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How to Avoid Losing Money to Scam Sites
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FreedomFire
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Joined: Thu Sep 22nd, 2005
Location: Chesapeake, Virginia USA
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 Posted: Mon Dec 17th, 2007 06:48 pm

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The internet is full of juicy offers to make money fast. Hundreds and thousands of people lose money fast daily because they get trapped by scam offers. These web sites look very attractive. They lure the people with the hope for solving their financial problems. They display pictures of smiling people who tell you that they have made their way. They provide you with testimonials. Be careful about what you see: Webmasters buy pictures of smiling, attractive people at internet photo agencies. Testimonials can be false. 

You need to do some research before you spend money for any of these internet businesses. The following checklist might be helpful for you: 

Are There Any Exaggerations? 

Does the website promise profits that sound too good to be true? Do you believe, if a profit of 5, 10 or even more percent a day is realistic and does sustain? Some websites offer a profit of 30% a day. Others promise you to convert $30 or so into $100,000 within an unbelievable short time. An ad even claims: Be a millionaire in weeks! No wonder that these websites disappear within a short time along with the people’s money – or they just leave a lot of frustrated people behind. 

Are the Contacts Reliable? 

Is there at least a reliable contact at the website? Do they answer to your requests? It is even better if there is a working live support, a working telephone number (not just a recorded voice, answering the phones). 

Check at Alexa 

You can check at the Alexa website. There you can type in the URL of the website. Alexa shows you if there is a name, a company, an address or a telephone number behind the website. If it is a well known scam website, you already can see some bad comments about the website at Alexa. 

Check out the Environment 

You can check out easily, what is going on around the website. You just go to Google, type in the name of the website and click search.  You will detect, if there are bad news about the website. The internet is an open world and you find complaints about bad offers quite soon.

Be aware: If you type in the full URL, Google only displays you the exact website. If you just type in the name or title of the website, Google lists you many background information.  

Check out Black Lists, Forums, Monitors 

There are monitors and forums about the issue, in which the website is active. Do you find any opinions about the website there? Is the website black listed? Do not spend any dime, if a website is on a black list. Are there any ratings about the website? Does the website have a certificate, e.g. one by NetIBA? The Internet Identity Bureau and Associates verifies the identity behind websites. Merchants can get a certificate if they comply with the NetIBA rules. 

You need to be aware, that forums can be manipulated. Scam websites can spread out favourable news about their website. They can use false internet addresses and nicknames. Scam websites have affiliates, who still go on promoting them, even if more and more people start complaining about the website. 

Trace the IP Address and Hosts 

You can find out the IP address and server of the checked website at network-tools.com. There you can type in the URL of the website. Certain scammers use always the same server and IP addresses. This hint could help to detect, if a well known scammer starts a new website. 

There Is No Warranty 

Even, if you do your home work: there is no warranty that you do not get trapped. A scam site might be new and a blank leaf to the internet community. It is recommendable to observe matters for a while before you spend money. The more the people become alert and the more transparency is achieved – the less chance new scammers get to do their fraudulent activities.

God Bless,

Michael



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reeders6
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 Posted: Sat Feb 23rd, 2008 04:14 am

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What is a scam artist? I thought long and hard before writing this article as not to offend anyone. Nobody would ever be complimented by being called a scam artist. A scam artist is one who takes your money for product or service and never delivers anything to you. They run off with your money to never be heard of or found again. I have found very few people in the world who are scam artists like that.It has been my experience that there are similar traits in a lot people on the internet and I’ll let you be the judge weather or not you call these people scam artists. I usually find that program jumpers have similar traits and characteristics to the scam artists or maybe more resembling a swarm of Locusts. These people are usually people who jump ship to every new program out there on the internet. If a new program comes out, they jump in it, take all you suckers out there with them until they have sucked you dry and then move on to the next program.

Here is an article I found at http://encarta.msn.com/encyclopedia_761574486/Locust_(insect).html Let’s see if this resembles any of the so called "Internet Guru’s". Locust (insect), common name applied to a number of jumping insects and especially to the true locusts, which are migratory grasshoppers (see Grasshopper). The true locusts cause great damage to crops wherever they swarm. Control measures include the spreading of poison bait and the plowing under of locust eggs. Infestations threatening large regions of the United States are combated with insecticides sprayed by planes and truck-mounted mist blowers provided by joint federal-state programs.

