The Perfect Cartoon Summarizing My Experiences

https://dilbert.com/strip/2019-03-24

Bad Propaganda: Meghan Markle and Homeopathy, really?

A tweet from Alberta Association of Naturopathic Doctors just came across my tweetstream:

Uh, even that statement is wrong on many levels.

• It's Sussex, not Essex
• She's a duchess, not a princess. 

But third, did no one ask the circumstances of this picture? Turns out, this is a "gifting suite", circa 2012. 

Scam Tactic: Moving the Goalpost (aka Special Pleading)

Moving the goalpost is very simple to explain with a single image:

Moving the goalpost, courtesy of zapiro @ zapiro.com

If someone moves the goal post, you'll never to be able to score a goal.

So what does that have to do with scams? Two ways:

1) when scammers promised one thing, then moved the goalpost with some excuses, or

2) when scam deniers tried to deny the evidence of the scam by moving the goalpost.

Scammer Moving the Goalpost

Scam companies that promise an IPO (initial public offering) while offering stocks or options to affiliates are known to move the goalpost because the IPO either will never take place, or takes place but were completely useless.  One such example was Wantong Miracle 萬通奇跡 scam in China, where a known scammer who launched multiple scams in China AND in the US seem to have finally been arrested by Chinese authorities.

Some suspect that recent attempts by Visalus to roll back the promised "founders equity incentive plan" may also be "moving the goalpost" after one side had already satisfied the requirements, only to be met with even MORE requirements from the other side or lose the supposed equity incentive they have gained, that a judge had to issue a restraining order.

OneCoin, which has been accused by multiple regulatory bodies on multiple continents of being a scam or a suspect scam, has repeated changed or delayed its IPO or ICO (depending on when you asked).  In January and February 2017, OneCoin announced they will go IPO in "early 2018", then the date was moved to July 2018 according to a Chinese website on OneCoin. However, in September 2017, the news completely changed. Instead of IPO, affiliates of OneCoin claimed that OneCoin will conduct an ICO (initial coin offering) instead, and it will not be until October 2018. That's at least THREE delays in less than a year, and it's ALWAYS a year away.

"Always delay the day of reckoning" is a standard bull****er tactic.

Let's go onto our next topic, scam denier moving the goalpost

Even "Hedge Fund of the Year" Got Tricked By Ticket Ponzi Scheme

A sports talk show radio host claims he has access to an almost unlimited amount of discounted major sports tickets, and he needed a lot of money to buy them in order to share the profits. Do you believe him?

A "hedge fund of the year" with 18 billion assets did, and it appears they have lost $4.3 million they put into two companies controlled by this talk show radio host.

You may think who'd believe this sort of stuff, or how can they be this stupid, but really, think about it...

Hedge funds, esp. fund of the year are NOT stupid.

However, there's no doubt that this is a ponzi scheme... When the Feds arrested the radio talk show host and uncovered a trove of communications between him and his co-conspirators, as well as evidence of his millions in gambling debt.  Robbing Peter to pay Paul is the very definition of Ponzi scheme. This radio talk show host, who co-hosts with a VERY famous former NFL celebrity, had been accused with running this scheme.

Yet you can see this sort of argument proliferate in the "make money fast" market, and promoters use the language of "this can't possibly be a scam because it associated with _____", and this guy has it in spades. A famous hedge fund gave him millions of dollars. He co-hosts a show with a celebrity. He can't possibly be a scammer, right?

WRONG!

Lesson to take away: when someone tries to sell you something on reputation only, think VERY VERY HARD on it. The risk is probably much higher than you think.

Critical Analysis of a R+F consultants denial that R+F is a pyramid scheme

Recently my news feed came across an R+F consultant (that's Rodan and Fields, an MLM cosmetics brand) denying that R+F is a pyramid scheme. Does her denial make sense?

She started out by casting a wide net, basically stating "I hear that from time to time... (some people) believe RF is a scheme... (but) RF isn't like that"

Then she immediately went into defensive dilemma, which means "if you say it to my face, I will assume that 1) you don't know me and I don't know you, or 2) you don't know what you're talking about"

But does the author know what she's talking about?

She never explained what a pyramid scheme is, or how R+F is not like that. She simply claimed that R+F is a legitimate company. But that's interesting are the two factors she cited in her denial.

