Monday, December 31, 2012

Are Nutritional Supplements Helpful, or Placebo?

It's a big question... are nutritional supplements for real, or just big placebo? 

Seems every person who sell the supplement swear by them, often with fanciful words such as "fountain of youth".  Here's one example:

Yes, this guy's talking about a nutritional supplement... something that had to do with hydrolyzed collagen and "custom matrix of special fruits rich in anti-oxidants". 

The reality? Contains tiny amounts of super-fruits in a custom blend of juices. Here's the ingredient list off one of their own sales sites:


http://www.jusururesources.com/Product%20Materials/Jusuru_LifeBlendSupplementFacts_USA_050712.pdf

Note that 60 ml serving (which is like 2 sips), but there is NO EXPLANATION HOW MUCH OF EACH juice. Which may be a violation of Federal Supplement Labeling laws.  However,  what you need to know is the labeling law requires you to list the stuff by "decreasing weight". In other words, the most plentiful ingredients in this product are apple juice, grape juice, and strawberry juice

Those you can find cheaply in any supermarket. 

So how much are you pay for all the other stuff? And how much are you getting? No idea. 

Ever heard of the term "pixie-dusting"? 

Sunday, December 30, 2012

Abuse of Power for MLM

PYRAMID SCHEME
PYRAMID SCHEME (Photo credit: ALL CHROME)
MLM is often compared to cult because its members are like mad recruiters, corralling any one they can get their hands on to either buy their stuff, or worse, join their biz/cult. Family and friends would be most of the people who have to put up with this, and it's annoying enough. However, there are people who then crosses the line: they take MLM to their DAY-JOB, or worse, they are in a position of power, and they try to recruit their subordinates and/or employees.

Regular MLMs that sell stuff are not that offensive in this regard, because if people say they're not interested, well, they're not. And you just know that if you sell "True Romance", don't market it to guys, and if you sell "Man Cave" stuff, don't sell to girls. But recruiting-based schemes and/or outright pyramid schemes? Anybody is fair game, whether they're interested or not. In fact, the more ignorant and desperate they are, the better.

Taking MLM to work is already wrong. Using workplace authority for personal gain is almost criminal and certainly unethical.

That doesn't stop the recruiters, of course. They rationalize it as "non-work activity", and co-workers as "potential recruits".



Saturday, December 29, 2012

5 Simple Mental Blindspots We Are All Guilty Of

Cover of "Forgiveness"
Cover of Forgiveness
Rajeev Pershawaria, in a Forbes post, pointed out 5 simple mental blindspots we are all guilty of. I am going to make a very quick summary of all 5 points:


1) Respect is earned, not taken by force or fraud

Respect cannot be demanded, then taken, but must be earned. Most people mistake fear for respect. If you demand respect (because of your position), you will get fear (and/or seething anger) instead. What are you doing to earn trust from others?

On the other hand, you cannot take respect through fraud either. You can *act* like a big shot, dress sharp, but you'd just be a hustler, not the real thing.


2) Why not a win-win instead of a win-lose?

If you are negotiating with someone, do you really have to be adversarial? Must he lose so you can "win", or vice versa? Why not try to strive for a win-win situation, by learning what each side *really* wants, then work from there?

On the other hand, a fraud can be described as falsely representing a win-lose situation as a win-win situation. Ponzi scheme is basically claiming that everybody makes money, when in fact only some people make money.


3) You control what you feel, not others

If you think too much about how others see you, you will never be happy. You control how you feel, because it is you who are feeling. Stop taking things so personally, and do not worry about other people's thoughts. Worry about YOUR OWN THOUGHTS.

Thus, a lot of this positive thinking "fake it till you make it" self-help books make a little bit of sense in that it can get you start controlling your own feelings, but it's not a cure all. Remember, "faking it" is not real.

Friday, December 28, 2012

What Do You Own From Joining MLM?

Robert T. Kiyosaki
Cover of Robert T. Kiyosaki
People who follow MLM know that Robert "Rich Dad" Kiyosaki were often quoted as "I support network marketing", and there's a lot of "sagely" advice on why. One of the most often used explanations is from Kiyosaki's book "Cashflow Quadrant", where he divided people into four kinds: Employees (you work), Self-Employed (you own your work), Business Owners (you own a system, and people work for you), and Investors (money work for you). 

However, the explanation becomes very vague from there. Most people quickly claim that MLM is a way for you to move from E (employee) to "B" (business owner). And the term "employee" is considered a pejorative. 

Sidenote: There's a lot of weird advice from Kiyosaki, one where he divided people into 4 wants: want to be liked, want to be comfortable, want to be right, and want to win, and network marketers are supposedly "want to win".  That doesn't explain WHY Kiyosaki like network marketing... other than he likes to hang out with... winners? But he defined it, so is he using circular logic? But enough about that later. 

But how much *do* you really own from MLM? 

Thursday, December 27, 2012

How to Scam a Scammer

Facebook logo EspaƱol: Logotipo de Facebook Fr...
Facebook logo (Photo credit: Wikipedia)
Scammers can be scammed, if you really put in the effort.

Facebook and dating sites are rife with "sweetheart scammers" that want to befriend you, then hit you up for money. I mentioned before one of my friends was hit by one such person who pretended to be someone in the UK and needs some money to pay for "inheritance tax" so she can move to the US and be with my friend (yeah, right).

Clearly, some people spot such scams, and instead of simply ignoring them, they scam the scammer, try to waste as much of scammer's time as possible so it cannot be dedicated to scam other victims, as well as try to draw out some real info for law enforcement.

The most famous of which is 419eater.com, which goes after the people doing 419 scams (i.e. Nigerian scams).

Wednesday, December 26, 2012

How Google Weeds Out Scam

Image representing Google as depicted in Crunc...
Image via CrunchBase
Ever wonder why Google don't display bad ads? That you don't see ads to malicious websites, and such?

There are HUMANS in the decision loop.

That's right, Google have TEAMS of people going over the people who buy ads. Both the ads and the sites that the ads link to are reviewed, as well as the company's background info.

The three teams (review ads, review sites, review advertisers) share data, so one company that triggered one alarm system is automatically reviewed by the other two, and all together, it eliminates the scams pretty thoroughly.


Tuesday, December 25, 2012

A Few Cliches about Scammers

On Christmas Eve, I read that a Zeek pitchman, who was "hosting" Robert Craddock's calls, had been sued by ANOTHER receiver for his winnings in another Ponzi scheme. 

Gregory Baker, who was hosting the conference calls giving updates by Kettner, Craddock, et al, was previously a "winner" in the Botfly Ponzi in Florida, and was sued by Florida AG for thousands of dollars of his ill-gotten gains. It is unknown if Baker himself had money in Zeek, but I would not be surprised if he did.

My first reaction is "Once a thief, always a thief". Or the very similar, "Leopard cannot change its spots; tiger cannot change its stripes."

