It’s Time To Ring Fence Yourself From Being Conned – Story #4.

It’s Time To Ring Fence Yourself From Being Conned – Story #4.

There is a con job that has the power of influencing many people.

In fact, it can grip their hearts and minds and turn them collectively into a cult-like organization.

This particular con job never seems to die. It has the ability to reinvent itself and even victimize the same people.

As long as greed is still very much a part of humanity, it will probably be with us till the end of times.

I’m referring to a Pyramid or Ponzi scheme.

The pyramid scheme is not the same as multilevel marketing (MLM) or network marketing even though there are some similarities.

MLM or Network marketing is illegal in Singapore unless it complies with the Multi-Level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order.

As most MLM practitioners are not aware of the Multi-level Marketing and Pyramid Selling (Prohibition) Act, they can ignorantly infringe the criminal act and run their business like a pyramid scheme.

More often than not, pyramid schemes will disguise themselves as legitimate MLM or direct-selling companies.

That’s what makes it so dangerous and alluring at the same time.

In other words, a pyramid or Ponzi schemes can operate like genuine multilevel marketing or network marketing businesses.

And genuine multilevel marketing or network marketing businesses can unwittingly operate like a pyramid or Ponzi schemes.

I am a supporter of legal MLM practice but I hate pyramid scheme.

A pyramid scheme is a scam. If you study how it is run, you will have an idea of some of the ways that are used by con men will try and cheat you.

The most frightening of these con men are those who are ignorant of the laws. They may not be aware that they are breaking the laws.

They may even be involved in the pyramid scheme in good faith and out of good intention. They don’t even suspect that they are conning others.

In addition, they enroll others to propagate and improve on their con jobs.

Take for example, the company that was selling a “miracle tonic.”

Their extensive network of distributors would swear that the tonic has curative and health-boosting power.

And even support the sales message with “real life” testimonies.

The tonic looked and tasted exactly like water.

Why?

Because it was subsequently tested to be – surprise, surprise! surprise!! – water.

Well, I supposed if you drink enough of it, it may be healthy for you.

Or due to the placebo effect, the tonic may have curative outcomes.

Like many pyramid schemes, this company went belly up after a while.

Unfortunately, it happened after the scammers have made their money and left many broken hearts and dreams behind.

A more subtle version of this scheme is when the “company” and “distributors” sell a “real” product or service.

However, the product or service is either overpriced or does not have commercial viability and values.

They rely on placebo effects and word-of-mouth stories.

Some of the “life-changing” and “health-transforming” tales can make many con men look like angels.

Once I asked a distributor, “How do I know that wearing your product is good for me? Do you have any lab test to support your claims?

He said, “Of course.”

Then, he enthusiastically showed me a bunch of reports. They are for tests done on thermal conductivity of his product.

I almost burst out laughing.

In case you don’t know, it’s basically a test about heat transfer through the product. Different materials have a degree level of heat transfer.

I almost wanted to tell the distributor, “If the heat transfer factor can strengthen you, please volunteer to clean my toilet. I promise to switch off the fan.”

If the pyramid schemer care to admit, it’s all about the money.

Finally, the motives mean, and ends of any proper business revolve mainly around personal motives, means, aspirations and gains.

The prices of many products or services are marked up to distribute part of the financial excesses to multiple tiers of distributors.
There are very few genuine customers if any that will buy the products or services to meet an urgent need.

Take this story for example.

A founder of a company died of an overdose of tranquilizers that he bought over the counter in a pharmacy.

Nothing strange except that his company sells “natural” tranquilizers.

He probably could not take the stress of selling “stress-relievers”.

The distributors of pyramid schemes profit from recruiting and selling to more and more distributors.

They are the main consumers because they are driven by commercial interests and potential financial gains.

Sometimes, they even recruit prominent personalities to give them the “Star” effects.

These “Idols” are used to attract and recruit more distributors.

I know one “expert” who is also a drug addict and alcoholic.

You will never find out the truth about him because he is such a talented actor and communicator.

He is definitely an expert in getting people to be addicted to the scheme.

In a pyramid scheme, the highest levels of distributors make money while the rest will lose money.

