Introduction
Multi-level Marketing (MLM) is hardly new, but it is one of the least-regulated kind of business because it is one of the youngest. Basically, instead of just selling, there are some well recruitment, and your salary will depend on your recruiting performance. However, there are a LOT of scammers to disguise their fraud as pseudo-MLM. In fact, most of Gle are controversial and scam-y. Here are some signs that you need to watch, to ensure that the MLM opportunity you may be thinking about joining can not in fact a pseudo-MLM scam designed to take your money.
Please keep in mind that even if your MLM opportunity is NOT a pseudo-MLM scam is still 99.5% chance (almost certain) that you will lose money while participating in her. This is due to its various fatal flaws. So my recommendation is to avoid MLM altogether. Read on and find out why.What is a matrix?
A "matrix", also known as "forced matrix" is just a fancy name for a pyramid. For example, a 2 x 3 matrix is the same as a 1-2-4-8 pyramid, because there are two child nodes per parent node, and there are three levels below the root node, so 2 x 3. A 1-2-4 pyramid is known as a 2 x 2 matrix.
The 8-ball version of a pyramid scheme, which is a 1-2-4-8 pyramid is the same as 2x3 "forced matrix".Wikipedia example of 8-ball system, aka 2x3 matrixWikipedia example of 8-ball system, aka 2x3 matrixGET MONEY FOR JUST RECRUITMENT = SCAM
The American Federal Trade Commission, or the Commission, clearly states that if there is more reward based on the recruitment of reward based on the sale, then there is a STRONG suspicion of a pyramid scheme. The reason is simple: where the money is coming from, if not in sales? The only other source of income from membership fees, and that makes this pyramid or Ponzi scheme / scam. The American Federal Bureau of Investigation, or FBI defines a pyramid scheme as a transaction where you have to recruit two or more people in the system to get paid.
The "recruitment" of the angle can be very well camouflaged by a large number of ambiguous words like "forced matrix" or "matrix bike." In reality, a "matrix" is just a fancy name for the "pyramid". Typical 8-ball scam or aircraft game is also known as the "2 x 3 matrix" (or "2 x 3 forced matrix"). If there is verbiage as "the bike outside the matrix", be very VERY suspect, because the only way to "cycle" is filling the matrix with recruits, esp. when there is a large premium "filling the matrix." It's basically doubletalk for "paid by the recruitment of many people."
Some fraudsters insist if you do you recruit two people, and teach these people to recruit more than two people each, this is NOT a scam. It's almost laughable that this goes against reality.
Another way to disguise the recruitment is to "sell" the opportunity "to join gift" and not to mention all the membership. For example, say you get "point x" when you join. Instead of just selling you this "point X", the recruiter will let you think you're buying this element X, when in fact, you actually paid for the membership, which provides you the element X. Surely they do not tell you about the problems you might encounter redemption as signup bonus, or they need recruits "cycle" of the matrix.
Another way is to hide the recruitment by the vague compensation for sales, but how you get mass distribution, through the recruitment of a large number of people is clear.
EXAMPLE: A company, which will remain nameless, offering $ 10,000 payment for joining fee of $ 250 if you can "cycle" of two matrices, which are both 2x3.SUPER SPECIAL CLAIMS = SUSPICION
The old adage "there is no free lunch," or "it's too good to be true" may be old, but they still apply today. If an opportunity to tell you that you can make $ 10,000 in a few weeks, doing simple things, you should be VERY suspicious.
* How manys sales you have to do to make that kind of money?
* There is a market in your area, what you sell, and what size is it?
* How much money you have to spend in a) obtain from the client, and develop the market, and b) the cost to actually sell all these things (work, location, etc..) Remember, a "witness" are a) read by accomplices, or b) "results not typical" or c) incomplete truth or d) all of the above
Most people can not calculate or not calculate the cost of "market acquisition / development." As a result, the "real cost" of business management is widely underestimated. And often, the size of the market itself is overrated. Remember, customers can not find you. You have to get customers. THAT cost $ $ $. And obviously, if there is no sale, just recruitment, while it is certainly a pyramid / Ponzi scam.
