Scam Tactics: Whip Up Fear, Provide "Solution", Take Your Money under false pretense

When questioned why does the company operate this way, the rep, either stammer "so don't join" or retorts with insults such as "you're obviously not an entrepreneur".  The implication for both is "if you want to know about the company before you join, you're obviously NOT ready to join."

Isn't that just faith, i.e. "I am willing to join without knowing what I am joining"?  Does that even make sense? 

But this just reminded me of the infamous diamond scams during the late 1970's in the US. 

The scam is simple... The sellers claim to be sourcing diamonds and are offering them as investment instruments to folks who are afraid of the stock market fluctuations. The concept is simple: "everybody loves diamonds", "it only appreciates because supply is strictly controlled by a monopoly", "all diamonds are sealed with certificate guaranteeing their quality", and so on. And all of these statements are even... true. 

Sufficiently convinced, the buyer sent off a check for thousands, and in a week or so, he gets diamonds... sealed in plastic with the certificate guaranteeing their quality... Except for the caveat: the quality is only guaranteed if the plastic is NOT broken. I.e. any attempt to have it appraised means it's no longer guaranteed. And many customers did break the seal only to find the diamonds are inferior or even worthless quality. It was bad enough that New York's Attorney General has to establish a "Diamond Task Force" just to process the hundreds of complaints of fraud.

Do you know the modern equivalent? Investment scam. They will tell you that all existing investments are run by the rich, and only whatever they are providing is good for you.

Following picture is a promo photo of an alleged cryptocurrency called Gemcoin, supposedly backed by amber mines and such. 

Yes, that's promo photo of promo event of a Ponzi scheme, called USFIA. They claim to own mines in the Dominican Republic of top grade amber. In reality, there was no mine. Quoting from the link of Pasadena news linked earlier:

“As for the amber mine in the Dominican Republic the defendant professed to own, no mine has been discovered. The receiver has learned that the address of the purported mine is a residential address of a house ... located in a residential area and there are no mines adjacent to it,” according to Seaman. “The receiver is in the process of domesticating the preliminary injunction order in the Dominican Republic for the purpose of seizing and securing assets of the receivership entities located there.”

The tall Chinese guy was portrayed to be a "gem appraiser". What USFIA did not tell you is he's really just a security guard:

Mr. Zhang as a security guard in front of USFIA at a USFIA Gemcoin promo event

Mr. Zhang as a security guard posing with Gemcoin "fans" at a USFIA Gemcoin event

They tell you stuff to make you fear existing investments, then they claim whatever bogosity they are selling (approved by bogus amateurs pretending to be experts) are the solutions to your financial security. In reality, your money simply disappeared into their wallets.

Does your MLM do something similar? Does your MLM leader start with a pitch that whips up fear then pitch you some solution you barely understand? With outrageous promises propped up by some "proof" that aren't really proof?

Why would people consider this sort of behavior actually acceptable, i.e. you had to pay to get information about the company?

Yet it's often "hand-waved" away with the excuse "we need to know if you are serious".

Basically, you just have "IKEA effect" and "ownership bias" used against you.

Which is why you should RUN AWAY from suspect schemes that use this sort of tactics.