Wouldn’t it be great to get a return of 12 percent on every dollar you invested? Well, there are plenty of websites out there promising that — and more. A couple of weeks ago when I was filling in for Clark Howard on Newstalk 750 WSB, we got a call about 12dailypro.com, asking if the site was for real.

For real? C’mon. Where else can you get a 144 percent return on your cash in 12 days? Depending on how you calculate the numbers, you’re talking about a 3,000 percent return on your cash over the course of a year.

This particular auto-surf site, 12daily pro.com, promised that for every dollar you “invested,” you’d get a 12 percent return on your cash as long as you surfed through at least 12 of their websites each day. So if you put in $100, and surfed 12 websites, you’d have an extra 12 at the end of the day. At the end of 12 days, you’d have $144 in your pot. At that time, you could cash out or allow the money to roll on and upgrade again.

Just taking a quick look online, it seemed to me that there was no way that it could be real. And, I said as much onair — much to the dismay of several 12dailypro.com participants, many of whom have obviously made a whole lot of cash with this autosurf website.

Of course, that’s how Ponzi schemes work. People who get in early always make money.

But to make sure I really understood how this scheme worked, I put my money where my mouth was. I “invested” $300 into 12dailypro.com in order to gain access to some of the restricted parts of the website. I’ve read everything on the site, and everything available on the forums. I still can’t understand how this company makes money. Even doing outside research, looking at other possible ways the site could make money, I couldn’t get the numbers to add up.

Which in my mind meant I was dealing with a classic Ponzi scheme. And sure enough, in the last few days, 12dailypro.com has come to a crashing halt. Stormpay.com, the electronic commerce site that processes payments for 12dailypro.com as well as a handful of other auto-surf websites, froze their accounts (and the other auto-surf companies as well).

There’s a lot of finger-pointing going on right now. 12dailypro.com says Stormpay has their cash. Stormpay sent out a notice that 12dailypro.com is a pyramid scheme and it has frozen accounts. 12dailypro.com says the owner of Stormpay, Steve Gerski (an attorney licensed and in good standing in the state of Tennessee according to the Tennessee Board of Professional Responsibility) said he doesn’t have enough cash to make all the payouts.

It’s hard to know what’s real. The bottom line is that whenever you have a pyramid scheme, eventually you get to a point where you can’t recruit enough new members to pay people higher up. And it all collapses onto itself.

It’s like musical chairs. Eventually the music stops, and somebody is left without a place to sit down. In this case, with more than 300,000 members and a ranking of 325 on Alexa.com, it looks like there are more than a few people who are left looking for a place to sit down.

I’ve got more information to post on the situation. I hope you’ll stay tuned.

Published: Feb 8, 2006