Tuesday, February 12, 2008

iPods as Bait in Ebay Pyramid Scams

The iPod is popular bait for one of the latest and greatest Ebay scams. Do a search for “iPod” and you will pull up a few thousand listings. Many look good but turn out to be inducements to join pyramid style matrix schemes.

Ebay these days to be swamped with such (illegal) schemes. Most appear on the outset to be legitimate buyers clubs. For many it is only on closer observation it becomes obvious that they are nothing more than classic pyramid or :Ponzi” style schemes.

In most cases, buyers respond to a great price on an iPod or other (usually electronic and in demand) gizmo. The buyer is told not to bid on the item, but is instead directed to a third party website which will offer the items as free gifts when products like CDs or eBooks are purchased.

Catch is that buyers only get their free iPod or whatever after more people have signed up. In the tradition of the classic Ponzi scheme, names get moved up the list as new people sign on. Eventually (at least in theory), the buyer gets their freebie.

To speed things up, buyers are encouraged to recruit new members, and Ebay is where the victims go to recruit new members.

EBay spokesman Hani Durzy states that he is unaware of the scams.

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