case at least, exposure to "TGVITW" came with fatal consequences.
Green bean coffee extract
Honestly, any product that appears on Dr. Oz should probably come with a warning, and that was never more true than with green coffee bean extract. Presented on the daytime show as a new miracle weight loss drug, it promised dramatic weight loss without any exercise or change of diet, and even came backed by a clinical study that appeared to support the claims. It was even advertised on fake news websites set up to deliberately mislead the public. Unfortunately for Dr. Oz, investigations later proved the study to be effectively worthless, the product ineffective (and even potentially harmful), and the claims fraudulent. The brains behind the scam were ordered by the FTC to repay $9 million, and Dr. Oz found himself in front of a Senate hearing where he was all but completely exposed and humiliated.
Admittedly, this was a pretty well-executed scam, which checked enough of the right boxes to snag the interest of otherwise-sensible consumers. But that doesn't change the fact that, no matter how many claims a hack like Dr. Oz spouts about the latest miracle, if it sounds too perfect to work (especially if the word "miracle" is used anywhere in the pitch), it probably doesn't.
Lottery scams galore
It doesn't matter where you live — you have probably received a letter or email about you just won the lottery or some sweepstakes. Hooray! There's a big catch though, because in all likelihood you didn't enter the lottery they're claiming you won. Often, the lottery is from a part of the country you don't live in (or even another country, period), and thus you couldn't even legally play it, let alone win. Nevertheless, enough people are either hopeless optimists, or play so much lottery they can't keep track of them all, because these notices keep on coming, and they want our processing fees.
However, as the New York Lottery appropriately points out on their website, "The New York Lottery does not know who the winners are until they come forward with a winning ticket. We do not notify YOU, you notify US." Admittedly, it would be nice if you could automatically enter lotteries, not pay anything, and then get automatically notified when you win, but even then, it would probably still turn out to be a scam. Most of the easiest roads are.