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The term “ponzi scheme” reminds me of pond scum. It may look like a pretty green shade of feed, but in reality it is toxic and sucks the life out of the fish trying to swim in the pond. How long are we going to let the pond scum of the HYIP/Surf world suck the life out of those of us trying to swim?
I know that I’m going to get flamed for this article with people wanting to know why I’m trying to bite the hand that feeds us. After all 99% of all HYIPs/Surfs are ponzi schemes. Well, I am not the only one sick and tired of these scammers and it’s time to take a stand against them. They are illegal, because they are toxic to our funds. If we aerate the HYI pond with knowledge and understanding, we can kill off a great number of these pond scum.
So, just what is a Ponzi Scheme?
The term ponzi scheme originates from a man named Charles Ponzi. Wikipedia has a nice explanation of the original scam here. Basically, the scheme consists of using new deposits to pay out old deposits that have matured into payments due. It doesn’t matter if the scheme is less than 100% of a ponzi. If ANY of the new deposits are used to pay off old ones, it is a ponzi scheme. It also doesn’t matter if there is a service, like advertising, in between. Ponzi schemes sometimes say that they include paid advertising, fees, etc. in with the payments. They are still a ponzi.
Even if an administrator has “honest” intentions for running a ponzi, they are still scammers. An “honest” ponzi scheme is an oxymoron. Eventually, the withdrawals match or grow greater than the deposits. Programs fold as they reach this peak or slide down the other side. Some blame it on the members and/or bloggers. Some blame it on administration. Think about it… ponzi schemes are set up to fail by definition. Folding with a large majority of losers is inevitable. EVERY ponzi scheme is a scam, no matter if they are currently paying or not.
In order for a program to not be a ponzi, they must use the deposits to earn outside of the program. It is fine if they use some of the deposits as a reserve fund. The ROI should reflect the actual earnings. No, I don’t mean the exact earnings. Program administration/staff need to make a profit from the program, too. They take a percentage of the earnings and/or fees. Their earning needs to be greater than their administrative and advertising costs. In other words, normal business practices. There is no reason why the administrator/staff (and members) of a real opportunity shouldn’t make it rich, if they are good at obtaining gains and running a program.
How do I spot a Ponzi Scheme?
Spotting a ponzi is not as easy as it sounds. There is a wide variety of criteria and even then, it is difficult to determine. Some ponzi owners are very slick con-men, like Bobby Krimm, and can fool most people. The administrators prey on those wanting to believe that their program is the real thing and “the next big one!” The really good ones are fluent in the current pulse of the HYI industry. People spout off in blogs/forums that they hate this or that and they are looking for xyz. The scammers use the information to set up their program to match xyz and leave out or address this or that. Just that slick!
There was a time that even stupid scammers could “win” big bucks setting up a HYI/Surf. Fortunately, as more and more HYI players become better informed, a lot of these scammers are being choked out of the pond.
Ok, on to the criteria, but first a disclaimer. The following list of criteria is not intended to be inclusive or to be solely used to determine if a program is a ponzi scheme. Why do I say that? It is because slick conmen are always evolving into new schemes and the criteria is always changing. Also, there is a chance that a real program meets a number of the criteria. A ponzi scheme may not meet all of the criteria. Any criteria that you use for choosing or bypassing a program should not be concrete; rather they should be a guideline. (Related articles: Things You Should Ask Before You Spend, Private programs, refunds and naive investors, and Accessing Risk when Investing in Surfs/HYIPs.)
Hype: The bigger the hype, the greater the chance that the program is a ponzi. Hype comes in many forms from over advertising to huge promises. Is the program advertised all over the place? Are there huge (usually big, colorful font) claims of great returns on the home page? Are people claiming that it is the “next big one?” Do they say “trust us” or “we are not a ponzi?” Then it may be a ponzi.
ROI: The bigger the ROI, the greater the chance that the program is a ponzi. Is the ROI unrealistic? Is the ROI greater than the revenue source normally returns? Is the ROI earned quicker than the source normally earns, i.e., earned in hours or days when normally it takes weeks or months to generate returns? Is it “too good to be true?” Does the ROI look like it was created out of thin air? Is the ROI fixed, rather than variable? Then it may be a ponzi.
Spends/Deposits: The smaller the minimum and the larger the maximum, the greater the chance that the program is a ponzi. Would a real business be bothered with members only depositing the minimum? Is the maximum greater than what can normally be used in the claimed revenue source? In addition, are they pressuring you spend fast or you’ll lose out? Then it may be a ponzi.