There had been LONG documented cases where people who were in a Ponzi jump from scheme to scheme, fast enough so they made a profit, and split before it goes kaput. In fact, the "winners" in Zeek reads like a who's who in Ponzi promoters, including Jerry Napier, Trudy Gilmond, O.H. Brown, and more, all of whom had previously been involved in Ad Surf Daily, Andy Bowdoin's Ponzi, also out of Florida. Other winners such as Kettner were involved in similar shady deals such as TVI Express.

It's almost as if joining Ponzi scheme is an addiction... if you "time" it just right you can make a bundle and pretend to be victims.

Then you dump the proceeds into ANOTHER Ponzi so you claim you don't have any money to give back. Which is a lie, of course. It's fraud, intentional dissipation of assets to hide it from authorities.


Monday, December 24, 2012

Are you really listening? 10 Myths about listening


The Myth: You consider yourself a decent listener 
The Truth: You're nowhere close to a good listener, as you have preconceptions that ignores information that does not fit your narrative. 

Here are ten related myths about listening:
Myth 1: Everyone knows how to listen.
Fact: Every one knows how to "hear". Listening is a very different skill. 
Myth 2: Sending messages is more important than receiving.
Fact: Listening and speaking are like ying and yang, they are complementary processes. You can't have one without the other. 
Myth 3: Listening is easy and passive.
Fact: Listening is an active process in which your brain actively interprets the data and evaluate how well it fits into your narrative. Thus, it requires mental power. 
Myth 4: Hearing and listening are the same.
Fact: Listening and hearing are completely different skills. Hearing is completely passive, while listening requires critical thinking. 
Myth 5: An effective speaker commands the audience's attention.
Fact: an effective speaker has the skill to "tease" the audience into paying attention, but the audience needs to participate as well. 
Myth 6: Hearing and decoding constitute listening.
Fact: Active perception, analysis, and evaluation are still needed even if you "heard" the information. 
Myth 7: Communication is the sender's responsibility.
Fact: Communication is like tango: it takes two, both speaker and listener. 
Myth 8: Listening is done with the ears.
Fact: True listening involves body language in addition to merely the verbal stuff. 
Myth 9: Listening skills are practiced, not learned.
Fact: Listening involves critical thinking, thus practice does not make perfect. You need to engage your brain for this instead of reflex. 
Myth 10: Listening ability comes from maturity.
Listening ability is from engaging your brain. Maturity merely lends you more perspective. 
(Reference: Adapted from "The Top 10 Myths of Listening," Copyright 2003 by Thomas Leonard, http://www.coachville.com)
 

Sunday, December 23, 2012

Reality Inversion: When the Absurd is Normal, and vice versa

What is reality inversion? It is when the absurd seem normal, and normal seem absurd.


Very often, when someone falls for a scam, what appears absurd to us ("How *could* you fall for something that idiotic?") would seem perfectly normal to them, mainly because their reality had been... inverted. To the people who had their reality inverted, it is the absurd world of the scammer that seem normal, and the "real" world that seem weird.

Examples are easy to find. Let's take a recent example... the Zeek Rewards Ponzi. 

The reality: there is no easy money. Any one promising easy money is very likely a scam 

The absurd: Getting easy money is EASY! Pay us up to 10000 at a time1 You get to take back out up to 1.5% every day subject to our esoteric rules. Just do something everyday so simple a child can do it in minutes! 

It's obviously too good to be true, yet MILLIONS of people had their reality subverted into believing that easy money *does* exist, that you can pay a company money and earn a return and was told it's NOT an investment, and when they had problems paying all sorts of excuses were believed. Even after the scam was shut down by the SEC, those who got more money out than they put in persist in believing they had earned the money "legitimately". 

That is reality inversion. 

And scammers are very good at reality inversion: convincing the victims that giving them money is actually EARNING money; that you should pay for something that's free; that investment is NOT an investment; and a scam is NOT a scam (even though it fits the definition of the law). 

Reality inversion does not have to do with something that's so obviously illegal, but can be done with something PERFECTLY LEGAL... such as convincing you to pay for something that should have been free. 

Saturday, December 22, 2012

The "Legal Threat" Scam

Image representing RIAA, Recording Industry As...
Image via CrunchBase
One of the latest ways to scam people is to pretend to threaten them with legal action... unless they pay up.

Basically, any sort of big news that involves government or lawsuit may be mentioned a scam.

One example: you got a robocall that claims the government tracked your visit to the Wikileaks site, which leaked a lot of US government diplomatic messages and caused some severe embarrassment. And now US government is going to take action against you... You may want to pay a fine and make them go away.

Except US government had taken NO such action.

http://www.forbes.com/sites/williampbarrett/2011/01/19/fraudsters-invoke-wikileaks-in-new-scam/

But wait, there's more!

Friday, December 21, 2012

Funky Shark fined by Montana AFTER shutdown

funky shark
funky shark (Photo credit: cyanocorax)
Breaking news: Montana has fined Funky Shark, which was originally launched as a penny auction / rewards program similar to Zeek Rewards (which was shut down as a Ponzi scheme back in August 2012).

Funky Shark had actually shut down in October 2012, when it was revealed that the founder had solicited money for so-called "Founder's Club" where people are expected to put in up to $10000. As this is essentially soliciting investments, but without any sort of registration with SEC or state-level agencies, such as the Commission of Securities and Investment, this is illegal.

Upon finding this, and probably on the advice of their advisor Kevin Thompson, Funky Shark shut down and refunded all the founder's club members' money.

Today, we found out what really prompted the shutdown... an investigation by Montana Office of Securities and Investment.


Thursday, December 20, 2012

Fast Decision or Accurate Decision, but not both

Previously we have covered how time pressure is an integral part of most scams. While this is seemingly obvious, now there seems to be some scientific proof, based on an article published recently.

The extremely short summary:  instead of one whole brain doing both fast and accurate, there seem to be separate areas of the brain involved with fast decisions, vs. accurate decisions.

In other words, the faster you need to make a decision, the more likely you are to make a mistake.


Bad Argument: Neglect to Mention

There are PLENTY of ways marketers can disguise themselves in order to get "foot in door".

I've personally been tricked once. I was looking for an IT job, when I got wrangled by this guy who said he needs a person familiar with the Internet. Turns out he was recruiting for Quixtar, the Internet arm of Amway., and not as an IT guy, but a regular MLM grunt. I hung up.

He neglected to mention he's recruiting for MLM, not IT.

However, the marketers are getting smarter. In 2012, before the US Elections, some shady marketers started to disguise their timeshare selling pitch as a political survey.

(A "time share" is where you buy only a piece of vacation home in some nice place but only use it maybe a month or two out of the year, so you only pay a fraction of the cost.)

In one such case, they claim to be conducting a survey, then at the end, it's "you've been selected to win a X day Caribbean cruise! You are now being connected!"  and they are asking for all sorts of booking dates.

Wait, they are giving away a cruise just for giving your opinion? How can they afford to do it?

Ah, we just want to fill up our cabins with you as free ads!

Can I have some time to think about it?

No, when you hang up this offer expires.

RED ALERT! RED ALERT!

There's something this offer neglected to mention, but what?