We are different: really?

According to the author, "If you’re looking at a company’s payroll by levels of income, it’s probably going to resemble a pyramid. The owner is at the top and earns the highest salary, everyone else trickles down.  Right out of the gate, we are different."

Basically, the author is saying that R+F is NOT like a traditional company where the owner is NOT earning the highest salary, isn't it?

Unfortunately, it seems the author is merely half-right. Because R+F is run by Chairman Amnon Rodan (Dr. Katie Rodan's husband) and President/CEO Diane Dietz. Drs. Rodan and Fields own most of R+F. They pocket most of the profit, just not a direct salary.

R+F press release says they achived 626.9 million revenue in 2015, and maybe a billion in 2016. You can be sure all the top execs took home MILLIONS in salaries or other compensations.

It's definitely NOT as different as the author implied.

Bad Propaganda: "Alternative Facts" about MLM

Recently the Trump camp used "alternative facts" when attempting to "defend" some numbers that are obviously bogus... with even MORE bogus factoids. It is interesting to note that this has been used by MLM for decades, with little success.

So what are some of the "alternative facts" that had been used by MLM supporters?

• If I can succeed you can too...  just like "any lotto ticket can be the big winner"
  
• Success requires hard work... and a whole lot of luck, and other stuff conveniently not mentioned
  
• Thousands of people around the world found MLM works for them...  out of 100 million, as estimated by DSA
  
• Avon is nothing compared to the bigger network marketing companies...  despite Avon is almost same size as Amway, about 10 billion annual revenue larger than any other MLM company.

Bad Argument: Flip the Burden of Proof

One of the most often tactics used by bad arguers is refuse to prove anything, even when you prompt them "where's the proof?"  Instead, they claim it is YOUR responsibility to give THEM proof that they're right.

Hilarious, right? Yet that's exactly what happened here.

K.S. : So provide evidence to prove him (Dave Ramsey) wrong. Where is it?

C.M. : Thousands of millionaires

K.S. : Citing please, or is that you just spitballing?

C.M. : Use Google, it's easy. do not be lazy.

K.S. : Sorry, telling people to "Google It" is not a valid answer to "citings please". You claimed it, so it is your job to provide evidence to support what YOU wrote. So it is YOU being lazy. Try again.

Bad Argument: Citing Celebrity Endorsement as Evidence despite Celebrities said Some of the Craziest Things

It is a fact that celebrities have said some of the kookiest stuff in public including

• Earth is flat (claimed by a rapper)
• Cancer is caused by "negative attitude" (claimed by a TV show host)
• Homeopathy and anti-vaccination (too many to count)

There are even dedicated lists of celebrities idiotic comments. Yet celebrity endorsement remains one of the top forms of advertising. Indeed, MLM has repeatedly used celebrity endorsements. Back when Vemma was a thing, Vemma followers have repeated cited association with Dr. Oz, mainly because B K Boreyko, Vemma's founder, had once said it is Dr. Oz's "favorite fatigue fighter." The real truth is Dr. Oz never endorsed Vemma... The linkback is a courtesy because Boreyko is on the board of one of Dr. Oz's charities.  In other MLMs, Both Donald Trump and Ben Carson (candidates for 2016 Presidential Campaign) have had dealings with MLM (ACN and Mannatech respectively).

SIDENOTE: Trump was quoted by Wall Street Journal, "I (Trump) know nothing about the company (ACN) other than the people who run the company, I’m not familiar with what they (ACN) do or how they go about doing it, and I make that clear in my speeches." A ringing endorsement indeed, despite Trump pocketing millions in speaking fees from ACN events. 

MLM itself often tout their "sales leaders" as minor celebrities, complete with big pageantry of award ceremonies and such.  As an example, Mary Kay is well known for its huge spectacles which are deceptively called "seminars" where new sales rep who reach some minimum goal are showered with praise from the crowd. It is very intoxicating and "inspiring".

Mary Kay convention, all the "ruby" folks getting recognized (date unknown)

But what makes celebrities seem to goof up more often? This can't really be merely explained by the spotlight effect, i.e. anything celebrity said is repeated ad infinitum, while a regular person's kook can often be overlooked. It is a factor, but it can't be all that there is.

