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.
