Feeds

Punters warned over 'matrix' web scam

Cheap trick turns sour

  • alert
  • submit to reddit

High performance access to file storage

UK consumers are being warned to be on their guard against a new scam offering "free" electronic gadgets in return for buying low-value products over the web.

Described as "matrix schemes", shoppers are promised the chance of getting a valuable "free gift" - such as a mobile phone, ipod, or PDA - if they cough up, say, £20 for a mobile phone signal booster or a CD-ROM containing ringtones and games.

However, the Office of Fair Trading (OFT) warns that these are just scams with consumers given little or no chance of getting their hands on these items. In particular, it seems that teenagers are being sucked into these too-good-to-be true offers.

Said OFT chairman John Vickers: "These waiting-list schemes require many more people to join than will ever receive their 'free gift'. The schemes will ultimately collapse and the vast majority of people who have joined will lose out. Don't be misled into buying by the remote prospect of a 'free gift'."

The scams work like this: customers buy a low value item and are placed on a waiting list to receive their chosen "free gift". The matrix works by sending the person at the top of the list their "free gift" but only after a prescribed number of new recruits has shelled out for their £20 item. Once the freebie has been sent, the remaining people on the list move up one place and only move up again once enough people have been suckered into buying the £20 dud prize.

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.

Said the OFT: "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'."

In August, UK company Liquorice Mix Ltd was "wound up in the public interest" for running a matrix scheme, after a DTI investigation. ®

Related stories

OFT checks out online grocers over price gouging claims
UK govt takes iTunes gripe to Europe
Dodgy UK websites terminated
OFT fingers Bristol man over misleading data protection ad

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Nokia offers 'voluntary retirement' to 6,000+ Indian employees
India's 'predictability and stability' cited as mobe-maker's tax payment deadline nears
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
Adrian Mole author Sue Townsend dies at 68
RIP Blighty's best-selling author of the 1980s
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.