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{{EngvarB|date=January 2014}}
{{Use dmy dates|date=January 2014}}
A '''matrix scheme''' (also known as a '''matrix sale''' or '''site''', and as a '''hellevator''', '''excavator''' or '''ladder scheme''') is a [[business model]] involving the exchange of money for a certain product with a side bonus of being added to a waiting list for a product of greater value than the amount given.<ref name=oftpress>{{cite web|url=http://www.oft.gov.uk/news/press/2005/161-05 |title=Matrix Website Scheme stopped by Office of Fair Trading |
==History==
The first known matrix scheme is widely believed to be EZExpo.com, which started the popularity of matrix schemes in 2002.<ref name =msn1/> By 2003 more than 200 matrix schemes were in operation, including one which had the same owner as the payment processor [[StormPay]] (TymGlobal). Subsequently, both TymGlobal and StormPay were accused of running an illegal Ponzi scheme.<ref name = leaf>{{cite web | url = https://pixyrs.com/mlm-software-development.php| archive-url = https://web.archive.org/web/20180210194900/http://www.pixyrs.com/mlm-software-development.php| url-status = dead| archive-date = 10 February 2018| title = mlm business |
==Operation==
The operation of matrix schemes varies, though they often operate similarly to pyramid or Ponzi schemes.<ref name =msn2>{{cite web | url = http://www.nbcnews.com/id/3078976 | title=$150 for a plasma TV? A bad bet |
In many cases, the token product alone could not be reasonably sold for the price listed, and as such legal experts claim that, regardless of what is said, the real product being sold is the "reward" in question in those situations. In these cases, the operator could be charged with running a gambling game or failing to supply ordered products. Steven A. Richards, a lawyer who represents [[multi-level marketing|multi-level marketing (MLM)]] companies for Grimes & Reese in Idaho Falls, Idaho, has stated that often there are no clear legal tests for Ponzi schemes. But if the product sold has no value or very little value, and consumers wouldn't buy it without the attached gift, the scheme probably runs afoul of federal and state laws.<ref name = msn2/>
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It is possible to see that as arrival rates rise towards service rates, the total waiting time (T) and mean number of customers in the system (N) will move towards infinity.<ref name =oftpress2>{{cite web | url=http://www.eventhelix.com/RealtimeMantra/CongestionControl/m_m_1_queue.htm
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==Legality==
Currently there are no laws specifically naming matrix schemes illegal in the US. However, the US [[Federal Trade Commission]] has issued warnings to the public about these sites. Additionally, the US [[Federal Trade Commission]] and the UK [[Trading Standards]] have issued warnings to the public regarding the ease with which these models can be manipulated for fraudulent purposes. Many of the original matrix sites, including EZExpo.com, are no longer in operation; some of them closed down while defending civil lawsuits. In 2003 EZExpo and several payment processors were sued in the civil courts for running an illegal lottery in the state of California, with the payment processors abetting the scam.<ref>{{cite web | url =http://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=0&doc_id=371626 | title = California Courts – Appelate Court Case Information -Docket Entries|
In the UK, the Office of Fair Trading has declared some of them to be illegal. On 1 July 2005, two matrix sites, pulsematrix.com and phones4everyone (themobilematrix.com), were declared to be running a form of illegal lottery. These two sites promptly closed down as part of a settlement agreement with the Office of Fair Trading (OFT). Other similar matrix sites also used this decision to close down their sites. A few UK matrix sites carried on by utilising contractual law to trade legally, with one major site carrying on until May 2006 when it was sold to a company in Denmark. In the UK there is no specific law against matrix sites.
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