This is the third and final article in my series on Make Money Fast Scams.  

The first part was on Chain Letters, and the second on Pyramid and Ponzi Schemes.

Whenever financial times turn into times of financial hardship, people start panicking and looking for ways to make extra money.

They are usually looking for a quick fix to their money worries.  When people are desperate, it is easy for us to believe in a slick sales pitch that promises easy money with little or no effort on our parts.

One such pitch common today is Cash Gifting.  This is also referred to as “Mailbox Money”.    Cash Gifting programs are all over the internet.

They seem like a no work way to make a lot of money simply by giving gifts of cash to people in the organization…usually a “Gifting Club”.

To “join”, you give a “gift”, generally $500 – $3500, to a member higher up in the organization. The new member is promised that they will receive similar “gifts” once they recruit more members into the organization.

Sound like a Pyramid Scheme?
It is.

Cash gifting programs are illegal.

The Federal Trade Commission reminds you to:

* Consider that a legitimate gift has no strings attached and is not an “investment.”
* Avoid being misled into thinking a gifting club is legitimate because the ads say that members consider their payments a gift and expect nothing in return. This is an attempt to make an illegal transaction look legal.
* Be wary of success stories or testimonials of tremendous payoffs. Very few members of illegal gifting clubs or pyramid schemes ever receive any money.
* Take your time. Don’t buckle under to a high-pressure sales pitch that requires you to join immediately or risk losing out on the opportunity. Remember, solid opportunities – and solid friendships – aren’t formed through nerve-wracking tactics.”

 

Just remember, the famous P.T. Barnum quote:

“There’s a Sucker born every minute”

Be smart and educate yourself so you know the difference between a scam and a legitimate MLM business opportunity.

Believe in Your Success, I Do!
Karen
mentor.karen.j.miller@gmail.com

Anyone been scammed by a Ponzi Scheme or Pyramid Scheme?

The United States Internal Revenue Service and Treasury Department have finally brought some form of financial relief to people who have been scammed by Ponzi-Type Schemes.

If you or someone you know have been scammed, consult a tax accountant to see if you qualify for the tax relief.

Following is an excerpt from the IRS Site explaining how the tax relief works…

• The investor is entitled to a theft loss, which is not a capital loss.  In other words, a theft loss from a Ponzi-type investment scheme is not subject to the normal limits on losses from investments, which typically limit the loss deduction to $3,000 per year when it exceeds capital gains from investments.
• The revenue ruling clarifies that “investment” theft losses are not subject to limitations that are applicable to “personal” casualty and theft losses.  The loss is deductible as an itemized deduction, but is not subject to the 10 percent of AGI reduction or the $100 reduction that applies to many casualty and theft loss deductions.
• The theft loss is deductible in the year the fraud is discovered, except to the extent there is a claim with a reasonable prospect of recovery.  Determining the year of discovery and applying the “reasonable prospect of recovery” test to any particular theft is highly fact-intensive and can be the source of controversy. The revenue procedure accompanying this revenue ruling provides a safe-harbor approach that the IRS will accept for reporting Ponzi-type theft losses.
• The amount of the theft loss includes the investor’s unrecovered investment – including income as reported in past years. The ruling concludes that the investor generally can claim a theft loss deduction not only for the net amount invested, but also for the so-called “fictitious income” that the promoter of the scheme credited to the investor’s account and on which the investor reported as income on his or her tax returns for years prior to discovery of the theft.
  Some taxpayers have argued that they should be permitted to amend tax returns for years prior to the discovery of the theft to exclude the phantom income and receive a refund of tax in those years. The revenue ruling does not address this argument, and the safe-harbor revenue procedure is conditioned on taxpayers not amending prior year returns.
• A theft loss deduction that creates a net operating loss for the taxpayer can be carried back and forward according to the timeframes prescribed by law to generate a refund of taxes paid in other taxable years. 

This is great news for those of us in legitimate Network Marketing companies.

The government is standing up for the consumer, or distributor, and beginning to make it clear that fraud in this industry will not be tolerated. 

This is the second of a three part series in making money fast scams.  The first post was on Chain Letters.

When money is tight and we have bills to catch up on or there are nicer things we would like to buy, we often search for easy and quick ways to make some extra cash.

The internet, and sometimes people we know, offer a multitude of opportunities for making money with “no experience necessary”.

Some of those opportunities are legitimate, while some are scams intended to part you with your money.

Pyramid Schemes and Ponzi Schemes
Seductive Offers of a High Rate of Return in a Short Time Span

The term “Pyramid Scheme” has a long standing reputation of being a scam.

The problem is that most people don’t know how to tell if an opportunity is a pyramid scheme or a genuine business opportunity, so many people get sucked in.

Pyramid Schemes and Ponzi Schemes are both similar and both illegal.

