- 1 Why Are Obvious Internet Scams Not Persecuted?
- 2 What Is The Government Doing About It?
- 3 How Can We Protect Us From “Make Money Online Scams”?
- 4 Make Money Online Scams Exposed
- 5 Scams Aplenty – But No Help
Why Are Obvious Internet Scams Not Persecuted?
This is something I have a personal interest in. Like millions of people around the world, I was searching the web for ways to start my own online business.
Like millions of people around the world, I had the desire to make money online. And like millions of people around the world, I fell for some of the scams by unscrupulous Internet Gurus.
All together, I was defrauded of several thousand dollars. You can imagine how angry I was; not only because of the monetary loss, but more about the fact that these scheisters are allowed to keep on robbing people of their hard earned money.
The Internet is literally flooded with hundreds of scammy products, programs or whatever you want to call this crap. Like many others I filed complaints with federal authorities, i.e. the FBI. But nothing ever happened.
Why is that, I wonder. People are being sent to jail for stealing a loaf of bread or a pack of smokes. Don’t get me wrong, please. I don’t condone shop lifting or stealing, but where is justice?
The Internet Scammers stealing MILLIONS of dollars every single year from unsuspecting folks. They launch a product, rake in a million or more, shut down the website. Then they come back 6 months later and do the same thing over and over.
What bothers me most is the fact that there is a well know group of characters behind 75% of all the scams. They call themselves “The Syndicate” and don’t keep it a secret what they are up to. They show no shame in announcing their upcoming “events” in massive email campaigns and on their websites.
Yes, they proudly let us know that they meet in the Philippines, Gran Canaria or similar exotic places for their brain storming sessions on how to make and split up millions of dollars over the next 6 or 12 months. Then they each come out with some new “miracle product” that, supposedly, will make everyone rich without having to lift a finger.
Have you ever heard that Apple Inc. is promoting Microsoft, or BMW is promoting Mercedes Benz? Wouldn’t make any sense now, would it? But this is exactly what these scammers are doing. Promoting each other products in form of “necessary add-ons to make the thing you already purchased“, work.
What Is The Government Doing About It?
Before digging into this, let’s take a look at recent history and some of most famous financial crime cases (in no particular order)
- James Paul Lewis Jr. (Financial Advisory Consultants) – Loss over 300 million – Scam: Affinity Fraud/Pyramid Scheme. James used investor funds for trading in foreign currency, purchasing luxury automobiles, and expensive jewelry. Sentence: 30 years/156 million restitution
- Barry Minkow (ZZZZ Best Inc.) – Loss about 100 Million – Scam: Pyramid Scheme. Barry created thousands of fraudulent documents and sales receipts to make it appear like he was building a multi-million dollar corporation. Sentence: 25 years/26 million restitution
- Kenneth Lay and Jeffrey Skilling (Enron) – Loss estimated 65 Billion dollars. Scam: Falsified financial reports. Stock went from $90/share to $1/share. Investors lost 68 Billion dollars. Sentence: Skilling 24 years/45 million fine (K. Lay died while on vacation awaiting sentencing)
Bernie Madoff (Bernard L. Madoff Investments Securities LLC) – Loss estimated at 65 Billion dollars – Scam: Pyramid Scheme. Bernie ran a typical Ponzi scheme by sending false statements to investors. When stock market crashed, he was unable to return investments. Sentence: 150 years/170 Billion restitution
What did these five frauster have in common? They defrauded people of surrealistic amounts of money. Here is a statement from the CEO of an investment firm.
Each year, more than 30 million consumers fall victim to investment frauds. The average loss for an investor stands at $15,000, with individual losses running into millions of dollars.
Is this the reason that government seems to be not interested in persecuting the online scams I am talking about? The losses of the victims of these crimes are NOT high enough?
True, in most cases people losing amounts ranging from below $100.00 to maybe a couple of Franklins. However, a lot of people lost amounts up to $9,000 with certain scams (Empower Network and it’s off springs come to mind).
This is my opinion: No matter how small or large the amount an individual is defrauded for, A SCAM IS A SCAM, a CRIME IS A CRIME and should be persecuted.
How Can We Protect Us From “Make Money Online Scams”?
Obviously, we cannot rely on our governing bodies to take action against the obvious scams on the internet and protect us. It’s left up to us to recognize and avoid the fraudulent offers. It may be difficult to realize that a certain product is a scam before a purchase has been made.
Make Money Online Scams Exposed
1) Illegal Pyramid Schemes.
Multi Level Marketing is a legal system of selling tangible and real products through a multi level sales force. These affiliates sell the products to their customers and are compensated by receiving a commission.
Affiliates can build their own sales force by recruiting interested people and receive additional commissions from the sales of these affiliates.
Important: In a legal MLM organization people are making money from the sales of products PEOPLE WANT & USE!
Illegal pyramid schemes try to camouflage their real identity by offering some kind of product(s) to their “costumers”. First off, if you join a pyramid scheme, you are NOT a customer but a “new recruit” entering Level One. You may receive some kind of product (usually outdated and useless eBooks) or access to equally outdated and useless training videos.
*** The only way to make money in pyramid schemes is through recruiting new members.
The chart below shows you how you could “earn” $37,500.00 in a 4x matrix scheme (product: DirectPayBiz)
You can see that it is not about selling products or services, it’s all about the membership fees you will collect from your down lines.
