12
Oct

Ponzi Scheme Frustrations

Author: Jerry Iannucci

Hello again!

Sorry I haven’t been updating my blog as often as I would like.  I’m still around, I just haven’t had much time to write.

But today I am ready to rant!

Yep, welcome back!

So, lately I have been spending way too much time on Sweeva.  Frankly, i’m addicted.  Whatever.  In case you live under a rock Sweeva is a social marketing site / traffic exchange.  So by using it you are not only getting your site seen by other marketers but you are also getting to know a lot of other marketers socially who are promoting their own sites.

I guess recently it has really started to bug me to see how many talented Internet marketers I know are out there promoting illegal pyramid and ponzi schemes.

I know.  These programs have been around even longer than I have.   It’s not like I haven’t seen hundreds of them come and go over the years.  But it’s interesting now to finally see the faces and talk to the people who are promoting these programs in a social environment such as Sweeva.

Ok, for the record i’m no angel.  I’ve been known to bend a few laws in my time.  If I am in a hurry I might go a few mph over the speed limit.  I probably play the stereo in my car louder than I should and I might even admit to having a few mp3s on my computer that I didn’t pay for.  Hey, I’m like a modern day Jesse James.

Let’s be realistic here.  The police probably aren’t going to break your door down and haul you off to jail for promoting an affiliate link that might not be entirely legal, but does that mean you should do it?

As long as nobody gets hurt, right?

Wrong.

People do get hurt.

Money doesn’t just magically appear.

No program pays out more than it takes in.

The only way for you to make money in these programs is for other people to lose money.  Your success can only come from someone else’s failure.

Am I the only one bothered by that?

No, i’m not a lawyer or a judge.  I can’t pass absolute legal judgment over every site out there.  But if you are not selling a product or service and the only thing you are offering people is a money making opportunity then chances are it’s either an illegal pyramid scheme or an illegal ponzi scheme.

What’s that?  You program offers a product or service?  I guess that makes it legit, right?

Of course it does!

In fact, Bernie Madoff would be a free man right now if he had only thought to provide his clients with some ebooks and a rotating banner ad on his blog.

You can dress it up anyway you like.  If people are spending money on these things with the goal of making more money back then slapping on a worthless product or ad credits isn’t going to make them any more legit.

It’s frustrating to me though because sometimes I just want to grab these people and tell them what they are doing is wrong… but I can’t.  Who am I to tell them what they should or should not promote?  Right?

Look, if you have the money and you want to gamble it on one of these programs I don’t really care.  Maybe you’ll get lucky and eventually make a profit.  Congratulations on your wise business investment.

My problem is with the program owners and the people who use these programs to prey on newbies who don’t know any better.  The people who only care about making money and don’t care where it’s coming from.  To me that is more than just breaking the law… it’s just wrong.

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This entry was posted on Tuesday, October 12th, 2010 at 11:26 am and is filed under Internet Marketing, Making Money, Traffic Exchanges, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or TrackBack URI from your own site.

22 Responses so far to "Ponzi Scheme Frustrations"

  1. 1 Louis Papp
    October 12th, 2010 at 11:58 am  

    In response to the Bernie Madoff situation. Why is it the people who got even richer off of that scheme were never prosecuted? They are just as guilty as Bernie!

  2. 2 Thomas Bergel
    October 12th, 2010 at 12:20 pm  

    You’re absolutely right on tack Jerry. There are more hucksters, scammers and just plain deadbeats out there than ever before and Sweeva is as full of them as anyplace else. Very bad news for legimate marketeers Confidence in internet offerings is dropping like a stone. You might be interested in reading a blog I wrote in June titled “What works? What doesn’t! at: http://bit.ly/cGZ5TA

  3. 3 Ben Fitts
    October 12th, 2010 at 12:24 pm  

    Hey Jerry,

    Right on man! Sweeva appears to be filled with this junk. There are certain people who seem to find a new Ponzi scheme to promote every week or two.

