Saturday, September 1, 2012

Victim, Denial, and Cognitive Dissonance

The shutdown of Zeek Rewards as a $600 million (and climbing) Ponzi scheme provides a very interesting study into the phenomenon of cognitive dissonance, denial, and victimhood.

Cognitive dissonance describes mental state of a person, who, upon finding what he believed to be true turned out to be a lie. There are now two conflicting ideas in the person's head, and somehow he had to reconcile the two, or the person is going to go crazy (maybe not literally, but he'll be uncomfortable for a while as he resolve this problem)  

Read more on cognitive dissonance

And the victims of Zeek are definitely suffering from cognitive dissonance now. What they believed to be a money making opportunity turned out to be a lie.

It is how they choose to deal with that cognitive dissonance that is the interesting part.

People NEVER want to hear negative information about themselves (negativity denial), and LOVE to hear positive information about themselves (illusory superiority). This was proven over and over in cognitive dissonance research.

Read more on negativity denial

Read more on illusory superiority

In order to cope with cognitive dissonance, victims may go into 5 phases of grief / loss: anger, denial, bargain, depression, acceptance.

Read more on 5 stages of loss

When you combine negativity denial, illusory superiority, and full-fledged denial of reality, you get a really weird phenomenon which I will call "fighting the helper".

A victim who suffers from "fighting the helper" refuses to admit that he was victimized. Victim choose to believe that his choice had been right all along.

This would be like police arrived to arrest the abusive husband, and the wife, victim of abuse, assaults to officers, preferring the status quo (being abused).

In case of a scam, the victim will believe that government that shut down the scam must be the enemy. Critics of the scam must be the enemy that instigated the whole thing. There must be a conspiracy of the rich out to steal the victim's money to prevent them from getting rich. The government must be stealing the American dream instead of protecting it. Blah blah blah.

Most victims will snap out of denial phase after a while, and move eventually to Acceptance. However, with the advent of the Internet, where like-minded people can be found and recruited easily, and the group nature of many modern pyramid-type scams, the victims who are still in denial will congregate and make their voices heard... esp when they are being LEAD down the path by some core shills, with websites and comments and such that feed their fears and biases. And due to self-reinforcing nature of group-think, it will take them MUCH LONGER to move toward acceptance. During the time they are still in denial, they can be further victimized, such as being solicited for donations to restart the scam, defend the owner of the scam, solicited to join a clone of the scam, and so on and so forth.

Here's one example of a comment posted by someone who's in denial and wants to blame everybody else except the scam and himself for believing in the scam:

He calls everything a conspiracy, despite the fact that Zeek, at merely 600 million, doesn't qualify even as a  SMALL bank, much less "financial institutions". For example, Zeek's former bank, NewBridge Bank of North Carolina, has assets of 1.7 Billion according to its website. The top 10 banks in the US have trillions to QUADRILLIONS of dollars. Remember, Bernie Madoff's Ponzi involved like 100 BILLION dollars.

Then there are the people posting bogus comments trolling for these people still in denial...

Yep, there's someone who wants restart the Zeek Ponzi scheme. SEC was a joke, they said. They have the "truth", and it'll be released in a week, or two... who knows when they'll actually sue, if ever. in the meanwhile, they want your donation, $50 per person is suggested.

The organizer is Robert Craddock, who previously identified himself as a Zeek consultant, but also operated a website selling "customer leads" to Zeek affiliates.

They are also being bankrolled by Todd Disner, whose fame is from suing the Federal government in ANOTHER Ponzi scheme he bought into: Ad Surf Daily, where he did the same thing: claiming Ponzi charge is bogus and Feds didn't have a case. Todd Disner is also a top Zeek affiliate.

And what is the proof? The proof is Paul Burks chose NOT to fight the charges, and accepted the judgement, with NO right to appeal.

So who are you going to sue as, hmmm?

Guess what happens when the entire world found out who's dumb enough to restart a Ponzi scheme?

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