Aside from the true locusts, the periodical cicada (see Cicada) is another important insect to which the name locust is applied. Grouse, or pygmy, locusts are small, jumping insects that are of little economic importance. Most species are dark brown and are less than 2.5 cm (less than 1 in) in length.

Now, does this sound familiar out there on the internet? I would love to warn you about these people by name, but would never do that. I will however, give you things to watch out for and let you be the judge.

If a person has joined 3 or more programs in one year, they are probably program jumpers, which as we see above, have similar traits to the locusts and do more harm than good. These people are simply out to take your money. No wonder they are making so much money. They have perfected the locust style of business...

.....Best Wishes.. Corey Christopher....mentoring with a vengeance




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matthemattrix
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 Posted: Sun Mar 16th, 2008 10:09 am

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Thanks for this good thorough summary.  Definitely useful, because some scammers are absolutely brilliant at making their sites look above board.

Actually, it makes you wonder.  If they put that much hard work into tricking people, then why not do the same amount -- or less -- to offer them good ethical services instead? 



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hellborne
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 Posted: Thu Mar 20th, 2008 06:47 pm

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These are great tips. It's also worth it to do a little research yourself. For some sale and work opportunities are based on fake numbers and addresses. There was one time when I responded to a sale opportunity, and then I checked its number and address lookup, and the address corresponded to a library in a different state, where the number was in a mountain shack in a state across the country. Scam for sure!

learntosucceed
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 Posted: Sun Mar 23rd, 2008 03:21 pm

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This is all tremendous information that will help those willing to put the time in to do some due dilligence BEFORE jumping into something just because it sounds good.

One other thing I do is check to see if there are Terms of Service listed on the site.  Then I READ them.  I look for many things and especially 'termination' clauses.  Some terms of Service will clearly state that you can be terminated without notice and or without cause.  I would never join a program that had no Terms of Service posted or had clauses in it guaranteed to close my account on a whim.

I also make sure I am not going to have to deal with some foreign country's laws if there is a dispute.

It doesn't take that much time to investigate an opportunity.  Follow the advice given above.  They are million dollar tips and will save you a lot of grief in the long run.



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doveygirl6
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 Posted: Mon Mar 24th, 2008 06:28 pm

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Thanks for this info!  I had never heard of Alexa before.  I typically use scam.com, and I check all businesses out at the Better Business Bureau.  One of the reasons it took me so long to actually invest in an opportunity was because I spent so much time researching!



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cusherr
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 Posted: Thu Mar 27th, 2008 08:58 pm

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I was just about to mention the BBB but the last poster beat me to it! All those websites are great places to research companies.

You could also ask a company rep if they have a BBB profile or membership. If they stall or change the subject than you usually know you're in the midst of a scam.

jeffpaul
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 Posted: Wed Apr 16th, 2008 05:40 am

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You can find out the IP address and server of the checked website at network-tools.com. There you can type in the URL of the website. Certain scammers use always the same server and IP addresses. This hint could help to detect, if a well known scammer starts a new websites
There Is no Warranty
Even, if you do your home work: there is no warranty that you do not get trapped. A scam site might be new and a blank leaf to the internet community. It is recommendable to observe matters for a while before you spend money. The more the people become alert and the more transparency is achieved � the less chance new scammers get to do their fraudulent activities.



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getbetterhealth
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 Posted: Tue Apr 22nd, 2008 10:27 pm

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Don’t you hate junk mail? I do! It seems that you always get it—that and bills—and rarely get anything worthwhile. I have been waiting for a check to arrive from something I did online, and so when I picked up the mail yesterday, I was pleasantly surprised to see one envelope that, when I held it just so, appeared to have a check inside. Strangely, though, it didn’t have a return address, just my name printed on the front. If I hadn’t seen the check through the paper, I would have thought it was a letter from a friend, perhaps, or a credit card offer.

So I hurried inside and opened the envelope. To my infinite surprise, the check wasn’t the one I had been expecting at all! I had been expecting something in the neighborhood of $12, and here I was holding in my hand a check for nearly $5,000!