Other factors at work includes:

• Luck blindness / Survivorship Bias
• Dunning-Kruger effect
• Self-Centered bias
• Positive reinforcement / confirmation bias / Echo chamber effect

Scam Psychology: "You have to try it to understand it" fallacy

One of the most popular fallacies trotted out by scammers and scammed sheeple is "you have to try it to understand it".  It has a cousin known as "you're not in it (so shut up)" argument.

Basically, the claim that any criticism levelled at the scheme is premature because the critics have not tried the scheme. The implication is once the critic have tried the scheme s/he will change his/her mind. It basically takes this form

A: Acme XYZ is a scam because of ____, _____, and _____.  

B: But you don't know Acme XYZ. How could you when you're not a member? Join us. 

The reply sounds very sensical, until you realize one thing: It never addressed your point: "Acme XYZ is a scam". It is completely irrelevant. It is a red herring. It neither disproves your premise, nor does it prove a counter premise.

The argument is non-sensical, and here's a very appropriate reply quip for such idiocy:

"So you have to eat shit to know not to eat it, huh?"

(Thanks to justicealwayslate on Facebook)

There are plenty of other quips, like "oh, so cops have to be criminals first to arrest criminals, huh?"  or "do I have to shoot myself to know it's a bad idea?" or "Do morticians have to die to be a mortician?" But you get the idea. It's ridiculous.

Scam Psychology: Idiot's Guide to Idiocy... and how to avoid it

It is very often in scam psychology that the victim refused to accept that they have been victimized, and they often square off against the critics. However, here are some questions they should be asking themselves... Are they *really* arguing best evidence... or merely best "intentions"?

1. What exactly are you arguing for? 

Often, proponents of a scheme have very different arguments. The ones I've seen are:

(Scheme name) is [mostly] legal!
(Scheme name) pays me [and that's good enough for me, never mind legal!]
Go pick on some [bigger evil] and leave (Scheme name) alone!

Some folks even managed to do all three at once.

But think about it, only the first item is a real "defense" of the scheme. The other two are tacit admissions that the scheme may indeed be shady, if not outright illegal.


2. Are you arguing or merely denying? 

There's a big difference between arguing, and denying.

Arguing means both sides present their best argument, and analyzes the other side's argument for flaws.

Denying simply means you insist that the other side is wrong, wrong, and wrong, without analysis.

Don't see the difference? Watch this comedy skit "Argument Clinic" courtesy of Monty Python:

3. Does your argument SOUND weak? 

A lot of scheme defenders, when trying to defend certain potentially illegal parts of the scheme, end up sounding like a whiny cat, because their argument end up as...

"But you don't *have* to do that... It's optional."

For example:

"But you don't have to recruit more sellers (It's just that you make more money if people you recruited also recruit more sellers)"

"But you don't have to buy stuff every month (If the people you recruited buy enough so your "group volume" qualifies you for commission)"

Now repeat that in a whiny kid's voice, and you'll see how weak that argument was.

It's also a bogus argument, because it's tacit admission that the scheme has at least one potentially illegal / amoral component. It's roughly equivalent to "I smoked (pot) but I didn't inhale".  That's a VERY weak argument.


4. Are you arguing from "might" or "meek"? 

Are you using "might" or "meek" for your arguments? Or just whatever that suits your argument? Are they even relevant?

Many promoters often invoke bandwagon fallacy (i.e. X people joined, Y amount of money spent, Z celebrities endorsed, etc.) That's the "might".

Many promoters adopt the "meek" attitude when they whine about government persecution, conspiracy of rich, and so on and so forth.

They are NOT relevant! Those are WEAK arguments! Find better ones!

Scam Psychology: Misconstruing quote from Zig Ziglar about Positive Thinking

Every once in a while, you'll see some MLMer pull out this quote as a reaction to criticism:

Positive thinking will let you do everything better better than negative thinking will. 

Remember, this is in reaction to criticism, not "general application", that the quoter basically threw the quote out, meaning "why are you so negative? think positive!"

Live video feed of Zig Ziglar speaking at the Get Motivated Seminar at the Cow Palace in Daly City, California.
(Photo credit: Wikipedia)

Some of the folks may have even gotten the source, Zig Ziglar, correct. Zig Ziglar is a almost legendary salesman and motivational speaker. He has left a lot of positive legacy when he died in 2012 after decades in the field.