Tuesday, December 18, 2012

Zeek 2013 update: same people, same fraud, different biz

My "good friend" Robert Craddock was spotted pushing "Offer Hubb", which claims to sell ads, and promise to share profits from ad sales... esp if people who "pre-purchased" ad packs for resale to businesses.

Hey, doesn't that sounds JUST LIKE "Ad Surf Daily"?

What other warning signs are there regarding "Offer Hubb"?  BehindMLM did some basic fact-checking, and came up with the following:
  • Offer Hubb is a virtual company with address listed in an outfit in Wyoming known to investigators as home of THOUSANDS of corporations, which only exists as mailboxes.
  • It's headed by a "David Flynn" which is a name popular enough that it cannot be researched effectively.
  • It's pushed by the SAME Zeek top earners, including Jerry Napier, Trudy Gilmond, and O H Brown.
  • Its video is produced by USHBB, the SAME company that did video promos for various suspect schemes, including Zeek Rewards, Ad Surf Daily, Narc that Car, and many others. 
  • USHBB is headed by O. H. Brown, who's ALSO a Zeek affiliate, and once referred to as "employee" and "official rep" on Zeek's support forum. 
If these aren't enough warning signs for you, you are probably blind and deaf.

But there's more.


Monday, December 17, 2012

Fraud, Acting, and HYIP

When something's too good to be true, it probably is, no matter how fancy / shmancy the proponents claim.

For example, one group of fraudsters claimed that they have a special high yield investment program (HYIP) offered by no less than the US Federal Government, specifically, the Federal Reserve.

Yeah, right.

Then they really piled on the sale... by claiming that this program generates so much profit, part of it goes to humanitarian purposes, like disaster relief for FEMA, part of it goes back as seed money, and part is given to the investors.

Yeah, right.

Oh, but wait, these fraudsters promise that investors get to meed a local Federal Reserve branch chairman, and head of a major bank, that'll testify that this HYIP exists.

Yeah, right.

Oh, and your money will be in an offshore Swiss Bank Account.

A program ran by Federal Reserve, *the* bank in the US of A, put money into a Swiss bank account?

If you are still enthralled by all this "crap", you are hopeless...or pretending to be.


Sunday, December 16, 2012

Due Diligence applies to business opportunity

Multi-Level Marketing
Multi-Level Marketing (Photo credit: Larry L for school)
Previously I've covered what constitutes "due diligence" when it comes to an "income opportunity", such as a MLM. I then ran into an article at Investopedia that talks about 10 steps you should do before you invest in a company.

MLM crowd, esp. Robert "Rich Dad" Kiyosaki kept saying "own a part of the system" like an investor. Well, why not apply the same due diligence to a MLM? When you join a MLM, should you not apply the same sort of criteria on the MLM company?

So, here goes, with the questions slightly rephrased for more relevant. And there are a couple items that doesn't apply to MLMs as they are not public, but there are a couple items that are important.

1) How big is the company? 

Most MLM companies are tiny, run by a few people. They will often claim that they run lean, and most of the work are done by you affiliates, but that begs the question... are you actually affiliates, or just not-quite-employees that have to put in your own money?

The size of the company is also indicative of how stable they are. BIG MLM companies like NuSkin, Amway, Herbalife, the ones that are public and had been around for many many years, have sales figures and other public info that you can look up. In general the larger the company is, the more stable its business model (and how trusted its products are). The fad-pills-of-the-week  companies generally don't last more than a year or two.

The smaller the company, the higher the risk.


2) Revenue, Profit, and Margin

A publicly listed company such as the big MLM companies have figures you can look up, and you want a company that has steadily growing revenue, stable or rising profit, and good amount of margin (sales to profit ratio). This is even MORE important in MLM as that margin is what you get paid out of.

If this is a private company that does not publish any figures, then you will have nothing to research on, and this is a major risk factor.

Saturday, December 15, 2012

To the Spammer Who's Spamming This Blog: You're barking up the wrong tree

To the spammer who's spamming this blog with anti-athiest comments...

Can't you see this blog is not about religion, but crimes of persuasion?

So, please go spam your comment elsewhere. It's WAY OFF TOPIC.

Zeek Rewards Ponzi Update: another attorney fighting the clawbacks

An attorney previously involved in the defense of Bernard Madoff, Ira Sorkin, is now representing two Zeek winners: Trudy Gilmond and Kellie King to fight the receiver Ken Bell and his attempt to recover funds for the victims of Zeek Rewards Ponzi.

Sorkin's position was that Zeek does not sell securities and thus receiver was appointed in error. Why he believes so is not certain. Presumably he knows what he's talking about, as he used to work for the SEC. However, he did not explain why Zeek does not pass the Howey test.

What's interesting is Trudy Gilmond was once listed as "employee" by the Zeek internal support board. Trudy Gilmond was also formerly of several suspect scams, one of which accused by no less than US Secret Service.

Cyber-currency: source of good... or evil?

one oz. Proof U.S. gold bullion
one oz. Proof U.S. gold bullion (Photo credit: Wikipedia)
BitCoin, a cybercurrency, made news when it launched in 2009, as it was not released by any central bank (i.e. backed by any country or group of countries, or any real assets like gold or silver reserves), and thus, is virtually untraceable. However, it's hardly the first cybercurrency. e-Bullion preceded it by several years having been launched in 2001.

The difference is e-Buillion is a scam that involved in murder, and it was used to scam people as well.

e-Billion was created by a Jim Fayed who lived in California, though e-Bullion was specifically incorporated in Panama in 2001, and its servers located in Switzerland as to prevent "interference" by US authorities. Though eventually he had to locate some servers in California.

e-Bullion was marketed as an investment, where you can buy precious metals from them, but does NOT physically take delivery of them. Instead, you basically exchanged your "real" currency for their virtual cybercurrency, which is backed by their precious metal reserves stored in several locations, like Australia, Switzerland, and so on.

And why would you do such a thing? To trade with other e-Bullion members, of course. In other words, they're acting like a bank, but have no such license from ANYWHERE.

Friday, December 14, 2012

Zeek Defenders FINALLY filed a motion to release funds... 4 MONTHS after freeze order

According to the Federal Court System, Fun Club USA, headed by Craddock and company, has finally filed the motion to petition for release of the eWallet funds frozen back in AUGUST 2012...  something they have been promising people for many many MONTHS.

Will try to read it and give you an update soon. Despite the legalese, it probably contains a whole barrel full of laughs with many ridiculous assumptions and requests.

The problem with spread crap info: a growing snowball of crap

If you can only act as a parrot and repeat what your upline said, then this is obviously NOT meant for you. Please go read some crap... and enjoy it.

However, if you actually believe yourself to have at least average intelligence, and you don't take crap from anybody, then perhaps you should continue to read.

Previously we have covered the existence of crap info, and how to detect them. But where do crap info come from?

