Scam Psychology: What is Survivorship Bias and How It Screws You Over (esp. in MLM)

Ever heard of "survivorship bias"? No? It means you gain a skewed view from examining only the "winners" (or survivors) of a particular process, and the skewed view is wrong. But to illustrate this, it's best to start with an example from the annals of history, namely, Mr. Abraham Wald, and Department of War Math.

Abraham Wald is a brilliant mathematician that lived in Hungary before World War II. Being a Jew, he was discriminated against, and when the Nazis took over, he emigrated to the US, and quickly joined the new "Department of War Math", where he and other scientists are asked to help solve math problems that is related to war. And one of them is about bomber survivability.

English: Boeing Y1B-17 in flight (Photo credit: Wikipedia)

In World War II, the Allies launched huge bombing raids against the Axis territories, and suffered tremendous losses. Chances of a bomber crew surviving two dozen missions is very very small. On some early mass bombing missions Allies suffered as high as 25% (i.e. 1 out of 4 bombers sent out were shot down). And remember, HUNDREDS were sent out at a time.  DAY AFTER DAY.

Obviously, one cannot armor the bomber enough to make it bullet proof, and make it still fly and carry bombs. So where should the armor be added? And how much? Where should the trade-off be done between bomb payload and armor? That's where Wald and his colleagues come in.

The story goes that the scientists and assistants flew to Washington, to be briefed by the US Army Air Corp generals and their staff, where they explained the problem, along with representatives from Boeing (the builder) who explains the structure of the airciraft and explains the problems. Then there's data from the USAAC where they present the data they gathered from the bombers that survived, where they are hit and patched, so on and so forth. And they tried armoring the parts that keep getting shot up, but it's not helping the aircrafts to come back safely.

Allegedly Wald listened to some more of this, then stood up, told the generals that they are looking at it ALL WRONG. The parts that got shot up on the bombers that came back are the parts that should NOT be armored.

Wait, what?!

Really! He's right! Think about it for a minute...

Scam Psychology: When They Say "Ignore Negativity", They Really Meant "Ignore Me".

Scammers often trot out the "ignore negativity" in order to train you, like Pavlov trained his dogs to salivate at ringing of the bell instead of at actual food, to ignore criticism against his or her scheme.

This is how you *should* react to such stupid suggestion. Thanks to Dilbert, 30-MAR-2014

Pointy-Haired Boss: The key to success is ignoring the people who say it can't be done. Dilbert: What if they're right?
Boss: They aren't right!
Dilbert: Really? Other people are never right?
Boss: You have to trust your gut!
Dilbert: My gut is telling me that everything you're saying is ridiculous.  It also says it wants a sandwich right now. I'd stay, but I'm putting my gut in charge of my decisions.  (Dilbert gets up and leaves)
Wally: My gut sends me messages in morse code. Here comes one now. 

Next time someone tells you that you should ignore other people's advice because it's "negativity", hand them a copy of this and leave. 

Related articles

• Scam Psychology: Charlie Munger on How You Screw Up, Part 2 of 6
• Scam Psychology: Intelligence is NOT Rationality
• Scam Psychology: Scam Denial for Dummies (i.e. How to be happy sheeple)
• Scam Psychology: Why Bad Arguers Often Retreat to Conspiracies As Final Defense

Scam Psychology: Scam Denial for Dummies (i.e. How to be happy sheeple)

Editor's Note: After reading the article "Science Denial for Beginners" by Austin Cline, I just had to adapt it for scam denial. All credit goes to original author, and any mistakes are my own!

--------

Scam Denial for Dummies: How to Be Obedient Sheeple

adapted by K. Chang 

from original "Science Denial for Beginners" by Austin Cline

Denialism is growing phenomenon around the world, esp. when it comes to scams. Denial is a means by which people hold on to ideologies ("my scheme is legal!") that are threatened by reality (Scheme is likely illegal / is illegal elsewhere) and preserve a sense of control over a world they cannot directly manage. Denialists tends to use the same tactics, because denialism originate from common mental processes. There are six tactics you can utilize to deny reality about the scheme you are involved in.

1. Conspiracies Everywhere!

You can't be an effective scam denialist if you don't understand that most people with proper amount of common sense and due diligence will disagree with you. You have left your common sense behind and the best way for you to express this to the masses is also a time-honored one: it's a conspiracy!

