Thursday, June 28, 2012

Full Response to DnD100's "critique" of my ZeekRewards Review hub

A person with handle "DnD100" appeared on my Hub review of ZeekRewards and is the *first* Zeek supporter to offer a relatively detailed counter-points to the analysis and questions my hub. Unfortunately, instead of pointing out the alleged "mistakes" I made, and defeat my logic and analysis through that, he actually used several fallacies. My comment reply is too short and cannot be formatted, so here's a full reply.

His stuff will be in blue, my comment will be in red.

DnD100 wrote:

First off I will say you did a great job mix truth with fiction and emphasizing your speculations. I really had to read it twice to wade through the BS.
Well, well, we can pretty much see where this is going from here, don't we? "Hate mail."  But let's see where is "fiction" and where is "speculation" according to Dnd100. 
You stated that Rex Venture Group has a F rating with the BBB which is true. But unlike you I will give a little info about myself I own a construction company in the state of California (yeah I know taxes suck) for over 12 years and I recently checked my BBB standing which was a D- with no complaints so I contacted the BBB and asked why I had that rating they stated it was because my info was not verifiable. So I completed their little questionnaire during the course of all this they tried to sell me to become a member which I respectful declined. After all of this well and behold I have C+ rating. I called back again and of course they told me if I became a member it would clear all this up which I did (because times are tough and I don’t need any negative propaganda) after paying their extortion money I now have an A rating still with no complaints. So you using this against Zeeks shouldn’t hold any water because they decided not to pay the extortion money.
This is basically an attack on the reliability of the BBB rating. 
First of all, this is "anecdotal fallacy", assuming that your case (in California) is "typical" of all BBBs (even the one in North Carolina, the other side of the country). But let's leave that aside for a second... According to you this is easily fixed by spending like what? $2000? Zeek made tens of millions in 2011. Why haven't that been "fixed" then, if this is so easily fixed? 
This leads to a few conclusions if we accept your fallacy: 1) Zeek doesn't have the money to pay this "extortion" as you claim, even though it is a TINY amount  2) Zeek doesn't *care* about any one seeing this rating. Obviously, neither can be right based on your premise. 
As your counter-premise is supported by anecdotal fallacy, you have NOT proven your counter-premise. 

In your very first scenario how do you get that the average bidder spent 200 bids plus 5 to try and win an android tablet? You know this because you bid 200 plus times on this item? So everybody else did? So with your math there were only 6.25 bidders on that 1 item that sold for 12.50? Hmm 12.50 on an item that sales for 100 buck somebody got a deal.
You didn't quote the next paragraph: 
"Let's assume you spend 200 bids to win this item (a bit on the low side if total bids exceed 1000), that's $130, plus $12.50 for the item, plus $10 in shipping and handling... You actually paid $152.50 for an item with MSRP of $100, even though you "felt" you paid only 12.50. And we are using optimistic numbers (rather minimal number of bids). "
Thus, your premise "they got a great deal" is NOT proven either. 
You said and I quote “There are some anomalous patterns. Some people are using ridiculous amount of bids, such as over 1400 bids (valued at approximately $910) for $100 cash And that's just ONE PERSON, not overall number of bids (that's believed to be over 5400 bids)” Are you the one person? So winning a 100 bucks for 14.00 zeeks is ripping people off?
Again, you are ignoring the cost of the bids themselves. You even quoted it  "1400 bids (valued at approx. $910) for $100 cash" Is there a reading comprehension problem on your part? 
Next you post this because of an error “Clearly, the daily profit share is NOT calculated, but rather, INVENTED and MANUALLY ENTERED. How else can they mistakenly typed in 8.9% instead 0.89%”
Let see there is some magical script out there that takes several different companies and merges each of their profits and just inputs it? The listings on the penny auctions just appear nobody has to input them? You have never had a bill from the phone company, credit card statement, with an error? Somebody has to input the information along the way so this clearly just a bone head statement!
First of all there is NO PROOF that RVG "takes several different companies and merges each of their profits". Zeekrewards has been advertised as advertising division of Zeekler, not the entire RVG. Thus, your premise is an automatic FAIL. 
Second, Zeek themselves called it "manual decimal point displacement" on ZeeRewards news.  Ah, but wait, you didn't quote that paragraph either!
UPDATE: In the end of May 2012, ZeekReward put in one day profit share of 8.9%, then immediately posted a correction that they had a "manual decimal point misplacement". This is the full quote:A manual decimal placement error occurred tonight when starting the RPP. Adjustments will be made to all accounts affected shortly. All unaffected accounts will run normally. Thanks, Zeek.