Frankly, a lot of crap info comes from crap info. When you repeat someone's crap info, you add your own narrative onto it, and it snowballs, grows bigger and bigger, until someone realizes that you've been spreading... well, crap! By then, you've spread so much crap, your own reputation takes a hit, and you're either so embarrassed that you'd want to dig a hole to China and hide in it, or you're so busy spreading even MORE crap to explain your previous crap that people stop listening to you altogether.

Why not stop spreading crap, esp. when it comes to SCAMS?  Of course, that requires you to engage your BRAIN, and a little research, and your "crap detector". Wait, you don't have one? Sure you do. Yours just need a tune up.

I'll cite some Zeek Reward Ponzi crap as example...

----------

(I am going to assume you already know how Zeek Rewards ponzi works. If you don't, please read my investigation )

When SEC shut down the Zeek Rewards ponzi scheme back on August 16, 2012, all of the various eWallets containing funds related to Zeek (both Zeek's own, and all the affiliates') were frozen in cooperation  of an emergency asset freeze order from the SEC. This was done by all 3 eWallet vendors used by Zeek: Payza, STP, and NxPay.

Considering the fact that vast majority of Zeek affiliates were told to keep their money inside Zeek as much as possible (as VIP points from buying and "giving away" bids) very few people would have money in their eWallet, unless they were getting PAID by Zeek.

If you were paid by Zeek, a purported Ponzi scheme, then it's obvious that your account needs to be frozen UNTIL the court (or court-appointed receiver) figures out how much of that money is yours, and how much really belongs to other people, but ended up in your account through FRAUDULENT TRANSFER.

And guess who's beating the drum of "free our eWallets"? Robert Craddock, the same person that tried to shut me down for pointing out how illegal ZeekRewards was.


Thursday, December 13, 2012

Zeek Ponzi Update: Kettner and Friends earned 2 mil from Zeek, and Receiver Conference Call next week

By filing a motion to quash the subpoena of the receiver, the trio Sorrel, Kettner, and Kettner have revealed that together they have received almost 2 MILLION dollars from Zeek while only paid in less than $5000.

Yep, that's the sort of people that's telling everybody that Zeek's legal, and was seeking DONATIONS to fight the SEC and the receiver, mainly by hiring an out-of-state lawyer to file frivolous motions.

In other news, Zeek Receiver Ken Bell announced a conference call for coming Monday. 17-DEC-2012.

To MLMers, "Employee" is a Perjorative, but Why?

Robert T. Kiyosaki
Cover of Robert T. Kiyosaki
Just the other day, when discussing a suspect scheme (it's a clone of an existing pyramid scheme), its defender trotted out this argument:
The people that call [Redacted] a scam are the quitters, employees of the world, and the people that can’t stand that there’s a 19 year old kid from [redacted] making more money than them just for traveling and showing people how to get what he has.
Clearly, "employee" is meant to be a pejorative. But why?

Blame one guy: Robert "Rich Dad" Kiyosaki.

In his various books, esp. "Cashflow Quadrant", he basically made the claim that there are four kinds of people: Employees, Self-Employed, Business Owner, and Investor. It goes something like this:


Seem to make sense, until you realize this is a MASSIVE simplification. You can think of examples all day to contradict this. You can easily span multiple categories. This sort of classification is no more useful than, say "bloodtype determines personality", or "Zodiac sign determines personality". It's a bunch of pithy stereotypes, nothing really useful. 

The truth is, nobody liked the book until Kiyosaki started pitching it to the MLM circles, where it was readily adopted as a MLM "training tool". MLMers basically claim that MLM is the easiest way for a regular E to move over into B. 

But is it real? Is MLM really the tool to move from E to B? 

Wednesday, December 12, 2012

Don't Make Threats Over the Internet, or You May Regret It

Image representing YouTube as depicted in Crun...
Image via CrunchBase
It's no joke to threaten someone, except maybe as a one-time joke against people you know, but when done to total strangers, it's harassment, and if prolonged, it's stalking and bullying. (or Cyberbullying)

And it's AGAINST THE LAW in many jurisdictions to utter threats over the Internet.

Just recently, in Canada, a certain D. Markuze was arrested by Montreal PD for violations of his probation terms... uttering online threats against multiple individuals. He got probation, so if he kept his nose clean, that would be the end of it.

But as you can expect, he tired to cover his tracks by going to proxy sites, coffee shops, libraries, and basically free WIFI spots to send his **** against skeptics, and he continued to harass skeptics through Youtube, internet forums, Twitter, blog comments, and much more, even though he was supposed to avoid internet forums, blogs, social networks, chatrooms, and such.

So he's now spending some quality time IN JAIL.

What does this have to do with a scam, you ask?

Tuesday, December 11, 2012

Zeek Loyal Affiliates Facebook Page goes underground

According to ASDUpdates, one of the more often updated Zeek Affiliate Pages that are still active, Zeek Loyal Affiliates, has gone dark, and may have gone underground, as it had deleted various comments posted by Dave Kettner and Ernest Moffitt, both of whom posted utter fantasy comments such as "SEC chairman resigned due to 1700 lawsuits filed by Zeek affiliates" and "Ken Bell Receiver is continuing his fraud" that seem to have only the flimsiest grasp to reality.

While SEC chairwoman is stepping down, a new chairwoman has already been appointed, Elisse Walters! Mary Shapiro had been on the post for 4 years, long enough! And there was NO 1700 lawsuits! If there was, it would have shown up in the court system!

However, that's not the interesting part.


Monday, December 10, 2012

Bad Argument: the either/or fallacy (i.e. false dilemma)

Chasing Madoff
Chasing Madoff (Photo credit: Wikipedia)
One way defenders defend a suspect scheme is to claim that a business is "innocent until proven guilty", and use that to deflect every sort of analysis by critics.  To the defenders, there are only two choices: illegal, or legal, and anything that was not declared illegal by a government or court must therefore be legal. 

This is a fallacy on multiple levels. 

As a legal concept, this is fallacious because "innocent until proven guilty" is primarily used for CRIMINAL prosecution, not civil. And if a business is fraudulent, it's a civil matter. (there are exceptions, but US is not one of them)

As a logical fallacy, this is a form of either/or (i.e. false dilemma), as a business can be "undetermined", as well as legal, or illegal. In fact, this is a fundamental concept in critical thinking, that you have to start from a "null hypothesis", and prove it either way. 

There's also the question about operating illegally, vs. formally declared as scam and received a judgement by a real judge in a court of law. For example, we knew that Madoff's Ponzi had been operating for a decade or more before it ran out of money in 2008 and Madoff confessed. So it was operating ILLEGALLY for a decade, but there was no charges. So was Madoff's scheme illegal? Absolutely. However, according to some scheme defender's logic, Madoff's scheme is NOT illegal UNTIL it's formally declared by a judge to be illegal. That's just bogus.

Sunday, December 9, 2012

Now we know where Zeek "beneficiaries" live! (Sort of)

One of the many mysteries regarding Zeek was somewhat answered on December 5th, 2012, when the receiver filed several dozen documents with various Federal District Courts around the country. They are shown in abbreviated form below:

Image courtesy of PatrickPretty.com and ASDUpdates.com
As you can see, there's a LOT of them. There's only 94 district courts in the US, and there are at least 40 (UPDATE: over 60 now) different filings in various courts, showing the widespread of Zeek corruption.