Beware of false testimony. Scammers often "borrow" the credibility of others, citing "evidence" of famous people somehow related fields, and intentionally misunderstanding between them to make them sound as if they approve the company when they are not.IF YOU DO NOT BUY IT, IT IS NOT FOR YOU
If you do not want to buy, you may have a hard time selling it, as you come across as hypocritical! People can tell when the seller does not really believe in the product, it is growing.
And do not sell "lucky" itself. This is recruitment. If you can not tell the difference between recruitment and sales, you are probably a scam.
Another thing to look for ... can you sell this item to the same person more than once? Or, in other words, it is something that people use, or "use"? The companies that sell supplies such as food supplements, cosmetics, and so on are successful, because they are things that people actually USE, and still need more. Things were NOT used as alarms, and cellular phone service phones, and so on are much more difficult to sell, because each person needs only one, and not repeat sales are possible. If you get a large order, that's fine, but most orders are small to small, and if you can not make repeat sales, the market cost of acquisition is GREATLY underestimated and the potential of your business is then overestimated.EC N'FRAIS MEMBERSHIP YOU BUY?
You have to get some physical or virtual products to sell, or equipment to sell "service" or tangible training for your membership fee. If all costs not "qualify" to be paid by the recruitment, you are certainly a victim of pyramid scheme.
If you just got a bunch of links to video lessons of dubious value, or an email, or a catalog, you're probably looking at best, a misleading picture of the actual situation. Worse, you're looking at a scam.
Also, keep in mind that the equipment may be the real source of profit for the seller, instead of the possibility itself. By widely exaggerated profit potential, and include equipment of dubious value (such as obsolete computer and printer), you can be fooled into buying something that is virtually worthless. You can be sold at a "custom greeting card company" when you have a obsolete computer, a printer and a greeting card printing program that you can buy for $ 4.99. And what you print is worse looking than the stuff you can get from your local store of the brand. (This is just one possible scenario)
If you do not get the bonus penalty, like a vacation, check to see how you did "use" or redeem the holiday. There have been reports that the horror of stay was actually a corner of the earth that few go, and the expectation of redemption has been more than a year, the company keeps blaming "exploding demand exceeded our system ". Do not let this "bonus" to be the main reason to join, instead of the real business opportunity.NO REAL MONEY = SCAM
There are some false opportunities that pay you NOT cash or check, but in some "electronic wallet", which is just a number somewhere on the Internet. To convert them into "real dollars" that you have to pay all kinds of crazy cool as wire transfer fees, debit card, fees, transaction costs, conversion costs, and so on and so on, and wait weeks or months. This is SOME sign of a scam.
If the opportunity is not TELL you how your commission is paid, fly! A "real" company would just send you a check, or direct deposit, even International companies.
This can be hidden by the company paying the "good" that sell to other recruits, so you are essentially paid by new recruits. And is DEFINED sign of the pyramid. What's worse, that really made a part of the scam, as you received. It is basically a system of money transfer.
And finally, pay attention when the business is operating at sea and only accepts "payment processors" that will take your money for the "conversion" and send. This means that once you have transferred the money, you can not cancel the transfer, EVEN IF YOU PAY BY CREDIT CARD. Payment processors such as AlertPay, Solid Trust Pay, Liberty Reserve, and so on, are in a sense, such as banks. You pay processors the money to open a temporary account, and you pay someone else from the temporary account. Once the money is gone for the account that it can not be canceled, even if you have a complaint. By adding this additional layer, the offshore company can be sure that even if you have had second thoughts, you'll have trouble getting your money back.NOT MANAGEMENT INFO = SCAM
If the opportunity is managed by a stranger, without a background check for you, or there is no name anywhere attached to this "opportunity", you must run away, just like you n do not have to lend money to strangers and expect to be returned (unless you are a charity, but it is another object altogether).
The American FTC NEED any kind of franchise / business opportunity provider provide this information, and 10 days for you to examine before you join. If they do not, they are probably NOT legally in the U.S.!
There is a website that claims to sell "online travel the opportunity franchise" for $ 250 initial sign only, no monthly fees, and earn a commission forever. Any kind of communication is signed "Management Team". There is not a single name of the corp be found on the website, nor any image, or any background. Moreover, not a SINGLE newspaper or media source in the world covered the company in more than 17 months, it has been in existence, with the exception of several documented reports in Asia, Europe and now in Australia it is a suspicion of fraud.