    Some of these are fairly obviously new schemes being run by the same people. They shut one scheme down and setup a new one with a new name.

    Some of the hype is outrageous. There is one advertising for a $7 investment you can make $31 MILLION. Some others say they pay out 100%. If they pay out 100% how does the owner make any money? The reality is they have what is called breakage which means that most people won’t reach the payout or meet all the requirements so they never have to pay out 100%.

    Then add in to it the newbies that follow these so called experts from company to company every 2 weeks. The experts don’t stick with any one thing. They just burn through the newbies and find more newbies to join them.

    I’ve been with the same MLM company for 6 years. If it is a good company you don’t have to switch every 2 weeks!

    Anyways I could rant on this all day. :)

    Thanks for posting. Sometimes I think everyone on Sweeva is delusional. It’s nice to know there are other people on Sweeva who feel the same way I do.

    - Ben Fitts

  4. 4 Thomas Bergel
    October 12th, 2010 at 12:30 pm  

    You’re absolutely on track here Jerry. There are more hucksters, scammers and crooks out here than ever before. This is very bad news for legitimate marketeers because people’s confidence in buying on the web is plummeting like a rock. Sweeva is as bad as anyplace. You might be interested in a blog I wrote in June “What works? What doesm’t!” @ http://bit.ly/cGZ5TA

  5. 5 Lynn McCutcheon
    October 12th, 2010 at 12:33 pm  

    Whoa, fantastic post! (And absolutely hilarious in places, hehe.) I know we’ve been chatting about a lot of this stuff in TE Live lately but it’s good to see this out there, I totally agree with everything you said, and this was just a fabulously written post. Hooray!

    I think you need to change one thing tho… instead of saying you’ve “been spending way too much time on Sweeva” you should change that to “I live on Sweeva”. ROFL :D :D

  6. 6 Lynne Sherman
    October 12th, 2010 at 12:34 pm  

    Bravo, Jerry! I hope more people read this post and start thinking about the ethics of what they’re promoting. I wish I had known about these schemes when I started- yeah, I’m one of the many who lost money to others. Thanks for posting this!

  7. 7 Jon Olson
    October 12th, 2010 at 12:52 pm  

    Love the post. Re: Sweeva, we know the majority of sites in rotation aren’t the best around. Not sure what we can do, we try to get people to comment and call out the bad stuff…

    Really at a loss for how to change the culture there. Would love to hear some suggestions =)

  8. 8 Jerry Iannucci
    October 12th, 2010 at 1:08 pm  

    I think what is frustrating to me is that because Sweeva is such a social environment I feel like I have gotten to know some of these people and they are some genuinely really nice people there. I just don’t feel right trying to sabotage their business by leaving negative comments on their pages when they have said so many nice things about mine.

    Plus there are way more of them than there are of me. I wouldn’t stand a chance if they all ganged up on me.

  9. 9 Diane Merriam
    October 12th, 2010 at 2:18 pm  

    Not meaning to sound like me too, but I’ve also got a post on it I called Weasel Words. You have the barracudas who know exactly what they’re doing when they rip people off. You’ve got the ones that may have a suspicion of what’s going on but don’t want to acknowledge it. Then you’ve got the biggest group – the ones who are out there just hoping that this one is going to work and don’t really know what they’re doing is wrong. Those are the ones I really feel sorry for.

  10. 10 Scott Douglas
    October 12th, 2010 at 2:25 pm  

    If it were not for the McCoys, we never would have heard about the Hatfields.

    Scammers actually create a demand for honest marketers.

    We will never be able to stop the scam artists, nor should we want to. More power to them.

    Show me a victim and I will show you an honest marketer with a prospect.

  11. 11 Thom Pearson
    October 12th, 2010 at 2:52 pm  

    I don’t like to come over as negative…

    but I no longer believe it is possible to do anything to control this trend of more and more scam sites appearing and being promoted.

