How Modelling Scam Works

While Modelling Scam is not MLM, some of the marketing tactics are remarkably similar: they involve selling your own dreams to you.

http://kschang.hubpages.com/hub/Modelling-Agency-Scam-How-it-Works-and-How-to-Avoid-it

Why do Some MLMers expect other people to take them seriously, when they do NOT take other people seriously?

English: Different customer loyalty cards (airlines, car rental companies, hotels etc.) (Photo credit: Wikipedia)

In life, "fairness" is often expected. You do something for me, I do something for you.

So why is it different in the MLM world?

A common theme that often emerges in discussion of a particular opportunity's legality is the promoter wants you (the critic) and anybody else to take what they say seriously, while they discount everything YOU wrote/discussed/pointed out as utter garbage to be ignored. Indeed, much of this blog covers such excuses used by such promoters to dismiss criticisms.

Recently, the discussion was rehashed about the opportunity called Lyoness.

Lyoness is a strange hybrid of a shopping loyalty program where you can earn shopping credits (funded by merchant contributions based on your purchase and purchases of those you recruited). However, it also has this potentially illegal component where you can purchase account units (normally generated through shopping) directly, bypass all the shopping, and get money THAT way. Some MLM experts (not me, really) have pointed out this is basically a Ponzi scheme.

Troy Dooly published a blogpost on July 22nd 2013 titled" Lyoness America Violating Pyramid, Ponzi, Securities, and Business Opportunities regulations?"  And the **** really hit the fan. Mr. Dooly lost a bit of credibility when he practically endorsed the ponzi scheme Zeek Rewards, but he was willing to admit his mistakes and learned from it. Now, after being advised by one of his close friends and MLM analyst, he decided to put the information he got out there.

A month later, he was invited down to Miami to talk with Lyoness American leadership and legal counsel in what is pretty obviously a damage control spin attempt by Lyoness.

So what do Lyoness supporters have to say about Lyoness itself, while ignoring its critics?

UNCONFIRMED: Is Brazilian Prosecutor Asking for US Cooperation to Shutdown TelexFree here too?

According to Brazilian Media, as reported by PatrickPretty.com, Brazilian prosecutor is asking US prosecutors (which state or Federal agency?) to help it shut down TelexFree

This cannot be confirmed as no specific agency or official was named and thus impossible to corroborate.

http://www.patrickpretty.com/2013/08/12/unconfirmed-report-in-brazil-says-prosecutors-have-asked-u-s-court-to-block-telexfree-accounts-new-signups-unconfirmed/

What Herbalife Apologists Are Ignoring (And You Shouldn't)

Warren Buffett, whose Berkshire Hathaway
owns Pampered Chef, a MLM. Is it comparable
to Herbalife though? (source:Wikipedia)

Hedge fund managers, being handlers of other people's money, tend to be very smart people, and usually very careful, but once decided, still do the Bush thing: "stay the course", based on their own analysis and their own criteria. And ever since Ackman started his "assault" on Herbalife at the end of 2012, the hedge fund managers have been divided on this issue, and roughly falls into three camps:

• Ackman-camp: I agree with Ackman and Herbalife is going down... eventually
• Icahn-camp: Ackman is wrong, Herbalife is NOT pyramid enough to be shut down!
• Spectator-camp: I'm not getting between those two gorillas... or Godzillas.

Most articles you find on Herbalife nowadays are about stock movements, rather than about the company itself. If Herbalife stock goes up, people publish some opinions about how Ackman's losing and Icahn is winning, even though they don't really know how the company works. One such title is "Carl Icahn is Squeezing Bill Ackman to Death", leaving aside the "merits" of Ackman's case.

Everybody is guilty of confirmation bias and automatic cherry picking. People see facts that support their own side, and unconsciously ignore facts that does not. Even hedge fund managers. One of which is Bronte Capital's John Hempton, who has a nice blog. Recently, he published a blogpost that repeated his view that Herbalife is just misunderstood and some MLMs are very good.