You missed your calling on this one you should have been a politician
And you need remedial reading classes. 
 I love how you mixed 2 facts to make this seem fraudulent. “However, the number is known to vary from 0.9% all the way to 2.0%, with an average of 1.4% or 1.5%. To put it into perspective, a noted scam prosecuted by the SEC and US Secret Service, "Ad Surf Daily", offered "rebate" of 1% on weekdays and 0.5% on weekends”. So what your saying is if Shell oil stock holder makes .09% to 2.0% on their stock they should be prosecuted by the SEC? And zeeks offered a rebate of? When?
Stock market does NOT provide DAILY return of 0.9% to 2.0% consistently. Your comparison is bogus. 
Maybe you should read up on ASD case before further demonstrating your ignorance.
Next “ZeekRewards hired several prominent lawyers and attorneys as well as MLM expert Laggos to check for compliance.” So what you are saying with all the regulations that the federal government passes down each year .(( From FoxNews (Do you get that in SF) “Obama administration regulations on new business rose to 3,573 final rules in 2010, up from 3,503 in 2009 -- the equivalent of about 10 per week”.)) Any business that hires attorneys to stay complaint with the law is guilty of something? There are 1000’s of businesses that start out without the advice of attorneys that need help later on down the road with all the regulations. But if you are a know all be all of business can you tell me how Obama Care is going to affect my business oh wait in the words of the San Francisco politician Nancy Pelosi “We need to pass this bill to find out what is in it” she don’t know what regulations will affect businesses and neither do you.
A better question to ask is... Why wasn't compliance lawyers retained when the company was first started? As Zeek Supporters are fond to remind people, Paul Burks and RVG have been at this for 15 years! How many times have they hired compliance team? Hmmm? 
No, hiring compliance team doesn't make the company guilty in itself. But SOMETHING made them realize they may actually be NON-COMPLIANT which is why they need a compliance team. So what was that realization about? 
Did they tell you they started auction in March 2010 (as FSC Auctions), but didn't get an auction license until March 2012? Clearly, compliance is not on their mind until recently. 
Next you talk about what happened in 6 countries internationally “Speculations were rampant, with at least one MLM supporter speculating that this had to do with FTC Warning about Penny Auctions (except this makes no sense as FTC is an American agency dealing with American law, so why ban international affiliates?) One Zeekreward response claimed this is due to actions / policies from those countries, NOT ZeekRewards. Members in those countries will be only refunded their monthly membership and initial bid purchases. All VIP points earned are lost.”
So let see Zeeks made good and returned all money to the people in those countries so ZEEKS scammed them in some way? Just because some countries don’t allow some business practices this makes Zeeks illegal? You as an American can’t buy land in some countries does this make you guilty of something?
Again, you manage to miss the answer right below the part you quoted:
One week later, on ZeekRewardNews, Paul Burks, CEO, claimed that countries that were banned were done to comply with US Department of Treasury, Office of Foreign Asset Control (OFAC) who maintains a list of sanctions. Burks only referred to "banned countries" and offered no specifics. However,request to OFAC for comment and study of OFAC list of sanctions shows that there are currently NO sanctions against those six countries that would cause blanket ban of those six countries.
Your last statement is a bogus comparison. A far better example would be you paid $1000 'screening fee" and were consulting a different company by remote over the internet for six months, then was told "We can't pay you because my country don't allow remote consulting, but we'll refunding your screening fee"  You did six months work for nothing. 
“ZeekRewards currently has no comment or clarifications, leading to outcry among other international affiliates, both in and out of the affected countries. There are also reports on how the company is only using a free Gmail address to process refunds, and is very slow or just flat out not responding to queries. This however, cannot be confirmed.” If there are reports where are they? If there are reports why cant they be confirmed oh I remember you put this whole article together without ever trying to get a response from ZEEKS!
Reports of using Gmail address was published right on ZeekReward News. Ever thought of looking there first? 
Again I love how you take some truth and twist it. 
I do NOT love how you manage to quote one part of my hub, ask some rhetorical question, and ignore the answer right after the part you quoted. 