Withdrawals: The smaller the minimum withdraw amount and/or caps on the maximum, the greater the chance that the program is a ponzi. Is the minimum withdrawal so small that it would be nickel and diming the program to death? Is there a cap on the maximum withdraw? Then it may be a ponzi.
Timing: The faster the withdrawal is paid, the greater the chance that the program is a ponzi. Is the amount of time between requesting a withdraw and receiving payment shorter than the average time for moving funds out of a revenue source and into your payment processor/e-currency? Are withdrawals automatic, i.e., you don’t have to request a payout to your payment processor/e-currency? Then it may be a ponzi.
Transparency: The greater the number of secrets/lies, the greater the chance that the program is a ponzi. Does the program tell you what they do to generate returns? (Note: Knowing the revenue source is the most critical criteria, IMO.) Does the program lie about what they are using to generate returns? Does the program hide who and where they are located? Is the program running illegally according to the laws in their country? Does the program lie about registration, security, etc.? Is the “About Us” copied from other programs or have other obvious lies? Does the program lie about when they started and/or post fake news, statistics, etc.? Does the administrator/staff refuse to answer or skirt around the hard questions? Then it may be a ponzi.
Referrals: The higher the referral commission, especially multi-level referrals, the greater the chance that the program is a ponzi. (Note: Referral commissions are a good form of advertising, IMO.) Are the referral commissions higher than average for an advertising budget? Is the sum of multi-level referral commissions too high? Then it may be a ponzi.
Bonus/Contest: The more bonuses and contests, the greater the chance that the program is a ponzi. Is there a sign-up or deposit bonus? Are there contests to win money? Then it may be a ponzi.
Forum/Monitor Presence: The friendlier and/or cheerleading in the forums/monitors, the greater the chance that the program is a ponzi. Are there way too many cheerleaders? Is the forum administrator spending an inordinate amount of time being “friendly” in all of the forums? Did the program pay to be rated higher in the monitors? Are there obvious paid/good votes in the monitors? Then it may be a ponzi.
Gag Orders/Threats: Threats to delete your account for bad mouthing or bad votes, then the greater the chance that the program is a ponzi. Does the program include threats, other than spamming, fraud or cheating? Are controversial posts in the program’s forum deleted? Are you in danger of being deleted for asking a question? Then it may be a ponzi.
Past Programs/Multiple Programs: The higher the number of past and/or current programs, the greater the chance that the program is a ponzi. Has the program administration run a ponzi scheme in the past? Is the program administration running multiple like programs currently? Then it may be a ponzi.
TOS/FAQ Disclaimers and Claims: The more outrageous the claims/disclaimers and the lack of critical information, then the greater the chance that the program is a ponzi. Are there unusual claims or disclaimers hidden in the TOS or FAQ, e.g., a claim of being exempt from the US SEC, especially when the program isn’t even based in the US? Is the TOS or FAQ copied from other programs? Is critical information/policies missing? Then it may be a ponzi.
Program Changes/Excuses: The more the changes and excuses, especially as a program grows older, the greater the chance that the program is a ponzi. Are the terms, i.e., ROI, length of time to earn, lock-up period, fees, etc., changing frequently? Are the terms changing to deal with {fill in the blank}? Is the program constantly making excuses as to why they are delaying payments? Do they blame everything and everyone else for “problems?” Are they going private and reopening again? Does it feel like you’re in a revolving door? Then it may be a ponzi.
Refunds/Re-spends: If a program requires new money to get a refund or a payment, like the 50/50 rule, then the greater the chance that the program is a ponzi. Does the program require and/or ask for you to re-spend or compound in order for you to get paid? Does the program require you to spend into a new program in order to get a refund from an old, failed program? Does the program pay you a “refund” into a virtual account, instead of your payment processor/e-currency? Then it may be a ponzi. (Note: It is never wise to spend new money to get old money.)
New Members/New Money: If a program requires you to recruit and/or depends on new members/new money to survive, then it is a ponzi. Do you have to recruit new members in order to earn? Does the program’s communication talk about needing new members? Does the program concentrate on referrals or ask you to get referrals? Then it may be a ponzi.
Does the program say that it is a game or admits that it is a ponzi/partial ponzi? Then it is definitely a ponzi!
Remember that it is never your responsibility to prove that a program is a ponzi. It is the program’s responsibility to convince you that it isn’t a ponzi.
So what, why should I care if a program is a ponzi scheme, as long as I make money?