It's a pretty long post, and mentions multiple MLMs, so I will summarize here. I understand I'm as guilty as anyone I'm accusing of potential bias, so feel free to read it and check it for yourself. But basically, his premise is that "MLMs don't sell products, they sell the value AROUND the products". His primary example is Pampered Chef MLM (owned by Berkshire Hathaway, Warren Buffet's company).  He claims that while Pampered Chef's cookware is overpriced, what they sell is not cookware, but cooking lessons and the entire lifestyle change around adopting cooking for oneself (instead of eating out).

Then he claimed that Herbalife's value, unlike Ackman's claim that Herbalife products are commodities, is actually the diet clubs and the distributors' relationship with the participants, and Ackman is "missing the point" about the whole thing.

Frankly, Mr. John Hempton himself is missing a few things, and this wasn't the first time he did so.

BREAKING NEWS: Zeek Receivership will continue, despite some Winner's Attempt to Stop It

Trudy Gilmond and Kellie King, both net winners in the Zeek Rewards ponzi, had previously filed a motion to dissolve the receivership. The motion has been denied.

The only reason why they would file such a motion is so they don't have to pay back their ill-gotten gains, i.e. keep the net loser / victim's money. And now, they will have to (eventually, when receiver sue them).

http://www.patrickpretty.com/2013/07/23/urgent-bulletin-moving-federal-judge-denies-alleged-zeek-winners-motion-to-intervene-in-case-and-dissolve-receivership/

Why You Cannot Treat Money With Rationality (and How to Fix It)

Lifehacker pointed out a TEDx presentation (kinda TED conference, but locally organized) where psychologist Daniel Crosby points out 4 biases that we share... and we have the same biases on finance AND love. That's why we behave toward both with irrational behavior.

The "I Can Change Them" (or "Fixer Upper") bias

Do you marry the person you love, thinking that you can change them, fix them up? You do the same with your money, investments, income opportunities, and the like.

Basically, you overestimate your power to compensate for the weaknesses of whatever your choice was. The person's bad habits? I can help him/her change that... maybe not. The business have a dark past? Don't worry about it, just worry about the future!  Hmmm... that may not help at all.

"This Time It's Different" Bias

Those who divorced are more likely to divorce again (and again). People believe "this one will be different", "this one will be the one". Unfortunately, this new one is probably just a rebound, and the problem that caused the original divorce was never found and fixed.

Same thing with money. Scam victims often fall for a reload scam, with the victims thinking "this one will be different", without considering what made the scam a scam. Just because there's something "new" mixed with this whatever doesn't make it new. This is called "new era thinking". Pyramid schemes have been around as old as money itself. HYIPs are the new pyramid schemes and Ponzi schemes, except they operate online. eToys, the online equivalent of Toys R Us, had a bigger evaluation than Toys R Us, despite never earning a profit. It's a bubble fed by new era thinking. Scam victims often fall for the same thing... over and over.

Profitable Sunrise Pitchwoman Nanci Jo Fraser Charged by Ohio Attorney General as Fraud Front

According to PatrickPretty, com, citing multiple sources, Nanci Jo Fraser, who ran a "Focus Up Ministry", was charged by Ohio Attorney General for defrauding the public for her part in the Profitable Sunrise ponzi scheme. Full asset freeze was ordered.

This came 2 months after the Feds closed down Profitable Sunrise and froze its assets all over the globe (but most of that had disappeared/laundered).

Fraser, along with another pitchman Albert Rosebruck, were appearently head of this group that claimed to be a "Christian Enterprise" that recruited locals into contributing milions into this scheme, never disclosing she profited heavily from the recruitment.

Rosebruck had previously complained that it was the SEC that ruined everything (i.e. closed Profitable Sunrise), and Ohio alleged that Rosebruck was previously Ad Surf Daily ponzi and Zeek Rewards ponzi member. Indeed, "blame the SEC" was a position frequently advanced the more ardent Zeekheads who, to date, still refuse to admit Zeek is a Ponzi scheme.

Makes you wonder why, doesn't it? Perhaps it's because they had a good thing going?

http://www.patrickpretty.com/2013/07/09/urgent-bulletin-moving-ohio-calls-nanci-jo-frazers-focus-up-ministries-front-for-profitable-sunrise-hyip-fraud-scheme-state-says-it-believes-frazer-was-an-adsurfdaily-pitchwoman-with-his/