Example of a bogus cryptocurrency opportunity: Ethtrade.club

There are tons of websites purported to make you money based on the latest trends, and the current trend is cryptocurrency, such as Ethereum.

EthTrade claims to generate 20% ROI per month if you invest for 2 months, or 25% ROI per month if you invest for four months.

However, once you look down toward their executive team, their fiction quickly evaporates.

What's interesting is two out of four photos of the executive team are verified to be nothing of the sort.  Let's pay attention to the two in the middle.

As it turns out, the photo of "Michael Jentzsch" is actually a Fiverr member who goes by the name of Andreas_hof. Fiverr is a place for freelancers to advertise their services.

As for "Ichiro Hikita", that's even funnier. It's a stock photo.

I haven't found the real identities of the other two individuals on the "executive team", but I have little doubt they'll also be stolen photos and their bios are utter fabrications.

But then, this is the same way how Ryan Gosling's face ended up on some cryptoscam website.

ALWAYS be wary online.

An LED light that cleans air? Nope, just marked up 10X LED bulbs

A company called "Pure-Light" claimed their TiO2 coated bulbs will clean the air...

...of these bacteria, viruses, mold, and pollutants. The air also gets deodorized as well since almost all odors are an organic compound. There is also a secondary PURE-LIGHT effect on the surfaces of items near the light bulb, such as kitchen/bathroom counters, dishes, stoves, cutting boards, door knobs, etc.  

But what is this "PURE-LIGHT effect"? It was never defined. It got only worse from there.

The two special super oxygen molecules Pure-Light bulbs produce are called SUPEROXIDE (O-2) and HYDROXYL ION (HO). These two super oxygen molecules provide a triple "action"... two actions against viruses and bacteria, and another "action" against VOCs.

Uh... O2 is just "oxygen". Calling it "superoxide" is just using bogus jargon. What's worse, their own diagram called it something else: "super oxygen" (right below the word "how")

There is no such thing as "super oxygen". The only place you'll find the term used frequently is at woo news sites such as "naturalnews" where the term is often used to refer to ozone (O3) as if it is better than oxygen.

Indeed, Pure-Light claimed that white blood cell works... by feeding bad things extra oxygen... which is NONSENSE!

SUPEROXIDE (O-2), or SUPER OXYGEN, is actually produced in the human body in large quantities by White Blood cells and is used by the immune system to kill invading microorganisms. ​Superoxide (O-2) inside the body, or in the air, combines with a microorganism giving it essentially a boost of oxygen. Good cells thrive with the extra oxygen while viruses and bacteria are killed by the extra oxygen. Superoxides are also used in firefighters' oxygen tanks and divers rebreather systems in order to provide a readily available source of oxygen.

White blood cells actually ingest the bad cells through a process called phagocytosis, and once the cells and virus are "eaten", they are digested with enzymes. Oxygen had nothing to do with it!

How to spot a suspicious Real Estate Listing

Someone brought this listing to Reddit /r/scams as it is suspicious as heck.  It's a house listed in New Orleans, and they ONLY take cash.

The listing is full of suspicious details, like

The only agent allowed is ours. Her name is Nicole Miller and can be reached at five six seven two eight four two four nine seven. There are tenants here currently there until March 29th, and need 48 hours notice before sale can commence or before anyone can see the inside. 

The phone number given, 576-284-2497 is a number in Toledo Ohio.

The lister wants 20% down, before you can even look at the house, and the house CANNOT be viewed until March 29th. According to the listing, it was posted on March 15th or so.

The listing was supposedly posted by a "Jeeb Renovations".

Except there is no such company in either Toledo Ohio or New Orleans, Louisiana.

What's even more interesting: Google found a SECOND house, this time in Jacksonville, Florida, for 30000, with the exact same terms: 20% down just to view it, cannot be viewed until March 29th, and the names are completely different, yet the language is IDENTICAL!

The only agent allowed is ours. Her name is Carolyn Dyer and can be reached at five six seven two eight four two four nine seven. There are tenants here currently there until March 29th, and need 48 hours notice before sale can commence or before anyone can see the inside. 

This time, the listing was supposedly provided by a "Larry Hutcherson", but the same 567 area code number was used. So now, we have FOUR different names attached to the SAME phone number, involving three different cities.