I started turning the check over to see if it was real, and looking for words like, “If you cash this check, you are agreeing to _______”, but it appeared real and didn’t have anything strange on it. So I began to read the letter. It informed me that my job search for mystery shopping (which I probably filled out by accident) had been found and I had been hired as a mystery shopper. I was to start by going to MoneyGram and sending $4,450 to a Jennifer [my last name] in Ottawa, Ontario, Canada, as if she were my relative. Then I was to fill out the info on the back and send it in by fax. Following this, I would be approved to use $100 of the amount sent me to shop at one of several popular stores, and when it was all said and done, I would have $300 left over.

Now, right away a red flag went off in my mind. You see, I am a former mystery shopper. (I mystery shopping to pay off my credit card after my baby was born.) I know how mystery shopping works. You sign up with a company, they match you to a job or you pick from a list of possibilities. Once your assignment is confirmed, you have to do the assignment before they will send you payment (which usually arrives in anywhere from 15 to 45 days). Sometimes your expenses can be reimbursed, but not always. The only time I got money beforehand was a check I was supposed to cash at a bank to mystery shop the bank, and the check had to be from that bank. The check was for $16 and some odd cents.

So I did the smart thing: I called the bank listed on the check to see if the account was even in existence. When the automated system assured me that it was, I then called the bank and told a representative about it. Then this morning I looked up the company on the check and informed them that someone is printing checks with their account number and name and using them in a scam.

What would happen if I cashed the check is that the check would probably cash (if I did it fast enough), and I would send the bulk of it by MoneyGram to someone in Canada who would make a fake ID to go pick it up. I would have the remainder, but they would have effectively stolen money from a real company and included me in the larceny. I’m not about to get in trouble with that. And if the company were to track down the casher of the check, I could be liable for the full $4,995, while the unknown person in Canada who picked up my money would get off scott free.

In the interest of making the world a better place, I would like to list a number of signs that I saw that convinced me that this company was not legitimate and that the offer was a scam. Some are obvious, while others not so obvious and require a bit of investigation. Almost any one of them would signal a scam.

•    Money sent before I agreed to shop
•    Amount extremely large
•    No way to guarantee that I would not keep the money for myself
•    Money being sent out of country
•    Name of company on letter and on check different
•    Large payment for service
•    Recipient is referred to as an employee
•    Could not find name of company on the Internet
•    Company listed on check is not in any way related to mystery shopping
•    Assignments too random and too generalized
•    Money sent to fake individual using my last name
•    Address of company non-existent
•    Number for company is cell phone in Canada


Money Sent First

Legitimate mystery shopping companies NEVER send money first, unless it is required for you to complete the shop. If I were to shop MoneyGram, for instance, they might ask me to use my money and then reimburse me. If I were to cash a check at a bank, I might be sent a check from that bank (as once happened to me), but the amount would be very low. Any company that pays you before you have agreed to work with them should be suspect.

Amount Extremely Large

When I was to mystery shop a bank by cashing a check, I was sent a check for $16 something made out to me from what appeared to be a personal account (the check was hand written). I was paid for the shop at a later date. $4,995 is a huge a mount of money. If I understand it right, any check $5,000 and up will get flagged by the bank, so by keeping the amount just under $5,000, the scammer is hoping to not get noticed.

No Guarantee From Me

There is no way for the scammer to guarantee that I won’t cash the check and keep the money for myself. Of course, since it’s not their money to begin with, they don’t care. But they tried to make a pretense by putting some legal sounding hogwash on the back about ethics and honesty, like “Imbursement of Company funds will not be tolerated.”

Money Sent Out of Country

The money was being sent out of country, making it harder to track. Sure, it’s not Nigeria, but for all we know, the person on the other end could be a Nigerian in Canada!

Company Names Don’t Match

The company name on the letter and the name company listed on the check were different. This means the scammer is stealing from a legitimate company.

Large Payment for Service

The most I ever got for a mystery shop was about $30, I think, and that was because they were desperate to get the shop done and I was the only one available, and they increased the pay to outweigh the inconvenience for me to drive half and hour one way to do the shop. The average I got paid per shop was about $10. So $300 for just two assignments was way too much.