I will admit that the “so what” attitude was my own attitude for quite a while. I didn’t want to think about the reality. All I could think about was how to make money from these programs. How could I spot when to get in and out fast enough? After all, I was only “investing” what I could afford to lose!
Wake up, people! This is the exact attitude that the scammers are looking for. They want you to make a big spend and re-spends in the hopes of making it out with a profit before they close. They prey on those that are uninformed and only thinking about potential riches from the high ROI.
How many times have you created a spreadsheet about how much you could earn? How many times have you developed a deposit strategy? How many times have you lost more than you earned? How much are you down from the total amount that you pulled from your bank account? How many times have you hit and run programs only to lose in your total balance? How many times have you remained loyal to a program, only to lose in the end? Or are you a referral hound, leading others to become losers?
The bottom line is that you are not “winning” money from the program and/or the program administrator when you are in profit. You are taking money from other HYI players. For every person in the black, there are many more in the red. Do you ever read the sob stories people tell when they lose their “fortune?” If you do, do you think oh how sad that they invested more than they could afford to lose, or do you ever think that the money they lost is in your pocket and other people’s pockets now? While we are running around taking money from each other, administrators take their “cut” and laugh all the way to the bank as they start planning their next scam.
Ponzi schemes are illegal to protect people from the exact greed that drives us all to find “the next big one!” Let’s take a stand and boycott them so that they are the ones suffocating in server, script and advertising costs. Just maybe real programs will step forward and be known when the scammers become dust in the wind. Just maybe real opportunities will shine through the HYI pond.
Just say no to ponzi schemes!
JMO,
Sharon
Popularity: 12% [?]
Wow! Great post Sharon! I totally agree with you!
Sharon I salute you for your guts and integrity to post this very sensitive article.
Very true and informative for the newbies, the uninformed and in general for everybody. I suppose also very debatable.
Sharon as you have already in your posting classified Bob from TriStar as a ponzi owner I think it is fair to ask you the following questions.
1. Do you then also, as an example, classify Jack of Planet-Surf and Mrsvee with her Matrix as ponzi owners?
2. Are there any surfs/matrices operating at the moment that are not ponzis according to your criteria above? [sometimes the ponzi and pyramid are inter -related] .
Your reply will be appreciated.
This is an excellent entry and should be made sticky on the sidebar. I’ll do it later.
Thanks Sharon
I’ll share with you what I feel about your questions jannie.
1. Yes, they are.
2. Yes. Though they’re inter-related, but they’re working on the same principle. The same cannot be said for MLM since they’re dealing with sale of products which is legal.
TYVM Everyone! I figure that I’m going to get flamed for writing this article, too. I know it’s sensitive, but it’s been building up as a burning issue for way too long.
Jannie, I agree with Jude.
JMO,
Sharon
*flame flame flame*
Wait… I think I fell on the wrong side of the fence… Lets try that again…
*clap clap clap*
There ya go… hehe
Sharon’s got a pretty good article there, basically says what I’ve felt all these years. First off, is there really a point in autosurfs nowadays? Arent they all ponzis? I for one would say that autosurfs are just money cyclers that you have to babysit everyday in order to get your money back, if you dont, then you’ll just have donated to teh big ponzi-wheel of life.
Think about this.
How many people actually view the “Ads” that are shown on autosurfs?
How many “Real” ads are there? (99.99999999% of the ads shown on Autosurfs are for referral pages, other autosurfs, mlms and hyips)
Would you spend real money to buy ad credits on these autosurfs?
No matter how good intentioned or honest and admin is, if he or she doesnt have any way of actually making money, then that program is doomed to fail. Money begets money, if these admins only spent more time in learning how to make money rather than spening hours upon hours doing marketting blitzes and promotional stunts then maybe we’d see more programs worth putting money in. I guess it all boils down to greed, spending months planning and setting up an elaborate scheme to rip money off from people is a lot easier than actually working for the money, and if it appeals to those people who naively believe that they can actually make money just by giving X amount to someone and he’ll receive 144% back in the next week or two is just pushing it.
Even the lowest return of autosurfs 0.8% per day or something like that will eventually fail, because they have no real source of income, if growth stops, then that’s it. Everyone is just passing money around and the only one getting rich from it is the payment processors and the admins that collect their “fees” from the transactions.
On with the rant…
MLMs and Matices… If they dont have a product, and if you cant make a living out of selling that product, then it’s just another cleverly disguised ponzi. (Read as, no, I wont buy any ebooks for $139, so that my upline and his upline and his upline can split up the $138 I spent and Im left with a $1 ebook that just tells me to sell more ebooks)
And no…
It’s not debatable.