Both make extravagant claims for huge earnings in a short timeframe.
They both rely heavily on recruiting new affiliates.

A Pyramid Scheme has a product to sell, but relies on the members within the organization to buy the products. This is often a huge monthly quota my mentor, Hugh, calls “filling your garage.”

There are also no retail sales to the general public.

A Ponzi Scheme only recruits new members. There are no products or services offered. There are no commissions paid for recruiting new members.

The promotor just collects the sign up fee and pays it to the upline.

“Both pyramid and Ponzi schemes are illegal because they inevitably must fall apart.
No program can recruit new members forever.
Every pyramid or Ponzi scheme collapses because it cannot expand beyond the size of the earth’s population.
When the scheme collapses, most investors find themselves at the bottom, unable to recoup their losses.”
(http://www.ftc.gov/speeches/other/dvimf16.shtm)

Legitimate Network Marketing, or Multilevel Marketing, businesses should not be confused with Pyramid or Ponzi Schemes.

A genuine MLM business offers a product or service and generates retail sales to the general public.

Believe in Your Success, I Do!
Karen
mentor.karen.j.miller@gmail.com

Financial times are tough and you need extra income NOW!

This is an ages old dilemma.

Money is tight in your household budget, your paychecks just aren’t enough, unexpected expenses keep popping up, and you just gotta have that new gadget or gizmo that’s been on your mind for just about forever.

Whatever the financial problem you are facing, you need money soon.

There are a lot of Make Money Fast and Get Rich Quick schemes that come before us every day.

Most promise thousands of dollars in returns in a matter of days or a few weeks.

Unfortunately, many of these offers prey on a person’s desperation in their financial situation and on an individual’s greed.

Most are scams and are designed to part you with your money and have no intention what-so-ever of providing you with the riches promised.

Chain Letters

Via Snail mail or email

At some time in our lives, we have all received a chain letter in the mail.

They typically contain a list of names of people you may or may not know. You are instructed to send something to the person on the top of the list, remove their name and place your’s at the bottom of the list.

You then are to make a certain amount of copies and mail them to a specified number of people.

Many times I have received and participated in recipe or dish towel exchanges. These types of chain letters are just for fun and exchange something of very low value. I’ve usually only received back 2 or 3 responses.

Chain letters that ask you to send money, however, are a scam AND are illegal. Even if the amount you are asked to send is just $1 or $5.

According to the USPS, chain letters are

 “illegal if they request money or other items of value and promise a substantial return to the participants. Chain letters are a form of gambling, and sending them through the mail (or delivering them in person or by computer, but mailing money to participate) violates Title 18, United States Code, Section 1302, the Postal Lottery Statute.”

 I received one that claimed to have gotten my name and address from a mailing list of people who were “opportunity seekers”.

It claimed potential earnings in the hundreds of thousands of dollars and had been seen on Oprah.

All I had to do was send $1 to the person on the top of the list.

The mathematical chances explaining how one would receive their money was believably explained.

However, it’s faulty reasoning.

A lot of people who participate in these chain letters are well-intentioned folks looking to make some much needed extra money.

Unfortunately, they are not aware that they are involved in a scam and are breaking the law.

They could easily be reported to the authorities and face federal charges.

Many scammers are turning to the internet with these schemes.

Although the enforcement on the internet is not as stringent, they are still offering the same dirty deal.

Often payment is arranged through a PayPal account to avoid using the postal system.

Do yourself a favor and stay clear of these kinds of “opportunities”.

In my last post about Mentoring For Free and the Big Lie, I exposed the hidden costs behind Mentoring For Free.

Namely, the Mentoring For Free Pro Version and the collection of CDs and ebooks Michael sells.

Mentoring For Free Pro 

Anyone in any company can use the training program as a lead generation system.  The Mentoring For Free Pro version offers…

• the ebook branded with your name and contact information,
• a back office to store your leads (those who download the ebook) that belong solely to you,
• an auto-responder,
• splash pages,
• an ad tracking system.  

Mentoring For Free is NOT an Affiliate Program.
None of the Mentors make any commissions from people joining the Mentoring For Free pro Version.

Mentoring For Free Pro is a reasonably priced lead generation system when compared to other systems available today.

Mentoring For Free CDs & ebooks For Sale

Michael Dlouhy sells a Personality Colors CD and ebook and an ebook about the 5 Pillars to Success.

Like most Mentors, I recommend people keep their credit cards in the freezer.  There is no need to buy anything until you read the ebook and see the total training program we have to offer.

All of the information in the CDs and ebooks Michael sells is offered in our free training program.  On top of that, the Mentors who blog or write articles for the internet, are writing about this information all the time.

So WHY does Michael offer these CDs and ebooks for sale if the information is free anyways?

Different strokes for different folks…

• Some people want the information in a defined, concise, and convenient format.
• Some people think information is only valuable if they pay for it.

What About the Lie?

The big question still hasn’t been answered.
Fess up to the lie.
What does Michael and his posse of Mentors GET from Mentoring For Free?

OK, OK, You got me!

Mentoring For Free is a lead generation system that offers a FREE ebook and free training…10 tele-seminars every week plus all the trainings since 2007 recorded and archived for anyone to listen to 24/7… plus access to your own personal mentor…a real live person.

All this to attract business leads.

Feel a little like you’re part of a cat & mouse game?
Is this where the Lie is exposed?

Here is where you have to learn how to lose your agenda.

Mentors help everyone, no matter what business they are in.
Oh, and all of the training is generic…no companies or products are mentioned.
The person you download the ebook from will not tell you their company.

But Why?

Let’s say out of every 10 people who download the ebook,

• 5 of them are happy with their companies and are just looking for some training. 
• 3 of the people are with companies that they know, at least deep down inside, are a bad deal, and are looking for help. 
• And 2 are looking to join a company and are doing research.

If you’re married, you wouldn’t like it if someone who knew you were married asked you out on a date.

Nobody likes being pitched either.
If someone’s with a company, they don’t want an opportunity thrown at them.

Only a few of the people who download the ebook will actually be interested in joining the Mentor in their business.

And that’s good!

• Who wants to be a sponsor monster and bring in anyone with a pulse?
• Isn’t it better to get to know each other first?
• Isn’t it better to find out who is serious about their personal development? 
• Isn’t it better to find out who is serious about learning business building skills and applying them through persistence?

So that is why Michael teaches us to lose our agenda.  This gives us the freedom to help anyone in need of learning these skills whether they join us or not.

In fact, it is not until a person goes through the training program and learns the concepts and skills that we teach that either the mentor or the client can make a realistic decision to become business partners.

It’s not until then that the Mentor will share his/her company information with their Client.

If they won’t become business partners, that’s great too.  They both get lifelong friends and the Client has accessed an invaluable training.

Still think there’s a big lie?
Maybe the style of Mentoring For Free is not for you.
Maybe you’re just a skeptic.
Well, you have a choice to make.
Remain a skeptic and walk away.
Or, get over it and get plugged into the system.

To read more about the Mentoring For Free program and find out how other Mentors have been impacted by Mentoring For Free visit my page here.

Your Friend and Mentor,
Karen

With so many of us out there looking for the same thing, several companies have been created to sell network marketers a package deal of leads.  Other companies who offer training services also offer a package of opt-in leads to their new sign on customers.

Sounds like a sweet deal!  5000 free leads you didn’t have to do anything to get!  Yes!

NOT!

Have you ever heard of CAN-SPAM?

This is federal legislation controlling email spam…Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003…Public Law 108-187.

CAN-SPAM requires unsolicited commercial email messages

1. to be labeled (although no standard guidelines have been provided)
2. to include opt-out instructions
3. to include sender’s physical address
4. misleading headers and titles prohibited

The law empowers the FTC to establish a “do-not-email” registry, although they haven’t done so yet.

Aside from the federal regulations, you have to abide by state regulations and your ISP’s (Internet Service Provider) terms and conditions.  Your ISP bans spam emails primarily because of the added costs associated with having to buy extra bandwidth.

As you read this, you are wondering what spam email has to do with opt-in leads.

You cannot buy an OPT-IN lead of ANY kind from ANYONE then send them Your Offer because they did NOT OPT-IN for Your Offer.

They Opted-In for the Offer that the Lead seller was offering.

You cannot send your offer to an opt-in Lead that you bought or were gifted as a bonus to join some company.

As an example, Go Daddy requires “conclusive proof of prior consent” that the recipient asked for your information (i.e., opted-in).

If Go Daddy receives a complaint that you sent spam, you have to provide specific information to fight your case.  If you can’t satisfy their requirements, your account will be terminated.

Some of the information requested to support your case includes

• server logs showing when the complainant connected to your site and subscribed or opted-in
• time and date of opt-in
• IP address of the web server the complainant used to connect to your site
• referral URL
• your explanation of how the email address was obtained
• copies of confirmation messages, complete with header information

Even though “a lot of people all over the world buy leads all the time”, it’s still a losing proposition.

Is it worth spending your time contacting people who have had their information sold or given away perhaps hundreds or thousands of times?

People who aren’t interested in your information or opportunity?

People who may report your email for spam or cause such a high rate of bounce back (rejected emails) that your ISP will suspend your account?

Buying leads or getting leads as a gift for joining an opportunity is a scam and will get you into trouble eventually.  Save yourself the trouble and generate your own leads.

I can show you how.  For Free.

Wishing You the Success of a Lifetime!
Karen
k.j.miller.777@gmail.com