Recipient Considered Employee

Every mystery shopping company that I ever worked for or considered working for said that I would be an independent contractor. If I earned more than $600 in a year from them, they would send me a 1099; but that was it. They were very specific to indicate that I was NOT an employee. However, the fine print on the back of the Sterling Consumer Surveys letter said things like, “We expect every employee to read and understand. . .”, “Every employee is expected to develop a sense of commitment. . .”, “Any employee who violates the standards in this Code [of ethics] may be subject do disciplinary action. . .”, “Our success depends upon each employee operating within legal guidelines. . .”, etc. They even warn that mismanagement/imbursement of funds will result in termination of employment and legal action. This is a big red flag. If you are an employee, they would have to take out takes, or at the very least have you fill out a W-4.

Company Name Non-existent

I googled the name “Sterling Consumer Surveys” and found not one link to such a company. Surely they would have a website if they were legitimate, or at least a listing in the yellow or white pages. Nope. Not there. I couldn’t find them on the Better Business Bureau, either. I sent the BBB a letter asking them to investigate.

Letter and Check Names Don’t Match

While I won’t tell you the name of the company on the check, I will say that it is a major steel processing plant, with its own website and all. I am sure they have nothing to do with the scam. And the words sterling, consumer, and surveys are not found anywhere in their company name. This is another big red flag. The address on the check and the address on the letter are also in different states.

Assignment Too Random

When a mystery shopping company assigns you to do a shop, you are told to go to a specific location during a specific time period. The exact day is sometimes given, or even a span of hours during which the shop must be completed. They wouldn’t tell you to just go to MoneyGram or to Wal-Mart or to Sears. They would say, The MoneyGram store located inside Wal-mart at this location, or the Sears at this address, etc. Also, the sheet I was supposed to fill out and send in was too generic. It consisted of 1 page of questions. Most mystery shops have several pages worth of evaluations and a ton of questions. For example, when I mystery shopped my local grocery store, the evaluation form referred to the employees as “partners”, a term that particular company uses instead of associate or employee.

Money Sent to Fake Name

To be able to pick up wired money, one must present an ID. If I am sending money to a fake individual, then they must acquire a fake ID to pick it up. If I were truly mystery shopping MoneyGram, I would be sending the money to a real person (probably an employee of the mystery shopping company), and I might be given a scenario as to who this person was (my aunt, my married sister, etc). The scammer said in the letter that I was to “pose as a potential customer sending money to a relative of yours JENNIFER (YOUR LAST NAME) in Ottawa, Ontario, Canada.” This is not how mystery shopping companies work.

Address of Company Non-Existent

When I typed in the address on the letterhead into the reverse look-up in whitepages.com, I got 0 matching results. Looking on Google maps, I see that it is located near a parking garage and several businesses. A letter sent to this address would probably be returned.

Telephone Number Is a Cell Phone

When I reverse looked up the number, it would not tell me who was listed, but it indicated that the number was a cell phone. This is not a company. It’s a person posing as a company.

In summary, Sterling Consumer Surveys is a scam, through and through. My past experience with mystery shopping helped me to pinpoint many areas that the average person would have overlooked; and if the points I have made will help you to avoid being scammed now and in the future, then the purpose of this article has been fulfilled.



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 Posted: Fri Apr 25th, 2008 03:27 pm

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I have read the information you posted with great interest , but i feel that most cash in hand prospects are excited for the moment, and any offer of fast easy cash is pounced upon without all the required research.
I bet most onliners have jumped at something impulsively at least once, i have.
You learn from your actions and this makes you wary of subsequent offers.

Peter




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veronicagoldy1
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 Posted: Sat Apr 26th, 2008 10:39 am

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Good article , As always, need to stop and think before clicking on “too good to be true” deals, and do some research before committing. Check out websites devoted to unveiling scams, such as Hoax Slayers, do a quick search on WhoIs, or simply use Google to do some background reading on the company involved.



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TeamMLMTheGame
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 Posted: Fri Jun 20th, 2008 12:29 am

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Today I read a reporters story about an alleged pyramid scam in China...

I have shared a few paragraphs of this report, and I think it is this type of ignorant reporting, or at least incomplete reporting that gives mlm, network marketing such a bad rap in the public view, please share your opinions...

Full report at:
http://www.thestandard.com.hk/news_detail.asp?pp_cat=11&art_id=65986&sid=18985806&con_type=1

.............................