The winners will tell losers that they need to build the business over time. The way to do it is to enroll more distributors.

Eventually, the losers will leave the network to join the next pyramid scheme in the hope that they will be at the top.

Meanwhile, their original network will start to collapse. History will then repeat again.

Pyramid schemers entice more distributors by telling them that doing the “business” is an easy job.

The product or service “sells” by itself.

This is interesting because I have never seen a product or service knocks on doors and calls upon a customer.

If you know of a product or service that can do that, please ask the product or service to call me.

I don’t need to be sold in this case. I will sign the sales contract directly with the “persuasive” product or service.

Like most scams, pyramid schemers show directly or indirectly the amount of money that potential distributors can earn through their schemes.

They do so by showing some of the commission records or cheques of winners.

In addition, they draw “circles” and project an unrealistic number of distributors that can be recruited within an unreasonable period of time.

For example, if you recruit 6 distributions and if every one of them recruits 6 persons, you can be super duper rich.

Sounds easy and logical, right?

By the 13th level, you would have 13,060,694,016 distributors in your network.

You would have recruited only more than 300% of the number of Singaporeans, including citizens from the pioneer generation and babies.

Scammers will do anything to promote you a profit and the profit may even come from the government. Don’t believe?

Listen to Willy Lim, my good friend about the latest scam.

“The flavor got a number of years in Singapore to involve PIC: pay $15,000 and get back $24,000 from the Singapore government.

“Never mind if you don’t have a business entity and never mind that you don’t even have a product or a service, just pay a deposit and the con men will do the rest.

“What they didn’t tell you is the victim is IRAS. Obviously, at the end of the day, the PIC funding comes from hard-earned money of tax-payers.

“And if the victim in the PIC case discovers the con job, the conmen don’t go to jail, YOU go to jail because you are the one claiming the PIC funding from the IRAS.

“You can be sure that the IRAS will not be shy to report the case to the police (laugh).

“Is this THE perfect con job?”

To pull the wool over eyes, pyramid schemers turn their network into a cult-like organization.

They conduct different rituals to drive their people into a frenzy so that they can continue to be blinded to the truth.

And unfortunately, many of them can be blinded again and again, and for many years.

When I was younger, I was told by a very charismatic and intelligent “expert” about how to build a powerful network.

He called it the “最高境界” or the highest level of skill.

Obviously, as a lifelong student, I was all ears. I was willing to give almost anything to learn the “ultimate secret.”

After literally begging him, he told me, “Patrick, you need to 装神扮鬼.”

In simple words, it means to “give them a god to worship and a devil to fear.”

When I heard that, my heart broke.

Greed can be turned into an obsession.

An obsession can be turned into a way of life.

Truths and lies can become part of the same adopted belief and lifestyle.

Let me share with you a litmus test to differentiate multilevel or network marketing from the pyramid or Ponzi scheme.

Before you get involved with the next biggest compensation plan on planet Earth to be super rich quickly, easily, and without having to do much, please ask yourself these questions:

1. Are the company, leaders and top distributors credible? How do you know you know that they are trustworthy?

2. Is the product genuine, beneficial and desired by consumers (not just distributors)?

3. What proof and evidence are there to support claims about the product or service?

4. Is the product of good standing and competitively priced?

5. If there is no money to be made, will distributors still buy and consume the product or service?

6. Are you required to buy a large number of products to qualify for a more senior position in the network and enjoy higher sales commission?

7. Will you be required to recruit new and more distributors to be successful in the business?”

8. How do you know the business will be sustainable?

9. Will doing the business make you a better and more respected person?

10. Have you spoken to distributors who have been active in the organization and are no longer in it and ask them for a second opinion?

Please make sure that those distributors are not saying anything negative because they have joined a competitor.

Caveat:

To all my friends who are doing a perfectly legal business, including MLM or network marketing and direct selling business, I’m doing you a good favor by exposing the truths and lies about pyramid or Ponzi schemes.

I love you but don’t recruit me and load my limited spaces with your wonderful offers.

Go4It!

I hope this message will find a place in your heart.

By the way, I have also recorded other reflections.

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