Empower Network, the largest pyramid scheme ever run on the internet had a membership of several hundred thousands participants. Most people lost money, very few made a livable income and a handful of folks (those on the top of the pyramid) made hundreds of thousands dollars. The EN income report tells the real truth about this scam:
Most founding members of Empower Network have left and either started their own scheme, or joined others as active promoters and top affiliates. Here is a list of similar pyramid schemes I have reviewed over the past 12 months:
Not only are these kinds of schemes illegal, they are a sure way to lose money. Avoid at all cost!
2) Binary Option Trading Scams
I am not sure how many of these scam products are out there right now, but I have list of 109 as of 12/12/2015. They all work the same way. Some guy (or gal) tells you a weird story about “loopholes in some software“, “noticing a timing anomaly” or simply is a frigging genius and “created a miracle BOT program” that CAN PREDICT THE FUTURE.
They all claim that “THEIR” program is almost always right (97%) and made them millions of dollars in one year. And they all using Binary Option Trading as their vehicle for their scam.
Let me make this very clear: Binary Option Trading is a legitimate form of trading commodities & assets. In the US it is regulated by the SEC and brokers are under oversight by the CFTC. Brokers that serve US clients are registered and regulated by CySec (the SEC equivilant Cyprus located agency). BOT is a risky business and it requires a lot of knowledge and experience.
How the BOT SCAM Works
The scammers claim that their software can predict the fluctuation of the market and will give signals which way to bet. There are only two possible outcomes of a BO trade. Either the value of an asset has gone up during a certain period of time, or the value has gone down.
They will show you graphs and spreadsheets that supposedly are proof that their system or program works and you will hardly ever lose a bet. They will “let you use their software for free“, they promise in the sales video, it will not cost you a single dime.
But in order to use their program, you are required to open a trading account with the broker of their choice. The minimum deposit is usually $250.00 and IS NOT REFUNDABLE.
They make a big effort to have you believe that IT IS FREE. Just watch one of their sales videos and count how many time the word “free” is used. However, in the end it’s not free at all. It cost you a minimum of $250.00.
Of course, you start trading and hope to win 97% of your bets. Rightfully so, because that’s what the scheister guaranteed you will do. But the reality is different. The programs CANNOT predict the out come of your bets. You will find out that it is a lot like a coin flip. You lose some, you win some.
Now here is the cold truth. Let’s assume you bet $20.00 that the USD will gain on value against the CAD within the next 10 minutes. If you win your bet, The payout is only 75% of your bet and you will make a profit of $15.00. If you lose, the broker gets your $20.00.
I does not take a genius to figure out that you cannot win easily. If you lose three bets, you will have to win the next 4 to just break even. But that’s the game and that’s not the SCAM.
The SCAM happens as soon as you make your none-refundable deposit. The referrer with the unbeatable software is in fact an affiliate of the broker and receives a commission for his effort.
The commission is ………..$250.00 and non-refundable.
How can they do that? Well, quite simple. When you win a bet, the broker gets 25%, when you lose, he gets the full amount of the bet. And they know, from experience, that most traders lose more than they win. They also know that 80% of people will add more funds to thei8r trading account in the hope to recoup their losses.
In many cases, the “referrer’ will get additional commissions when people restock their account.
And you have been scammed by the slick creator of the scam and the slick sales video.
3) The WEB Hosting Scams
This another popular scam by the internet gurus and, again, you will get something FOR FREE. You will get a pre-made websites and have the choice in what niche or niches you want to work in. These are so called mini sites, consisting of a “Squeeze” page and maybe one or two additional pages you are able to add some content.
The scam here is that you are required to enter a “WEBSITE HOSTING” contract with the host of the their choice. They call it “Cloud Hosting” and the prices are outrages high. Between $80.00 and 120.00 for a 6-months contract, between $130.00 and $190.00 for a one-year contract.
You see, a domain name will cost you around 10 bucks for one year. You can get first class state-of-the-art hosting at NameCheap for as little as $5.00 per month.
Again, the creator of these products are affiliates of the hosting company and receive a hefty commission.
are two of these scams I reviewed.
Scams Aplenty – But No Help
I hope that this article helps you to recognize scams so you can avoid them. As I said earlier, I was a victim. Not once, but several times. These people are doing this for a long time now and their sales tactics became very sophisticated and convincing. I just hope that government will take action soon and rid us all from these gangsters.
What I Did Next
Of course, the bad experiences and losing money at the same time did set me back in my efforts to make money online. But I refused to give up and continued looking for a way, and also for some help, to start my own business.
When I stumbled across a Wealthy Affiliate Review, one sentence caught my interest. It was the offer of a FREE STARTER MEMBERSHIP to find out first hand what WA has to offer.
I admit that I was very skeptical but decided to “give it a go” and followed the provided link. They didn’t ask for a credit card, a penny or a dollar. I just walked into the membership area, took a long look at the forum and started with lesson one of the “Online Entrepreneur” course. The level one course consists of 10 lessons, supported by excellent videos and by the end of week one, I had built my first website and was on the way to online success.
It did not cost me a penny. The free starter membership is indeed free and one can stay a free starter member for as long as he/she wishes. It’s absolutely up to the individual to decide to become a Premium Member.
If you are interested in making money online and want to learn this exciting business from the ground up, I suggest you read my #1 Free Recommendation and join me at WA. And like I said. I will not cost you a dime to check it out and see for yourself what WA has to offer.
I am John, the owner of this website. I made it my mission to expose online scams and to help newbies to start their own business. If you have any questions about this article or Wealthy Affiliate, please leave comment below and I will get back with you asap.