It's obvious by now that both house listings are bogus and perpetrated by the same scammer who's out to steal the 20% down "viewing fee". Once the money's deposited, the guy cuts contact, and you'll never see your money again.

Don't fall for the scam.

Cognitive Distortions, i.e. when your brain is lying to you

You can trust your brain... in general. You have to, since your brain controls everything. But there are occasions when your brain will lie to you. Not intentionally, but call it... "miswired" or "misprogrammed". It's been fed some garbage data and it formed some connections that should not have been made.

And scams are basically intentional signals to encourage your brain to form a connection it should NOT have, to reach a decision that will hurt you, usually financially.

Our brain was created to form connections between vast sets of data and memories, and see patterns in every ing: thoughts, ideas, actions, and consequences, even when they make no sense whatsoever. Athletes and gamblers often have lucky tokens or special rituals, because they associated "winning" with those tokens and rituals. We did A, we get result B. That's the power of correlation. But we've been told time and time again "correlation is not causation".

Yet a cult (and by extension, MLM), and scams are very fond of presenting partial facts as a part of their mind modification techniques to increase your devotion to "the cause".

Here are sixteen of the most common cognitive distortions, and how they apply to cult mind modification. (NOTE: This list is long, so it will be continued in the next post).

1) Extreme thinking

Ever heard the expression: "you're either with us or against us"?  That's polarized thinking. There are no shades of gray. It's either good, or bad. It's great, or awful. There is no in between. This sort of thinking makes it impossible to discuss things with any rationality, as the real world is full of shades of gray.

Commercial cults often treat anyone who questions their favorite company/product as evil to be either avoided at all costs, or as objects of derision, when all the other side wanted is some honest answers. Commercial cults often throw out terms like "dream-stealers" or "naysayers" and use that to describe anyone who doesn't agree with their narrative, even when those narratives are full of holes. They don't want to deal with ANY questions about their own narrative, either you believe, or you don't. 


2) Overgeneralizing

Taking conclusion from one data point, and apply it to everything, is an overgeneralization. Get one "C" on a test, and the student is considered a dismal failure. Get paid once by a suspect scheme, and it must be a "good program". It's obviously not logical, yet you'd be surprised how many people do it.

Commercial cults members are often very fond of citing their own experience in trying out the product as if that validates everything they presented. They can't seem to see that it's just ONE datapoint... their own individual experience, they are are presenting, as if it's the universal truth. Commercial cults are often fond of asking its members to go after the low-hanging fruit first, i.e. friends and family, because those are the easiest to get, thus giving the members a false impression of "how easy it is", thus reaching "overgeneralization". When the members ran out of the easy pickings, they started to find out how the business is REALLY run.

On the other hand, it's more likely for the negative experience to linger and become overgeneralized, i.e. "I failed here, I'll always fail".

Herbalife's first post-FTC disclosure still uses funny math to manipulate impressions

Herbalife settled with the FTC in 2016 in exchange for FTC not calling the company a pyramid scheme outright. The settlement included a long series of accommodations and required disclosures, and the first of which was just published, and it included some interesting statistics.  The document is called "Statement of Average Gross Compensation" for 2016, and here's a link to it from myHerbalife.com

It's parsing the numbers that make things interesting and reveals what's between the lines (and behind the numbers).

Note the following tidbits:

"In 2016... 86% of US Distributors (466926) did not receive earnings from Herbalife"

If you do some math, that says 14% of distributors, or about 76000, did receive earnings in 2016.

"In a typical month from June to September 2017, about 45000 US distributors order products for resale from Herbalife and about 40000 of them earned money from their sales and the sales of those they sponsored."

This disclosure statement contrasts HEAVILY with what the president of Herbalife, Des Walsh, said during the November 2 3rd quarter earnings call, where he said

"Today, we've got about 470000 preferred members. We've got about roughly 215000 distributors." (source)

How did Herbalife go from 215000 distributors in June to September 2017 (3rd quarter) to "45000 distributors (who) ordered products" between June and September? If it were only 10-20% variance, we'd say oops, and let them fudge. But we're talking about a 478% variance (45000 vs 215000). 170000 distributors went missing between the President's statement and FTC-required disclosure.