Saturday, December 8, 2012

Happy 50 Million Downloads to WOT

Web of Trust, or WOT, recently celebrated their 50 million-th download.

WOT is a browser plug-in that you install, where you can see what other users say about this website you will be visiting, and the links. You don't want to visit any of the "red" ones, for example.

Actually, that happened back on October 29th, 2012, but I just found out, okay?

Previously, WOT was mentioned here as a way for you to cut through the **** that was all over the Internet, and basically has four grades: red, yellow, green, unknown.

As you can imagine, there are plenty of MLMers out to abuse this system.

Friday, December 7, 2012

Zeek Defenders Finally Moved... Hilarity Ensued

On November 30th, Dave Kettner, his wife, and one other person filed a paper through the Fun Club USA attorney Michael Quilling to the court that wants an "examiner" appointed as voice of the Zeek members affected.

This is quoted from their court document:

According to the Receiver this case is the largest case of its type ever filed in the United
States in terms of the number of potential victims and participants. According to the Receiver’s
estimates there may be 2.2 million Affiliates located around the world. Many of the actions being taken and proposed by the Receiver may substantially and irreparably impact their rights. It is impractical for the Affiliates to each retain counsel and appear in this case. Many of them cannot afford to do so. The Affiliates need representation of their interests in this case and Movants request that the Court appoint Michael J Quilling as Examiner in these proceedings to represent the collective interests of the Affiliates and all creditors of the receivership estate and that the Examiner and his counsel be compensated out of the receivership estate.
We've previously identified Dave Kettner as an early participant in Zeek (first documented July 2011) and scams such as TVI Express, and its clones such as Diamond Holidays. Kettner had been releasing plenty of comments hostile to the receiver along with Robert Craddock, through Twitter and other avenues for the past several MONTHS.

Consider the simple question... Who Benefits from appointment of examiner, ignore their version of explanation for the moment?
Examiner -- An official or other person empowered by another—whether an individual, business, or government agency—to investigate and review specified documents for accuracy and truthfulness.  
FACT: You'd only need an examiner if the receiver's NOT doing his job, and needs to be audited/verified.  Examiner is an ANTAGONIST to the receiver.

FACT: There was no call for examiner UNTIL he started sending out pre-clawback subpoenas.

Thus, it's quite clear that when Kettner wrote "collective interest of the affiliates", he meant "those who benefited from Zeek" (about 100000 of them, per Receiver's October 31st, 2012 update), not all 2.2 million Zeek victims as he was implying.

After all, there are TWO kinds of affiliates... those who gained money and those who LOST money. Receiver's job is to make things equitable again: take money from those who gained, and give them back to those who lost money, so everything is back to the way it was (or as much as possible).

So what is the examiner supposed to be doing again? Is it implying that receiver is NOT representing the affiliate's interests?  Or is doing his job TOO WELL and needs to be shackled?

Who benefits? (by creation of an examiner) The beneficiaries of Zeek Ponzi.


Thursday, December 6, 2012

Zeek Reward's Victims are All Around the World

Zeek Rewards was touted as such an easy way to make money that it attracted victims from all around the world. This article was printed in World Journal, a Chinese newspaper, on 18-NOV-2012. I'll make a paragraph by paragraph translation, as the Google translate is a bit stiff.



č€é¼ ęœƒéؙ局

Ponzi Scheme is a Meeting of the Rats


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äŗŒ○○å…«å¹“é‡‘čžå±ę©Ÿēˆ†ē™¼ä»„來,ē¾Žåœ‹å¤±ę„­ēŽ‡äø€ē›“居高äøäø‹,꜉čØ±å¤šå¤±ę„­ēš„äŗŗä¹…ä¹…ę‰¾äøåˆ°ę–°å·„作,ęœ€å¾ŒęŠ•å…„å¤šå±¤ę¬”č”ŒéŠ·MLM (又ēرē‚ŗē›“éŠ·ęˆ–ē¶²č·Æē‡ŸéŠ·)ēš„äŗ‹ę„­,å› ę­¤é€™å¹¾å¹“ä¾†ē¶“ē‡Ÿå¤šå±¤ę¬”č”ŒéŠ·ēš„å…¬åøę•øē›®å¤§å¹…增加。ē¾åœØåŒ…ę‹¬å“ˆä½›å¤§å­ø、史äø¹ē¦å¤§å­øåœØ內,ęœ‰å¤§ē“„å…©ē™¾ę‰€é«˜ē­‰å­øåŗœęä¾›å¤šå±¤ę¬”č”ŒéŠ·å­øēš„čŖ²ē؋,åÆč¦‹å¤šå±¤ę¬”č”ŒéŠ·å·²ē¶“ęˆē‚ŗč³‡ęœ¬äø»ē¾©ē¤¾ęœƒēš„äø»ęµē¶“ęæŸę“»å‹•äŗ†。

Since the 2008 FInancial Crisis, the unemployment in the US remains high, and many unemployed cannot find a job for a long while, and many jumped into MLM (also known as network marketing or direct selling), and thus there is an explosion of MLM companyes in recent years. Now, including Harvard, Stanford, and about 200 other higher learning schools offer MLM related courses, thus MLM is now a part of capitalist society's mainstream. 

但ę˜Æå¤šå±¤ę¬”č”ŒéŠ·å…¬åøę°“ęŗ–參差äøé½Š,å¦‚ęžœäøę‡‚å¾—ę€Žęأ判刄,å¾ˆå®¹ę˜“ęŽ‰é€²é™·é˜±ä¹‹äø­。ä»Šå¹“å…­ęœˆ,ęˆ‘é«˜äø­ę™‚ä»£ęœ€č¦å„½ēš„同å­ø從台ē£ę‰“é›»č©±ä¾†ēµ¦ęˆ‘,č¦ęˆ‘ę›æä»–ęŸ„ęŸ„äø€å®¶åå«zeek rewardsēš„ē¾Žåœ‹å¤šå±¤ę¬”č”ŒéŠ·å…¬åø。他čŖŖåœØ台ē£å¾ˆå¤šäŗŗ加兄,åŖéœ€č¦ęƏ天äøŠē¶²é»žę“Šå¹¾åˆ†é˜,公åøå°±ē™¼ēŽé‡‘,什éŗ¼č²Ø都äøē”Øč²·,他ēš„ęœ‹å‹å‚¬äæƒä»–趕åæ«å…„꜃č³ŗ錢,ä»–č¦ęˆ‘ēœ‹ēœ‹é€™å…¬åøę˜Æäøę˜ÆåœØꐞéؙ局。

However, there is no standard of performance among MLM companies. If you do not do your own due diligence, you will fall for a scam. In June of this year, one of my high school buddies called me from Taiwan, asking me to help him look into a US MLM company called "Zeek Rewards". He said lots of people in Taiwan have joined. Just go online few minutes a day, click on something, and the company pays! You don't need to buy ANYTHING, and his friends are all asking him to join. He wants me to check if this company is a scam. 

