I was browsing Facebook a while ago when I chanced upon Miss Salve Duplito’s fb page full of harsh comments from enraged One Lightning Corporation members. The issue is something about Miss Duplito’s report about the company that the OLC members claim as being biased and not trustworthy. I read a bunch of comments from both sides of the story. Reading the comments just made me more disappointed for the following reasons:
- Some of the netizens which I assume are also distributors of the said company claim that they do know about Ponzi and Pyramiding Schemes yet they insist that OLC isn’t one.
- Because of the promise of quick returns, a lot of people get into the action. When they receive their first payout, that becomes their living “PROOF” that the company isn’t a scam. But think about it, who says that Ponzi and Pyramiding Schemes don’t pay?
- When a distributor receives a payout, it quickly follows that the company isn’t a scam. This thought is now becoming a basic standard which is alarming and depressing. You will hear a lot of people claiming their Network Marketing companies isn’t a scam because they earned money from it. Wrong!
- Some of the people involved in the company were living in a financially free lifestyle based on a Ponzi/Pyramiding system without knowing about it.
- It’s really hopeless to educate these people because they believe what they want to believe and if what they believe earns them money, then they’ll fight and die to protect it.
This prompted me to visit the SEC website to find out more about the company. While browsing the website, it surprised me because a lot of their advisories this 2015 came from suspected investment companies. EmGoldex, Goldextreme, Success200, Klikmart, One Dream Global Marketing.. just to name a few! There’s so much investment scams happening nowadays! That’s why I think that 2015 is a Ponzi and Pyramiding Scheme Year!
So how do we educate the people who’s into this type of schemes anyway? Well if you’ll ask me, we can’t unless you click a button on their heads that says “UNLEARN EVERYTHING”. Let them believe what they believe because it’s what they believe in simple! Let them realize deep within themselves what is right and what is wrong. In my opinion, financial literacy is like religion. We can’t force someone to be a Catholic if that person believes in Allah. There will always be two sides of the coin, the Yin and Yang, oil and water.
Well anyway, for the sake of the general public, I’ll list down some pointers below on how to identify a Ponzi / Pyramiding scheme:
- More emphasis on recruiting rather than selling. Take note of the compensation of recruiting versus the product sales. If it primarily focuses on recruiting, then most probably it is a pyramid scheme. Legitimate network marketing companies focuses on PRODUCT SALES and building long term customer relationship.
- Complex payout systems. Always remember that legitimate network marketing companies base their commissions on sales to people outside of the marketing program. Ponzi schemes nowadays offer you some type of recurring fees or a repurchase program of some sort to keep an endless pool of money that will be used to pay the distributors.
- High returns in a short amount of time. This suggest that payouts comes from new recruits. Always remember that the driving force of income in a network marketing company must be product sales.
These are some of the things that you should check as these are the very obvious ones. Also, read another post of mine about investment scams here for more information.
To Miss Salve, please continue at enlightening the Filipinos about these “SCAMpanies”. I support your advocacy. +1 respect and a two-thumbs up from me!