$10m lost as victims fall to pyramid scam


Diana Lee
Monday, May 19, 2008

New immigrants, fresh graduates and jobseekers have lost more than HK$10 million in a pyramid- selling scam.All said they were duped into buying hundreds of thousands of dollars worth of aroma products.
Cheung, in her 40s, said she was persuaded in 2005 by a neighbor to buy HK$500,000 worth of essential oils of a certain brand after being promised amazing returns.
She said she attended day-long meetings at a company office, during which she was subjected to a variety of underhand sales techniques.
"They told me I must not tell my relatives about the business, otherwise they will stop me. I followed the advice and secretly used the savings held jointly with my husband."
Another woman, surnamed Tsang, invested HK$1 million by mortgaging her property.
"My husband was a public security officer and told me it was a scam. I refused to believe him. I said they held grand conferences at the Hong Kong Convention and Exhibition Centre and that the company hired a lawyer to explain its business was legal and profitable."
Pang from Shenzhen borrowed HK$67,000 from relatives using different excuses, but the money was for seven bottles of essential oils and a membership fee.
The victims later went to police headquarters to meet officers from the Commercial Crime Bureau.
The company involved in the alleged pyramid selling scam could not be reached for comment.
...........................................
By no means am I defending how this company, who ever they are acted in their corporate headquarters, and by no means am I defending the distributors that have strongly mislead their prospects into front loading products for sake of immediate payout to their uplines.
I do however see many problem with this:

1. The words pyramid scam are thrown out way too often, and often irresponsibly so, if used need to be justified, so that uneducated people can learn the difference.

2. Other countries company leaders need to be educated so they don't prospect like many people did here in the US 20-30 years ago. (some still do)

3. The general public needs education so they don't make moronic decisions like the poor folks that bought all this product!

4. Reporters need to be educated so that THEY can report about the specific issue and name the specific companies, reports like this make even legitimate companies and people involved in them look bad.


What do you think?


Anders Gustavsson



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keyaw
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 Posted: Fri Jun 20th, 2008 06:39 pm

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Perhaps the company IS indeed a scam, but COME ON!  How crazy do you have to be to think that all you have to do is spend some money and "poof" you'll be rich.

The article says there were college grads and middle aged people.  sounds like they were all people who had absolutely NO common sense.

But then again, many many people go through life with that victim kind of attitude.  You know "woe is me they told me to give them all my money". But these same people never take the time to think about the role they played in being duped.

Just my thoughts.



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frankcseke
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 Posted: Sat Jun 21st, 2008 08:28 pm

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Many of you are likely involved or currently soliciting a home based business, MLM, or network marketing business.  As such, I imagine that many of you also wondered or are still wondering if these business models are legal, scams, or poor ventures to spend your time and money.  In my legal career I have had several clients ask me about the business they have got involved in or are thinking about getting involved in through a friend or co-worker. What most know is that pyramid-type schemes are illegal and you may be penalized by the justice system for being involved in one.  Under theories of law surrounding commerce, contracts, and trade, many companies have circumvented the legal regime that once made it illegal to set up a MLM or network marketing company because they were perceived as pyramid or ponzee schemes.  Through the sale and distribution of products that make the company legitimate as well as sensable corporate formation this is obviously no longer generally the case.

However, under common law theories surrounding contract and tort that typically apply in most states, any business offer that mispreprents in some fashion or does not afford the other party the benefit of their bargain exposes the company and or reseller, distributor, associate, agent, etc. to uncertain liabilities that are open to litigation.  The issues are not always clear and findings of fact and conclusions of law will be weighed into the decision making process either by bench trial or jury trial. 

The caveat is basically this: if you promise something that contains false information or the "buying party" has not received the benefit of the bargain a "legal can of worms" is openned.  Certain defenses are obviously available such as adequate consideration or a mutual meeting of the minds, etc.  Yet, if the "buying party" does not have the skill, acumen, or sophistication as the party soliciting, the courts could view the contract void, or there to be a breach of contract, through operation of law or fact.  The consequence is economic damages may be weighed against the losing party in addition to non-economic or punative damages if a deception of some kind were to be found.

