The letter claims that Microsoft and AOL (America On Line) are now the largest Internet companies and in an effort to ensure that Internet explorer remains the most widely used program, Microsoft and AOL are running an e-mail usage test.

It goes on to claim that users will be paid $245 by Microsoft for every person to whom they forward the letter, $243 for every person who on-forwards it and $241 for every third person who receives it.

A statement issued by Microsoft to the Office of Fair Trading verifies the letter is a hoax and did not originate from Microsoft.

"It's not clear at this stage how promoters of this scam could benefit," Ms Spence said.

"One possibility is that they simply want to cause problems for Microsoft.

"Chain letter schemes are covered by the pyramid selling provisions of the Fair Trading Act.

"Promoters and participants in such schemes are at risk of prosecution. The maximum penalty for people found guilty of offences against these provisions is $40,500. "

"The pyramid schemes don't sell products, they sell false promises," Ms Spence said.

For further information, contact: Ellen McIntyre 0408 732 491