A Ponzi scam is a type of fraudulent act that involves investments and most people are familiar with massive Ponzi schemes like the one perpetrated by Bernard Madoff. Unfortunately, it's common for people to assume that these schemes don't actually target anyone but rich people, when in fact all types of individuals can become victim to Ponzi scams. The way in which a Ponzi scheme works is that the scammer convinces people to invest in something that doesn't exist (or which is terribly over-inflated in value) and feeds those initial investors with funds from new investors.
As long as the Ponzi scammer can get new "customers" for his or her scheme, the scam can go on indefinitely. These scams are one of the most common types out there and can run for months or even years without anyone actually realizing what's going on. Ponzi schemes can also be of any size and don't necessarily have to be something that involves millions of dollars. Visit ScamGuard.com if you've been the victim of a Ponzi scheme to find out more about this type of scam and to report your experience.