When Market Declines, Hire More Sales People?
06/14/2009 10:16 PM Filed in: Economics/Financial
Economic Recessions always produce new scams. They also expose existing ones.
For example, the current Recession exposed Bernard Madoff’s Wall Street Ponzi. Many of Madoff’s investors suddenly needed cash when their real estate and stock market investments sank. When they asked to withdraw their money Madoff could not do it because he had already transferred their funds to earlier investors or used it himself. He could no longer hide his fraud so he confessed. Investors lost $50 billion when his fund collapsed.
It was the Recession that exposed Madoff’s scam. Government regulators were not even investigating him and the media had not raised a serious question.
In the case of multi-level marketing (MLM), the Recession is both spawning new MLM scams, e.g., Donald Trump’s new scheme, and exposing the fraudulence of existing schemes.
The revelation of MLM fraud, which the Recession provides, is this:
As the markets shrink and fewer people buy goods, MLMs are ramping up recruitment of salespeople! Here is proof positive that MLMs make money off the recruits themselves, not from their “sales.” The Recession reduces the ability of MLM recruits to sell, but increases the ability of MLMs to recruit salespeople. More people are unemployed and desperate – perfect candidates for recruiting to invest in the MLM “income opportunity.” Of course, they will not be able to sell products, but the market for MLM recruits (who are destined to lose) has increased. Read More...
For example, the current Recession exposed Bernard Madoff’s Wall Street Ponzi. Many of Madoff’s investors suddenly needed cash when their real estate and stock market investments sank. When they asked to withdraw their money Madoff could not do it because he had already transferred their funds to earlier investors or used it himself. He could no longer hide his fraud so he confessed. Investors lost $50 billion when his fund collapsed.
It was the Recession that exposed Madoff’s scam. Government regulators were not even investigating him and the media had not raised a serious question.
In the case of multi-level marketing (MLM), the Recession is both spawning new MLM scams, e.g., Donald Trump’s new scheme, and exposing the fraudulence of existing schemes.
The revelation of MLM fraud, which the Recession provides, is this:
As the markets shrink and fewer people buy goods, MLMs are ramping up recruitment of salespeople! Here is proof positive that MLMs make money off the recruits themselves, not from their “sales.” The Recession reduces the ability of MLM recruits to sell, but increases the ability of MLMs to recruit salespeople. More people are unemployed and desperate – perfect candidates for recruiting to invest in the MLM “income opportunity.” Of course, they will not be able to sell products, but the market for MLM recruits (who are destined to lose) has increased. Read More...
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MLM Travel Scheme, YTB, May Be Finished Off by Regulators
05/15/2009 09:25 AM Filed in: Economics/Financial
Some state regulators are doing what the Federal Trade Commission (FTC) will not do – protect the public from pyramid selling scams, also called “business opportunity frauds.”
The latest example is the scheme, Your Travel Biz.com, a classic pyramid in which consumers buy the right to become “travel agents” and then make money when they recruit other “agents.” California Attorney General, Jerry Brown, has struck a fatal blow against the scheme and provided a great benefit to hundreds of thousands of consumers. Read More...
The latest example is the scheme, Your Travel Biz.com, a classic pyramid in which consumers buy the right to become “travel agents” and then make money when they recruit other “agents.” California Attorney General, Jerry Brown, has struck a fatal blow against the scheme and provided a great benefit to hundreds of thousands of consumers. Read More...
Ponzis and Pyramids on the Rise
01/30/2009 03:08 PM Filed in: Economics/Financial
Two recent news articles provide insight into the recent proliferation of Ponzi and Pyramid Schemes.
I was interviewed by the Wall Street Journal about the sudden revelation of more Ponzis on Wall Street.
A reporter for the State Journal Register, the dally newspaper of the capital of Illinois, interviewed me and used Pyramid Scheme Alert's work as the centerpiece of his article on the same subject but included the spread of Pyramids schemes on Main Street.
These articles reflect a growing realization that:
* pyramids and ponzis have become imbedded in the economy;
* the Recession is spawning more scams, and attempts by investors to withdraw funds reveal previously hidden, existing ones;
* they affect nearly everyone;
* they are seldom prosecuted by the government regulators unless they collapse (after maximum damage has occurred);
* they are dressed up in the garbs of the respectable, legitimate, pious and patriotic;
* recognizing them is increasingly difficult for the average person;
* the "endless chain", which used to be understood as classic fraud, is now treated as a legitimate "marketing tool" or "compensation plan."
* The pyramid is now a business model.
Read More...
I was interviewed by the Wall Street Journal about the sudden revelation of more Ponzis on Wall Street.
A reporter for the State Journal Register, the dally newspaper of the capital of Illinois, interviewed me and used Pyramid Scheme Alert's work as the centerpiece of his article on the same subject but included the spread of Pyramids schemes on Main Street.
These articles reflect a growing realization that:
* pyramids and ponzis have become imbedded in the economy;
* the Recession is spawning more scams, and attempts by investors to withdraw funds reveal previously hidden, existing ones;
* they affect nearly everyone;
* they are seldom prosecuted by the government regulators unless they collapse (after maximum damage has occurred);
* they are dressed up in the garbs of the respectable, legitimate, pious and patriotic;
* recognizing them is increasingly difficult for the average person;
* the "endless chain", which used to be understood as classic fraud, is now treated as a legitimate "marketing tool" or "compensation plan."
* The pyramid is now a business model.
Read More...
No More Silence: Take Action
01/27/2009 02:30 PM Filed in: Pyramid Scheme Politics
Over the last eight years, Pyramid and Ponzi schemes have grown and spread. The Internet is now choked with "cash gifting" scams and "matrix selling" frauds. Pyramid selling scams have multiplied and now boast that the Recession will bring them more desperate "recruits." The false promise of income from an "endless chain" recruitment scheme is the lure of these multi-level marketing scams. Many of the “job” and “business opportunity” solicitations on the internet are nothing more than pyramid schemes, flim-flam frauds.
Consumers now have a way to fight back. A petition for stronger regulation is being gathered on the Pyramid Scheme Alert Website.
Consumers now have a way to fight back. A petition for stronger regulation is being gathered on the Pyramid Scheme Alert Website.
.To Read and Sign the Petition, Click Here
Read More...