No matter who disagrees with you and no matter what reasons and evidence they offer, you know deep in your heart that their "real" reason is they are part of a massive conspiracy against the scheme you're involved in. There is a nefarious plot afoot which is designed to suppress the "truth" (as you know it) about your scheme. This makes you a brave warrior fighting for your truth, your justice, and your people, at least in your mind.

(Actually, this just makes you sound like a loon, like Don Quixote...)

Therefore, when you meet criticism, accuse the other side of all sorts of conspiracy, the crazier the better. Start tame, like "you are just jealous", "you are just negative", then upgrade to "you're working for a competitor", then go all the way to "you're the 1% out to keep us the 99% poor".  You will sound like a hero, as least to yourself and to your fellow partners in the scheme.

(Also see Pigeon Chess)

(Also see "Why Bad Arguers Retreat to Conspiracy as Final Defense")

2. Cherry-Picking Evidence

It may become depressing to keep finding evidence that supports the other side, but if you're persistent enough you're bound to stumble across little nuggets of information which, if presented just right will appear to support your truth (as you see it). The lack of obvious evidence is proof (at least to you) that the world needs you to cherry-pick any evidence you can find, or if need be, "manufacture" some. It's for a good cause, you think.  Or you can always buy some endorsement with small disclaimers and let fellow sheeples claim it's good news!

Therefore, you should emphasize ANY sort of news that can be "spun" to your advantage. Your personal observation is 100% true and you are infallible. Your paycheck is a marketing tool, flash it on your video. Never mind FTC guidance on what's legal or illegal. FTC is a part of conspiracy! If you see some sort of minor and inconsequential court victory, proclaim it as "final proof" that your scheme's legal! Who's going to check your word? It's all base on trust!  Make up your own definition of what's a pyramid scheme or a ponzi scheme! Your own people will understand!

(Actually, nobody is infallible, not even you. That's called the Self-serving bias.

Furthermore, making false income claims can get you into trouble with both the company's compliance department, and the authorities.

And lying or exaggerating will hurt you later. )

(Also see "Eleven Bad Arguments MLM Defenders Must Stop Using")

Bad Argument: When You Comment, You Should Check Your Facts!

Was browsing YPRPariah's website, and found something amusing... Some Vemma noob came and posted some comment about how great is Vemma and how everybody else are losers for doubting Vemma, blah blah blah.

Vemma Product Photography and Ad
(Photo credit: themichaelminer)

Here's a point for point critique.  His stuff is in blue, and mine will be in red. 

Honestly I use to be skeptical about vemma just like everyone here. As a business student I’ve been approached multiple times. but I realized that if I’ve been approached so much times it must be a trend and I put my ego aside and just let my friends explain to me why their so excited

So he just admitted he's a victim of FOMO: fear of missing out.  

 At the end of the day you guys really have to choose who your listening too.

So why should we listen to him?  

For anyone who’s skeptical your choosing to listen to a wordpress blog which has no credibility over people like robert kiyosaki, bob proctor, and eric thomas who are all millionaires who all directly work with vemma.

It's interesting how much credence he puts in "credibility". I wonder if he knew the following:

Kiyosaki was an Amway rep and his book was made popular by Amway's Sager Group. And he advocates screwing over his partners because he got away with it TWICE. He charges big speaking fees to appear at events. 

Bob Proctor basically stole all his schtick from Napoleon Hill (and admitted so), and his wife and daughter are high-rankers in Vemma 

As for Eric Thomas, former NFL player and now "Hip Hop Preacher", he's an inspirational speaker who will come to your event if you pay him enough. Between 10K and 20K per appearance, according to one article, as spoken by himself. 

They work with Vemma because Vemma paid them. They are mercenaries, much like lawyers. 

 Why would such credible people put their million dollar reputations on the line to work with vemma if it was a scam? They don’t need any extra money so the risk of working with a scam DEFINITELY wouldnt be worth it.

The answer is simple: they can always speak for someone else. Kiyosaki is constantly pumping out more rehash of his books and has that stupid "seminar" for pumping people more money. Bob also speaks for various other companies as well as his own "The Secret" related seminars, and so does Mr. Eric Thomas. If anything happens to Vemma, it wouldn't hurt them much, if at all. The damage he *thinks* will happen to them is negligible, and the deterrence he relied on is nonexistent.

