Ray’s Blog at RedHotClicks.com

They’ve been around for a while now and it seems they just won’t go away.  I’m talking about the so-called ”Randomizer” programs. 

In reality, Randomizers are nothing more than a variation of the classic Ponzi scheme, which of course makes them illegal.   They sell no product.  That should be an immediate red flag.  Their means of bringing money into the program is by recruitment of new members.  The person at the top is guaranteed a payout but the other members aren’t.  Their primary (and typically only) means of funding is from the members themselves, not by sales to people outside the membership.  By legal definition, in the USA at least, that is a Ponzi scheme. 

In some cases, there is also a lottery associated with these programs.  Of course, they use some convoluted language to say it isn’t really a lottery, but all you have to do is look at how these programs work.  Lotteries are legal, but only if you are licensed and officially sanctioned to do run one. 

When a new member joins, usually for $10-$25, a part of that immediately goes to the program owner; he or she can’t lose, except perhaps legally when he/she winds up being indicted for fraud.  All too often however, the amounts involved aren’t at a threshold for the Justice Department to investigate. 

Another part of the cut goes to the person who referred the new member, which makes the referrer an accessory to felony.  And finally, a part (typically $5) goes into the “pool”. Each time a new member joins; someone within the program is randomly selected to receive the $5 pool allotment. 

There is just no other way to say this, so let me be blunt.  The people who believe they are going to make money through this system obviously have no understanding of basic mathematics.  Not only are the odds against you, those odds continue to decline as the program grows. 

The math is painfully simple. If there are 100 people in the program and 5 new members join, your odds of being randomly selected for the $5 are 1 in 20 (5/100 = 0.05%, which translates to 1 in 20). When the membership increases to 500 and 5 new people join, your odds of winning one of the randomly selected pool slots drops to 1 in 100 (5/500 = 0.01%).  When the membership reaches 1,000 members, the odds drop to 1 in 200.  If the membership reaches 10,000 and 5 new members join, your odds drop to a rather unattractive 1 in 2,000.  That’s the math.

All Ponzi schemes are beset with a basic conundrum, Randomizers included.  These schemes need additional members in order to pay out to the current members.  But as those additional members join, your odds of a payout decrease dramatically.  Eventually, the scheme collapses due to the sheer weight of its increased membership.  When that happens, the vast majority of people wind up with less money (if any) than they started with.  The originator folds his tent and walks away with a bundle.   

 Of course, you don’t have to rely solely on the lottery.  You also receive a “commission” for bringing new members into the program.  That means, of course, that in order to make money, you are now in a position of having to recruit people for what is essentially an illegal activity. For those people who are considering joining one of these nefarious programs, I suggest a 2-step detox program: 1) go to your local community college and take a fundamental mathematics course, and 2), make an appointment with a neurosurgeon to have your head examined. 

Randomizers are specifically banned from redhotclicks.com.  Diligent owners of other traffic generation sites (traffic exchanges, safelists, etc.) also ban these scams.  Unfortunately, this is not always the case.  As a result, these scams appear in site promotion vehicles all over the Internet.

To anyone who is considering joining one of these schemes, I would strongly advise you to run far, far away as quickly as you can. 

-Ray

http://www.redhotclicks.com