Financial Wisdom

How to Spot a Scam – A Guide (Part 2)

In How to Spat a Scam – A Guide (Part 1) I discussed different ways to make it easier to spot online scams. A fun topic, and serious problem, no doubt.

Now I will discuss some intriguing money-making promises I have come across on the internet lately that are potentially enticing. Are they scams or not? I will discuss each and make a final verdict.

The Yuwie Craze

Image courtesy of Associated Content

I’ve had a number of friends and colleagues sign up for Yuwie, which is a brand-new social networking site with a twist. It actually pays it’s users. All you have to do is sign up, start making connections, send out referrals, and the site will pay you based on the number of page views and referrals you get.

Other than that, it doesn’t appear to be any different from any other social networking site. It’s got more ads than myspace. It doesn’t offer anything else in terms of functionality that other social networking sites already have. The only perk it offers is that it “pays it’s users.”

Apparently someone had the great idea that social networking was the wave of the future and if they offered an incentive to sign up, they could also rake in some of the quote “20 million per month of ad revenue” that myspace enjoys. How does this affect the user? How much can you expect to make?

I’ll give you a simple answer: A few bucks. Good luck making more than that. Here is why:

It is a pyramid. Remember my discussion in part 1 of this guide about the mathematical inevitabilities of pyramids? They collapse. Of course, that’s not entirely fair to state about Yuwie, as it will not collapse like most pyramids. This is because (according to James Blackshaw, who was helpful in providing some very useful information and insight on this subject) the top level of users will already turn a decent profit. This means that those who were there FIRST will reap the profits while everyone who has signed up since that date will be gathering the scraps below. That means everybody who has signed up except probably the first very few users (at the top level) or one extremely well-connected person.

Most pyramids collapse because it is not possible for the higher levels to pay the amount promised to the users lower in the chain. That’s almost the case here, but not quite. So Yuwie is NOT scamming it’s users in the traditional sense. It will pay you a few cents if you waste time on it. It’s just that the payouts are going to be so low that it isn’t even worth signing up. For more information on Yuwie (and the math behind it), check this link.

Bottom Line: Yuwie isn’t a scam (only because it is free to sign up), but it’s as close to being a scam without technically being one as you can possibly get.

The Dream Job

It’s hard enough searching for valid work when unemployed, especially when you aren’t exactly looking forward to another dreadful dead-end office job. But one has to make a living, right? It gets tougher. Now one has to worry about job offers that are too good to be true!

Imagine getting the following letter in your e-mail’s inbox from careerbuilder:


This is in reference to your resume posted on web. Currently our client has several openings. If you are currently looking for change of assignment, please email your resume ASAP to along with the expected compensation package and contact details. Feel free to call me at (xxx) xxx – 9599 to discuss about these opportunities. xxxxxx is preferred (Tier I) vendor several other major clients (xxxx, xxxxx, xxx, xxxx, xxxxx etc.). To know us a little better, please visit us at

Please send me your Updated Resume, Expected Pay Rate per hour and also best contact numbers.

Functional Title: Administrative Assistant

Target Start Date: 8/10/2007

Estimated Duration: 6 Months (Extendable Contract, W2)

Rate: $27/hr on W2 without benefits

Responsibilities: Responsible for performing general and specific administrative support tasks involved in an engineering environment. Responsibilities may include maintaining records, specifications, drawings and other related documentation. Assisting with the preparation of ECNs (Engineering Change Notices), creation of BOMs, and assisting internal and external customers in various administrative tasks directly related to the work unit¿s primary function. These tasks may include, but not be limited to, assisting with researching information, assisting with analysis, compiling data for reports, coordinating work processes following work unit manager¿s directions and other established administrative procedures. Coordinates work within the work unit and with other work units/departments, both internal and possibly external to the company. May assist in work for one or more professional employees other than the direct supervisor….

Wow. $27 an hour to be an administrative assistant at…. where is this company and what does it do anyway? That should be your first clue that trouble is afoot. They say that they will refer you to their “client” but they haven’t even met you. What is the name of the company?

A quick search on asserts that most administrative assistants do not make $27 per hour.

This is an example of a new type of scam. The bogus job offer. In many ways, these are worse than almost anything else that’s out there. They take advantage of people who are looking for work. People who are already under enough duress. I’d really like to tell the author of these scams which cliff they can jump off, or which eye they can stick which sharp fork into.

What happens if you actually sign up and agree to come in for your interview? Usually they’ll just try to sell you their products at some big convention (or try to get you to do the work for them, which never fits the job description and at a much, much lower rate than what you read online.) This is, if you are lucky.

They may also ask you to do illegal things for them like forwarding bad checks and money orders under the guise of a job, effectively turning you into a money-launderer.

Bottom Line: Bogus job offers like this (with bad misspellings, no specific company and ridiculous pay rates) are sneaky scams in disguise that can actually be dangerous.

Career Builder is so full of these things that it is practically a scam itself, and Monster is getting pretty damn close also.

I’ll Buy Your Furniture

Use Craig’s List with gusto, but tread very lightly. While they now do a great job of warning you on every page about how scammers take advantage of people who are trying to unload items or get jobs on the site, sometimes bad people still lurk, looking for a quick steal.

758006_red_rocking_chairLet’s say that you are moving soon, and trying to sell your $1,000 rocking chair (hey, some of them are quite valuable!) You post an ad, and to your delight, someone replies very quickly. They’ll buy your furniture and have someone come and pick it up for you right from your home.

There is only one catch: they live in another state and will forward you a check for the rocking chair. On top of this, they will overpay you as an “act of good faith” and you can return the difference later. Of course, what you don’t realize is that if you go through with this the check will bounce (you could get in huge trouble for trying to cash a fake check) and you will lose the rocking chair anyway. Good luck trying to contact the scammer after the deed has been done. By this point, they have disappeared with your beautiful rocking chair. No more rocking for you.

This is why Craigs List warns you to only deal with buyers face to face. And who would just go and buy something from an independent dealer like yourself from another state without even seeing the item? They go buy the same thing locally. As always, questioning a person’s motives comes in handy.

Bottom Line: Don’t sell expensive things online unless you trust the source and it is a secure transaction.

Final Thoughts

If you are tempted to go through with something that seems too good to be true, read my guide first (or go to for help. You’ll feel a lot better that you did, and be none worse for the wear.

Remember: you aren’t stupid if you fall for a scam. There is no shame in being duped by a con artist. It happens to just about everyone at some point, and if it happens to you, don’t feel bad. Chances are good if you take a healthy attitude about it (well, I’ll be more careful next time) instead of an unhealthy one (I am stupid) you are less likely to fall for one in the future.

Good luck!

“Yuwie” image courtesy of Associated Content


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