This is just "appeal to celebrity" fallacy, or "association with celebrity" fallacy.

MLM Absurdities: When MLM Sells Not Just Woo, but Fake Woo

Back in early 2013, Waiora settled a lawsuit for selling watered down version of their own product (as full strength) That brought back some questions... how do MLM promoters, and I mean the ethical ones who really push products (instead of the scam-y ones that just recruits) actually know what they're selling is actually any good?

They rely on the company being forthright and honest of course. They don't know anything. They have to rely on company literature, genetic fallacy (this ingredient is good, so anything containing this ingredient must also be good!), pseudo-science, anecdotal evidence (which doesn't really count), and bandwagon fallacy (X users can't be all wrong!)  However, that's for another article.

What we're here to discuss is instead, what if the company's literature / promotional material is NOT the whole truth? But actually half-lies?

The Waiora case is a great example... That the product doesn't even contain what it supposedly contains (it has some... but at a far lesser concentration than labelled). According to tests done in 2010, Waiora product called NCD that allegedly has some anti-aging properties through "zeolite" (some sort of volcanic mineral that is supposed to help body purge "toxins"), is supposed to contain 2400 mg of zeolite per bottle.  Actual tests shows it has less than 150 mg... that's less than 10% of advertised strength.  The test was done at a second independent lab, which found the concentration to be even LOWER.

The lab results were presented to the company, who dismissed them, claiming the products were tested and *does* contain the advertised amount. However, a few months later, the company seem to have quietly switched suppliers and the product has a different flavor, consistency, and color than the allegedly watered down version.  A bottle of NCD (Natural Cell Defense) has MSRP of $50 per 15-mL bottle.

Class action lawsuit was launched in 2012, and was finally settled out of court in April 2013. Waiora, without admitting fault, is giving 3 bottles (full strength this time) of NCD to any one who ever bought NCD, as well as 12 million (unknown distribution).

This brings up a serious question... Whose fault was it that watered down the product? Usually a factory wouldn't cut corners like that, as it does them no good cutting corners like that. This heavily suggests there is some sort of complicity in Waiora, and their subsequent action, such as deny any wrongdoing, then quiet change factories and settle out of court would suggest (but NOT confirm) some sort of conspiracy between the factory and a senior official at Waiora.

But the real damage is how can any one in MLM trust that the product they got from the factory is real and contains whatever exotic ingredients it was supposed to contain in the right amount?

Wall Street Runs on Greed... And Conspiracies (so Don't Trust Them)

English: Wall Street sign
on Wall Street
(Photo credit: Wikipedia)

Previously, MLM Skeptic had pointed out the futility of using stock price as a measure of the company's "legitimacy". Wall Street will drive the stock prices higher as long as the company remains profitable, no matter how many people it screwed over.

However, Wall Street also runs on fear. Merely mention of Senator Markey's letter to SEC and FTC asking for an investigation into Herbalife dropped its stock price down more than 10% in a day.

And this fear had turned some stock analysts into conspiracy theorists, looking for someone to blame, and who better than the ultimate stock market boogeyman, and Herbalife "nemesis" Bill Ackman?

Brian Bolan published an essay on Zachs that claimed not only is Herbalife a good bet, he outright accused Senator Markey of colluding (perhaps unwittingly) with Bill Ackman to drive down Herbalife stock price to help with Ackman's epic short that started back at the end of 2012!

Bad Propaganda: Perpetuating Myths and Misunderstandings to Deflect Criticism

Editor's Note: This is start of a new segment 'Bad Propaganda' where I will analyze bad propaganda used by various MLM promoters who, whether intentionally, or by accident, or perhaps, even ignorance, perpetuate myths, misunderstandings, half-truths, and "spin" to promote their MLM when they don't have to. I've done this several times before, but usually as some sort of rebuttal (for Wazzub, Zeek, TVI Express, and other scams). This will make it a new 'regular feature'.

When a new MLM recruit wants to express their enthusiasm for their new venture, one of the things they do now is create a web page, esp. if they wish to market online. And one of the frequently asked questions asked about many MLMs is "isn't it just a pyramid scheme?"  There's the right way to answer it (explain the Koscot test and why MLM does NOT fit the Koscot test... if done correctly)... and then there is this way... done by a Vemma Rep.

