From the SEC website:

“Auto-Surfing”: What You Need to Know

In the world of marketing, people often get compensated — with cash or free products and services— for doing fairly easy things, like sampling new ice-cream flavors, filling out surveys, or allowing a firm to monitor the television shows you watch or the websites you visit.  While some “money for nothing” opportunities may be perfectly legitimate, others can turn out to be frauds.

“Auto-surfing” is a form of online advertising that purportedly generates advertising revenue for companies that want to increase traffic to their websites.  The premise behind auto-surfing is that companies that advertise on the Internet are willing to pay to increase traffic to their web sites.  These companies hire an auto-surf firm or “host,” which in turn pays individual web surfers to view certain websites on an automatically rotating basis.  The more sites the individual visits, the more money he or she stands to earn.

While auto-surfing may sound easy and appealing — and risk-free — there can be a hitch.  Some auto-surf programs require their surfers to pay to participate, although perhaps not initially.  When you first sign up to auto-surf, the firm might assign a limited number of sites for you to visit and pay you accordingly.  Once you’ve made a modest amount of money, the firm might encourage — or even require — you to purchase a “membership” so that you can maximize your earnings.  The program will promise high — often double or triple digit — returns on your investment in the program, often within days or weeks of joining.

The line you’ll hear is that the more you click, the more you collect.  But the reality is that any scheme that requires you to pay to participate — and promises handsome rewards in no time at all for little to no effort on your part — bears many of the hallmarks of a “Ponzi” or pyramid scheme.  These schemes look deceptively legitimate because the fraudsters behind them typically use money coming in from new recruits to pay off early stage investors.  But eventually the pyramid will collapse when it gets too big.  It’s simply not possible to “rob-Peter-to-pay-Paul” forever.

The SEC warns investors to be wary of any sort of “get rich scheme quick” scheme — and to be especially leery of opportunities that require you to pay to play.  Before you pay a dime to make extra cash in your spare time, be sure to do a little due diligence:

• If it sounds too good to be true, it probably is. Compare promised yields with current returns on well-known stock indexes.  Any investment opportunity that claims you’ll get substantially more could be highly risky — and that means you might lose money.

• Check out the company before you invest. Contact the secretary of state where the company is incorporated to find out whether the company is a corporation in good standing.  Also call your state securities regulator to see whether the company, its officers, or the promoters of the opportunity have a history of complaints or fraud.  If a supposedly upright business lists only a P.O. box, you’ll want to do a lot of work before sending your money!

• Steer Clear of Testimonials. Watch out if the company’s promotional materials, contain “testimonials” from supposedly satisfied customers, especially if all the “testimonials” are full of praise.

• “Guaranteed returns” aren’t. Every investment carries some degree of risk, and the level of risk typically correlates with the return you can expect to receive.  Low risk generally means low yields, and high yields typically involve high risk.  If your money is perfectly safe, you’ll most likely get a low return.  High returns represent potential rewards for folks who are willing to take big risks.  Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or “can’t miss.”  Don’t believe it.

For more information on investing wisely and avoiding costly mistakes, please visit the Investor Information section of the SEC’s website at www.sec.gov/investor.shtml.

http://www.sec.gov/investor/pubs/autosurf.htm

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