Matrix Scams: the new pyramid scheme

A new form of Pyramid Scheme, dubbed “Matrix Schemes”, has apparently been targeting teens in non-existent “free gift” offer.

The scheme operates by asking someone to buy a low-cost low-value item, in order to qualify for a free larger quality product. For example, such a scheme might encourage the purchase of a CD-ROM of ringtunes, in order to get a free iPod.

The problem comes in that the “gifts” are only sent out after a specific number of people have joined and paid their money. For example, someone who is hundredth in a list that requires 50 new recruits per gift would not reach the top and receive their prize until 5,000 people had joined and shelled out ��20 each.

According the Registers report, Punters warned over ‘matrix’ web scam, the Office of Fair Trading stated:

“The nature of the schemes means that the number of members who are waiting for their ‘free gift’ will always far exceed the number of ‘free gifts’ actually awarded. The further down the waiting list you join, the less your chances of ever receiving your ‘free gift’.”

The Register reports that in August, UK company Liquorice Mix Ltd, was closed down for running a matrix scheme, after a DTI investigation.