Next you talk about profit sharing “Assuming 1.5% compound daily, and 100% reinvestment, 100 points will become 244 points in 60 days. However, this is all "virtual growth". No actual money has reached your pocket. Instead, you have paid in at least 100+10+10 dollars into the system. If you spend the next 30 days (before the first 100 points expire) doing 100% withdrawal, you can draw about 3.5 dollars per day (steadily decreasing). which should mean you will make back your $100 and a bit more so it's a zero-sum game. If you play a longer term game you may actually make some money.” You are correct that no money has reached your pocket but in the stock market it doesn’t either until you cash out. The more points you have the more you make just like in the stock market the more stock you have the more you make when it goes up or lose when it goes down. Yes the longer you keep your money in you make the compounding interest that is why its encouraged but you can start taking from day 1.
This points to three fundamental problems:
1. They say this is not an investment, when it works just like an investment
2. Business model makes no sense, as ZeekReward is a pure loss center with no gain
3. People who put in a little money gains virtually nothing
So you can't quote me in shorter chunks?
1. You buy points from day 1 and they disclose that when you buy in. You get VIP points for posting ads the more you post the more you sell yes with 1000’s of members not everyone is selling bids every day. But in January when the 2012 Mustang was auctioned off points where selling like mad as they were VIP points that need to be used not the FREE bids.
No, the more bids you buy and give away the more VIP points you get. Posting ads is a qualifier (you also have to do). Are you actually a Zeek affiliate? Seems you don't even understand the system yourself. 
2. In ZeekRewards business model What fact do you have it is “a pure loss center with no gain”?
What money does ZeekRewards have coming in, other than membership fees? Let's say 60000 members in 2011, average membership fee $60 (not everybody pays $99). That's only 3.6 million. 
Yet it pays out TENS OF MILLIONS in 2011, according to their income disclosure statement. 
ZeekRewards pays out money, doesn't make money to generate positive cashflow. Thus, loss center. Are you *sure* you run a business? You don't seem to understand profit and loss. 
3. People that put little money in gain virtually nothing. So you were one of the lucky ones that bought Microsoft stock at 20.00 when they first went public and have made millions? Most returns are based on the amount of equity you have meaning the more you put in the greater the returns that’s the way it works in the real world with startup businesses and financial backers.
So you agree that ZeekRewards is an investment, right?  The more bids you buy and give away, the more VIP points you get, the more "return" through RPP you get. Investment.
In response to your coment on the SEC” Howey Test” you question item 4
1. investment of money
2. in a common enterprise
3. w/ expectation of profits
4. solely from the efforts of others
According to and other web traffic sites in the last year zeekler as risen up the charts. Without the advertisements of its affiliates do think that zeekler is driving traffic to their own site with out it? IF you don’t advertise you don’t get paid so how do you make money soley from the effort of others?
Again, you managed to skip over the part that answers your question. I'll quote it again here:
As you buy bid from Zeek, trade it for VIP Profitpoints, then expect profit share, it appears that Zeekrewards at least conforms to elements 1, 2, and 3. So the main question is element 4... Does the additional requirements, such as "post one ad per day" negate element 4?While a strict interpretation of the word "solely" would appear to support the position that the additional requirements ZeekRewards would mean it is NOT an investment contract, historically the Federal Courts have ruled that "solely" is interpreted rather loosely. Generally speaking, element 4 is a test on how much control do the participant have over day-to-day operations.The fourth element of the Howey test, “to be derived solely from the efforts of others,” requires an examination into the level of control retained by the investor. Courts will examine the investor’s involvement in the day-to-day operations or management decisions of the business enterprise to determine whether the investment depends solely on the efforts of others. Here, the courts are more interested in substance over form. 1: In the case SEC vs. Glenn Turner Enterprises, Turner argued that participant have to recruit in order to get a return, thus the return is NOT "solely" from efforts of other. The court rejected the argument. The "efforts" in element 4 are regarded as essential managerial decisions that affects the success of the scheme, and recruiting is NOT such a decision.Example 2: In the case SEC vs. Ad Surf Daily, Boudwin, head of ASD, and his lawyer argued that because they require participants to click on ads, to get the profits, the return is NOT "solely" from the efforts of others. The court rejected the argument for the same reason.Is posting of ads "critical operation" required for success or failure of Zeekler and Zeekrewards? Logically the answer is "no".As the additional requirements does NOT defeat element 4 "effort of others", Zeekler fits all four elements of "investment contract" and "securities", and thus, ZeekRewards may in fact be guilty of selling unregistered securities.