In order not to embarrass him too badly, his name will not be used, and URL will NOT be included (don't want to give him any LinkJuice), but you can see a picture of his web page below...

The title is "Vemma : Scam or a legitimate opportunity for you and your friends" by "Nick".

From here on, his stuff is in blue, and my counterpoints will be in red.

You might be wondering if there is an opportunity to make money with Vemma, or if the Vemma scam allegations are true. Don't worry you have come to the right place seeking answers so look no further.

Wow, he claims to be the ONLY place on the web to offer answers about Vemma, look no further! This guy is full of himself, isn't he?

Nick (censored) is a 21 year old adventure seeker, who went from scrubbing dishes at an old hospital for minimum wage to traveling the Northwest and has built a distribution network of close to 1,000 people in the past 12 months. He has inspired young entrepreneurs into taking charge of their lives, and isn't afraid to challenge the status quo. CLICK HERE to learn about how you can become one of the next success stories on his team, and work personally with Nick and the other leaders of Treasure (censored) Vemma.

The standard rags-to-riches underdog story that appeals to the "rebel youth" crowd. 

   There are many Vemma reviews on the internet that make claims about the company, and for someone who wants to cut straight through the BS you need answers. So lets get to the bread and butter, but know that multi level marketing scams are hard to detect so in this article I will help you swim through the sludge of information on the web.

    In order to confirm or deny if Vemma is a scam you need to understand what the company is. They are a health and wellness business based out of Scottsdale Arizona. Founded in 2004 by Bk Boreyko, Vemma has done over 1 billion dollars in sales over the past nine years. Pretty big for a scam i'de say.

First paragraph is a completely waste of space, as it said nothing. Second paragraph started off wrong. To know whether Vemma is a scam, you need to define what a scam is, not what Vemma is. That comes second.

That was segued into a "too big/old to be a scam" myth, though he did couched it as a personal opinion, bad spelling and all.  Go look up FHTM should tell you it lasted 11 years before being shut down by the FTC as a pyramid scheme. Bernie Madoff's ponzi scheme took even longer. Both are much bigger than Vemma. Clearly, Nick had NO IDEA what he was talking about. 

But wait, there's more! Lots more!

Bad Argument: "You can't live a positive life with a negative mind"

Recently, I ran into some MLM promoters, who, when confronted with problems about their particular scheme(s), tossed back this particular reply:

"You can't live a positive life with a negative mind."

Frankly, this is just sloganeering. And it's often used with a favorite: "Analysis paralysis."

Care to guess who was this quote attributed to? Miley Cyrus. Yes, *that* Miley Cyrus. Though this is apparently from her pre-Twerk days, as part of her song lyric. 

Of course, nowadays, when we think of a Miley Cyrus quote it'd be like this:

Obviously Miley Cyrus didn't invent the quote, but she sure made it popular in recent years. 

Of course, I'd tell you first that who said it wasn't important. If it's true, it's true no matter who said it. So, is the quote "you can't live a positive life with a negative mind" true or false. 

The answer is: it is true for life in general, but false in the context in which it was used. 

Now you're probably thinking: did you just give a weasel answer? 

No, I'll explain that in detail. 

Bad Argument: If it were a scam it would have been busted by cops long ago!

Previously we had covered the bad argument: Wall Street Legitimacy Gauge, where being traded on Wall Street, for a long time, was used as "proof" of legitimacy when it's proven that Wall Street don't care as long as the stock prices go up.

Today we'll cover a parallel bad argument: because the government(s) haven't closed them for such a long time (5 years, 10 years, or even longer) they must be legal beyond reproach.

Very often, the fact that the network marketing company had been around for more than 5 years was touted by some of the most junior reps as a sign of legitimacy (both to themselves and to others), with an implied corollary "If they were illegal government would have shut them down long time ago!"

If you put it in the A therefore B form, it would be

a) company has not been deemed illegal for X years
therefore
b) company will never be deemed illegal in the future

Logically, this doesn't fly, as it's "appeal to age/tradition" fallacy.  It is... because it always had been. That's not a reason, that's just a statement.

Frankly, there is one example in 2013 that easily disproves this bad argument... Fortune High Tech Marketing, otherwise known as FHTM. FHTM was founded by Paul Orberson in 2001, and closed by FTC and several state attorney generals in January 2013. Took the authorities 11 years to close this pyramid scheme.

