Frequently Asked Questions
REALLY Frequently Asked Questions
Q: Have you covered ______...
A: Try the search bar on your right.
Q: Let me tell you about this scam called _______
A: Did you try the search bar on your right? Also search at behindmlm.com, Oz covers more scams than I do. I tend to go general concept rather than specific scam any way.
Q: You said ____ is a scam. Why haven't there been any arrests yet?
A: Wheels of justice turns slowly. Typical investigation takes 18-36 months. Most HYIPs lasts about 2 years. So most die before they can be investigated and shut down. And most are so small to be almost not worth the effort. There's also often just enough barriers to litigation (like being in a foreign country, legalese and disclaimers you didn't read, illegal contracts that you don't know it's illegal, and so on) that victims rarely complain, and no victims reporting to police means no fraud investigation.
Q: Why don't see see victims?
A: By the time victims realized they have been scammed, i.e. scam stopped paying, the scam's already dead, and the victims are often too ashamed to come forward. Many also recruited friends and family and are deeply shamed and guilted.
Q: Why don't you report all these crimes to ______?
A: The victims have to do it for themselves. As Morpheus said in "The Matrix", "I can only show you the door, you have to walk through it."
Q: Why do you say _____ is a scam? They are properly registered! They paid people! They _____.....
A: None of which precludes them from being a scam.
About the BloggerQ: Who are you?
A: A skeptic who chose MLM as the primary topic for this blog, but it's also about scams, critical thinking, and general skepticism.
Q: What are your qualifications to criticize MLM?
A: A mind capable of critical thinking is enough. Does having no sports knowledge stop billion people from criticizing "their" team after every game? Nope. Are you so hung up on credentials any way, when credentials don't necessarily mean anything?
Besides, if nobody don't criticize MLM's shortcomings, how will it ever improve?
Q: Do you have any experience in MLM?
A: No. One family member was in Amway and a few other MLMs, but she's on a different continent.
Q: Then how can you criticize MLM without having tried it?
A: Billion people never played sports professionally yet they will criticize "their team" every day. As long as I support my observations with evidence, why does it matter whether I was in the industry or not? Are you prejudiced against my views if you are trying to dismiss my "qualifications"?
Also, by being a neutral bystander, I often understand the system far better than the so-called participants. The participants are constrained by loss aversion and Ikea effect.
About MLM in general
Q: Are all MLMs pyramid schemes?
A: No. MLMs and pyramid schemes are like good/evil twins. You can't tell which is which without intensive study that often requires insider data or public disclosure and other transparency. Do not *presume* you are dealing with a trustworthy company or everything you've been told is the truth, whole truth, and nothing but the truth. The reality is often soul-crushing.
Q: Can you recommend a good MLM?
A: No. There are several reasons:
a) Fairness. If I recommend company A, everybody would think I am a shill for company A (heck, many people accuse me of shill for... "capitalists")
b) Truth. I haven't found such a "good" MLM, but then, I haven't looked at every company under the sun
c) Focus. I don't focus on individual companies unless they have some questionable claims or such that attract my attention.
Q: Why does MLM have such a negative reputation?
A: The cliche "its greatest strength is also its greatest weakness" applies here. MLM is effective because it spreads via social circles. However, such social marketing can backfire spectacularly. Furthermore, many products sold via MLM are woo-ish, because they can never be sold in regular retail channels, and this leads to further backlash in woo-putation. Furthermore, MLM and its lack of central control leads to establishment of local cults of personality where "leaders" take their "team" from one scheme to another, keep putting money into his/her own pockets while their team members drop out when they ran out of money, only to be replaced by yet others.
Q: Is MLM a cult?
A: No, but many MLM leaders use cult-tactics in 'team-building'. Steven Hassan, cult expert, once told Huffington Post that MLM organizations are essentially commercial cults, and use the same brainwashing techniques to keep the members inline. I would add that the techniques keep the "sheeple" paying into the system, enriching the high-ranking members while emptying sheeple's wallets.
Q: Is Company ________ a scam?
A: I don't comment on individual companies unless they've been specifically mentioned in the news as a scam or have been accused of being a scam.
Q: Why don't you say company _____ is a scam?
A: I believe in the saying "Give the man a fish, you'll feed him for a day. Teach a man how to fish, and he'll feed himself for a lifetime." I prefer to teach.
Q: But company ________ is not a scam! (I don't care what government said!)
A: You are probably in denial, one of the 5 stages of grief. I'd suggest you sleep on that. You'll be calmer later.
NOTE: This is quite common after a scam had been busted. It happened with almost every scam. Sometimes, even the scam organizer claimed so.
Q: You are just a hater of all MLM!
A: That's not a question. Seems your mind is already made up. Why are you reading this?
NOTE: Frequently, a scam leader will claim that the scam was shut down by all the "haters who reported us to the government". This is fundamentally dishonest. If you are innocent, government won't shut you down (unless you buy into "conspiracy of the rich" theories).
About Scams in GeneralQ: What is the difference between a Ponzi Scheme and a Pyramid scheme?
A: You can read the explanation here
Q: Why do smart people fall for scams?
A: Generally, it's because they think they're too smart to fall for scams.
Q: All right, so company ________ is a scam. Government just shut it down. Are you happy now?
A: No. As the cliche goes, "I have no horse in the game". I'm a neutral bystander trying to teach those who are most likely to be victimized how to do due diligence, how to tell if the company they allied with may not be what it appears to be,
If you were in the scam company that was shut down, I hope you learn from your experience, on how you could have been deceived, and learned how not to be in the future, rather than jump into some other scheme in order to "make it back". That makes you reckless.
If you suspect you are in a scam company that is very similar to the one shut down, I would ask you to study how the company really runs, not the PR material that emphasized bad arguments listed here.
And if you were NOT in a scam company, I hope you learn from the bad arguments raised by less scrupulous network marketing people to support their cause and do your marketing properly and ethically.
About Other Topics
Q: Is Bitcoin (or any other virtual currency) a ponzi scheme?
A: Some experts say yes it is. Yet others say no. For myself, I don't know. However, "investing" in such can lead to heavy losses if you don't understand what it is or how people can fly the Bitcoin flag to mask something else. A repository (that also claims to pay 10% interest) in Hong Kong went poof and earlier a similar British repository for Dogecoins (similar to Bitcoins) tried to merge with another then the CEO resigned and revealed he wasn't using his real name and may have disappeared with a good chunk of the company reserve.
In fact, one head developer of Bitcoin stated that it's quite possible most of the "mining pools" are Ponzi schemes.