I have a lot of respect for Zig Ziglar, which is why I need to point out that this is a total mangling of the original Zig Ziglar quote, and is taken out of context.

In other words, Zig Ziglar NEVER meant for this quote to be used in deflection of criticism. And to understand this, you need to read the ENTIRE quote by Zig Ziglar, which will prove it was taken out of context.

Follow me...

Bad Argument: Blame game and god-complex

God-complex is a psychological condition where the afflicted has inflated belief of personal ability, privilege, or infallibility. It is not a clinical term but it was coined by psychoanalysis pioneer Ernest Jones. Basically the afflicted believe that one's a minor deity.

And MLM, due to its persistence in "positive thinking", as well as tap into one's innate belief that one "deserves better", often encourages participants to develop god-complex: that the individual is better at sales than s/he actually is, that the individual deserves to be treated with respect (more than s/he has earned), and the individual is infallible and any proof to the contrary must be wrong.

Here's a very clear example of such: You all are wrong, I am right (trust me).

A person that goes by screenname Shufel posted the following on BehindMLM about Lyoness, a suspect ponzi scheme on multiple continents.

You are all very , but very wrong. My respectful advice is to check everything very well before you do some statement. Do not collect your information from some random blog in internet or you may be collecting wrong information (Like in this one) .

Shufel posted the message twice, without providing ANY proof for his viewpoint (i.e. "you are all wrong") and merely insinuated, with a lot of condescension, that whatever posted at BehindMLM was not the truth, without providing anything to prove such.

Shufel expect you to believe him or her without proof, which is faith, and ignore any evidence to the contrary.  Thus, a nearly perfect example of god-complex.

But it points at something slightly deeper... the "blame game"... as demonstrated by Shufel in the same post later:

 if some one have a big Lifeline (translation: group of Lyoness downlines) and don’t have income that’s only one option : He is not doing is work right. (sic)

Ah, the familiar "if you fail, it must be your own fault" blame game in MLM.

Bad Argument: The Evil Twin Did it

When confronted with the news that their pet scheme may be a scam, victims of a scam react in various ways to deal with their cognitive dissonance, when two sets of facts collide as they can't both be true.

Some recoil in horror, realize they've been scammed, and quickly attempt to withdraw their money (which are usually stonewalled, leading to further desperation.)

Some are doubtful but vowed to stop taking their upline's word and do some honest research on their own

Some recoil and hide, denying that any "negativity" exists, and you should shut up because they don't want to hear about how they are wrong.

Some react with indignation and attempt to defend their scheme, but when they are armed with little more than PR material and fallacies like "I got paid so it's not a scam (to me)" they rarely have much success convincing anyone but themselves.

Some goes for "special pleading", i.e. come up with reasons why their scheme is the exception, not the rule, i.e. it fits all the definitions of a scam, but it's not a scam

Some go for a "no true Scotsman" gambit, claiming that the company itself is fine. It's only a few "rogue reps" that ruined things for everybody else.

Though recently, in span of a week or two, I saw a new variation on "no true Scotsman"... which I will call...

"The Evil Twin Did It!"  aka "They stole our name!"

This is how many scammers react to questions...

When you ask some scammers (or scammer-taught sheeple / judas goats) about their scheme, they may react this way:

http://dilbert.com/strip/2015-04-27

Bad Argument: Distributors can't lose money if they enjoy the product (WTF?!)

One of the contentious issues between MLM proponents and critics is the definition of a "customer" vs. a "distributor".

Logically, the differences are crystal clear:

Customer spends money, buys stuff (from distributors).

Distributor earns money, sells stuff (to customers).

However, in the MLM world, things are never so clear. And one of the arguments proponents often use is "if the distributor enjoys the product for internal consumption, they could not be considered having suffered financial loss".

Or as someone argued on reddit /r/vemma...

Because even those "poor souls" who join the business but don't earn commissions still aren't losing money, just like when you buy anything else in life that you ultimately consume or use you don't think of it as losing money. 

This is bogus logic. Can you imagine a bar owner drank all his own stock of liquor, and need to close the bar, and then tell himself, "I didn't really lose money because I got drunk"?

There's another reason though... consuming the stock prevents distributor from getting a refund.

MLM Basics: Why are there so many names for MLM?