Clearly, the two are using some VERY VERY different definition of "distributor"

Which really makes you wonder... What ELSE is Herbalife not telling us?

Scam Tactics: Why do HYIPs compound DAILY?

Why do HYIPs compound daily?

The answer is "habit loop"... The HYIPs are there to feed you false information to get you to form a habit... "trust us"

Habit loop has three steps

• Cue -- the trigger to start the routine
• Routine -- the behavior
• Reward -- the reward for performing the routine

A cue triggers the habit, much like the bell causes Pavlov's test dogs to start salivating. 

The actual routine is the behavior triggered by the cue. A physical routine is sometimes called "muscle memory", but a routine can also be emotional or just mental, or combinations. 

The reward is the endorphin rush you get when you've completed the routine, can be physical rewards (like chocolate) as well. A reward can be a simple "whew, glad I survived that" to a little smile when you realized you parallel parked perfectly or anywhere in between.  

The way the brain works is as soon as it spots a cue, the brain automatically executes the routine, without further processing. Think of it as "macros" that is run automatically. The brain doesn't need to calculate every move as long as it saw the cue. And the reward for finishing the routine is what cements the routine into place, and turn it into a habit. 

So what does all this have to do with HYIP, i.e. micro-ponzis? 

The HYIP operators are out there to make it your habit. You are prompted and was rewarded for doing so. And to accelerate your habit formation, the ponzis compound daily. Once it became a part of your habit, it makes you resistant to any suggestion that you're involved in a fraud. 

News: BehindMLM is under Denial of Service Attack for several days now

BehindMLM is under Denial of Service Attack, where bad actors, controlling a swarm of hacked PC's, flood the server with traffic it cannot handle. The result is the website becomes unavailable.

No one has claimed responsibility, but then BehindMLM has made many enemies when it exposes new suspect scams almost daily, both online and offline. And it wasn't the first time the BehindMLM had been knocked offline. This time, not even Project Shield by Google, which is supposed to handle DDOS attacks, was able to handle the traffic at this time.

BehindMLM's last expose revealed that USI-Tech, had been declared illegal by several US and Canadian jurisdictions, has apparently stopped withdrawals. This has not been confirmed when the website went offline.

It's also reported that OneCoin is pretty much in stasis, with many of the prominent "leaders", many of whom had fought bitterly online with critics, have moved on to other kleptocoins.

MLMSkeptic will keep you updated on such news as available.

MLM Basics: Why MLM (almost) never have a price advantage

Ever notice that the products in MLM cost way more than equivalent products elsewhere?

doTerra essential oil... Intro kit is $27 for 15 mL of oil.

However, Amazon sells 10X the oil for slightly lower price, from a different vendor

Remember, 15 mL vs 160 mL of oil. doTerra is more than 10X more expensive. 

You can guess the doTerra reps will start yapping about how their stuff is Certified Therapeutic Grade Pure and nobody else compares. Actually, it's a term invented by doTerra themselves, and they certify themselves, it doesn't mean anything!

How about juices, you say?

Unspirational Quote: It is not the mountain we conquer but ourselves

Recently, it seems some folks want followings by posting popular quotes but framing them to be inspirational toward MLM participants. Here's one example:

However, it seems these folks do NOT actually look into the origin of such a quote.

Scam Tactics: How Easy It Is To Fool Experts and Review Sites, or allow them to fool you

Recently, there's an article at Vice.com, where the author decided to play a hoax on TripAdvisor... They created a FAKE restaurant, which is a picnic table in the back of the author's house, created some FAKE entrees (you'll laugh at the ingredients), got some FAKE reviews through burner phones and whatnot, and got it to be the top-rated restaurant in London... a restaurant that does NOT exist.

I won't spoil the method, let's just say, it's easier than you think.

This wasn't the first prank the author, Oobah Butler, had done. Previously he bullsh*tted his way onto Paris Fashion Week and it was absolutely brilliant. But he's hardly the first to prank experts and succeded.

But then, expert reviews are fooled all the time.  In 2008, wine critic and author Robin Goldstein created a fake restaurant, allegedly stocked with the worst wines Wine Spectator magazine had ever rated. The submitted it to the said magazine. After a while, the fake restaurant had won "award of excellence" by the same magazine.

