Some recent surfing brought me to an interesting bit of information:
Here it is important to note that FTC questions were actually 1) Did you purchase an opportunity to operate (your) own business 2) Were you lead to believe most of the money earned from this business would be from recruiting others to join the business, rather than sale of products and 3) Were you deceived by the offer of business opportunity with false income claims or false offers of assistance? (Not exact wording, but you can find the questions in the linked PDF)
It is worth noting that in MLM...
A) Almost all MLM claim you are "owning your own business", follow by a derisive attitude toward a job ("just over broke" is often uttered).
B) You almost always get some lecture that you are NOT in a pyramid scheme, yet you are told to "build your team", which is just euphemism for recruiting.
C) Many questionable "leaders" of MLMs will resort to false income claims and false offers of assistance to get you to join, then blame you for your failure. "You must be doing it wrong", they'll point fingers, "because it worked for me."
But there is a hidden statistic that is not obvious until you read the fine print...
But think about it. If there are so few reported incidents for them to even calculate the odds of underreporting...
Either there are so few instances of fraud in business opportunities...
Or there are so many instances of underreporting in business opportunities that it's like an iceberg...
Let's consider a real ponzi case... Zeek Rewards.
ZeekRewards is a ponzi scheme that finally died in 2012 when US Secret Service moved in. Its chief perpetrator, Paul Burks made a plea deal and went to Federal prison for 14 years. In the complaint against him, it was stated that ZeekRewards is a $939 million ponzi scheme involving possibly 2.2 million accounts (unknown number of actual victims).
The receivership reported that only 122000 filed proper victim claims and will be paid. Out of 2.2 million accounts. That's less than six percent reporting rate. Let's round that up to 10%, to account for the fact that some claims are probably just mis-filed, and not all the 2.2 million accounts are real.
But 10% is still low as that means 9/10 of ponzi fraud did not complain, compared to 22% for pyramid scheme victim reporting rate... or less than 1/4 of the victims. Obviously the two stats cannot be compared directly as they are from very different methodologies, but it is still food for thought.
ZeekRewards scam deniers are very fond of claiming they are operating a business... an internet advertising business, they claim, helping to spread the word of Zeek. Indeed, ZeekRewards bought advertorials (pretending to be real articles) on Keith Laggo's NMBJ touting "business opportunity", while Keith Laggos is working actively for Zeek as a consultant *and* is taking money out of the "profit pool"... and did not disclose that to his readers.
Could it be a deep sense of shame that caused many of these victims to not seek any distribution? That they just want to walk away and start over? A firm who specializes in "asset recovery" for victims calculated that roughly HALF of victims of scams will NOT actively seek recovery of assets, but instead write off the loss completely... or try to negotiate with the scammer for return of the funds. And we are talking big amounts here, millions.
We need more data, and we need more justice done.
And the victims need to stand up, and let other victims know... that they do not stand alone.
The more they stay silent, the more the perps will get away with scamming. And that only creates even MORE victims.
...consumers who had purchased a [membership in] pyramid scheme were the least likely to complain – less than one-quarter indicated that they had complained. -- FTC fraud survey (2004)This is a fascinating statistic. The FTC definition of pyramid scheme specifically means "pyramid marketing schemes", as in MLMs that went over to the dark side.
Here it is important to note that FTC questions were actually 1) Did you purchase an opportunity to operate (your) own business 2) Were you lead to believe most of the money earned from this business would be from recruiting others to join the business, rather than sale of products and 3) Were you deceived by the offer of business opportunity with false income claims or false offers of assistance? (Not exact wording, but you can find the questions in the linked PDF)
It is worth noting that in MLM...
A) Almost all MLM claim you are "owning your own business", follow by a derisive attitude toward a job ("just over broke" is often uttered).
B) You almost always get some lecture that you are NOT in a pyramid scheme, yet you are told to "build your team", which is just euphemism for recruiting.
C) Many questionable "leaders" of MLMs will resort to false income claims and false offers of assistance to get you to join, then blame you for your failure. "You must be doing it wrong", they'll point fingers, "because it worked for me."
But there is a hidden statistic that is not obvious until you read the fine print...
... In conducting this test it was necessary to drop the government jobs and business opportunities categories because there are too few consumers who experienced these types of frauds to meet the necessary statistical properties to conduct a Chi-square test.The "government jobs" fraud is victim paid for false promises of government jobs. And business opportunities... needs no introduction.
But think about it. If there are so few reported incidents for them to even calculate the odds of underreporting...
Either there are so few instances of fraud in business opportunities...
Or there are so many instances of underreporting in business opportunities that it's like an iceberg...
Let's consider a real ponzi case... Zeek Rewards.
ZeekRewards is a ponzi scheme that finally died in 2012 when US Secret Service moved in. Its chief perpetrator, Paul Burks made a plea deal and went to Federal prison for 14 years. In the complaint against him, it was stated that ZeekRewards is a $939 million ponzi scheme involving possibly 2.2 million accounts (unknown number of actual victims).
The receivership reported that only 122000 filed proper victim claims and will be paid. Out of 2.2 million accounts. That's less than six percent reporting rate. Let's round that up to 10%, to account for the fact that some claims are probably just mis-filed, and not all the 2.2 million accounts are real.
But 10% is still low as that means 9/10 of ponzi fraud did not complain, compared to 22% for pyramid scheme victim reporting rate... or less than 1/4 of the victims. Obviously the two stats cannot be compared directly as they are from very different methodologies, but it is still food for thought.
ZeekRewards scam deniers are very fond of claiming they are operating a business... an internet advertising business, they claim, helping to spread the word of Zeek. Indeed, ZeekRewards bought advertorials (pretending to be real articles) on Keith Laggo's NMBJ touting "business opportunity", while Keith Laggos is working actively for Zeek as a consultant *and* is taking money out of the "profit pool"... and did not disclose that to his readers.
Could it be a deep sense of shame that caused many of these victims to not seek any distribution? That they just want to walk away and start over? A firm who specializes in "asset recovery" for victims calculated that roughly HALF of victims of scams will NOT actively seek recovery of assets, but instead write off the loss completely... or try to negotiate with the scammer for return of the funds. And we are talking big amounts here, millions.
We need more data, and we need more justice done.
And the victims need to stand up, and let other victims know... that they do not stand alone.
The more they stay silent, the more the perps will get away with scamming. And that only creates even MORE victims.