Chain letters

# Chain letters

Chain letters are illegal. Chain letters are a waste of time. Net sites which do not discourage electronic chain letters risk losing their net connections, as they have the potential for wasting great amounts of bandwidth and disk space.

## What are chain letters?

Chain letters are letters which promise a phenomenal return on a small effort. The simplest form of a chain letter contains a list of x people. You are supposed to send something to the top person on the list. Then you remove the top person on the list, sliding the second person into the top position, add yourself in the bottom position, make y copies of the letter, and mail them to your friends. The promise is that you will eventually receive y**x somethings in return.

## Why do people think chain letters could work?

The reason people are even tempted by these schemes is that the human mind does not have an intuitive view of geometrical progressions. Suppose we presume the chain letter to have a list of five people. You are asked to send one postcard to the person on top of the list, and remail the letter to five friends. You are promised thousands of postcards from all over the world if everyone participates. Your cost: a postcard, five photocopies and envelopes, and six stamps. Not much to risk to see what comes back...

## Why can't chain letters work?

Now let's assume that everyone on the list is honest and just perpetuating the "chain." (After all, these letters do emhpasize being HONEST.) Then if everyone on the list has made five copies, you are one of 5**5 or 3,125 people receiving copies in your "generation" of the letter. So far, the numbers don't seem outlandish. And looking the other way, you stand to get postcards from 3125 people. That doesn't seem impossible either. But view it as the "chain" you're in the middle of, and there will be 5**11 or 48,828,125 people receiving copies in that generation of the letter. If distribution were confined to the United States, there wouldn't be enough people left who hadn't already received a copy for the next generation.

## A brief analysis of the Dave Rhodes chain letter

The Dave Rhodes chain letter is a famous example of electronic chain letter which has appeared several times on the Internet. It has a list of 10 people and suggests you forward the letter to to bulletin boards (not people)! A twist with this letter is that you start to receive money when you get to position 5 on the list. Just assume for this analysis that only the person who posted the message you read was honest (that is, just making copies and passing it along - not in on the beginning). Let's see how the generations go until you could see some results:
``` Copies in	  Your
generation	postion

10	   --
100	   10
1,000	    9
10,000	    8
100,000	    7
1,000,000	    6
10,000,000	    5
```
So by the time you could get any money out of this, the message would have appeared on over 11 milion bulletin boards! Do you think there are that many? Even if we were only talking people, that would be a healthy number. There aren't enough people in the US (let alone bulletin boards) to maintain two more generations.

## Do chain letters take other forms?

The idea of each participant needing to bring in several more to perpetuate a program, sometimes also called a pyramid or Ponzi Scheme, is not confined to letters. In the 1980's, there were Pyramid Clubs, some costing \$1000 to join. I just recently saw a pyramid phone calling scheme. And multi-level marketing (eg, Amway) also has elements of the pyramid, in that more money is to be made by bringing in other sales people than by selling the product yourself.

### Offline

I found surprisingly little on chain letters in print. John Scarne has a reasonable description, story, and analysis in a section called "The Chain-Letter Racket" in
• Scarne, John. Complete Guide to Gambling, Fully Revised, Expanded, Updated edition. New York: Simon and Schuster, 1961, 1974. (pages 803-806)

I guess it is possible to make money legally from chain letters. The Truth About Chain Letters is a book by Dan Squier (often called Dan Squire on the net) which purports to tell you if you can actually "Make \$60,000 in Two Weeks Mailing 600 Letters!" He'll tell you if they're really legal, show you some actual examples, and give you his own personal experience, all for \$15. I finally got this "book" -- \$12 at Barnes & Noble. It's 8 1/2 x 11" on newspaper-quality paper. The content is no better than you can find on this and other web pages on chain letters. The most amusing part was his experience with a chain letter - the reports variety. A brief quote about covers it:

By the end of the fifth week, I was trying to forget my mistake and was wondering how I could LEGITIMATELY earn back my money that I had wasted on this plan.
If you have an offline friend who believes he might get rich through chain letters, it might be worth sending him this if you can get a copy for maybe \$5.

And The Facts About Multi-Level Marketing and Chain Letters by Robert Drake will help you "distinguish between a legitimate opportunity and a rip off" while telling you "the right envelope to use" and "letter openings that draw the reader in" for chain letters. Doesn't sound like he wants to discourage them, does he? I guess I should get a copy of that one too to review here. (Hmmm. Maybe I should charge for access to this page?)

Dick McLeester has been kind enough to provide a list of books he found in Books in Print.

### My opinion of The Report Chain Letter

The author of the above referenced page has provided a link to my Chain Letter page "so you can make your own decision as to the legal, ethical and moral value of this program." Allow me then to make a few comments on the "program" as I read it.

The page discussed here was removed within a week of it's initial appearance on the web. I will leave my comments here, and have obtained the above (edited) copy of the original scheme for educational purposes.

• Boy, does it sound familiar. Hi, My name is John Doe. Only a short time ago, my life was a worse mess than yours, and now I'm living on easy street...
• The program is GUARANTEED! Your guarantee: If step #1 does not work for you, you can repeat it (ie, spam some more people) until it does!
• Check out their own analysis. They pick the numbers, worst case returns, etc. Yet by the end of the analysis of one case, 2 million people are involved. This alone is a significant fraction of all the people on the Internet. If this has been going on for some time, haven't most of the suckers (ahem, likely investors) been used up? How may more must be before you reap the advertised success they claim?
• How come it's \$5 CASH? If I were running a business of this scale, I'd be happy to open a bank account to keep the loads of money in. Are they trying to hide it from the IRS? Or just obscure the trail of who has already been taken?
I'm not a lawyer and these are just my opinions, but when I read "you can sit back and relax, because YOU ARE GOING TO MAKE AT LEAST \$50,000. Mathematically it is a proven guarantee." and see the mathematics they provide or imply, I see fraud. And when they're using the USPS to perpetuate that fraud, then it looks like mail fraud to me.

If anyone is not completely discouraged by this and goes ahead and orders these "reports," please do a public service and let me know if you get anything and if you do, mail me a copy.

In summary, if I was walking down the street and stepped in something that looked like this program, I'd wipe my shoe very carefully.

Coincidentally, Rolf's MMF Hall of Humiliation looked at a very similar scheme in more depth in the MMF Of The Week for March 9, 1997.

http://www.cs.rutgers.edu/~watrous/chain-letters.html