Wednesday, December 5, 2012

How did Bernie Madoff Got Away with His Ponzi For So Long?

English: Bernard Madoff's mugshot
English: Bernard Madoff's mugshot
(Photo credit: Wikipedia)
Bernard Madoff ran the largest Ponzi scheme (in terms of amount of money involved) in US history, and it is difficult to track... just how far back did Bernie Madoff ran this Ponzi scheme?

The original thinking was that Bernie Madoff started the Ponzi after the 1987 stock crash. However, in early 2012, Federal prosecutors charged several Madoff employees in a conspiracy to defraud, alleging that Madoff's Ponzi scheme went all the back to the 1970's, and he had plenty of help along the way, despite his claim that he acted alone. Frankly, this Ponzi was so big he could NOT have acted alone.

Tuesday, December 4, 2012

Time Pressure, Propaganda, and Scam

Time pressure is one of the most effective tools in advertising, so it's no wonder why many scams incorporate time pressure as well.

Infomercials are the best candidate to demonstrate time pressure. You've seen infomercials, those 1 hour programs where they sell you this product,

"free gift to the first 500 callers"

"call now and get free upgrade to express shipping, and get bonus accessories!"

"this is a limited time offer! call now!"

And the most often used time pressure tool? A countdown clock, like this one on Groupon:


Time pressure alone is not going to sell anything. It simply adds a sense of urgency, like "I'm about to miss out!"  It is used on top of other persuasion techniques to force a "tip over", the final step off the cliff, the straw that broke the camel's back... so to speak.

And the best scams often incorporate time pressure as a part of their scheme.

Monday, December 3, 2012

Should Everybody Return Scam Money? Absolutely!

English: Division of Insurance Fraud Patch
English: Division of Insurance Fraud Patch (Photo credit: Wikipedia)
In every moral sense, if you received tainted money (i.e. money obtained through fraud, even if it's not your fraud)  you have to return it. If someone stole money and used it to pay you, it's tainted money, and it needs to be returned, for example.

In November 2012, the receiver for Zeek Rewards Ponzi sent out 1200 subpoenas to the highest earners on record, asking them to supply info to validate their own earnings (in preparation to clawback), and/or to reach a settlement with the receiver. It appears though that some people continue to float the myth that somehow the people who benefited from the Zeek Rewards ponzi can keep their earnings (which they did NOT earn)

Clearly, they did not hear about Alan Stanford's Ponzi, and how his money ended up going to some VERY big national organizations that had to give it back.


Sunday, December 2, 2012

MORE DANGER of Positive Thinking / Attraction Marketing / Whatever

Cover
The Secret: cover
(Photo credit: Wikipedia)
Ever read the book "The Secret"? I will tell you now I have not, nor would I ever want to.

Why? Because I already know all its supposed secrets, and while it has some use, the rest of the book can be described in two words: wishful thinking.

The book essentially says: if you do a lot of wishful thinking, what you wish for will come true.

Yeah, right. (I'm being sarcastic, if you haven't figured that out yet)

This, surprisingly has a lot with philosophical discussions of... God.

To many, belief in God started as "better safe than sorry". Or put it more plainly, if God does exist, and I believed in him, then I would have benefited. If God does not exist, then I really haven't lost much if anything. So it's better to believe in God.

Indeed, this became formalized as "Pascal's Wager", and all the argument's strengths and weaknesses answered in that article I linked.

"The Secret" is much the same way: it's better to believe that we have full control of our destiny. If we do, great! If not, we wasted money on one lousy book. Thus it's better to believe in believing!

Not really, because this is circular argument. I believe because I believe.

A Zeek Rewards Update, and a Lesson to All

Previously, we've reported on a Zeek Rewards affiliate who got one of the 1200 "top earner" subpoenas to report their income and perhaps come to a settlement. This guy instead decided to take a hostile approach... he filed a document with the court to quash the subpoena, and basically called the receiver (a pretty famous lawyer) a criminal who can't serve a subpoena properly.

The receiver today retaliated by sending a subpoena FROM FLORIDA, this guy's home state, and "93 miles" as required within 100 miles from the procedure. This time, it's sent via both USPS Next Day and FEDEX, so there's no excuse that he didn't receive it, and there's no excuse that it's not served with in 100 miles of him this time. Apparently this guy forgot that the Receiver works for a large lawfirm which has branch offices all over. THIS document WAS issued by a court "local" to him (within 100 miles).

Wonder if he can still mail in his response, or does he have to DELIVER it in person this time?

Which is a lesson to all: don't play legal word-mincing games with an ATTORNEY. They know the law better than you do.

Saturday, December 1, 2012

A New Variation on Charity Scam: The Matching Funds Scam

English: basketball player
English: basketball player (Photo credit: Wikipedia)
Normally, charity scams involving cheating the charity itself so it can send money to a scammer. However, in 2011 a relative new variant of a charity scam was discovered: the Matching Fund Charity Scam. It works as follows:

  1. Scammer finds a company that has a program to match charity contributions, i.e. if you, employee of this company, donate $1000 to an approved charity, the company will match your donation, so the charity will actually get $2000.
  2. Scammer sets up a fake charity, complete with the IRS certification and all that. It will be very authentic, for a very good cause, and even has celebrity endorsements. 
  3. Scammer gets his fake charity approved as one of the allowed charities for the company.
  4. Scammer recruits one of the employees as a co-conspirator, with the following proposal: you put in the paperwork that says you donated $1000. I'll give you "receipt" that "proves" you did so. When the company matches your money, I'll split it with you. It's free money! As I do most of the work, you get small cut. However, if you can find me more people that'll do the same, I'll give you a bigger cut. It's free money! Do we have a deal?

So this is what happens...

  • Employee submits a fake donation record as certified by this fake charity that says he donated $1000. 
  • Company matches the supposed donation, and gives $1000 to the fake charity. 
  • The scammer then splits the $1000 with the employee. 

Yep, and this is highly illegal, as it's fraud on multiple levels.

And it's a real case that involved Federal Court, and a fake charity called Hoops4Africa.


Friday, November 30, 2012

Grandparent Scam: What to look for

Do you have a child or a grandchild? Is he or she active on Facebook and such? With detailed profiles? This happens more with sons than daughters. If so, you may soon become a victim of grandparent scam.

The scam is quite simple: the scammers will call you from some foreign number, usually in Mexico. A scared voice, greet you by name, says he's in trouble, probably car accident while on a vacation south of the border, need money wired right away for some sort of emergency, like bail, hospital bill, attorney, etc. The "child" will only say a few sentences, then hand the phone to an associate, who'll be the real scammer, pretending to be hospital staff, police, attorney, etc. who wants to help the child, and they need the money now, so the grandparent needs to go to a Western Union like "now, now, now" and send like 2000 or so dollars to this unknown destination. In many cases, they convinced one, who has no money, who convinced someone else to send the money.