    As an traffic exchange owner I can tell you that trying to control it at my site is VERY bad for business. It seems to have little to no positive effect, but it sure as hell has a whole lot of negative – all I get is deleted accounts and aggravation and problems from people angry with me for not letting them promote their “scam of the week” :(

    I have had MANY discussions with people wanting to convince me to allow promotion of these scams. Every one of them has been a total waste of time.

    The root of the problem is GREED. It is a greed that suspends peoples ability to think logically – it also totally removes any ability to use simple arithmetic. Trying to explain it logically is a waste of time, they cannot (or will not) see the logic. Mathematical explanations are just ignored.

    You can see some postings I made on this here.

    http://pearsons.ws/pearsons_forum/viewtopic.php?f=16&t=174

    To end this on a positive note…

    I am not done fighting it yet :)

    best wishes

    Thom

  12. 12 Mark Hodgetts
    October 12th, 2010 at 2:59 pm  

    Great post Jerry. I think it is incumbent upon us all to call out he scams as we see them. I know I do when I’m at Sweeva. To be honest if somebody is prepared to promote junk they forfeit all rights for me to be considerate of their feelings – I’m more concerned to alert people tempted to get in to these systems t the legality and futility of doing so. IM is at a critical low point right now – there have never been so many scams – as Scott says this is the time for the good guys to shine.

  13. 13 Winter Perkins
    October 12th, 2010 at 3:46 pm  

    Amen… chuch! It’s not surprising that they stay around, new ones pop up daily… they make people money, so until they stop making money, they’ll always be here.

    It’s definitely a predator/prey relationship. Newbies come in, old heads grab their money and run.

    I’ve lost plenty in my newbie ignorance. You KNOW better but you want to think it’s possible to make tons of money without doing anything.

    You rant, cuss, fuss, live and learn. It’s almost an initiation of sorts here, but it turns many people away before they learn how to really earn here.

    Sad, but it t’is what it t’is.

  14. 14 Jerry Iannucci
    October 12th, 2010 at 4:36 pm  

    You’re right. I know better but I almost wish I didn’t. I could probably make a killing promoting some of these programs. If only my damn conscience would stop getting in my way. I guess some people just don’t have that problem.

  15. 15 Jean Grainger
    October 12th, 2010 at 8:53 pm  

    I think I would understand this better if I actually knew what ponzi means. I looked it up in the dictionary and it is not there at least not in the most reliable “English” dictionary so it is obviously a US word.

    I have been trying to guess what it is for 4 years now.

    Is it cycler not sure what they are?

    Is it recruit someone and get what they pay in paid directly to you?

    Is it a matrix well GDI and Traffic wave are both matrices and so are most MLM schemes.

    I was in MLM before I came on line. When you think about that it is just saving a copmpany all the work and expence of having to constantly recruit reps.

    So can someone help me?

    I have banned cash gifting and pay to promote on my ad exchange are they what a ponzi scheme is?

    Or lastly I was with a company who promoted an education scheme that was of no use to anyone outside of the US. Yet half the distributors are from outside the US they have to buy at $1000, $3000 and $10000.

    I could not see that anyone but the network marketers as they called us were buing the product.

    I got out because I could not afford the fees and then on top of that the Google advertising. I recon I needed to be making over $10000 a month just ot break even. That is legal or is it?

  16. 17 Dorena Begonia
    October 12th, 2010 at 11:52 pm  

    Aloha Jerry,

    Thanks for bringing up this about those sites on Sweeva. I have been feeling the same way lately when surfing Sweeva, and when I see a few of them over and over again. I stop surfing for awhlie and go back later. Although I have found those same sites while surfing other TEs
    as they are rampant. and they are the newest crop of doublers, triplers.

    Oh and I daresay remember all those randomizer sites that were soooo….. popular about 2 years ago.