Wine Spectator called it "publicity seeking stunt", but it exposes something deeply troubling... What sort of experts at the magazine review the candidate for "award of excellence"?  And if they let a fake restaurant get on, what can DELIBERATE manipulation do?

But the pattern ran much much deeper than that. Experts are fooled ALL THE TIME.

• TV host displayed a $15 IKEA print in an art museum, and none of the art experts spotted the problem. 
• The Wine Spectator gag had a sequel... a French scientist decided to die a white wine red and gave it to 54 wine science students. NONE could detect they are tasting a white wine.  
• Food experts cannot tell McDonalds chicken McNuggets from "organic" chicken nuggets. In fact, people cannot tell organic fruit from non-organic fruit

And the problem doesn't stop there. There are review and authority websites that secretly signs under-the-table deals with crooks to promote or write nice articles without any disclosure. And this had been a long-standing problem in network marketing.

DADA Loop: Data / Analysis / Decision / Action and the MLM mind

How do you make decisions?  It's usually a 4 step process:

1. Gather Data

2. Analyze Data

3. Decide on Action

4. Perform the action

This is pretty obvious to most people. Military call it the OODA loop, civilians called it DADA loop (data, analysis, decision, action), but it's the same thing.

So how can this loop go wrong?  EVERY one of the four steps can go wrong.

• One can gather the WRONG data (victim of deception or bad data gathering)
• One can fail to analyze data objectively (by ignoring good data)
• One can fail to decide on any action (stalled loop)
• One can fail to perform the action correctly.

Let's see how MLMer reacts to these steps.

Ponzi Analysis: Suspected Australian and Canadian Ponzi Schemes show all the classic signs long before collapse

In 2017, there were lots of Ponzi schemes, and two of them caught my attention. One was the Pilbarra Ponzi scheme in Australia, and the other was Istuary Innovation Labs Ponzi in Canada. Both of them show classic Ponzi signs long before their collapse.

To recap, the alleged Pilbarra Ponzi was a real estate investment project on the island of Newman near Western Australia, and Port Hedland, also Western Australia. Over $120 million where raised from 1800 investors who were promised between 10 and 36% per year return, into what they thought where property-backed investment. Turns out, the largest property was a piece of undeveloped land on the island of population 7000. The group of companies went bankrupt in 2016, and the Australia agency ASIC charged the operator Veronica Macpherson of operating a Ponzi scheme, with the later joiner's money went toward paying the early participant's interests.

As for Istuary Innovation Labs Ponzi, it started in 2013 as "technology incubation platform" to link tech startups in Canada with customers in China. What was interesting was it promised to return FIVE TIMES what was put into the company in two years, alleged the victims suing the company. Several employees and contractors claimed they had not been paid for work or wages. One investor outright called Istuary a Ponzi scheme.

Let's ignore for now whether they are really Ponzi schemes or not. But what are the signs of danger both exhibited long before they started actually showing problems?

Being Skeptical: Can you make $$$ mining bitcoins? (2017 edition)

With Bitcoin around 8000, people are once again excited about mining Bitcoins. But does it make sense for YOU to order a mining rig and start mining yourself?

Frankly, no, unless you live in an area with extremely cheap electricity.

You can play with the profitability calculator.  http://www.bitcoinx.com/profit/

Remember to plug in the cost of the rig (assume Antminer S9 cost $2000, 1600W, produces 14 TH/s), and cost of your local electricity (assume $0.13/W), AND the current BTC/USD conversion (use $8000)

Even at the current prices of $8000 USD/BTC, you won't break even for 5 MONTHS (breakeven is calculated for 140-160 days depending on electricity costs). The ONLY way this can be profitable is you setup where electricity is cheap, like in India and China, where electricity is 1/3 less than in the US.

Scam Spotting: Is this kitten for sale page on Facebook legit or not?

Someone brought this to the attention of /r/scams... is this legit?

FB page claims to have Sphynx kittens for sale at $600 

The initial page is already problematic. Google photo search comes up with a for sale ad from south Australia town of Glenunga.

Scrolling through the cute photos shows they've been advertising these cats since January 20th, 2017.

A volunteer contacted them via Facebook Messenger, and they claimed to be in Dallas, TX.