There are several variations. It could be your best friend and husband/wife traveling abroad and got robbed, and need money to take care of a hotel bill or they'll miss their plane back home, or something. It could arrive via email instead of voice call. But the voice call involving allegedly wild antics of a grandchild is far more likely.

It's gotten so prevalent, FBI now has a warning for this:

http://www.fbi.gov/news/stories/2012/april/grandparent_040212

and various newspapers have picked up on this as well:

http://www.washingtonpost.com/blogs/rosenwald-md/post/the-grandmagrandpa-scam-is-back-in-the-region/2012/11/26/854ae7ce-37db-11e2-8a97-363b0f9a0ab3_blog.html?tid=pm_local_pop

http://www.wjla.com/articles/2012/11/scam-tricks-grandparents-out-of-thousands-82455.html

How *does* this scam work, from a psychological point of view? Let us examine it from a different angle.


Thursday, November 29, 2012

Bad Argument: Wishful Extrapolation, Testimonial, and Placebo Effect

English: A chocolate-flavored multi-protein nu...
English: A chocolate-flavored multi-protein nutritional supplement milkshake (right), consisting of circa 25g protein powder (center) and 300ml milk (left). (Photo credit: Wikipedia)
Sometimes, the product in MLM, esp. nutritional supplements, are marketed one way that in no way can be proven. One company is known to claim their supplement "assists your body's natural release of stem cells" (huh?). Clearly, if they wish to not enrage the Federal Drug Administration (FDA) they need to be very careful about what they claim their product can do. In other words, if it's known to have a direct effect on the body, it's a drug, and therefore ILLEGAL TO MARKET (unless registered and underwent safety trials).

Not too long ago, FDA took the cosmetic maker Estee Lauder to court over some of their anti-aging cream claims that it affects the cells. THAT would make it a drug, not cosmetic.

Nutritional supplement companies only test to prove safety (i.e. at the concentration it's being sold it's not toxic) for their products. Unlike drug companies, nutritional supplement companies are NOT required to prove that product actually has any effect, and in fact, would prefer NOT to have any direct effect else they'll run afoul of the FDA.

Which is why you see all these "weasel wording". That stem cell "support" company clearly wants to say that if you take their stuff, your general stem cell level in your blood will increase, and therefore you'll be healthier. However, they need to word their ad very carefully, and the result is one vague sentence that allows you to interpret it any way you like. It's "You know what I mean".

Problem happens when this "you know what I mean" turns out to be unproven narrative that is wildly extrapolated from minimal research.

Wednesday, November 28, 2012

Bad Argument: Association Propaganda

Almost all sorts of advertisement (a form of propaganda) use association.

Alcohol ads usually use beautiful women, dancing to music, flashy cars, and so on. There's also the "AXE" product's frequent association with sex, or Marlboro cigarette's association with cowboy, the West, and freedom.


But what exactly is association? An attempt to associate (relate) two separate things that normally have NO relations with each other, usually by evoking an emotional response such as lust, guilt, pity, and so on.

If you hang out with the rich and famous, you look good by association (unless of course, you're merely hired help).

MLM companies, most having almost no name recognition (i.e. reputation) to stand on (there are very few exceptions, such as Amway, and maybe Herbalife, and NuSkin) must rely on association to get their point across, and when such association are made through merely implication, or outright FRAUD, the result can be devastating to its affiliates.

False associations are easy to make, and can often be misinterpreted by affiliates, who has confirmation bias to interpret any information they receive as somehow confirming their choice.


Tuesday, November 27, 2012

FBI list of online scams: an epic list

FranƧais : Logo de l'association
FranƧais : Logo de l'association (Photo credit: Wikipedia)
FBI, in May 2012, released an epic list of online scams, and some of them are rather interesting as they aren't covered much in the news. You usually heard of mortgage fraud, scareware, ransomware, grandpa scam, and so on. But have you heard of funeral fraud, smishing / vishing, and telephone Denial-of-Service? 

Funeral Fraud

A variant of the insurance fraud, employee in the mortuary bought insurance in the name of a person, reported that person's death, then arranged a fake burial for this fake person, and claimed the payout. They went as far as hiring actors to play the alleged deceased's family at the funeral and a burial plot (no headstone!)  

They were discovered by insurance investigator and FBI Fraud Unit, when they tried to cover up their crime by exhuming the buried casket and had it cremated instead. 


Smishing / Vishing

Both are variants of "Phishing" (SMS + Phishing and Voice + Phishing, respectively). Basically you receive a message (SMS or Voice) that directs you to a method of contact where you are gently prompted for personal information that may result in compromise of your account information. Phishing usually involves a link to a website, while Smishing and Vishing appear to be more secure as it's used less often. 

The phone number will be worthless, even if it has an area code in the US. The proliferation of VOIP services has made phone numbers available anywhere for pennies. People in India can be calling you with a US number that's nearly impossible to trace. 

Monday, November 26, 2012

Bad Argument: The Half-Lie

Many of the "Bag Arguments" we've covered before are outright lies, logical fallacies, or red herrings. However, there is another kind of lie: the half-lie.

A half-lie is basically something that is partially true, and partially false, but you don't know which part is real, and which part is not real, and when the whole thing was presented as real, you'd assume that it really is real... never suspecting that part of it is not.

Here's an example... Has everybody heard of Alcoholics Anonymous, or AA? Founded by William G "Bill" Wilson? Their main book is simply called "The Big Book", and inside are tons of advice not only for the alcoholic him- or herself, but also for all the people around him or her. Here are some quotes:


As wives of Alcoholics Anonymous, we would like you to feel that we understand as perhaps few can. We want to analyze mistakes we have made.A.A. Big Book, 3rd Edition, William G. Wilson, Chapter 8, To Wives, page 104.
Sometimes there were other women. How heartbreaking was this discovery; how cruel to be told that they understood our men as we did not!A.A. Big Book, 3rd Edition, William G. Wilson, Chapter 8, To Wives, page 106.
Okay, this is obviously written by the wife of Bill Wilson, Lois Wilson, right?

Wrong. Bill Wilson wrote it himself, from the POV of his wife. Later truth emerged that Lois did not write a single word, despite volunteering to do so. Apparently Bill didn't trust his own wife to write properly.

By omitting the truth (that this "wife to wife" advice was NOT written by a wife at all), the advice is now of dubious value.

And it wouldn't surprise you that a lot of Scam, MLM, and Ponzi propaganda work the same way through recruiters and shills.


Sunday, November 25, 2012

Who really benefits?

Every sort of narrative has a purpose, and often, it's to benefit someone.

Most narratives are of benign nature, like one's life, latest vacation, best friend's wedding, and so on. It's often for "social prestige" or "social capital".

However, sometimes, narratives are for commercial, or financial gain. Advertisements are the most commonly seen narrative, where they want you to buy the product in question, or raise the prestige of the company in question.

If you are not sure about the narrative's purpose, ask this question: "WHO REALLY BENEFITS?"

The results may surprise you.

----

One of the most often used fake arguments used by defenders of a suspect scheme against a critic of the scheme is to claim that the critic is just out to raise controversy to push for ad views to the blog or website.

