Saturday, August 31, 2013

Genre Analysis: The Hilarity of Carbon Credit MLMs

United Nations Framework Convention on Climate...
United Nations Framework Convention on Climate Change (Photo credit: Wikipedia)
EDITOR'S NOTE: Genre Analysis is my personal opinion on a particular genre of network marketing, like MLM + penny auction, or MLM + daily deals, and so on.  

You can mix MLM with almost any business that needs a lot of consumer-level marketing, In the past several years, there has been some attempt to create multi-level "carbon credit" MLMs. So what exactly is a carbon credit? 

A carbon credit refers to any sort of trade-able certificate that permits the emission of one ton of CO2 or any equivalent greenhouse gas. Now you're probably going... Why would ANYBODY want to buy that? Good question! To understand that, we have to take a sidetrip to discuss global warming. 

Basically, the globe is warming (how much and how fast is subject to some debate) due to all the carbon emissions we're putting into the air from all the fossil fuel we've been burning. And the warming ocean is not good for us in the long run, so United Nations created a framework in 1997 called UNFCCC which established a global quota on how much carbon emissions is allowed for each country. This was signed in Kyoto, Japan, so it's known as the Kyoto Protocol. 192 different states signed, and it was formally adopted in 2005 by the UN at Montreal (see logo above). 

What's significant is while US representative signed the treaty, Congress never ratified it, so this protocol is NOT binding on the US. (i.e. US has no requirement to follow the quota given)  Canada withdrew from the protocol in 2012, and many nations that had was committed to first period (2008 to 2012) stated that they have no intention to continue onto second period (2013 to 2020). So basically this thing is dead in the water, and may sink altogether. 

That doesn't prevent some hucksters from selling you some carbon credits though. 

Friday, August 30, 2013

Why Zeek Rewards Was Such a Successful Scam

Magic ball toss
Magic ball toss (Photo credit: backofthenapkin)
Zeek Rewards Ponzi, closed by SEC last year, is the largest Ponzi scheme in the US, involving up to 2 million victims (due to some people having multiple accounts, the actual number is closer to 1 million) for 700 million dollars. How did it get so big? Don't people care about the warning signs? Are they all so blind? These aren't the smartest people in the world (we are talking the average Joes, not the elites like those Madoff soaked) but surely there are SOME smart people in that million victims?

It is a combination of factors, and it had everything to do with psychology, by taking advantage of your cognitive biases.

Your brain, due to millions of years of evolution, tends to form thoughts in certain ways, and a successful scammer can take advantage of that.

Think about magic. A lot of magic relies on misdirection. The magician tosses the ball up and down, up and down, followed it with his eyes. Then he tossed the ball up... and it vanished.

No it didn't. He didn't actually throw the ball up, but his eyes went up as if he did. And you, expecting him to do the same thing again, didn't actually look at his hand with the ball.

In other words, you were "trained" by the magician to follow his eyes, not the ball itself, so you were amazed at the ball vanishing into the air... when it never left his hand.

Zeek did the exact same thing... It showed the victims enough of a legitimate business that the victims never bothered to follow the IMPORANT item... the money.

Is it any wonder that Paul Burks, head of Zeek, is a trained magician? 

But wait, there is more!

Wednesday, August 28, 2013

Blind Men, Elephant, and MLM, Revisited

Previously, I've discussed how many scheme participants have evolved rather convenient holes in their logic, by insisting that their experience of the company, which by their admission is not a complete experience, proves the company is legitimate, like three blind men, depending on which part of the elephant they touch, describe the elephant in very different terms.

Here's a revisit, on a different type of selective blindness, that the belief that as long as the product or service is legitimate, then the company itself must be legitimate. This is often used by affiliates of a company being suspected or accused of being a product-based pyramid scheme.

8-ball pyramid scheme model.
8-ball pyramid scheme model. (Photo credit: Wikipedia)
A regular pyramid scheme is a pure exchange of money. You pay to join the pyramid at the bottom. Additional joinees push you up the levels. When you get the top you grab all the money gathered up and leave. No product was involved. This was also known as the "airplane game".  The wikipedia picture on the right shows the 8-ball version, which has captain, co-pilots, crew, and passengers.

So what is a product-based pyramid scheme? A product-based pyramid scheme is a regular pyramid scheme that was disguised by purchases of products or services. However, to explain that, we have to discuss the definition of pyramid scheme, i.e. the Koscot Test.

Monday, August 26, 2013

Zeek Winners May NOT Be Able to Dodge Receiver Lawsuit By Filing Bankruptcy

As the deadline to filing Zeek Rewards Ponzi scheme claims draws to a close (you need to file before September 5th, 2013!)  the day of reckoning is getting closer for the net winners to cough up their "winnings" (it's not their money!) to avoid getting SUED by the receiver.

Thus far, it seems that vast majority of the winners believing they are untouchable, possibly on the advice of some "Zeek advocates", who, to this date, still maintained that Zeek is a real business, Burks is not a crook, and SEC stopped a good thing ("there was no victims until SEC stepped in") who we have covered before on this very blog, many of them either worked for Zeek, lied about Zeek ("we have evidence that will exonerate Zeek"), liked about SEC ("we heard that SEC doesn't really have a case"), and tried to silence its critics through the use of bogus takedown notices.

There's no doubt that many have adopted a wait and see attitude, as they believe they can always go for the ultimate endgame: bankruptcy. It seems at least one coupon in New Mexico have taken that route, albeit, not for Zeek, but a different Ponzi scheme. However, it's not that simple...

Sunday, August 25, 2013

BREAKING NEWS: NY AG sues Trump and Trump University. Who's Next?

Donald Trump enters the Oscar De LA Renta Fash...
Donald Trump, who's getting sued
 (Photo credit: Wikipedia)
New York's Attorney General have just announced a lawsuit against Donald Trump and Trump University, alleging fraud. Attendees paid thousands for "real estate investment lessons" from instructors hand-picked by Trump himself, supposedly, though vast majority have yet to complete a single transaction, according to NYAG.

Trumps reaction is indignant, and he countered with allegations that NY AG is running an extortion scam on him, abusing his power of office to retaliate against Trump who apparently didn't donate enough to his campaign (elected in 2010).

Frankly, this is a very simple pattern of alleged fraud... And quite popular. Find a field. The field had to be complicated enough and variable enough that you can always pointed at a few success stories and say "it worked for them, you must be doing it wrong." Line up a bunch of "instructors", promote the heck out of the free seminars, celebrity would be great. Do a bunch of FREE seminars, but they're just teasers to sell the books and upsell them on $2500 special long seminars of dubious value.

Possibly applicable fields? Internet income, multi-level marketing, real estate, precious metal, forex, etc. Anything that involves making lots of money by doing little, that's for sure.