Would YOU give your money to strangers who will not even tell you their names, and expect to be returned several times, without a contract and a credit check?OPPORTUNITY TO PURCHASE THE GODFATHER = SCAM
One of the most insidious tricks used by pseudo-MLM scam artists to encourage the recruitment is to allow the upstream to sell the opportunity itself, and pocket the costs of the application, through a sort of "redemption "which can be delivered. The sponsor is not paid a lot of real money, but instead is given the "codes". For the money, upstream have to SELL codes new recruits like you. In this way, the sponsor receives real $ $ $, and gains new recruits, while the company itself did not really lose money, and kept the upstream recruitment.
For example, say that the "upstream" is paid $ 250 each to four people it recruits. The people joining pays $ 125 each. The sponsor gets $ 250, half in cash and half in this "activation code", which would have a value of $ 125. To actually get the full $ 250, you had to "sell" the redemption code for yet another rookie (fifth), and pocket $ 125 in real money. So in essence, he was forced to recruit people to FIVE $ 250, not FOUR as specified. This is a way for the scammer to play with your head. And this is a bad spirit of the game shows you how nasty this supposed event.
Another variation is the intentional blurring of product or opportunity. If you buy this opportunity for free, you are buying a business or a system, not a product. To give an example ... say, when you join this company X for $ 250, you get a vacation package of some sort. If the recruiter is to present the whole thing to sell you on the holiday package for $ 250, NOT focusing on the company X, or he is very confused, or was intentionally misleading ( as it requires the actual cycle).
Yet another alternative is to buy stocks of stuff to sell, from your upline, then sell your newly recruited downstream. It is fundamentally wrong to sell, and very illegal according to the FTC. Why? Basically, it is disguised as a pyramid or Ponzi scheme. Instead of moving money, he moves around the inventory, which is simply a substitute for money in this case.
(Also, back to the first tip: if there is more recruitment from the sale, it's probably a scam, and this is yet another way to "hide" the recruitment!)
A variation of this is "stacking", encouraging a member to sign up for several positions within the company. A true MLM company does NOT stack, because it confuses the issue. After all, why should you get more commission to join more than once when you are still, well, you just have? It's not like you can sell more stuff by joining twice ... The only one who benefits from the "stack", it is the people at the top, which then do not need to recruit 15 people, but much less than real people. Any company that allows "stacking" in their matrices or advice or whatever is that people move through the system, not to sell things, and that makes them very likely a scam.AVOID Hardsell WITH LITTLE OR NO REAL INFO
Many of these pseudo-MLM scams (and those late night infomercials) use the hard sell: a lot of images of luxury cars, beautiful life, beautiful women, business jets, personal yachts , a dream vacation, beautiful houses, villas, whatsoever, even people taking beautiful jewelry and loads of cash ... and keep the words "would not it be great to join them?" It's hard to sell, and this is where your "bullshit" detector should be honking loudly.
Most of these scams will spend most of the presentation talking about how great life, but very little about what their opportunity is, how you do, and how you actually get paid to do, and finally how you can actually get these special bonuses.
One of these presentations was on the Internet for download, recruiting for one of these scams. It was expected that the 70 slides, only four really gave details of all remuneration (eg. How you get paid for what you do). It is a little over 5%. Most of the slides actually talked about how great the so-called society, how they are giving away luxury cars, laptops, villa stays, even luxury yachts, and so on. This is a sales pitch, not a business opportunity presentation.
If they do not tell you what needs to be done (ie. What are you selling the product or service), this is not an opportunity for all.WHEN THE GOVERNMENT BEGINS TO INVESTIGATE = SCAM
When a government, a government in the world, sets out to search for the company, it's time to run away from this so-called opportunity.
How do you know? Internet research.
One such company began operating in January 2009, began recruiting in China in March 2009, and has been declared illegal in September 2009 in China, with tens / hundreds of people arrested in the sweeps. In March 2010, the news is that the disposition of a pyramid in Hungary. China sentenced to less than two "leaders" in the scheme of consumer fraud, and now the word comes from Australia that the consumer protection agency has obtained an injunction to stop the operations of the company " distributors "recruitment.
If you were to do the research, you know about these reports.The five Nevers
Here are five "nevers" to consider when it comes to detecting bull ****, or from the possibility or its promoter.
