Straight from the US Postal Inspection Service:
A chain letter is a "get rich quick" scheme that promises that your
mail box will soon be stuffed full of cash if you decide to
participate. You're told you can make thousands of dollars every
month if you follow the detailed instructions in the letter.
A typical chain letter includes names and addresses of several
individuals whom you may or may not know. You are instructed to send
a certain amount of money--usually $5--to the person at the top of
the list, and then eliminate that name and add yours to the bottom.
You are then instructed to mail copies of the letter to a few more
individuals who will hopefully repeat the entire process. The letter
promises that if they follow the same procedure, your name will
gradually move to the top of the list and you'll receive money --
lots of it.
There's at least one problem with chain letters. They're illegal if
they request money or other items of value and promise a substantial
return to the participants. Chain letters are a form of gambling,
and sending them through the mail (or delivering them in person or
by computer, but mailing money to participate) violates Title 18,
United States Code, Section 1302, the Postal Lottery Statute. (Chain
letters that ask for items of minor value, like picture postcards or
recipes, may be mailed, since such items are not things of value
within the meaning of the law.)
Recently, high-tech chain letters have begun surfacing. They may be
disseminated over the Internet, or may require the copying and
mailing of computer disks rather than paper. Regardless of what
technology is used to advance the scheme, if the mail is used at any
step along the way, it is still illegal.
The main thing to remember is that a chain letter is simply a bad
investment. You certainly won't get rich. You will receive little or
no money. The few dollars you may get will probably not be as much
as you spend making and mailing copies of the chain letter.
Chain letters don't work because the promise that all participants
in a chain letter will be winners is mathematically impossible.
Also, many people participate, but do not send money to the person
at the top of the list. Some others create a chain letter that lists
their name numerous times--in various forms with different
addressee. So, in reality, all the money in a chain is going to one
Do not be fooled if the chain letter is used to sell inexpensive
reports on credit, mail order sales, mailing lists, or other topics.
The primary purpose is to take your money, not to sell information.
"Selling" a product does not ensure legality. Be doubly suspicious
if there's a claim that the U.S. Postal Service or U.S. Postal
Inspection Service has declared the letter legal. This is said only
to mislead you. Neither the Postal Service nor Postal Inspectors
give prior approval to any chain letter.
Participating in a chain letter is a losing proposition. Turn over
any chain letter you receive that asks for money or other items of
value to your local postmaster or nearest Postal Inspector. Write on
the mailing envelope of the letter or in a separate transmittal
letter, "I received this in the mail and believe it may be illegal."
** Comment From the Girls at FightFraudAmerica.com:
"The only Chain Letter we ever saw that struck us as funny was the
one that guaranteed men that they could increase the length of their
penis, if they did not break the chain. The instructions involved
getting a sharp knife, slicing off one inch of their own penis,
mailing it to the top name on the list, then taking that name off
the list and moving the remaining names up the list and adding their
own name in the last position. The promise was that if they sent the
chain letter on to five of their closest male friends (and if nobody
broke the chain), the participant would receive 15 or more new penis
inches via the US mail within two weeks."
** Comment from the Guys at FightFraudAmerica.com:
"That's NOT funny!"