Consider from two different perspectives: the defender of the scheme, vs. critic of the scheme.

When a critic criticizes the scheme, who benefits?

Does the critic achieve any financial gain? No. (Though defenders often make baseless accusations of this, such as "your'e just out to get ad views" or "you're just bashing us for our competitor". ).  They don't really gain either way by busting a scam. They are doing it because it's the right thing to do.

Does the defender achieve any financial gain? Yes! They continue to benefit from whatever they are participating in! They *have* to protect their own livelihood, even if it means making illogical attacks!

As a neutral observing the situation, think about it: who has the most to gain, or lose?


Saturday, November 24, 2012

Self Deception and Woo (and MLM)

Self-Deception is one of the most dangerous forces in the world... If you can lie to yourself, and convince yourself of it, then it's no longer a lie (to you, at last). After all, if you don't believe in yourself, who *can* you believe in? Thus, if you lie to yourself, i.e. practice self-deception, there is no telling what sort of harm you will do, not only to yourself, but to everybody around you.

Unfortunately, once you have convinced yourself of your own lie, it is very difficult for you to extricate yourself from it, because this means admitting to yourself (and everybody else around you) that you were wrong, and most of us just have way too much pride to do so.

Sometimes, the "sin" is merely promotion of "woo", such as those "magnetic bracelets" or some "super-duper-hyper juice" that is somehow good for everything under the sun (and moon, and stars). If you believe somehow that it works, and you bought it, then you will cheerfully say things like "ever since taking / using _____ I feel much more energized! Thanks! I would recommend this to anybody!" without considering whether you really really believe this stuff works, or simply because you WANT to believe it works.

It's one thing for you to use it, as the only thing it hurts is your wallet. It's another thing completely to actively sell it to others, and trying to convince them, the way you convinced yourself, that it works great.

And it's yet ANOTHER thing to convince them so you can pocket profit, either from they BUYING it, or further, from them SELLING it to other people.

All just because you *want* to believe it works, but you don't really have proof that it works. Later on, you *have* to believe it works, because you can't sell a product you don't believe in. You are now both emotionally AND financially involved. So, are you really selling the product, or your dream?


Friday, November 23, 2012

Bad Argument: Illusion of Cause

English:
Ice Cream... causes polio?
(Photo credit: Wikipedia)
Our brain seeks to associate cause and effect, so we can recognize the pattern in the future and react accordingly. However, very often, our brain makes the wrong choice, by associating the effect with the wrong cause, or finding a cause where there is none. That is known to psychologists as "illusion of cause", and was popularized in the book 'The Invisible Gorilla".

Illusion of cause has many forms, many have long Latin names that I shall not attempt to repeat. I have even covered a few of them before as bad arguments. In no particular order (and probably incomplete list):
  • Correlation is not causation [Read more]
  • Spotting patterns when it's merely random distribution  [Read more]
  • Two things happened consecutively are not necessarily cause and effect
  • Attribution to God
Today the discussion will be on the two topics that weren't covered before. 

Thursday, November 22, 2012

Thanksgiving... But Scammers Do Not Rest, Neither Does Justice

It is now Thanksgiving Holiday in the US, and both the just and the scam are still working. There are two updates to keep in mind.


Pigeon King International fraud trial still ongoing

Dave "Scambusters Now" Thornton, has an update on Pigeon King Ponzi in Canada.

Dave Thronton was one of the earliest to raise the alarm about this ingenious (nefarious?) Ponzi scheme that literally used pigeons to trick farmers into buying million dollars in pigeons (and spending even more in facilities and equipment). This trial is still ongoing in Canada, and apparently the judge had issued a gag order so there's a media blackout on the trial. The actual trial likely won't reach Canadian court until early 2013.

[ Read Scam Study: Pigeon King here on A MLM Skeptic ]

Canadian report on this scam: the perp still insist he's innocent.


Zeek Rewards affiliate who profited filed response, called Receiver a criminal

The saga of Zeek Rewards Ponzi scheme continues. Despite months of promise that whoever's behind the Zeek Defense effort is going to sue SEC, and somehow clear Zeek's name, NOTHING has been filed other than names of two attorneys. Instead, someone else from Florida sent the judge on the case claiming receiver  misconduct. Basically, this guy (who's NOT an attorney), just accused an attorney of not knowing the law.

Hilarious, isn't it? Let's take a closer look.


Three Ways to Shut Down a Scam Pitched To You

Back in October 2012 Forbes published a short list of four tips where John Wasik, a frequent contributor, listed four ways to shut down an investment scam being pitched over the phone. (actual link at the end) They are:
  • Show me the your licensing info
  • Show me your firm's registration
  • Mail me the info as I don't conduct business over the phone
  • I need to have this reviewed by my accountant, lawyer, and financial adviser
This list concerns investments, because in investment industry, both the agents and the firms must be registered / licensed. In normal business, where the agents do not need to be licensed, you're left with just three things.

Do these three things then apply to regular scams, not merely investments? Very much so, but also some caveats as you need to know what's legal and what's not within the industry.

Wednesday, November 21, 2012

How do you know if you're dealing with woo or a real product?

Stem cells
Stem cells: where do they really come from?Does having more of them make you healthier? Can you make more of them? Miracle Pill says yes, yes, and yes!
(Photo credit: BWJones)
One problem with MLM is very often, it ends up selling woo, instead of stuff with proven scientific benefits. This problem is completely aside from the sometimes questionable business model of MLM itself.

Very often, the nutritional supplements use weasel words to sound as if they do something, when they don't. FDA is very strict on what a company can say about products that goes on or in the body, and one misstep can result in thousands of dollars in fines. One nutritional supplement company claims their product "supports your body's natural release of stem cells".

Wait, what does that mean?

It doesn't mean anything, because what they claim is not scientific fact. Their literature claims
Recent scientific developments have revealed that stem cells derived from the bone marrow, travel throughout the body, and act to support optimal organ and tissue function. Stem cell enhancers are products that support the natural role of adult stem cells
Is what they claimed true? Not really.

The US National Institute of Health, a Federal agency has a website on stem cells, it clearly says that scientists do NOT know somatic stem cells (i.e. adult stem cells) come from. Bone marrow produce blood cells and some derivative stem cells, but that has nothing to do with any other stem cells found in various tissues (at least no such relations have been observed).

Tuesday, November 20, 2012

You've Been Scammed On the Internet. Now What?

English: Image is similar, if not identical, t...
English: Image is similar, if not identical, to the San Francisco Police Department patch. Made with Photoshop. (Photo credit: Wikipedia)
Due to the distributed nature of the Internet, and often disguised nature of a scheme, it is often hard to know where you should complain to, if you have been scammed.

Often, the victims are to embarrassed to be victimized, they never speak up, thus allowing the scammer to scam even MORE victims.

Here's a short list of where you can complain. You're unlikely to get your money back, but you'll let people know and help them avoid the scam.



Sometimes, complaining to the local police, esp. when it is in a large city, may have some result.