However, the problem apparently was even more endemic than that... the problem is the authorities... In that the victims have to complain for the authorities to act... and Pyramid/Ponzi schemes are very good in keep its victims in the dark with the mushroom treatment.

Why Is Robert Kiyosaki Trying to Shoehorn MLM onto his Cashflow Quadrant in the WRONG Quadrant?

One of the most frequent pro-MLM arguments from fans of network marketing is "Robert Kiyosaki likes it!" (with an implied "he knows what he's talking about!")

Previously, MLM Skeptic has documented that Kiyosaki was actually an Amway rep (and a rather unsuccessful one, as he never touted his success there, or rather, NEVER EVER mentioned it) once upon a time, his book only became successful because it was "discovered" by Bill Galvin, a then diamond Amway rep, who recommended his sales organization, i.e. Yager Team, adopt it wholesale, as a part of the "Amway Tool Scam".  With the sales numbers "kickstarted" via MLM, Kiyosaki went to Warner Business Books and FINALLY (after YEARS of trying) got a real publisher instead self-publishing.

Thus, let's just say that Robert Kiyosaki is not exactly an impartitial expert when it comes to network marketing. Because he owes his entire publishing success to it, he's unlikely to say bad things about it.

But let's analyze the book Rich Dad Poor Dad, and its sequel, Cashflow Quadrant instead, and how it REALLY applies to MLM.

Most people who got the "recruiter's version" of "why you should choose MLM" will basically explain to you that MLM is in the "B" quadrant of Cashflow Quadrant, which looks like this, from a MLMer...

Employee works for Business owner, "has a job"

Self-Employed, or specialists, controls/owns their own job

Business owners own a system, so they can sit back and their business will continue to make money. (they hire employees)

Investor owns investments... money makes more money.

Sounds pithy, yes? Nothing *really* wrong with that. But... Where does a MLMer fit in on this quadrant?

The MLMers will say that it's in "B" quadrant. In fact, even Kiyosaki claimed that "network marketing is what I recommend for people who want to move to the B quadrant".

WRONG!

Bad Argument: I Only Listen to People Who Made Money

One of more "cultish" arguments raised by followers of a particular scheme (starts with V) is "I don't have to listen to you. I listen to people who made money! How much did you make, huh?"

A somewhat more polite version would be, "If I want to play basketball I want to be like Michael Jordan. If I want to play football I want to be like Peyton Manning. If I want to make money I'll want to be someone who has made lots of money, such as my leader _______ in ______."

This sounds like it made sense... For about 3 seconds.

Why would you NOT want to emulate the top billionaires in the US of A... like Bill Gates (Microsoft), Warren Buffet (Berkshire Hathaway), or Larry Ellison (Oracle), or heck, Mark Zuckerberg (Facebook)? Why would you suddenly lower your goalpost? What sort of crazy argument is that?

It's like saying, "I want to be the best in the field... EXCEPT when it comes to money!"

WTF?! Man... WTF.

But wait, there's more!

Just what *are* your odds in Herbalife? (With bonus Kiyosaki debunking)

Apparently some Herbalife distributors were spreading this on Facebook

(following picture courtesy of SaltyDroid)

Notice the graph says "Rich Kid Smart Kid?" We'll get back to that.

Let's assume that the odds are accurate... for the Herbalife portion... But there's something SERIOUSLY not mentioned in the odds... That the odds are NOT evenly distributed, like you'd been lead to assume.

That's right... Some people have far better odds in Herbalife than the average distributor.

The relatives of those already in "President's Club" have much better odds. It's an insider's game, not "equal opportunity" like you'd been lead to believe.

Kevin Trudeau Will Face Jail for Lying on TV... AND Stiffing the Court of Penalties

Kevin Trudeau
 (Photo credit: Wikipedia)

Kevin Trudeau is a master salesman. Unfortunately, his early exposure to MLM seem to have lead him down a dark path, and he became a scammer instead. And now he's really going to pay the price... in jail. Following is a short history of Kevin Trudeau.