Have you ever wondered why are there so many different names for multi-level marketing? Here are most of them:

• 

  Network marketing? Multi-level marketing?
  Home-based Franchising? Direct Sales?
  Concentric Marketing? Affiliate Marketing?
  Referral Marketing? Inline Marketing?
  WTFIsIt Marketing?
  (Photo credit: Wikipedia)

  Multi-level marketing, the main term
• Network marketing (most often used alternative)
• Home-based Business Franchising -- WARNING: franchising is NOT multi-level marketing
• Direct sales -- selling direct to consumers, related to but NOT equivalent to MLM
• Affiliate Marketing -- now used by Vemma, often plagued by fraud
• Seller-Assisted Marketing -- mostly a "business opportunity" scam
• Referral Marketing / sales -- marketing via word of mouth; some forms may be illegal
• Dual Marketing / Dual-Level Marketing -- mainly used by Mary Kay, still MLM
• Concentric Marketing -- used by convicted pyramid scheme Burnlounge, replaced "levels" with "circles", but otherwise, the same as MLM
• Consumer Direct Marketing -- the consumer is doing the marketing, potentially illegal if recruitment heavy, as it becomes recruiters recruiting more recruiters. 
• Inline Marketing -- trademarked by "Nutraceuticals Inc", it's still MLM

There are probably a few more I missed. If you spot some new ones not on this list, as a something-marketing, feel free to let me know via the comments.

Any way, why are there so many fancy names for the same thing?  Fraud experts, such as Tracy Coenen say this is an attempt to obfuscate and distract from the bad reputation multi-level marketing had picked up over the decades it had been in existence. However, I think this is also a symptom of how the decentralized nature of MLM became a sin, not a virtue. People are just appropriating terms that sounds SOMEWHAT similar to multi-level marketing, and in some cases, inventing them out of thin air.

First, let us define multi-level marketing... a marketing strategy where the sales force is compensated on multiple levels... direct sales profit, and portion of sales profit achieved by other salespeople they recruited (downlines). Remember, MLM = direct sales + commission based on downline sales.

But first, we have to clear up a few myths...

Bad Argument: The "We shall see" parting shot and how it's linked to cultism

When defenders of a certain scheme ran completely out of viable arguments, they will often depart with a throwaway comment:

"we shall see"

It has several variations, like

"Time will tell"

"History will be the judge"

"Truth will prevail"

and such.

This is a pretty lame departing shot, as it basically demonstrate they have *faith* that they will be vindicated eventually, but they don't have any evidence to support their opinion right now, which makes that a BELIEF.

faith

fāTH/

noun

1. 1.

   complete trust or confidence in someone or something.

   "this restores one's faith in politicians"

   synonyms:

   trust, belief, confidence, conviction; More
2. 2.

   strong belief in God or in the doctrines of a religion, based on spiritual apprehension rather than proof.

   synonyms:

   religion, church, sect, denomination, (religious) persuasion, (religious) belief, ideology, creed, teaching, doctrine More

Note definition #2... "based on ... apprehension rather than proof".

That's exactly what happened here... they have only their own apprehension of how the scheme will make them rich, rather than actual proof. It's religious, rather than evidence-based.

The fact that many scheme promoters behave in a religious fashion have lead to cult experts in calling such schemes "commercial cults".

News Update 13-JUL-2014: International Schemes on the Rise; World Ventures threatens critic

Been busy last week, so this will have to be a big news update. Remember folks, I link to the actual news items, not just random blog posts.

International Suspect Schemes on the Rise 

Recent scheme reviews on BehindMLM revealed that more and more schemes claim to be international, when most of the international presence are mere facades.

Mr. Link IT Solutions -- probable Ponzi investment scheme, claims to be IT exporter from Japan with office in China and Japan... AND Brazil (where it's really based in)

BrokerAds -- clone of BannerBroker ponzi scheme, with horrible broken English, and Alexa traffic pattern indicating it's probably ran out of Pakistan, even though the site's disclaimer seem to suggest a US connection.

LEO (Learn, Earn, Own) -- PO Box in Dubai UAE, Mail drop in Hong Kong, Regus Virtual office in Egypt and India, and more virtual office in other locations.

Beware when you run into one of these "international" companies. Do your due diligence.

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