Recently Google banned essay writing companies from advertising on Adwords. College students struggling to complete term papers on their own pay hundreds of dollars to these internet companies for completed work.
I was suprised to find that Google still allows illegal ponzi schemes to advertise with them. HYIPs, an acronym for High Yield Investment Program, is actually a simple ponzi scheme where older members are paid out on the pay ins of newer members. Its kind of like the US’s social security program except one is illegal and the other is not!
Next I checked Yahoo, they too allow these cons to perpetrate. To Microsoft’s credit, when searching HYIP ads were displayed however they directed to sites like ebay and less harmful paid surveys.
It does not take a genius to understand these web sites are scams. Some may first appear “legit” but all you have to do is take a look at their claimed returns. This is easy, common sense stuff. 22% a day? Yeah, I don’t think so.
Consider this excerpt from Wikipedia’s entry on HYIPs — “As a comparison with a typical 1% per day claim, Warren Buffett, one of the world’s most successful investors, made around 30% per year during his most successful period; that is on average, less than 0.1% per day. As the claimed returns of 1% per day are extremely unlikely to be produced legitimately, all HYIPs are therefore likely to be Ponzi schemes, and so most investors will in due course lose their money.”
Still don’t believe me? Do this search on Google — hyip site:*.gov This will give you a list of all of the documents US government web sites have concerning HYIP scams — and thats exactly what they consider them. You’ve got some reading to do.
I decided to take some screenshots to show you exactly is going on. The first is from Google.com, searching “hyip.” Click to enlarge it to full size.
The first ad is a little wierd. It includes GE’s logo on the page and only claims a 10% return. Perhaps legit? What really throughs me off is the ad copy “Tired of 3-4% Physicians go to work and I get Paid. I like that!” I don’t know about you, but that should send up the scam red flag — oh, and the domain is registered to some Jason Lavin at Golden State Communications through GoDaddy.
Below is a screenshot from another site that showed up on Google when searching “hyip.” The site is hyip-multiply.com and is listed as registered to Elizabeth Tyler at 5426 Rosecrans Lawndale, CA (could be fake whois, no clue.)
(run the numbers on these, I find it pretty hard to believe anyone can deliver me $22 million tommorow if I pay them $90,000 today)
Yahoo’s results were even more obvious that they were scams.
The #1 result was “E-Gold Investment Programs” claiming a 22%-49% daily profit. It mentioned forex investments so I wanted to make sure that it just wasn’t some forex program entrepreneur cashing in on a hot search term.
It didn’t look like it. A screen capture posted below, from their FAQ — http://www.egoldinvestment.org/faq.php — specifically says “you will earn a total of 220% divided into 10 payments of 22% daily” That is definately a claim, not an alleged possible return that top FOREX investors make.
HYIPs are very, very profitable for their owners. Many of their users do understand its a pyramid scheme. The attitude is that as long as I get in early enough, and re-invest my “earnings” I really don’t have much to lose. Thus, HYIPs continue to thrive. But, being a pyramid scheme eventually the smart users pull all their money out and move on. Then the party ends for every on left inside.
This is not a questionable or legal grey area — it is illegal! By allowing these sites to operate on their networks Google and Yahoo are hurting their own reputations and damaging their brands. This carries through to others who choose to advertise on the sites.
One of the screenshots above is from a site asking users to deposit up to $90,000 at once. If someone did that, and lost all of the money, how do you think that would change their opinion of Google or their trust perception of other companies advertising on Google?
Has either Yahoo or Google been too busy to notice the HYIP advertisers? For Google, certainly they spent some time and thought before purging essay writers from the system. Considering that Google and Yahoo will delete your Adwords/Yahoo Search Marketing ads for something as silly as a typo I consider it outrageous that they will allow ads to run claiming to deliver 22% daily returns.