----------

Kevin Trudeau apparently was a real go-getter even when he was young. He was voted "most likely to succeed" by his high school graduating class. However, he refused to go to college. He claimed he went to an Amway meeting at 15 and have wanted to be financially free ever since. He claim to have started a mail order company before he was 18. However, after high school he tried selling cars for a while, found it boring, then went on the seminar circuit, peddling one thing after another, like "super memory!" around the nation. Apparently that was not challenging or lucrative enough, as he went into fraud.

Apparently around 1990 he impersonated a doctor when meeting with bank officials to open accounts, then wrote 80000 worth of bad checks. He apparently also fraudulently obtained 11 credit cards (identify theft) and spent them. For the first crime he spent maybe a month in jail as the judge gave him a soft sentence for first time offender. A year later, when he got caught for the credit card fraud, he spent almost two years in a Federal prison.

When interviewed by Washington Post in 2005, Trudeau blamed "math error" and "overzealous bank officials" for his rap sheet. For the fraudulent credit cards, he said he was unfairly penalized for paying late one time his AMEX card which resulting in him not being able to get any card, and he had no choice but to apply with fake social security numbers.

He just cannot admit that he did anything wrong. Such narcissistic behavior is indicative of sociopathic personalities.

The prison stay did not stop his criminal behavior at all. It only make him even MORE determined to make his money... through any means possible. He also met up with a guy named Jules Leib (to whom he gave a Tony Robbins self-help book while in prison), and when they got out, they teamed up to make money... through MLM.

More Hilarious Woo Endorsements: Having a Chiropractor as your "Chief Science Officer"

Folks, I have no problem with you buying woo, as long as you UNDERSTAND it's woo, that any claims to benefit are merely CLAIMs, for worse, UNPROVEN claims. 

However, the marketers of woo should at least pick REPUTABLE and SCIENTIFIC people to be their advisors, to look legitimate. 

Previously, MLM Skeptic have pointed out some other woo products (a patch that claims to affect accupressure points through 'wireless communication', sea 'scum' dried and packed into pills as ULTIMATE nutrition, and a product that's based on assuming that the seller's hypothetical position paper about stem cells is true) MLM Skeptic now must add another item to the list of woo: a Chiropractor selling brain supplements as co-founder and "chief science officer". 

First, before the "haterz" (a term I borrow from my, well.. haterz)  jump all over me, I have nothing against chiropractors... other than they shouldn't pretend to know stuff they know nothing about... same as anyone else. There are special chiropractors, such as Ted Carrick, who may have invented something called Chiropractic Neurology. On the other hand, there are also chiropractors who want to be family M.D. can't get the degree, but want the job any way. 

So what's wrong with this guy? Let's start with the premise: brain supplement. I.e. nutritional supplement that helps your brain, with 14 important ingredients! What are they? They ain't telling. 

The company is called Brain Abundance, where they claimed the following:

In fact, thanks to our Co-founder Dr. Pejman Behrouzi, along with our team of top experts in the fields of neuroscience, nutrition, medical science, and product formulation Brain Fuel PLUS is the most complete supplement for your brain ever created!

On a different page Dr. Pejman Behrouzi is listed as "chief science officer" along with head of the company. 

Notice the word "neuromusculoskeletal"? That's codeword for "chiropractor". 

Why Experts Do NOT Add Credibility To A Company

O RLY (Photo credit: Wikipedia)

One of the most often heard excuses thrown at the MLM Skeptic is "so and so is involved. So and so is an expert and thus Acme XYZ can't possibly be a scam".

And two of the most favorite experts used for pseudo-legitimacy are lawyers (esp. MLM lawyers), and accountants, esp. auditors.

Frankly, many lawyers are so blind or so suave their testimony is completely worthless.

While I hate to bring up an old issue, it is worth pointing out that Gerald "Gerry" Nehra of Nehra and Waak, one of the more prominent MLM lawfirms, had a reputation of pointing at ponzi schemes and said "not Ponzi". He did so first with Ad Surf Daily (and testified in court to that effect), then did the same with Zeek Rewards (his and Waak's name were on the final Zeek creditor's list). Their involvement was touted highly by participants of both schemes as "proof" that the "business" can't POSSIBLY be illegal. Yet both were shut down as scams.

(And it's noted that another person who told people that both ASD and Zeek are not Ponzis... Keith Laggos, MLM consultant)

Just because lawyers said something legal doesn't make it legal.

But what about accountants?

