Bad Argument: The "You can't satisfy everybody" red herring

When supporters of a suspect scheme ran out of arguments against its critics, they often fall back to the "you can't satisfy everyone" fallacy, where they try to dismiss the critic's points as "negativity" without saying so. It is a type of red herring, and takes the following form:

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

B: Acme XYZ can't satisfy everybody. There's always some detractors.

This is a red herring because B's statement neither disproves the premise (Acme XYZ is a scam), nor does it prove the counter-premise (Acme XYZ is NOT a scam). Instead, it throws in a completely irrelevant statement: "so what?"

Which is just plain rude.

Bad Argument: the "lack of complaints" fallacy

A suspect scheme supporter may defend the scheme by touting how few complaints it had with legal authorities or agencies such as the BBB (that is, when they are not discrediting the BBB). It may take the following form:

S: Acme XYZ is not a scam! It has a million affiliates and only 8 complaints! 

Unfortunately, this is a fallacy of "appeal to ignorance". Just because there's lack of complaints doesn't prove the scheme's legit.

The fact that there had been few complaints could have variety of explanations... age (it may have just started), maturity (Ponzi schemes and pyramid schemes don't generate complaints until they stop paying), cult control (if you complain you are not one of us), and so on.

EDITORIAL: People in denial do some crazy things...

It is interesting that people in denial will do some absolutely crazy things, such as claiming black is white, truth is fiction, and so on.

This is exactly what's happening with many Zeek affiliates, one week after their scheme, ZeekRewards, was shut down by the SEC as a $600 million Ponzi scheme. And they are being lead by someone who thus far has yet to publicize his own relationship with Zeek, not as an affiliate, but also as a consultant for Zeek.

This is a letter I was forwarded recently, and it illustrates the amount of delusion people in denial has, in that they refuse to see the truth, but would rather spin some sort of conspiracy to fit their own narrative.

Their words will be in blue, and my reply will be in red.

Are you the success story, or the "Judas Goat"?

A judas goat leading lambs to the slaughter (Photo credit: Wikipedia)

People in suspect schemes often defend their pet scheme with the "it paid me" defense. It is a fallacy. Sometimes, they don't even get paid. It's "my friend / my upline / my relative / someone I know got paid".

Apparently they never heard of the "Judas Goat".

Judas Goat is a trained goat that goes out, and leads other goats or lamb to a specific destination, often, a slaughter house.

In general, the judas goat's life is spared while the rest of the flock are slaughtered.

That is exactly how a Ponzi or a pyramid scheme works; some people will get paid, the rest gets fleeced, but they don't know it yet. And they may be taught to bring in even *more* people, "share the wealth / opportunity", so to speak.

In other words, in a pyramid scheme, everybody is a judas goat.

WARNING: "reload" scams targeting Zeek Rewards Ponzi victims

On the Internet there are a LOT of "opportunities" pledging their innocence, and going after Zeek victims any way. Enough so, that North Carolina Department of Justice, Attorney General's Office, issued a special alert warning any Zeek victims of falling for a "reload scam".

One such company, whose name starts with a V, even announced a "rescue plan" for all Zeek affiliates. After the outcry, they quickly reversed course and claimed they are being mistaken for another scam.

Another company, whose URL starts with U, is far less worried about their image. Why? Because they are a penny auction site too.

But then comes the ultimate shills... or self-delusionals... who believe that Zeek's innocent and should be restarted. These are the people who created a petition on Change.org, and later, on Whitehouse.gov. And people signed them because they are gullible, that they believed their uplines when their uplines sprouted garbage about "the competition told lies to the government about us".

And now, these people want your DONATION. That's right, they need YOUR MONEY to help them restart a scam, whose owner had already capitulated.

How to stop (or at least slow down) online Ponzi schemes

The Zeek Rewards ponzi scheme shut down by SEC is the largest Ponzi scheme in the US ever, involving up to a million victims. While it only involved $600 Million dollars, and Madoff and Stanford involved billions, most victims of Madoff and Stanford are rich, while victims of Zeek are mostly middle class everyman.

Such a scheme are organized into FOUR levels:

Mastermind and "cadre" -- the one who setup the whole scheme, and the inner circle that implemented it. They KNOW it's a scam, and they are out to scam people.

Core shills -- those who who were first recruited, usually "MLM Stars / Recruiter" with established group of downlines. They know it's probably not legitimate, but they will drag the judas goats into it any way. And they have plausible deniability, or they will pull their team out just before the endgame so they will be thanked instead of getting tarred & feathered.

(See Six types of MLMers)

Judas Goats -- goats that will "lead" sheep to slaughterhouse, and would be spared themselves, judas goats were told by core shills to recruit as many people as possible, and make plenty of money in the process. And they believe it's legitimate because core shills told them it is. They will gladly demonstrate how much money they made.

Sheeple -- the victims, 98-99% of all participants, who were convinced by the judas goats (who they trusted) to join (and sometimes, become Judas goats themselves).

In the past, Ponzi prosecution had been limited to the mastermind and cadre.  The core shills were almost never charged.

Bad Argument: the shifting goalpost

The best example of "shifting goalpost" is the "No True Scotsman" fallacy. However, there are many others. It's such that they are very popular fallacies used by defenders of suspect schemes, when they need to "revise" their statement when critics point out holes in their reasoning or evidence.

The proper name for this fallacy is "ad hoc rescue", where the arguer keep revising the original argument by adding more and more exceptions. Though the term "shifting goalpost" is a better visual metaphor. It may take a form similar to this. 

B: You can make legally a ton of money with Acme XYZ! Just work the system!

A: But Acme XYZ requires you to put in money first. That's investment, not work. 

B: Uh, right! Invest in Acme XYZ and make lots of money!

A: But Acme XYZ insists they are not an investment. Says so here _______.

B: Uh... You just don't understand the system! It's new hybrid! 

B just keep changing his argument that he got backed into a corner, and had to invent some new sh__.