That popular ‘book exchange’ on Facebook is terrible, deceptive, and probably illegal

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From Business Insider:

Have you seen a post from a Facebook friend asking you to participate in a book exchange? The system is basically an old-school fraudulent chain letter. It won’t work the way you probably expect, and it might be illegal.Here’s the text from a typical post:

Hello all! Calling out to all of you who are bookworms, book lovers, and bibliophiles (like myself) from all walks of life. We need at least 6 people to participate in a book exchange (but can be more). You can be anywhere in the world. The further we get, the better! All you have to do is buy one of your favorite books and send it to one person. You will receive approximately 36 books back! If you are interested like this status so I can fill you in on all the details!

Sounds harmless, right?

Here’s the problem.

Chains like this — with every new member sending books or gifts or money backward to the last people on the chain— are basically efficient systems for enriching a small group of people at the expense of a much larger group. In fact, no matter how big the chain grows, it’s mathematically impossible for more people to get free stuff than people who spend money without getting anything at all.

. . . .

But because each link on the chain has to include more people than the last one for the chain to work, there will always be this massive, expanding group of people who have bought books and sent them up the chain that far outweighs the group of people who have received books. Eventually, the chain will run out of steam with a small group of people at the middle who’ve managed to hoard lots of books and a giant group of people who eagerly signed up but ultimately spent money they’ll never get back.

Link to the rest at Business Insider and thanks to DM for the tip.

If you’re playing a poker game and you look around the table and can’t tell who the sucker is, it’s you.

~ Paul Newman