Have you ever been asked to participate in a Chain Letter Guaranteed to earn you big $$$ with one small investment?

"Don't waste your money," warns the U.S. Postal Inspection Service. Chain letters are a form of unauthorized lottery and may violate federal mail fraud laws, says the Postal Service. The same three elements that apply to unauthorized lotteries (payment, prize, and chance) also make these schemes illegal.

Why They Don't Work
People lose Hundreds of Dollars every year through these schemes. The promise that all participants in a chain letter will be winners is mathematically impossible. The first investor in the chain may receive some money, but later participants rarely even get their original investment back.

A typical scheme may require you to mail the chain letter, along with a specified amount of money to six people, each of whom must then mail letters to six more people, and so on. But look at the chart . . . You can see that more participants are required than there are people in the entire world!

Variation On A Theme
Someone offers you a painless way to make money. You invest a certain amount and solicit others, and so on—like a chain letter. This is a Pyramid Scheme. Sometimes the original investors are paid a small dividend, but when the pyramid crashes—and it always does—everyone loses. Except the person at the top who has just skimmed off everyone's money and never invested it.

Number of Participants, Number of Mailings
 1 = 6
 2 = 36
 3 = 216
 4 = 1296
 5 = 7776
 6 = 46656
 7 = 279936
 8 = 1679616
 9 = 10077696
 10=60466176
 11=362797056
 12=2176782336
 13=13060694016

U.S. Population: Almost 300 million
World Population: Over 4 Billion
Source: National Security Institute