If you use new money to pay old debts, then its a ponzi, then it’s a scam.
hmmm. nice post. but, you seem to have listed every possible scenario for a site and said “maybe its a ponzi.”
i agree with a majority of what you have said, but you did not differentiate between anything. Its like if you said “is it low roi? is it high roi? then if its either it may be ponzi”
or as if you said, “does it have a log in form, then it may be ponzi”
i dont know if i am getting my point across, but while i agree with a lot of what you have said, i think that you took everything that makes up a site and labeled it as possibly being a ponzi.
yep , you need to have income streams. if not, its destined to fail.
HI Israel,
I was just listing possible criteria to use when trying to determine if a program is a ponzi. I tried to do it in the style of the redneck jokes, because none of the criteria is a hard and fast rule.
The only definite criteria is if it produces returns from inside the program, it is a ponzi. If it produces returns from outside of the program, then it isn’t.
(BTW, I only said if it is a high ROI, not if it is a low one. I don’t think I contradicted any of the questions. If I did, then it wasn’t intentional. I’ll re-read it after a good night’s sleep.
)
JMO,
Sharon
Okay, i didnt mean to come off like an attack on your post. It was a good one, just left me thinking that you deemed any site a ponzi just for opening.
but more often than not, that is the sad truth.
“The only definite criteria is if it produces returns from inside the program, it is a ponzi. ”
if a site sells advertising banners spots, thats not a ponzi act.
but if the only funds they produce are from members, then yes. thats a ponzi.
member upgrades i meant.
Hi Israel,
It’s OK! I didn’t view your first comment as an attack at all! Different opinions are welcome! I am just hoping that I didn’t contradict myself. It was a long article to write. LOL
We have the same bottom line criteria.
Thanks,
Sharon
I would say investing in these ponzi scheme is same as gambling….u dun know what’s is the results next..
Looks like a good read Sharon, too long for my ADD though, LOL
Can you say Social Security?! Shhhhhhhh
LOL NetZen! Yeah, I know it’s a long article. I guess I should have put an ADD warning at the beginning or broken it up into more than one article.
Yep, I can… Shhhhhhhh.
JMO,
Sharon
lets not get to complicated here every buiss is the same if you dont bring new money in get ready to close your doors why wal mart is opening stores all over the world and banks are offerings interests on cds ect investing your money i guess that ponzi guy tried to do what banks do without a back up from another larger bank and no publicity media now days with the net he would be a genius of finances that its called work with other peoples money taught now days right? so difference would be the trust you have in who is handling your money trust that he has earned by standing by his word which is worth more than money actions with results as paying on time ect in some societies that is how you survive and die of old age that wouldnt be the case for some admis on the industry right? but having a good product which is the ads, paying on time you can be old doing it just good old trust is what is needed now and not in god [he wont betray us] but within ourselfs this no adv. sing the petition www.healthfreedomusa.org before april 30 watch the video other scam affecting your survival and your familia hope you do chao//
Jambiz,
Bringing new money is selling a product, not offering a money making opportunity.
The ad space sold by autosurf programs are not a product because I and most others would not even consider Autosurfs as advertising vehicles if it wasn’t for the profit share.
So..
That makes EVERY autosurf a definite ponzi.
Period
End of story.
Best wishes
Paul
Mr. Jambiz,
A self-sustaining business can survive without new money. Companies and Corporations take loans from banks because they want to expand. Banks invest in other businesses, it is a win-win situation on their end. If the business flourishes, they pay interest. If the business fails, banks get to foreclose for cheap on those properties they put up as collateral.
Well, since everyone is being frank now, and no use in mincing words…
PONZI HAD NO BUSINESS, HE HAD NO REAL PRODUCT, HE WAS NOT EARNING ANYTHING. He just took money from new members, and paid it to old members. I guess that’s what’s lacking nowadays… real understanding and the simplest of all things… reading and comprehending what you’re getting into.
Unless one knows for SURE what a site IS doing behind the scenes to make sure a program/site is NOT ponzi based…then one must give the benefit of the doubt that maybe SOME DO create outside streams…
Granted, we are all taught that 90-95% ARE ponzis….doesn’t mean we ALL are…some of us DO try to be different…..
Just as in life: generalizations and labels don’t ALWAYS fit every situation.
MrsVIP DOES offer a valid product…one that can be paid for and used regardless of the matrix being with it or not.