That being stated, the bad news is that a flood of litigation is possible in the area of MLM and network marketing for those who fit within either a veritable or nebulous realm of arguable trickery and/or defective contract making. The good news is that there are legitimate companies and business models out there which, if conduct of trade and expression of the solicitation are done honestly with full transperency, can be a promissing home based business.  A lot of new companies have seen the mistakes from those MLM businesses which have failed and have constructively innovated the way business was once done so as to help people economically benefit from their home based business.  My opinion is that there are few companies out there that can do this.  But I do endorse some as an attorney and have seen things done by these companies the right way.

Thank you for reading,

 

Frank A. Cseke, Esq.

frankcseke@gmail.com

 



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PMHayes
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 Posted: Sun Jun 22nd, 2008 11:28 am

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Frank, I truly appreciate that post.  The MLM industry has gotten such a bad rep as a result of the things you mentioned. I am in  legitimate business, affordable products, fair compensation plan, etc. But I cannot tell you how often I have to field that "is this another pyramid scheme,"  question or how often I have to debunk the "don't  join a business that asks for money or credit card information, like the scam sites," statements, even in forums like this! Since you are a lawyer, perhaps you could shed some light on that one. There is nothing wrong with start up costs, requiring distributors to purchase product, a reasonable amount, I mean, website hosting fees, etc. How would you field such questions. And, I would love to invite you to post on my home business blog, things pertaining to marketing ethically and with integrity and excellence. If you would like, please check out my blog, it's in my sig file.

Mitch



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frankcseke
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 Posted: Sun Jun 22nd, 2008 08:36 pm

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Thank you Mitch,

The problem with most MLM is that the business models I have seen that people are struggling with fail to preface or frame their offering in legal terms or through legal instruments that are well explained as well as disclosed.  Business offerings have two aspects to them a contract and legal disclosure, from these more aspects emerge. Surrounding these aspects are initial investment and maintaining the contractual agreement through the terms and conditions signed off on by the new "business owner."  Few MLM or home based business have legal endorsements because the companies do not want or cannot afford legal counsel to assist in the solicition, offer/acceptance, and contractual executions involved in bringing in distributers, resellers, affiliates, partners, teams, etc. (whatever terminology used to call a downline person). 

That being the case in most situations, MLMs are moving in the direction of legitimizing and building credibility through attorneys and accountants so as to help increase the ability to bring new people into the business.



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 Posted: Wed Jun 25th, 2008 10:57 pm

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People have to realize that any business takes work committment consistency and effort. It has a long learning curve. Too many people think in MLM or home biz just cause they pay they will make millions. They fall for hype and fast riches. It is unfortunate.



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Mana: 
 Posted: Thu Jun 26th, 2008 02:06 pm

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I couldn't agree more!  So many think that by joining a HBB program that it is a get rich quick deal.  When I decided to have my own HBB I didn't expect to get rich quick but I did not expect the amount of work that it took to promote my business.

The system we use IS automated and IS simple but the efforts have come in the marketing of the business.  Lucky for me that I am deidicated and have an entrepreneurial mindset to succeed:)  

I always thought that everyone (or nearly everyone) wanted to be a business owner but boy was I wrong.  It is amazing, after talking with so many prospects, how many would rather a JOB and don't have the mindset to be an entrepreneur....which is ok.

That is why it is essential to QUALIFY your prospects.  You will save yourself a great deal of time if you sort in the beginning.

 

Ok- I am getting off topic.........;)



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Mana: 
 Posted: Fri Jun 27th, 2008 09:53 am

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TeamMLMTheGame wrote:
New immigrants, fresh graduates and jobseekers have lost more than HK$10 million in a pyramid- selling scam.All said they were duped into buying hundreds of thousands of dollars worth of aroma products.
Well, to point out the obvious, this could not by definition be a "pyramid scheme." A pyramid scheme exists when no product is sold. In a true pyramid scheme, people make money on the money people below them spend to get in the business, and the process continues downward, indefinately. No product ever changes hands, only money. A chain letter is a good example of a pyramid scheme. This reporter obviously does not know the difference. I just finished and submitted an article to ezines on this very subject, mlm scams. It was specific to my business, but none the less, I am getting sick of that word being hurled like a cannon ball at the mlm industry by people who do not know what they are talking about. Anders, I am in agreement with you, people who don't know what they are talking about should just stop talking!



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Mana: 
 Posted: Fri Jun 27th, 2008 05:47 pm

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Amen to that!  They appear to speak from a place of authority, but they are truly ignorant about mlm. 



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