Their first timeline photo is this cat:

While I cannot find the EXACT photo, it was pretty obvious it was a screencap from a video, as I was able to find this photo of the same cat, the same potted plant, the same plastic sheet on the same table, just different pose, but it's from a classified ad in Granada, Spain.  There's a video below (no longer available) so presumably, that's where the above "photo" came from.

MLM Basics: The eBay Test

"Jason McRiffle" brought up an interesting test in a BehindMLM comment for the "legitimacy" of an MLM, and it's more useful than it first seems. He dubbed it "the eBay test".

If an MLMer wants you to join "for the product", the way to check whether it's viable or not... is to take the product name and size, and go search on eBay for the same item.

If you can buy it cheaper on eBay including shipping than what you are supposed to sell it for, then it's clearly NOT profitable to join at all as you can't retail it at any profit.

Let's randomly pick one product from each of the top 3 MLM companies by revenue: Amway, Avon, and Herbalife.

Amway Nutrilite Double X Refill "retail price" is $88 on Amway's website

Same refill is easily found on eBay for $50-$60, and if you want to bid, even less

That's not a surprise, is it?

How Paris Hilton and celebrities made SEC, FTC, and FDA see red: possibly illegal endorsements and reviews are exploding; how to spot them and avoid them

What do actor Jamie Foxx, ex-Boxer Floyd Mayweather, rapper DJ Khaled, soccer player Luis Suarez, and hotel heiress Paris Hilton have in common?

They all endorsed an initial coin offering (ICO), either publicly or online. Jamie Foxx tweeted about anticipating Cobinhood, Floyd Mayweather and DJ Khaled endorsed Centra, Luis Suarez endorsed Stox. Paris Hilton tweeted that she supported ICO of Lydian. only to delete the tweet 3 weeks later.

New York Times wrote an expose on how boxer Floyd Mayweather and rapper DJ Khaled endorsed an ICO called Centra, despite many questions about the head of the company and the business model. And that is when Security Exchange Commission (SEC), the regulatory body of investments in the US, started to see red.

SEC had already issued an investor bulletin in July specifically on ICOs, warning that some ICOs may be considered securities in the US, and promotion of such may violate security laws because they are not registered with the SEC.

SEC in September 2017 closed two fraudulent ICOs and alleged Maksim Zaslavskiy of fraudulently promoting two ICOs, REcoin and DRCoin, which were advertised as being backed by real estate and diamonds. SEC alleged that Zaslavskiy raised only 1/10th of the money he actually did, and never hired any experts nor purchased any diamonds or real estate as it claimed it did or will do. SEC obtained a court order to freeze all assets of companies related to these two ICOs.

SEC on November 1st issued a directive to all people, but specifically, celebrities who promote/endorse ICOs.

Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.  A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.  Persons making these endorsements may also be liable for potential violations of the anti-fraud provisions of the federal securities laws, for participating in an unregistered offer and sale of securities, and for acting as unregistered brokers.  

Paris Hilton seems to be the only celebrity who had walked back on his or her ICO endorsements as of 11/11/2017.

But SEC wasn't the only US Federal agency out looking for misleading and possibly illegal endorsements. Federal Trade Commission (FTC), and Federal Drug Administration (FDA) are also clamping down on such illegal behavior that may be misleading consumers.

This Is How Internet Pet Scam Break Your Heart and How You Can Avoid it

Pet scams are all over the place, and pet scammers have moved onto the Internet as well. Current generation of pet scammers create fake "adoption" websites, then hand you off to associates with fake pet shipping services with an excuse for additional fees.

A woman in Milwaukee was duped by a fake kitten adoption website. The man claimed to be in Virginia and will ship her a kitten for $170... Except he demanded payment via a reloadable gift card, not regular methods. Then later, when a separate scammer called her, claimed they need to "recrate" the kitten at the airport for additional $840 that's "refundable" she knew she'd been had. They even used the name of a real pet transport service.

A Delaware woman was duped into sending money via Western Union to a scammer for deposit on a toy poodle, and even told the woman to go to Baltimore, MD to pick it up, except the address was bogus... The man living at that address had no pets, much less a toy poodle.

Delta Airlines discovered that someone had created a fake pet transport service using Delta's name called DeltaPetTransit.com, complete with Delta's logo and pictures of its planes, used by pet scammers to trick people out of even more money.