The fee for MrsVIP is for the PRODUCT…the income opp is a bonus…
Entry into the surf, as a part of this MLM/matrix, creates more stability as well.
The labels DO fit many times…but, not always.
Hi Sharon,
Nice article.
I applaud your effort but my guess is that it will fall on deaf ears for the most part.
As you might already know, Ponzi programs appeal to the baser needs of most people.
That being greed and something for nothing, or in most cases almost nothing.
I know that is what brought me into this industry almost 8 years ago and I would guess that it was the same for you.
Personally I have a love hate relationship with ponzi programs. I hate the fact that all they do is circulate money from one person to another while the programs admin take a piece of every thing as it changes hands.
But
This model is no different then the model found in the traditional financial industry. 90% of those who trade in the stock and currency markets end up losing their money. When ever someone makes money in the stock market, that money had to come from someone else.
So
Ponzis really aren’t that different then what we are use to dealing with.
But
What makes some ponzi sickening is that they try to pass themselves off as something other than what they are. This actually is pretty easy because people in this industry want to believe that there really is some unknown secret out there that allows the average person to earn 44% on their money in just 12 days.
Get real!!
If someone could earn 44% in 12 days, do you really think they would be begging for your $5, $10 or $50 bucks.
I think not.
Oh, I have gotten off the subject a bit. I was talking about my love hate relationship. Yea,
The reason I love - well maybe love is a strong word. It should be, I tolerate ponzis in this industry is because without them internet investments would seize to exist.
Yes, that’s right.
The so called honest investments would not make their way into this arena because they would not see that there is a market.
People open honest programs because they see how much money the ponzi programs bring in. They come in to get their share but in a hopefully hones way.
So my point is
Although we despise ponzis and hate that they prey on the greedy an misinformed, I feel they are the cost to do business in this arena.
JMHO
Paul
P.s. You are doing a great job here Sharon.
You want to be able to know if a program is a ponzi or not 9 out of 10 times?
It is really very simple.
Assume that every program you see is a ponzi and you will be right 9 times out of ten.
Insist that every program owner prove that they are not a ponzi by proving they have revenue coming in from an outside source.
AD PACKS DON’T COUNT AS OUTSIDE REVENUE !!
If the program admin won’t or can’t prove a source of outside revenue then you have your answer.
Move on to the next program.
Or will you ….
Best wishes
Paul
Great article, I really believe it’s about time we boycott these ponzi programs. I took that decision over a couple of months ago, even though some of you are smart enough to make a quick buck off these programs, i just couldn’t live with a feeling that I am also part of a scam that’s going to rip someone else’s money. Let’s all take a stand and boycott them so that we could all win together and not feed a bunch crooks who pry on our hard earned cash.
LETS ALL TAKE A STAND!
tell you the truth i dont know the whole story on mr ponzy maybe he wasnt given time needed to raise the capital he needed to operate the car dealership he dreamed an pay everybody out like maybe some others did with whisky and made it to the top im not saying you need to step in everybodies head to attain your purpose i dont know his story but if he was paying and keeping his word many stories are well known of people selling ocean fronts in colorado all over this planet right but like said there is a 5% of honest people so lets stick with those an make a better survival of this, what ind ,way of living, co0op ,paying it forward what ever social name you want to call it and maybe that 5 will grow to 6 i f you guys thought this could nt work in an honest, legal way then you wouldnt had spend all this yrs watching it right so there might be some hope that one of this people might be able to open his car dealership with electric cars by the way and grow into better things
Um, Jambiz,
Please go read Charles Ponzi’s story at http://en.wikipedia.org/wiki/Ponzi
I’m not sure what you’re talking about with cars. But, there are no honest ponzi schemes. There are some administrators who want to believe they are being honest, but if they are paying withdraws from newly deposited money without investing it in either a product, service, and/or other investments outside of the program, then they are just fooling themselves or trying to fool us.
Ponzi schemes can not work in an honest, legal way. Those that go in it blindly or study it, myself included, don’t want to look at the facts. If you’d rather go on getting your hopes up and losing overall, then by all means you’re welcome to do that. My purpose is to warn those that either don’t know or are still trying to hold on to the dream that ponzis are the way to riches. The more informed potential players are, the more we can choke the life out of scammers. I hope we reach the day when scamming via online ponzi schemes is no longer lucrative enough for scammers to bother with it.
When you grow sick and tired of all of the BS out there, please stop back and let us know.
JMO,
Sharon
and just remember that every thing that shines is not gold this was just to remind you of www.healthfreedomusa.org please take a look at it like your life depended on it and it does see you guys and keep it up
It is sad that matrix owners like mrsvee, posting here, is still trying to sell their lies.