    We don’t see them anymore!

  17. 18 Ben Fitts
    October 13th, 2010 at 12:16 am  

    What bothers me most…

    The, I already made my money I don’t care if the next newbie traffic exchange surfer get’s burned.

    I’ve had people actually reply back to me with comments like “they’ve made $600 already with this program, so what if it goes under.” The problem is they are burning the newbies who don’t know any better. These newbies get ripped off a few times and then they quit. They say TEs don’t work. They say MLM doesn’t work.

    It has nothing to do with whether TE’s MLM direct sales or whatever works. It has to do with them being ripped off by marketers who should know better but don’t care.

    Yes Jerry we could make money with these scams. But 2 years or 5 years or 10 years from now people will still be following us because we are ethical. We stand to make a lot more money in the long run by being ethical rather than being a scammer.

  18. 19 John Bell
    October 13th, 2010 at 9:24 pm  

    Normally I would agree with you, as in with the majority of these types of programs really are scams and what is important to understand is that just because something offers a product doesn’t mean it is legit..

    there is one however who’s name I won’t mention that comes from a network of long term successful sites, and the “profit sharing” is for a purchase of advertising on that network which I already advertise on and on, and it is already in my budget so if I can get a share back on a product I am using anyway.. awesome!

    However I totally agree that a lot of these other ones I keep seeing are a total joke and I won’t be surprised if the vast majority of it’s members don’t even use the advertising packages they are offered..

    As far as the comment “The only way for you to make money in these programs is for other people to lose money. Your success can only come from someone else’s failure.”

    Well something most of us industry would never want to admit, is that every singe affiliate marketing product / bizop / org is like that. It will always take more then 1 referral before you begin to break even, which means those multiple referrals are spending money, so you can earn it. They have to make sales to in order to break even let alone go into a profit, and you can even look at the diagrams on their sites you will see how many people it takes at the bottom to make money for a few at the top..

    The important thing people need to do is realize this fact, and need to be purchasing these products without expectation of making any money, a product worth it’s cost or with more value then it’s cost puts you in a winning position whether you make 30 affiliate sales, or none.

    Another thing people will find is when they are buying products they can use and are using and are actually getting value from, they are also a lot easier to sell.

    Just some observations on your post, I like a lot of the points you made but being my rambling opinionated self I felt the need to add my 2 cents in 8 paragraphs. Thanks for keeping us informed and all the hard work you do to educate our fellow affiliate marketers.

  19. 20 John Bell
    October 15th, 2010 at 7:04 am  

    I bought in to this program believing that “this one was different”

    I believed the admin and the reputation of their existing products was PROOF that it was different.

    I was wrong. I take back my last remark, this really is just like all the other “profit sharing” (ponzi) schemes out there…

    you get what you pay for with these type of things.. and that’s either ripping a lot of people off as referrals, or losing money..

    which is worse, really?

    I apologize for ever saying a positive or endorsing comment about this “product” because it really is as it appears, just another get rich quick scheme feeding off of people’s dreams..

    promising the world and delivering a bill.. I have had a very negative experience with the only one of these I ever felt was worthy of my endorsement, and I formally apologize for my post here, and anyone who’s influence to join I effected.

  20. 21 Credibility In Internet Marketing
    February 28th, 2011 at 10:23 pm  

    [...] first email was from Jerry Ianucci directing me to a blog post that he had just made concerning his frustrations with the amount of Ponzi schemes on the market.  In the blog post Jerry speaks candidly about his concern for people trapped in to [...]

  21. 22 Two Days of Traffic Exchange Live and Not Wearing Pants on the Internet : Lynn M Dot Net
    July 22nd, 2013 at 1:27 am  

    [...] lives on Sweeva these days) has been taking a proactive approach with Sweeva commenting, following his recent and most excellent anti-Ponzi schemes post on his blog, and calling out some of these scammy sites that have recently been a hot topic of [...]

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