The Difference Between Skeptical People and Toxic Negative People

When one searches on the internet (through Google, Bing, or any other search engine), one often comes across MLM minded articles, and so many of them are touting "no negativity". In fact, heaps of articles are online about how to deal with negativity. Some may even quote 'studies' that claimed successful people avoid negative people. Some of the articles are actually relatively accurate, but many of them are just outrageously wrong.

One website used this definition:

Negative people are friends, family, strangers, associates, or prospects that talk badly, or in a non-positive way about your dreams, goals and how you plan on accomplishing them.

Why would people be positive about your dreams, goals, or potential accomplishments? Your friends and family will probably support you just because they know you. But why should ANYONE ELSE care? It would be up to you to convince them.

The same author went on to describe techniques on how to overcome the resistance of the prospect... Though prospect here means a potential recruit into the organization, not a prospect for a sale. But that's not the problem.

Another author claimed that negativity comes from lazy people who can't profit easily from MLM and create a rant blog about it, then went on to use "pyramid // pyramid scheme" obfuscation to deflect the criticism. It was a classic diversionary tactic.

Both suffer from a fundamental problem of lumping in all criticism, including skepticism, as "negativity".

And if you can't tell legitimate questions from insults, you can never improve your situation.

Scam Hilarity: Suspect ponzi claims to be mining bitcoin w/ perpetual motion engine

Woo, short for woo-woo, is a term used to describe something that is completely implausible, yet explained with pseudo-scientific and potentially-plausible jargon that can fool innocent sheeple. You can encounter woo in all sorts of places, and most of the time they do no harm. However, when they show up in medicine and finance, they can do quite a bit of harm indeed. And today, we'll discuss the a new wrinkle... physical woo on top of financial woo.

But let me start from the beginning.

HYIP, or "high yield investment program" is a form of ponzi scheme that promised impossibly high yields. Claimed returns like 1% per day is not uncommon.

Some of them are pretty transparent in being a scheme, while others may adopt weasel language like "crowdfunding" or "charity". Yet others turn to woo explanations for their ability to pay such high yields that makes absolutely no sense when examined in detail. Frankly, it failed to pass the smell test... If they have techniques that can reliably generate such income, just put down a mortgage or borrow X dollars from credit card or bank, and they'll make it back in no time. Right? Yet there have been, for decades, schemes that attempt to explain their ability to generate such returns, with bogus excuses such as "bridge loans" [DOJ], "P2P lending" [CNBC], "forex" [DOJ], "arbitrage" [wikipedia], "penny auctions" [CBSnews], "prime bank" [SEC] and so on.

The latest buzzword is cryptocurrency, and it's no wonder ponzi schemes have latched onto it as the latest craze, by incorporating something people who have heard of, but do not understand, as their woo. Some launch their own cryptocurrency (that nobody would ever use), yet others latch onto the idea of cryptomining, the idea that you can "mine" bitcoin and other currencies.

While cryptomining is real, it is hard to make money in such because the hardware to mine and the electricity to run them, not to mention cooling, are expensive as well. It may be possible to run such in China and Eastern Europe, where electricity is cheap (by government mandate) and hardware and labor are cheap, esp. if one exploit scale by running massive crypto-mine.

So the latest crypto-woo is launched by a company called USI-Tech, which used to be Forex HYIP (see above), but they've since switched to Cryptomining as their new woo. Recently in London, they've shown their latest "innovation"... they can create "virtually FREE energy" to run their cryptomining machines.

USI-Tech claims they can create "virtually free energy",
but they only want to run cryptomining rigs with it

Perpetual motion machine doesn't exist, as it violates law of thermodynamics. Yet there are plenty of kooks who claim they made one, or claim the knowledge was suppressed by the evil government or energy consortiums or something. Though you had to admit, using one to power cryptomining is rather cute.

But what does this thing look like?

Scam Psychology: Theory on Stupidity, Scam, ponzi, and pyramid schemes

Ever heard of Professor Cipolla's theory on stupidity? Neither have I until recently, but it explains quite clearly how the world works, esp. scams.

According to professor Cipolla, you can measure a person by 2 axis: benefit derived from their own actions... and benefit to others because of their own actions

It roughly goes like this:

Cipolla's theory on stupidity, summarized