Do not take NO positive opinions at face value
In a pseudo-MLM scam, forcing people to recruit people who are already in the scam will say ANYTHING to score another rookie, which increases the chances of "bicycle" and get his / her large sum money. They can not be invoked to give impartial reviews.
If you see a review that says good things about the opportunity, while the examiner at the end cheerfully wants to recruit you, you should consider reviewing the "tainted".
Similarly, a review should do: study the opportunity at hand. If the auditor switches fashion sales at the end, and trying to sell you "the secrets of MLM success", the examiner can not be trusted. This is used if the last sentence or two to talk about his secret sauce (just kidding), but if he went through the stuff in a paragraph, and then spent the rest of the review trying to convince you that you need his secret sauce, the exam itself is a fraud, as it is just there to make you look at his "secret", not really review things. I call these "comments weasel."
NEVER trust a critic who uses logic, fallacies
Of logical fallacies are basically saying 1 +1 = 3, but in the words. Here is an example:
1) BIZA pay real money2) Pay real money = no scamtherefore;3) BIZA is not scam
This is a logical fallacy because 2) is NOT always true. A pyramid scheme or Ponzi scheme can pay money for a while, but they are certainly scams. Thus, the conclusion 3) is not true, or at least not proven by evidence.
You can find a list of logical errors logicalfallacies.info
Any critic who had to use logic to support his statements sophistry is doing a horrible job. You can find some examples of this in my "review of reviews"
NEVER trust anyone not to respond to the legitimate concerns
The first thing you should worry about any kind of MLM is whether this is really a pyramid scheme. As explained before, pyramid schemes can be well disguised buzzwords masked by dollar signs. It is also illegal and a crime in most states, even for small amounts. If your recruiter can not or will not respond to questions about why this legal thing, you must be VERY careful.
Keep in mind that some scammers and bottom lines, desperate for more recruits, have resorted to inventing definitions pyramid scheme, in order to "prove" that the scam is not a pyramid scheme. This is known as "strawman argument" and is a type of logical fallacy. Remember the basic definition of the pyramid to be paid just for the recruitment of other members, they must ALSO do the same. For those familiar with Star Trek, it's like being assimilated by the Borg,. You are transformed into a Borg who go there to assimilate the other, turning them into Borg. Real MLM business selling things or services to people. Pseudo-MLM scams just to recruit people in their pyramid.
Search for local legislation defining the pyramid, Ponzi scheme, endless chain scheme, or whatever the name of your local authority use, and see for yourself if your so-called opportunity meets this definition, and how your recruiter says he was NOT.
NEVER trust a man who told you not to tarnish the information
All kinds of information are two sides of the same story. A "review" the opportunity is good or bad. As we explained earlier that good reviews are not reliable, esp. if it is followed by a recruitment call. Negative reviews will tell you much more about the possibility of a "good" review would never say.
And if your recruiter tell you to ignore negative information that you have found, you should REALLY be careful, because you can not be sure what his motivation is to say. Some have learned to ignore the negative thoughts, so they do not "contaminate" their positive attitude, which is necessary for success. It's just psychobabble, no amount of positive thinking can protect you from reality. Still others are willing to engage in a lie just to he / she may "cycle" and get paid before the whole scam collapses.
Face your recruiter with the negative reviews, and ask about matters of fact, and how they are treated. And do not take bull **** for answers.
NEVER trust people who make the information as they go along
A real company would have answered all of the major concerns, such as the issues and concerns raised by the 9 signs earlier. In fact, most companies have a "compliance officer" to ensure that the company complies with all applicable laws.
If your recruiter can not answer the question, or if the company still have to answer all these questions, and they are very obvious, the company may be in the shade and do not want to complicate their lie by lie a little more.
Some international scam refuse to recognize questions about their legitimacy and allow its members to explain that they will, and two layers of lies: one by the company itself, the other by its members and it is sometimes difficult to separate the two. A legitimate company would have answered for himself. A scammer would leave it up to members to cover.Conclusion
Gle many are illegal scams that fits on top of the warning signs. Each of the warning signs were explained.
Please keep in mind that even if the company you are considering exhibits any of these warning signs, it might not be profitable for you, despite your best efforts.
Be careful.
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