What constitutes a scam?
Let’s start by pulling out the dictionary and getting the definition according to Webster.
NOUN: fraudulent or deceptive act or operation
VERB:
1: deceive, defraud
2: get (as money) through a scam
Now that we know what Webster considered a scam, let’s examine what many Internet marketers consider a scam; because, I think there is a difference of opinion on this issue.
After spending many years on scam forums, it seems that most people think that a program, company, or business opportunity is a scam if you don’t make money from it. It seems to me that that is the only real requirement to be able to cry scam online. However, the fact that a person cannot build a network marketing business, online or offline, does not make the opportunity/program a scam. It can simply mean that the person who failed did not do something right, or did not work hard enough, or at all. Many think they can enroll in a program and the money will just come. When it doesn’t happen that way, instead of looking at themselves for failure, it’s easier to yell rip off at the company.
As for the idea of money for nothing, some would blame salespeople for making them believe that it is possible to accumulate vast amounts of cash by doing absolutely nothing. However, they can’t really blame anyone but themselves, because they were stupid enough to fall for it.
Think about it: Let’s say someone buys a TrueValue(TM) franchise, but doesn’t advertise or promote the business enough in the right places, and loses their shirt, files for bankruptcy, etc. the right to call TrueValue(TM) a scam? Certainly not. Or let’s say someone orders a product from a mail order catalog and the billing goes bankrupt; Let’s say the person was charged twice… Does that mean the mail order company is a scam? No, he does not do it. Paperwork errors do happen and data entry, since it requires human interaction, isn’t perfect either. In other words… Things happen.
If the policies and procedures aren’t to your liking, that’s no reason to complain either. The company has the right to establish policies at its discretion, within the limits of the law. If the policy breaks the law, then either the company has a poor legal team or it could be a scam.
Going back to Webster to define a couple of the different types of scams…
PONZI:
Pronunciation: pän-ze
function: noun
Etymology: Charles Ponzi died in 1949 American con man (born in Italy)
Date: 1973
: an investment scam in which some early investors are paid with money contributed by later ones to encourage more and greater risk
PYRAMID SCHEME:
function: noun
Date: 1975
– A generally illegal operation in which participants pay to join and profit primarily from payments made by subsequent participants
Then there’s the infomercial scam, seminar scam, investment scam, insurance scam… The list goes on.
There are literally hundreds of different types of scams, but the most common of all is the matrix scam. And this is the one that people fall in love with most often. Many companies that run this type of scam refer to it as a power line. This is a situation where one person is told that they need to buy a product or pay a membership fee, and all those people who pay after them will generate a massive income for them. Or, they are told that if they buy product A, for which it ends up being much more than it is worth, they will receive a prize of higher value, once they get a certain amount of others to buy product A, using the same promise. of health. Both scenarios are similar to the pyramid, in that eventually someone at the bottom loses everything (time and money), and receives nothing.
The problem with this is that there are a finite number of people in the world and someone has to be the last in line. That number of people is further reduced because there are fewer people in the world who can be reached, who are of legal age to consent to being scammed, or who can afford to take the risk. Because of this, programs configured this way will ALWAYS crash. That is why they are illegal; someone always loses, usually more than they can afford to lose.
The best way to avoid being scammed is to research a company before getting involved with it. Think of it like a reverse interview. Instead of being interviewed for a job, you interview the person and the company that is trying to hire you. Make sure the company has a legitimate product, at a fair price, and that you like it enough to use it yourself. As in the Automated Prosperity System scam, there was no product. All the participants got was a website, an autoresponder, and promises of riches. What they paid for was a list of potential clients and someone who would entice others to join the program for you. People spent a lot of money on leads for PAS. The guys at the top got rich and the guys at the bottom got fleeced. Then the government shut them down, and my sources tell me that even the people who lost on the show are having legal challenges as a result of their involvement, not just the big cheese. The scam, 12DailyPro, is another example of getting something for nothing gone horribly wrong.
Just because you don’t make money in a network marketing business doesn’t mean the business is a scam. If you really want to know if a business opportunity is a scam, show a lawyer the fine print.
Golden Rule: If the only way to earn a commission is by selling memberships to something, not a product, then it’s not a good business opportunity. The reason is that the number of memberships that can be sold is finite. Products can be sold over and over again, generating repeat commissions. And those programs that require passing sales to an upline member (commonly called ‘qualified sales‘) before being to earn a commission are illegal; at least in the US
To be successful, offer a product or service that is more valuable than the money required to obtain it. You’ll have happy customers, and they’re money in the bank.
Copyright © 2008
The electronic publication Trii-Zine