Here we go again mixing things together to make what you want them to say 
And here you go again, quoting one part, pose some rhetorical questions, and pretend not to see the answers. 
so now we go to ponzi scheme
“A1. Does Zeek Rewards promise return on investment? Absolutely yes, esp. before February 2012” Can you point me to where Zeeksrewards promises any return?
Has the return ever been ZERO? You yourself accepted that RPP has always been 0.9% to 2.0% DAILY
“A2. Does Zeek Rewards have an underlying product that is legitimate? Or merely fraudulent disguise? NOT EXACTLY. Zeekler does have a legitimate product: bids.” You say not exactly but zeekrewards sales bids for zeekler and advertise for zeekler. So this was just a good place to give anyone reading your article to see the word fraudulent? Then you say
“However, people don't buy bids for the bids. They buy bids to get VIP points, and returns are earned on VIP points, not bids.”
Then explain to me how zeekler site traffic has exploded in the past 8 months if no one is going to the site and no one is bidding on the product.
I didn't say nobody is going to the site and nobody is bidding on the product. I question whether there is a significant number of them, compared to the affiliates buying bids. As stated in your quote of my words, bids have two purposes: a legitimate use, and one possibly fraudulent use as a money transfer mechanism. Perhaps that dichotomy had not sunk in yet? 
As for "site traffic exploded", explain why ZeekRewards ranks higher on Alexa than Zeekler? Clearly ads are for Zeekler, according to you there... Driving all the traffic that way... 
“A3 Does Zeek Rewards require continuous influx of new members to provide payout to old members? PROBABLY YES. If you solely analyze by logic alone, the answer would be no”
Here you go again without any facts to support what you are saying.
And your proof is? 
“However, people are using bids very strangely. The cases where people used like 1400 bids (worth $900) to win $100 in cash are actually quite frequent.” What is strange they buy bids they use them isn’t that what they are supposed to do? Duh
Using $900 to win $100 cash is not strange to you? Oh, I see. You think this is like eBay where the bids are free! Yet the sentence you quoted specifically says $1400 bids worth $900). So I guess you have some blindspots toward words you don't want to read. 
People used like 1400 bids to win a 100 bucks so lets do the math here someone won a 100 bucks for 14.00(equals 1400 bids) but let see here if there was only 2 people biding ( you would need at least 2) that would 700 bids each(700bids x .65 cent = $455) yes that would be crazy but in the auction world including Qbids, Ebay, ect people bid to a certain amount then someone else out bids them and so on and so on the people that probably won only bid a few times. So again what is strange about people using bids isn’t that what zeeklers is about penny auctions with bids?
That's not what I wrote. I said they WON the auction with 1400 bids submitted. BY HIMSELF (or HERSELF). Actual final price is like $45.54. It's clear that you read my words and choose to make up an interpretation that suits your own narrative. 
I can keep going all the way down. But all you ever say is “howey test” which I will redirect you to the above. 
I direct you to read my subsequent paragraphs right below where you cut off the quote where the reasoning is explained. 
All I can say is 
Gee, then what was all that above about?  You said plenty!
Zeeks does work it does pay 
And so did Bernie Madoff, and Charles Ponzi... for a while. Standard "It paid me" argument. 
its parent company has been in business 15 years 
So? Bernie Madoff had been at it even longer. 
I really don’t care what kschang thinks 
But you care enough to come post a rebuttal. 
I just don’t want you spreading bullsh** about a company that you know little about. 
Yet all of your rebuttal contains fallacies, partial quotes, and such where you ask questions that was already answered, you merely conveniently didn't quote them. 
Just because you can throughout a few court cases that do NOT pertain to Zeekrewards or zeekler you know it all. 
Yet you didn't prove it doesn't pertain at all. 
But KSChang you wanted someone to ask questions I have so answer my questions? 
Your questions are all answered in the hub itself. Apparently you merely turned a blind eye to the answers. 
(I left out the one about your credentials since we ALL know we will never get that answer).
I answered that already in the comments: it's not relevant. Standard "show your face" tactic. 

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