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Why Derren Brown's horse scam was nothing new

publication date: Feb 13, 2008
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Hi

I finally managed to watch Derren Brown's The
System last night . . .

I had a hunch what the secret was and within a few
minutes of the programme I had it sussed. Now, I
am not showing off my powers of deduction or
lateral thinking here. I had seen it all before, albeit in a
slight different form as I will show you in a
moment . . .

As we all know, there's no such thing as a surefire
guaranteed system to predict which horse is going
to win. And as the show explained, Derren Brown
had to start with over 7,000 people, splitting them
into 6 groups and sending each group the name of
one horse from a 6 horse race.

Naturally, 5 horses lost and one horse won.

So one group were naturally delighted, while the
other 5 groups lost.

The winning group was then split into 6 and the
same process repeated again and again until I think
by the 5th race there were just 6 people left, all of
whom had had a seemingly odds-defying winning
streak.

By the time it came to the last member of the
group, she was so certain that the system worked
that she begged and borrowed as much money as
she could to place on the 'dead cert'.

Of course, as this was a TV programme, everyone
was offered a refund on the money they had
gambled. And as a nice twist, despite appearing to
put money on a horse that lost in the final race,
Derren Brown somehow managed to switch betting
slips and the last punter turned her £4,000 stake
into shed loads of cash!

But this system doesn't usually have a happy
ending like this . . .

In fact this system is actually a version of a classic
direct mail scam that has been around for years,
although it is interesting to note that I haven't seen
it circulated for at last the last 8 years.

The scam is not exclusively applied to horses, as
the numbers involved are huge. To make it more
manageable, it is also used on games where there
are only 2 or 3 outcomes (if you count a draw).
Think football, baseball, tennis, basketball etc.

The scam comes as the punters on the winning side
are asked to send in their money so that the
scamster can place the bet on their behalf. As soon
as the big money is sent in, he runs off without
placing the bet!

What can you learn from this?

First, don't fall for this scam. I can guarantee that
after that programme some of the more dubious
outfits will be scheming to resurrect the scheme in
one form or another. If in doubt, send it to me and I
can confirm if it is a con or not.

Try and see the bigger picture - the trick with The
System was that the victims only had a limited
view and were basing their decisions on their own
personal experience. Always try to stand back from
an opportunity and look at it rationally. Is it too
good to be true? Are there claims that the returns
are guaranteed?

You will find that similar principles exploited by
certain MLM/network marketing schemes where it
seems that everyone is making money. But all you
are seeing are those who have joined the
opportunity early and are benefiting from all the
other punters piling in and filling heir downline.

And that brings me nicely to something I am
covering in the Feb issue of What Really makes
Money.

Simon 'Megawealth' Johansson is back (again)
with yet another over-hyped and seriously dubious
scheme. Now you may remember Simon from the
ill-fated Mega Wealth Academy, The Property
Automated System and The Emerald Passport.

Well, his new venture is The Over Night Cash
System. As far as I know this is not his system, but
one that he is promoting heavily. It's interesting to
see the use of Youtube videos clips to promote his
as well as the more traditional methods. One in
particular made me laugh, where a guy is opening a
FedEx package around Christmas time (the
decorations are in the background) and he takes out
wads of dollars . . .

Check it out here:
http://www.youtube.com/watch?v=-Kgoc9Z-Lgk

So what's so worrying about this? Well the
promotion explains quite explicitly that this is a
'cash gifting' scheme. Back in 2001, a high profile
cash gifting pyramid scheme called 'Women
Empowering Women' lured hundreds of UK
women into parting with £3,000 each in the hope
that they would receive similar multiple cash gifts
back.

Yes, this worked . .  . for a while . .  . and there
were plenty of women who received significant
returns, but inevitably once the new entrants started
to dry up, the pyramid collapsed and many people
were left thousands poorer.

Is this any different? Well, you'll find plenty of
advocates of this system who will do everything
they can to persuade you that it's different and to
shoot down anyone who is sceptical. This is a
classic technique used by many network marketing
schemes and scams - they flood the Internet with
evangelical followers who populate forums and
even buy up keywords or use on Google Adwords
like 'cash gifting scam' to lure sceptics in and then
come up with all manner of persuasive techniques
and explanations to 'prove' that yes, this one is
different.

Don't believe 'em!

There is debate whether 'cash gifting' is illegal or
exploiting a legal loophole, but whatever the
argument, these schemes are never a serious long
term business and in my opinion this one will
eventually crash and burn leaving plenty of people
a lot poorer.

Look, you cannot make money out of thin air.
Money is never generated in a vacuum. Real
businesses require a product or service and a fair
form of exchange. But as far as I can see, there is
absolutely no product in a cash-gifting system, but
merely the promise that by sending money to
others on your upline, those in your downline will
do the same to you . . .

So what else can you find in this month's issue?

There are 2 very exciting blueprints - the first
exploits a little-known law that 70% of small
businesses are breaking. You see, businesses are
now required by Health and Safety rules to have
any portable electrical appliance regularly checked.
And we have come up with a business plan where
you can become what's known as a PAT tester.
The great thing here is you do not need to be an
electrician to do these tests and yet you could be
making from £300 for half a day's work!

The other blueprint is one I came across in a recent
issue of Avril Harper's eBay Confidential -  it is a
relatively little-known new feature called eBay
Classifieds that allows you to bypass eBay's
strict rules and direct people outside o the eBay
auction system so you can sell everything from
affiliate products, ebooks all the way up to high
ticket items like boats and aircraft for a
commission.

I have also decided to share with readers exactly
how to use win-win Joint Ventures deals as a free
and zero risk way to sell your products  . . .
especially information products.

You'll also find my usual biz opp reviews
including one for an affiliate shopping opportunity
called EI42 that only launched last Friday plus I
take a hard look at The Ultimate Entrepreneur Club
. . .

Right, I'm of to see Spamalot this afternoon with
Zac (and Heloise). This is the musical stage
adaptation of Monty Pythons Holy Grail film. I
was a big Python fan in the 1970s (my father's
influence!), so it will be nice to introduce a new
generation to their surreal humour!

Best regards

Nick

PS: Remember to check your emails tomorrow for
news of the very exciting Foolproof Earlybird
strategy!
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