You cannot trust the disclaimer

NOTE: Part of this post was reworked into one of my hubpages hubs.

Suspect schemes often contains some strange disclaimers, as if they can avoid legal responsibility with it.  The matter of act is if a company lie in a disclaimer, like "This is not an investment", when the business, in fact, passes the Howey Test, then the disclaimer is a lie and thus company has committed fraud.

Most Ponzi schemes claim to be investments, but a noticeable portion claim they are not. "Ad Surf Daily" was shut down in 2008 and its website has the following disclaimer (pulled from court document PDF):

All payments made to ASD are considered advertising purchases, not investments or deposits of any kind. All sales are final. ASD does not guarantee any earnings or profits. Any commissions paid to Members are for the service of viewing other Member web sites and for referring Members to AdSurfDaily. All advertising purchases are non-refundable.

Note the elements:

• We say it's a purchase, not an investment
• No refund (all sales are final)  (repeated twice)
• No earning or profit guarantee
• We say we pay you for the service (of watching ads) and referral (of new members)

In general, paying other people for service is called salary, or compensation, not "commission" (which implies sale had taken place, but not to the person being paid). So this is confusing already. 

The Federal court shut it down via a full IRS / Secret Service raid in 2008 and its owner is now in a Federal jail, having plead guilty to wire fraud. 

[ Learn more about Ad Surf Daily ponzi scheme ]

Let us now look at another disclaimer... In April 2012, Zeek Rewards also started requiring its affiliates to recite a long disclaimer at sales meetings. It is reproduced below:

“If you make a purchase from ZeekRewards you are purchasing a Premium eCommerce subscription or you are purchasing bids to give away as samples. You are NOT purchasing stock or any other form of “investment” or equity. You MUST actually use the bids that you purchase or give them away as samples to help grow your business. Affiliates who present our products to others in a misleading manner or in a way that leads the buyer to believe he or she is making an investment or purchasing equities will be terminated and all commissions and awards will be forfeited. Buyers MUST read the entire How It Works and Get Paid pages on the ZeekRewards website and the Legal Disclaimers.”

Now let's compare the points

• We say it's a purchase, not an investment
• If you say the wrong thing we don't want you
• You have to use what you buy or give it away. (implying that's what you're being paid for)

Zeek Rewards was closed by SEC as a Ponzi scheme involving 700 million dollars and up to a million members. Clearly, the disclaimer is fraudulent.

[ Learn more about Zeek Rewards Ponzi scheme ]


Note the common points between the two Ponzi schemes:

• "we say we're not investment"
• "we say we're paying you for service" (it was implied in the second one) 

Both turn out to be lies. Members are required to buy stuff (ads in one, bids in the other) in order to participate in this "revenue sharing". The more you buy, the more you share. The "service" each member performed is negligible and certainly not worth whatever profit they are sharing.

WTF is TelexFree trying to do in Brazil?

Either they got a real cult going or they're making up **** as they go.

First, they started floating unverified claims that they signed a contract with Best Western to build hotels in Brazil (for the upcoming World Cup). (Why? What's the relation? Where's the confirmation?)

In Feb 2013 then they got investigated by department of justice.

Their follower go nuts, claims investigation is over and ended right after it started.

In March 2013 Brazilian ministry of Finance claimed TelexFree is likely a Ponzi scheme and not sustainable.

Their followers appear to be undeterred, started posting hate mail to all the websites citing this news.

In June 2013 Brazilian court shut them down, order them to stop recruiting and paying people.

Ten Months Later, Zeekheads Still In Denial

English: The protest event Occupy Wall Street in Zuccotti Park in New York, on Day 8, September 24.
with protester making a sign "I don't mind being called a conspiracy theorist" (Photo credit: Wikipedia)

A hearing about dissolving the receivership of Zeek Rewards ponzi scheme was moved to July 2013. And the news coverage of that attracted many ZeekHeads posting comments such as

"There was no victim until the SEC got involved."

"Someone paid off the judge and they closed Zeek with minimum evidence".

"Government is the crook that stole our money"

and other comments of a similar nature.

http://www.the-dispatch.com/article/20130607/News/306079985?tc=ar

It was last August (16-AUG-2012) that Zeek was closed. Ten months later, Zeekheads are STILL in denial.

It was last September that I posted "7 Myths/Excuses Zeek Apologists Kept Repeating" and it's interesting that the same ones are still being used.

BREAKING NEWS: TelexFree gets "cease and desist" court order in Brazil

According to Brazilian news "Globo" (as reported by Behindmlm) the local court judge had ordered TelexFree to cease operation in its recruiting and and advertising arm.

Oz at BehindMLM has long concluded (back in 2012) that TelexFree is merely a Ponzi scheme disguised by a telephone company, and since then the various supporters of the scheme have circulated various misinformation, including "there was no investigation in Brazil" and so on and so forth, despite newspaper reports. TelexFree allegedly hiring Gerald "I can't spot a Ponzi with both hands and a flashlight" Nehra didn't help either.

XKCD on Crowdsourcing... Isn't Crowdsourced Marketing MLM?

http://xkcd.com/1060/

Isn't crowd-sourced marketing just MLM? Think about it. MLM companies "crowd-source" their marketing to their reps (letting them bear the marketing costs).

The problem with some MLM companies is they ONLY do marketing. They don't have their own products or services. They are purely marketing organizations that can be pushing multiple companies / opportunities at the same time. That creates a fundamental disconnect, as there are TWO types of people... customers, and affiliates. If you can't figure out which is which (they respond to different things), you have a pyramid scheme in the making. They have no "us". They are much like this comic: it's all about other people making and selling products.

So what is the company itself for?

Related articles

• Is Network Marketing a cult? Good Question! The Answer is Yes (keep reading)
• The MLM Test by Rod Cook of MLMWatchDog
• How Much Can You REALISTICALLY Expect to Make With MLM?
• The Three Types of People Looking Into MLM: What You Should REALLY Know

HYIP Pitchman's New Pitch

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Why Scammers Hate Skeptics

PolySkeptic (Photo credit: Wikipedia)

Scammers are expert bullsh**ers. They are experts in appearing trustworthy that you accept their word as believable without verifying the information they give out. They play the confidence game extremely well.

Previously I've highlighted 5 secrets of expert bullsh**ers (and scammers) based on article from Psychology Today. Most scammers know not to take on the skeptics directly, because skeptics are NOT vulnerable to the 5 secrets.

Secret 1: Skeptics are NOT afraid to challenge Scam Leaders

Sheeple are afraid to challenge the leaders. They will either clam up or just "go along with the crowd" even when they don't really agree with the leader.

Skeptics are not afraid to challenge the leader for answers. If they don't get an answer, they'll find a way to get an answer. They are very much like scientists... devising ways to get at the data to analyze.

Secret 2: Skeptics do NOT accept tales told at face value, but always seek verification

Sheeple are easily impressed by titles, alleged experience, and even association with titles or alleged experience. MLMers thus often claimed "top rank in multiple companies", "decades of experience", and so on. Or have hired the biggest lawyers or associated with the biggest companies.

Skeptics never accept titles or experience at face value, but instead, figure out how such titles and experience are earned (or faked). Skeptics know having X years in an particular industry doesn't mean much. And titles and degrees can be faked. Even hiring of lawyers can be faked. Skeptics prefer to see proof, not "I told you so".