Because if some rando tells you to join Amway or invest in AmCOIN™ you will tell them to get bent, but if it's a trusted friend, you're much more likely to be open.
It's disgusting, but it happens. And in a small town, likely everyone goes to the same church or two, hangs out at the same bar, etc. It can spread like wildfire, though usually after the first few scams it becomes known and starts to die out a bit.
Sometimes you recognize the situation and decide to "participate" (read: lose some small amount of money in the scam) to stay in the community.
Thankfully no one in the group is dumb enough to go all in on this hyper risky investments but I can see how it would be easy to be talked into something if you're in an echo chamber.
Before anyone gets too worried I'm talking about spending a few hundred dollars each on stupid investsments over the course of a few years.
In case anyone has any illusions about how bad financial scamming can get, pyramid schemes famously led to civil war in Albania not that long ago.
Around 1999, my hometown (pop. ~600) fell for a conman. Like, the actual Town government, and almost everyone in it.
Pudgy, balding, middle-aged white dude breezed into town and seduced the owner of one of the motels. She kicks her husband out and starts taking Conman to town board meetings, etc. Eventually divorced husband.
Guy claims to be Hollywood connected, a wealthy promoter or agent, scouting locations for future filming, etc.
This goes on all summer, and the town manager and county administrator, and the whole board and chamber of commerce totally buy it, lock, stock, and barrel. Conman claims he can bring in some big country music star he knows. I don't remember who. I can't stand country, so why would I remember? Big star. Not Dolly big, but Boot Scooting Boogie big.
He convinced the town to foot the bill, that he would pay for everything once they had the final bill... and this podunk nowheresville town 60 miles from the nearest traffic light pays to fly this star in on a private jet, sets up a huge stage for her, and all like 50 of us that show up get a private concert. It sucked.
This whole time... Everyone in town is talking about this guy, right? And nobody is asking if he's legit. I mean, I did, but I had long hair and was a nobody, so...
Spoiler: he wasn't. Not even a month after the big concert, he disappeared with motel lady's (and her husband's) life savings, and obviously skipped on the million-odd bill for Peggy Rae or whoever TF it was.
Everyone looked like a moron. Motel lady declared bankruptcy and left town. I gloated mercilessly.
Idiots. They all voted Trump, too. Some people never learn.
Written by Conan OBrien. Had a Catchy song and had Leonard Nimoy cameo.
> pays to fly this star in on a private jet, sets up a huge stage for her, and all like 50 of us that show up get a private concert. It sucked.
The concert actually happened? That's the craziest part of all of it.
What tends to happen is that the first person who picks up some new scam does fairly well because there's no exact competition for whatever they're selling. They tell their friends, who are likely to join because they made an enviable amount of money, but returns drop off rapidly because most of the people who want whatever that company is selling already bought it from the first person (whose social network overlaps considerably) and at some point most of the money is coming from the people buying the initial inventory which will mostly sit in their garage.
The social dynamic also means that _nobody_ will ever admit that they lost money or made the equivalent of $2/hour even as they're giving away that unsold merchandise at baby showers for the next 5 years.
Cryptocurrencies have largely been the brilliant idea of capturing this dynamic for a different demographic (libertarian men).