Have You Really Been Scammed?
What Constitutes a Scam?
Trina L.C. Sonnenberg
Let's start off by pulling out the dictionary, and getting the definition according to Webster.
NOUN: a fraudulent or deceptive act or operation
Now that we know what Webster considered a scam, let us examine what many Internet marketers think of as a scam; because, I think there is a difference of opinion on this topic.
VERB:
1 : deceive, defraud
2 : to obtain (as money) by a scam
As for the thought of money for nothing, some would blame the marketers, for leading them to believe that it is possible to amass huge quantities of cash for doing absolutely nothing. However, they really can't blame anyone but themselves, because they were stupid enough to fall for it.
Think about this: Say a person buys a TrueValue™ franchise, but does not advertise the business, or does not promote it enough in the right places, and they lose their shirt, file for bankruptcy, etc.. Does that give them the right to call TrueValue™ a scam? Certainly not. Or say that someone orders a product from a mail order catalog, and the billing gets screwed up; say the person was charged twice... Does that mean the mail order company is a scam? No it does not. Paperwork errors happen, and data entry, since it requires human interaction, is not perfect either. In other words... Shit happens.
If the policies and procedures are not to one's liking, that is not a reason to cry foul either. The company has the right to establish policy at their discretion, within the confines of the law. If the policy breaks the law, then either the company has a poor legal team, or it could very well be a scam.
Back to Webster to define a couple of the different types of scams...
PONZI:
Pronunciation: \pän-ze\
Function: noun
Etymology: Charles Ponzi died 1949 American (Ital.-born) swindler
Date: 1973
: an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks
PYRAMID SCHEME:
Function:noun
Date: 1975
: a usually illegal operation in which participants pay to join and profit mainly from payments made by subsequent participants
Then there is 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 them all is the matrix scam. And this one is the one people fall for most often. Many companies running this type of scam refer to it as a powerline. This is a situation where a person is told that they need to buy a product, or pay a membership fee, and all those people that pay their way in after them will generate a massive income for them. Or, they are told that if they buy product A, for what ends up being way more than it is worth, they will receive a prize of greater value, once they get a certain amount of others to buy product A, using the same promise of wealth. Both of these 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 got to be last in line. That number of people shrinks even further because there is a smaller number of people in the world that can be reached, who are of legal age to consent to being ripped off, or who can afford to take the risk. Because of this, programs set up this way will ALWAYS collapse. That is why they are illegal; someone always loses, usually more than they can afford to lose.
The best way to avoid getting ripped off is to research a company before becoming involved with it. Think of it as a reverse interview. Rather than you being interviewed for a job, you interview the person and the company that's trying to sign you up. 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 Prosperity Automated System scam, there was no product. All participants got was a web site, and autoresponder, and promises of riches. What they paid for was a lead list, and someone who would seduce others to join the program for you. People spent an awful lot of money on leads for PAS. The guys at the top got rich, and the bottom people got fleeced. Then the government shut them down, and my sources tell me that even the people who lost on the program are having legal challenges as a result of their participation, not just the big cheese. The scam, 12DailyPro, is another example of getting something for nothing gone very bad.
Just because one does not make money in a network marketing business does not mean the business is a scam. If you really want to know if a business opportunity is a scam, show the fine print to an attorney.
Rule of Thumb: If the only way you can earn a commission is to sell memberships to something, not a product, them it is not a good business opportunity. The reason being 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 the passing up of sales to an upline member, (commonly called 'qualifying sales') before being to earn a commission are illegal; at least in the U.S..
To be successful, offer a product or service that is more valuable than the money required to obtain it. You will have happy customers, and they are money in the bank.
Copyright © 2008
The Trii-Zine Ezine
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About the Author:
Trina L.C. Sonnenberg
Publisher - The Trii-Zine Ezine - Your Trusted Source for Internet Business and Marketing Information. Serving online professionals since 2001. ISSN# 1555-2276
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Author of: My Journey A Lifetime of Verse http://stores.lulu.com/triizine
Internet Marketing Mavens
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Keywords: scams, ponzi, pyramid scheme, business opportunities, online scams
Dear Trina,
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