BREAKING NEWS: Tesla CIO Jay Vijayan surprised at his picture appearing on WCM777 websites, will seek removal

A few days ago Ming Xu of WCM presented his speech at SVIEF 2013, and took pictures with Steve Wozniak (ex-Apple), Al Gore (ex US VP), and Jay Vijayan (CIO of Tesla). These pictures, already translated along with Ming Xu's 10 minute video, are spreading like weeds among WCM777 affiliates who are posting them on their websites and blogs and tweets and videos as if it adds credibility to the suspected Ponzi scheme.

Guess what... Just found following tweet:

One down, two to go!

Related articles

• WCM777 affiliate steals Will Smith "inspirational" video, just like Club Asteria Scam Did in 2011
• BREAKING NEWS: WCM Ming Xu admits on Twitter that he faked his resume on LinkedIn
• BREAKING NEWS: Siemens denies ANY involvement with WCM or any related company, Ming Xu lied
• WCM Head Ming Xu posts paper with name Siemens China and some unknown company, claim it is "agreement"

Ming Xu got a few photos with celebrities... So what?

Plenty of WCM folks claim that the photos with some Silicon Valley and other celebrities will somehow "prove" that Ming Xu's not a scammer, as posted on Ming Xu's Twitter account.

First, I ask you, what is the 7th Sin in the 7 Deadly Sins?

The 7th deadly sin is Pride. Showing off oneself.

And these "Ming Xu with celebrity photos" are evidence of pride: appearing next to celebrities to make oneself a faux celebrity.

Real people doing God's work are NOT supposed to show off by posing next to celebrities.

When pride comes, then comes disgrace, but with the humble is wisdom. -- Proverbs 11:2

Yet every photo of WCM777 are of leaders showing off themselves alone, themselves standing next to Ming Xu, Ming Xu himself, Ming Xu standing next to some celebrity... or Someone Ming Xu claims to know standing next to some celebrity (like his friend in Colombia, which he can't spell, shaking hands with the Pope).

They are ALL evidence of pride.

Now you are probably complaining, but those celebrities can't possibly take a photo with a scammer!

You'd be sadly mistaken.

Frankly, if you can afford to buy yourself into that forum (and Ming Xu is a "diamond sponsor", look it up, which means he paid at least $10000) he can pose with anybody he wants, esp. with the abbreviated resume he presented to the forum, not mentioning his various shady activities such as

• "zero-risk EB-5 residency visa for $530000 USD"  [Proof]
• "WCM777 ponzi scheme under investigation in Colombia" [Tweet and news]
• "lying about working with Siemens" [Proof]
• "confessed to fudging his LinkedIn profile"  [Proof]
• "confessed involvement in Olympic fundraising scandal" [Case] [confession]
• "confessed involvement in Vantone stock / pyramid scam in China"  [case] [confession]
• "continued to use Vantone name, but ONLY IN CHINESE"
• Created multiple questionable unaccredited schools such as "Harvard Global Institute" [Proof]
• and so on and so forth 

But if you want a better example... Any one recognize this photo?

Yes, that's President GW Bush on the right. Who's on the left? That guy claims to be "Commander" Bobby Thompson. He can't possibly be a scammer because he shook hands with the president, which means Secret Service must have looked him over, right?

WRONG!  This guy is a con man, who ran a fake foundation called US Navy Veterans Association. He got ton of donations (millions), then tried to stash the money under multiple identities, disappeared with 1 million cash in a suitcase, captured after a manhunt, and claimed IN COURT that the whole thing is a CIA plot.

But wait, there's more examples of conmen posing next to really famous people!

How To Help People You Suspect Are Being Scammed

There has been many questions by folks with friends and relatives who were into suspicious schemes. The victims are so cult-indoctrinated that nothing seem to work. What can be done, if one cannot afford cult deprogramming / exit interview? And what if the victim does NOT wish help?

First, a disclaimer. I'm not a psychologist, psychiatrist, or know anything about the mind, other than some critical thinking. The following stuff is UNTRIED, UNTESTED "common sense" sort of approach I would take if I were to approach someone in a similar predicament.

My approach is... asking questions, Socratic questions. But this is NOT a quick fix. Undoing the knot will take a lot of time, and a lot of questions. This is my personal idea, based on Socratic Questions (as explained in Skeptoid #384). I hope this is of use to people, and I welcome any feedback. Any way...

