Check out these consumer fraud images:
MEPs vote in favour of a resolution for labelling of meat in processed foods by country of origin
Image by European Parliament
Meat used as an ingredient in processed foods, such as lasagne, should be labelled by country of origin as is already the case with bovine fresh meat, said MEPs on Wednesday. They call on the European Commission, which published a report on the issue in late 2013, to come up with legislative proposals in order to rebuild consumer confidence in the wake of the horsemeat scandal and other food fraud cases.
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Charles Ponzi Book Cover
Image by MarkGregory007
The cover the book I publish, Charles Ponzi’s autobiography. The cover design is by Aaron Lee, Florida graphics designer. This is the story of the world’s most famous swindler as told in his own words. Over 50 years out of print, and scarce, Ponzi’s autobiography is now available for your reading pleasure. www.amazon.com/Rise-Mr-Ponzi-Charles/dp/0963192442/ref=sr…
A quote from the book by Charles Ponzi about the legitimacy of his postal coupon scheme.
“People must have thought I had discovered the buried treasure of the Incas. Or Alladin’s lamp. If they gave a thought at all to the coupons, they must have got dizzy figuring how many of them I needed to justify what I was doing. In fact, my visible resources were then in excess of ,000,000. Assuming I earned two cents on each coupon, I should have had to handle over 250,000,000 of them! It was absurd. There were not that many in the whole world. There had never been that many. And, it would have taken months to print them!
The Rise of Mr. Ponzi, By Charles Ponzi may be purchased on Amazon.com as a hardbound edition or an e-book. MM
TIPS ON AVOIDING PONZI SCHEMES….
Because of the billion Bernie Madoff investment scandal, Ponzi schemes are receiving lots of news
coverage. However, Ponzi schemes aren’t new; they have been around since the 1800s. With Ponzi frauds regularly surfacing, it is worth your while to know how to recognize one. I’ll also explain the differences and similarities between Ponzi schemes and pyramid schemes.
Ponzi schemes are named after Charles Ponzi, a 1920’s Boston businessman who lured in investors with promises of a 50% return in 45 days if you bought one of his corporate promissory notes. Ponzi told Bostonians he would invest their money in international postal reply coupons, when in fact he didn’t have a real business operation and never intended to invest their money in a legitimate business.
His real plan was to “rob Peter to pay Paul.” He would simply pay investors their monthly interest with money he received from other investors.
With Ponzi schemes, as the number of new investors grow the supply of new investors available to solicit diminishes. Eventually the Ponzi bubble must burst under the pressure of meeting the promised interest payments to its ever-increasing investor base. While some early investors do receive interest payments, the newer investors lose all or most of their money when the scam is exposed. Again, that’s because there is no real business venture to generate legitimate income.
Unfortunately, Ponzi schemes can go on for years without detection. As long as investors receive their monthly interest payments they are happy and they don’t question the legitimacy of the alleged business operation.
Pyramid schemes are not typically investment schemes. They involve multi-level marketing opportunities. An illegal pyramid scheme relies on an organizational structure whereby compensation is derived primarily from recruiting others into the organization, rather than from the sale of goods or services. What differentiates a legal, multi-level marketing program from an illegal one is that a legal one generates profits mainly from the sale of merchandise.
Many illegal pyramids attempt to establish their legitimacy by purporting to sell a product. However, the merchandise or service to be sold is largely ignored. The pyramid scheme functions like a chain letter, and eventually collapses as participants try to recover their initial investment by recruiting more and more new investors from the ever decreasing number of prospects.
Finally, here are red flags of Ponzi and pyramid schemes with tips on how to avoid becoming a victim:
• You are provided with ‘insider’ or ‘secret’ information.
• The investment has an unusually high rate of return.
• You are pressured to invest.
• You are told the investment has no risk.
• You are unable to get regular reports on the status of your investment.
• It sounds too good to be true.
• Be leery of multi-level marketing opportunities that require large start-up costs.
• With multi-level marketing offers, be sure there is an actual product to sell.
• If there is a product, be certain there is a consumer market for the product.
• With multi-level marketing opportunities, be sure the sale of the product is the main focus of the marketing plan, not just bringing in new members.
copyright – Mark Mathosian, retired economic frauds investigator