Shows what she think of the integrity and intelligence of most of the surfers.
Sharon wrote : “The smaller the minimum and the larger the maximum, the greater the chance that the program is a ponzi”
I disagree on that. I dare to say : on the contrary, the bigger the minimum join fee the more chance it is a ponzi. You see, scammers are smart, they gradually beef up the minimum join fee, because of their “good” reputation some people are stupid enough to invest the 1000$ minimum or something because they see that as a sign that the program is real.
Would a real business be bothered with members only depositing the minimum? Why not? Money is money… but would a scammer be bothered with members only depositing the minimum. *NO*, A scammer want to max profit and is more interested in the big fishes.
thanks for the link on ponzi first time i read it but i guess i had an idea he has been marked for history for his doings wrong or right . right for the ones that lost money and wrong for the ones that lost . what i refer to him been a genius on finance he was he almost made it go right as stated on the inf [Ponzi wanted to look as honest as possible, and according to his autobiography, he was always hoping he could use the fortune he was accumulating to start a legitimate business that would make enough money to pay back all his investors and make everyone rich.]that wont mean a thing to the ones that lost but there is what i ment by car dealership [The overhead required to handle the trades would have eaten up the profits quickly.]and that plus[Ponzi lived luxuriously: he bought a mansion with air conditioning and a heated swimming pool, and brought his mother from Italy in a first-class stateroom on an ocean liner. He was a hero among the Italian community, and was cheered wherever he went.] so good intentions combined with wrong doing just dont cut it i guess some admins are getting to experience this . his idea was good but wasnt carried out correctly and honesty without good actions does not cuts it either similarities of his operation with some models 60 or 70 yrs later means that something implemented correctly might work with this in mind ponzi would have been a pioneer in this ind ahead of his time implementing a sales force and network that was producing mucho money with some coupons like i said some did it with whiskey and got their sons to yale u hartford u and produced you know history i guess generalization is a darn bad habit we humans have im not defending any ponzis or we can call them whats the guys name from enron taking your retirement without you even knowing it, any way, a thief is a thief here in china or in the patagonias but maybe a system well implemented even it has similarties to what ponzi created 70yrs ago just knowing the right people with the right purpose, goals, right intentions ,delivering a good Product might make this ponzi guy a hero i was going to say a lincon but just as a liberator of debts for maybe i dont know what 90% of world habitants lets look for this endengered enterprenuers and offer them support well i hope i cleared any miss understanding in my later exposure shraron thanks and keep us well informed
Most people do not invest in long term investments online because to tell the truth 95% of them crash within 9 months. Lets say the return is 5% a month, my total loss would be 60%(site paid for 8 months, on the 9th month they dont pay me anymore).
At the same time a newbie invested in a 12% daily site that pays daily, after 4 days the site already crashes. I call him a stupid newbie but then I am woken up by the BIG **reality shock**. I count his total loss, and this newbie ONLY lost 52%.
So now we have ME, who spend all his time, effort and energy for 9 months NON STOP into a “so called” honest opportunity, and we have a newbie who only spend 4 days of his time into a stupid ponzi.
I am one of the few who promote LYIP’s over HYIP’s but I do understand why so many still invest in these dang ponzi’s. Above example shows that long term investments online are HIGHER risk then ponzi’s and it takes a lot of DD and own investigation to make it worthwhile to invest in them.
A ponzi is a ponzi, regardless of the length of time and ROI. There are ponzis that pay XX% in days and require a $10 or less minimum (obvious ponz.i) And there are ponzis that pay X% in months and require a $1,000 minimum. That’s why if you just use the length of time, ROI and minimum deposit to try to determine a ponzi, you can’t. You have to dig deeper.
Sometimes it is easy to see that a program is a ponzi by just the information on the site. Other times you have to dig deeper and go looking. IF after digging deeper, you are still unsure and are still considering funding, send them an email asking all hard questions that haven’t been answered already. The most critical question is about what they are doing to generate the returns. Then if you like their answers, take a chance with them, but always be on the look out for new information.
Using the above approach is still not a guarantee that it is or isn’t a ponzi. If it is a ponzi and they fooled you, it will show up eventually. You can fool some of the people all of the time, but you can’t fool all of the people all of the time. If it is real, there is no need for fooling any of the people.
JMO,
Sharon
Wow! A really good article!
I agree with the most of it, but there is a couple of things I disagree, such as “Forum/Monitor Presence: The friendlier and/or cheerleading in the forums/monitors, the greater the chance that the program is a ponzi. Are there way too many cheerleaders? Is the forum administrator spending an inordinate amount of time being “friendly” in all of the forums?”
I run RTA Online Investment and I try to be active on as much forums as I can, because I find it to be the best way of marketing. Many people tell me I’m supposed to be MORE active in forums in order to do the better marketing; I tell them I do best I can.
RTA Online Investment is not a ponzi; it complies with your sentence “In order for a program to not be a ponzi, they must use the deposits to earn outside of the program.” I use the deposits for marketing my site and the advertise revenue of the network is the profit that is distributed among the users. I have several plans for extending the network that will generate revenue besides the advertising revenue…
Anyway, you were pretty accurate, but as I said, I don’t agree with the forum aspect…
Regards
Max
Hi Max,
Thanks! But, as I said early on not all criteria applies to all ponzis and some real programs may have some of the criteria. It’s just a guideline. Then again, you’re welcome to your opinion. All opinions are welcome, even if they do not agree!
Thanks,
Sharon
hi again to max willis and all .to max wishing you the best on your start. youre creating an opportunity out of your initial investment for others to make some profit too .to be different from mr ponzi take a look at what made him fail and dont make his same operating procedures .but basically like any buissiness starts with an initial investment promotes and works with what he has coming in till he can secure a clientel and more stable investment to secure your operation im not an expert but take a look at mr ponzis link above from sharon and learn from his experience specially the result of him not being able to deliver what he promised . product delivery would be key to success could be a piece of paper a trip to mars which they are paying millions for it a shiny metal a rock a coupon % OF YOUR DREAM what ever but deliver what promised even if situations conditions acts of god looks like youre not going to make it but deliver youll be compensated and money will follow[ ethics ]
Hi, jambiz! Thanks for your reply.
I don’t want to follow the steps of Mr. Ponzi, I am very much aware what he was doing and what most of the HYIPs are doing. I’ve been “Ponzied” (scammed) myself.
Believe me, I wouldn’t go into creating just another HYIP. My idea was more initiated by Mylot and some other sites, not HYIP sites.
I won’t go into Ponzi scheme cause I know there is no future. And I do want RTA to have a future…
Best Regards
Max
Sharon, I agree with most of what you say in your article. Just a few
comments.
We tend to refer to the paid surfing sites as “autosurfs”, which most are, and I agree that autosurfing is useless as an advertising tool.
However, many paid to surf sites these days offer manual surfing, or partial manual surfbars, and in my experience they do provide effective advertising value.
I tend to sign up mostly to PTS sites that offer manual surfing and I do
use the PTC and banner sections extensively to advertise my affiliate
business and I get a good response from those.
Before paid surfing, I spent a lot of time surfing in traditional manual traffic exchanges, and when paid surfing came along, especially when I could find ones with the “manual” surf bar, or strong incentive for people to watch
the surf bar, I find them effective from an advertising point of view.
And why wouldn’t I rather advertise, and spend my advertising dollar, in a place from which I’m also earning a profit share?
In my view, the programs that focus on enhancing the advertising aspect of their businesses offer a value added service.
There is a huge market in the traditional traffic exchange industry that would be ready, willing and able to join legitimate “manual” paid to surf sites if the owners/operators could unequivocally prove that they are not running on a ponzi model.
My point is that the paid surfing industry can succeed if it focuses on
offering real advertising value, and to do so in a number of different ways, not just surfing, but as some are doing now with optin paid emails, paid to clicks, banners and text ads on their sites. If it can attract advertisers, not just profit share seekers, it has a chance to grow into a viable advertising business.
And it wouldn’t matter if the revenue is generated from the profit share membership who purchase the advertising products, as that is a legitimate revenue source. Repeat business in any industry is necessary for survival.
I imagine the traditional traffic exchange industry would consider that as a real and competitive threat to their market share.
HeyJude
Hi Judy,
First, thank you for a very informative summarization of the manual paid surfing, including profit chare models, paid-to-click (PTC) and paid-to-read (PTR) industry.
I agree with you concerning PTC and PTR. They take in $X for an advertisement. Then they pay out a percentage of that to pay people to view the ad. Those that get paid do not have to purchase advertising in order to get paid. Usually the cost of an ad and the payout is very small. Quantity of people and ads make it worthwhile for the PTC/PTR administrator and advertisers.
