Don't Get Rolled By Auto-Surfing Schemes
By Brian Mulford
Spring 2007
In the world of marketing, people often get compensated – with cash or free products and services – for doing fairly easy things. While some “money for nothing” opportunities may be perfectly legitimate, others are frauds, plain and simple.
“Auto-surfing” is a form of online advertising that purportedly generates ad revenue for companies that want to increase traffic to their websites. The premise behind auto-surfing is that companies that advertise on the Internet are willing to pay to increase traffic to their websites. These companies hire an auto-surf firm or “host,” which in turn pays individual web surfers to view certain websites on an automatically rotating basis. The more sites an individual visits, the more money he or she stands to earn.
“While auto-surfing may sound easy and appealing – and risk-free – there can be a hitch,” says Lori Schock, Acting Director of the Office of Investor Education and Assistance at the U.S. Securities and Exchange Commission.
Some auto-surf programs require their surfers to pay to participate, although perhaps not initially. When you first sign up to auto-surf, the firm might assign a limited number of sites for you to visit and pay you accordingly. Once you’ve made a modest amount of money, the firm might encourage or even require you to purchase a “membership” so that you can maximize your earnings. The program will promise high – sometimes double- or triple-digit – returns on your investment in the program, often within days or weeks of joining.
The line you’ll hear is, “The more you click, the more you collect.” But the reality is that any scheme that requires you to pay to participate – and promises handsome rewards in no time at all for little to no effort – bears many of the hallmarks of a Ponzi or pyramid scheme.
“These schemes look deceptively legitimate because the fraudsters behind them typically use money coming in from new recruits to pay off early-stage investors,” says Schock.
But eventually the pyramid will collapse when it gets too big. It’s simply not possible to “rob Peter to pay Paul" forever.
Before you pay a dime to make extra cash in your spare time, be sure to conduct due diligence:
If it sounds too good to be true, it probably is. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you’ll get substantially more could be highly risky – and that means you might lose money.
Check out the company before you invest. Contact the secretary of state where the company is incorporated to find out whether it is in good standing. Also call your state securities regulator to see whether the company, its officers or its promoters have a history of complaints or fraud. If a supposedly upright business lists only a P.O. box, do a lot of investigating before sending your money!
Steer clear of testimonials. Watch out if the company’s promotional materials contain “testimonials” from supposedly satisfied customers, especially if all the “testimonials” are full of praise.
There is no such thing as a “guaranteed return.” Every investment carries some degree of risk, and the level of risk typically correlates with the return you can expect to receive. Low risk generally means low yields, and high yields typically involve high risk. If your money is completely safe, you'll most likely get a low return. High returns represent potential rewards for those willing to take big risks. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or “can’t miss.” Don’t believe it.
Be wary of any sort of “get rich quick” scheme – and be especially leery of opportunities that require you to pay to play. For more information about investing wisely and avoiding fraud, check out the “Investor Information” section of the U.S. Securities and Exchange Commission website at www.sec.gov/investor.shtml.
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Brian Mulford is an attorney in the Office of Investor Education and Assistance at the U.S. Securities and Exchange Commission. The SEC disclaims responsibility for any private publication or statement of any employee or Commissioner. This article expresses the author’s view and does not necessarily reflect those of the SEC, the Commissioners or other members of the staff.