You will probably need an empty work area, preferably with a big table where you can spread stuff out, a computer to do research on various topics, and a big stack of index cards. Figure at least 100, if not 200 cards, and a few pens, different color (you use one color for questions, he uses another for answers). You will definitely need one big red marker in addition to other colored pens.

And finally, you will need several hours, with refreshments and snack breaks in between, but NO CELLPHONES. The idea is to get the victim AWAY from his/her upline's influence for a while.

And you will need a quick lesson in critical thinking, and understand what is a "null hypothesis". I suggest you research a bit of critical thinking on your own before you attempt this "intervention".  Null hypothesis is best described as unknown / indeterminate state. If the premise is "WooPlus cures cancer", the null hypothesis would be "we don't know whether WooPlus cures cancer or not". the ANTI-premise is "WooPlus does NOT cure cancer". Facts and Logic (evidence) are suppose to move you from null hypothesis toward the premise. When there's not enough evidence you're left with the null hypothesis, not the anti-premise. Yet many people mistake the critical thinking process into thinking that it's either the premise, or the anti-premise, with no null hypothesis.

In the future, I may publish some of the better questions to ask, though this is highly dependent on the individual subject.

NOTE: If you cannot finish this in one sitting, you may want to pick a smaller premise, like "WooPlus product is effective for _____" first. Or perhaps ask for help analyzing his answers, even online. Just don't let him consult upline (yet). If questioned, reply that you want to get to the facts, which are easily Googled, instead of relying on someone else's memory.

There are three general phases:

• Engage and clarify premise with supporting evidence and logic
• Identify ambiguities, assumptions, and logical fallacies
• Re-examine premise with multiple perspectives

Are Serial MLMers Insane, by a common cliche definition?

There was a quote often mis-attributed to Albert Einstein:

The definition of insanity is repeating the same mistakes over and over again and expecting different results

However, the quote had been mis-attributed to a variety of people including Albert Einstein, Mark Twain, Ben Franklin, and others. However, its real origin is from a Narcotics Anonymous newsletter dated 1981 (scroll to page 11). Which means this is a quote about addiction.

Which makes it oddly appropriate about MLMers, specifically, about SERIAL MLMers, those people who keep joining one MLM after another, looking for "success" and kept spending money on the products, on his or her upline's advice, always having an excuse (the leader made a mistake, the market wasn't ready for us...)  As they keep doing the same thing over and over, hoping for a different result.

One such example was the "confessimonial" on SaltyDroid... a story by "Roger Wilco". RW described a relationship with a woman who was heavily into MLM, spent well over 200K into various MLMs over 7 or so years, and in the end, chose MLM instead of him, never finding any success.

Addicted people, by certain "colloquial" definition, are "insane" because they are driven by their addiction into making choices that no "ordinary" people would make.

And MLMers, similarly, are "addicted" to MLM that they make choices that no "ordinary" people would make. That is a form of insanity.

Bad Argument: "You are biased!" (with bonus Vemma debunking)

A couple months back, I documented the bad argument "Demand for Parity", where defenders of a suspect scheme often react to "negative" information about their scheme with "I demand you cover some POSITIVE aspects of our scheme!"  I have already explained that "demand for parity" is an unethical debate tactic, as there is no proof that the two sides are equal, thus there is no "parity" to be sought. However, recently I ran into a variant of this bad argument, which I'll summarize as "You are biased!" bad argument.

It generally go like this:

A: Magazine _____ has published an article that states MLM ____ may be a pyramid scheme. 

B: That is a biased article! Don't believe them! MLM _____  is not a scam!  I am proof! It paid me! 

Somehow, in B's mind, being biased is mutually exclusive from being true. If it's biased, it cannot be true. That clearly can't be right. He believes that MLM is not a scam. Is his opinion biased? Of course it is! Thus, by his own standard, it can't be true! And of course, he used "it paid me" bad argument to justify his position, which is, of course, false proof.

A biased article can be absolutely true. It just may not be the complete truth. 

What's hilarious (or disturbing) is B then usually launches into a tirade of bad arguments that proves he's far more biased (albeit of a supporting nature) than whoever s/he had charged of being biased. The difference however, is that the defender often end up using various fallacies as defense.

Now let's get to a real example: