Just as ancient Egypt’s pyramids were the final resting places of the Pharaohs, today’s internet pyramid schemes are where some folks’ investments go to die. These scams have been around forever and have crossed over into the internet age with gusto. The Better Business Bureau advises consumers to watch out for pyramid schemes and avoid them no matter how attractive an offer may look.
Recent headlines were made by a 600 million dollar online pyramid scheme allegedly by a Lexington, Kentucky businessman. The website was called ZeekRewards.com. The Securities and Exchange Commission has charged them with fraud and slapped an emergency asset freeze on ZeekRewards. That action has secured the ability of their victims to recoup more of their investments and perhaps avoid devastating losses.
The Better Business Bureau received close to 30,000 inquiries about ZeekRewards, Zeek, Rex Venture Group and other names of the company associated with Paul Burks, accused of running the operation.
How is the average investor to know which companies are ethical and which they should avoid? Here are some suggestions for consumers to consider:
* Ethical companies are about products first. In a pyramid scheme, people make money for selling the business opportunity. They make money when people join, not when they sell a product.
* Network marketing doesn’t work on autopilot. You’ll see claims that you can make money on “autopilot.” False. Network marketing and direct sales are about making connections with people. That doesn’t happen on autopilot. A legitimate, ethical company will provide you with real information about the type of work you’ll be doing. You’ll have to talk to people.
* Is the company a member of the DSA? The Direct Selling Association membership doesn’t come easy. It’s a lengthy process involving a thorough legal review of a company’s marketing materials and policies. There is a strict DSA Code of Ethics. Look for the DSA logo on a company’s website to assure you that they comply with these high standards