I could agree with you on surfing (auto, manual and profit share), except that the majority of people joining look at it as an investment vehicle (or a gamble) and not as an advertiser. There are three big problems. First, everyone is required to spend to earn and not just the advertisers. Second, the returns are way out of proportion to any perceived value added. Third, they are taking new money to pay out old deposits. (With profit share they tell you this by definition.)
So, as long as a surf takes in more money than is due out, it will survive. It will survive longer if people can compound (80-90% compound all, even those that know better.) Eventually, the money required to go out will exceed new money coming in. This is by definition a ponzi scheme.
Usually the administrator pulls the plug on the program right before or right at the point where withdraws exceed spends. Then they blame it anything and everyone else that they can. A few blame it on themselves, saying they were not scamming, they just miscalculated. HA HA HA HA HA HA!
IF they took in $X for an advertisement, then split a percentage of those dollars among all who view the ad, then they would have a real paid advertising site. As long as they are taking in money from every member and paying out outrageous returns, they are a ponzi scam (pond scum), regardless of any perceived value added. It is exactly why 12DP was shut down.
Any way I slice it, I still keep coming up with all surfs (auto, manual, profit share, or any other model) are ponzi scams. So, I respectfully disagree with your opinion. Even though I disagree, I appreciate your explanation and can see where you are coming from.
JMO,
Sharon
hey jude thanks for not making it sad looks between the two of you meaning sharon would make it better and looks that focus is on _admin_.how good they are to deliver a service. advertising cos take profit in different ways legally . straight payouts ,exchange , and % of product sold . might be another im not aware[ kick backs ]is been done an not consider legal. always need fresh money to operate and keep op running.this programs are getting closer to whats out there if they deliver. we might see ad cos offline giving their customers a% back if they stay as customers for the long wrong specially the small ones that dont have coca cola and walmart on their accounts for them to survive is hard for all types of small buiss to survive this days . a wanted and needed service was created out of the different ones that existed on lines and its been on the rise because is needed and wanted for what ever reasons each individual has like in any buiss the ones that are creative and keep their customers, delivering what was promised from the start, or if any future changes, always for the good of your customers which is what makes a co.. for a buiss to make it they have to adv adv advertise and this looks like is another way of doing it .for online and offline. its hard in both worlds so necessity is the mother of invention so keep creating good ideas for a better survival in an ethical manner to say the least
sharon, so you are saying that no matter what , all surfs are ponzi scams?
“Any way I slice it, I still keep coming up with all surfs (auto, manual, profit share, or any other model) are ponzi scams. ”
While I agree that MANY of the sites out are indeed ponzi or out to eventually close down (the admin making a quick buck) then scamming or possibly refunding people until break even, making it a game, I have to question why you think this.
I am not sure what research you are doing and I cant speak for other sites, but there are some of us that do have income streams outside of member upgrades. Income streams that are allowing us to give the returns we offer.
I just get sick to my stomach when people label all sites as ponzi scams when we arent all that. Hopefully with this egold thing some good will come of it and these scammers will start going back under the rocks the crawled out form under.
HI Israel,
I’m looked at hundreds of surfs and haven’t found one that hasn’t/isn’t a ponzi, yet. There are two models that would not be a ponzi, IMO:
1. Have a payment model closer to PTC and PTR, where $X is taken in for advertising and a % of that is paid out to those reading the ads. The PS model comes close to this, but not quite. First, it requires everyone to be an advertiser, thus devaluing the purpose of those actually wanting to advertise. Second, what you spend is paid back when it reaches a partcular ROI, which makes it an investment. It is taking a new spend and splitting it among all those who spent previously (definition of a ponzi.) If compounding is allowed, then the returns for old spends just keep growing bigger. What is owed will eventually outstrip new money taken in. The model needs to change so that everyone gets paid, regardless of whether there is new money or not.
2. Have an outside income source that sustains the ROI. Investing in other surfs/hyips doesn’t count, because then it becomes a house of cards (e.g., when one of the base sites fail, those that were counting on it fall, too.) Payment Process fees, deposit/withdraw fees, and site adblocks are not enough to sustain the high ROI.
So, Israel, what are you doing outside of 4newbiesmarketing and CEPTrust fees, to sustain the ROI? I’m just asking for a brief description and not any trade secrets. Has an independant 3rd party verfied that you are actually doing what you say you are? If yes, are their findings posted somewhere?
I once knew a surf administrator who took the member’s money and used it to buy antiques, restore them and sell them at auction. The profits from the sale were funneled back to the surf to pay the ROI. They were a lower ROI and longer than most sufs at the time and not a big fish. Eventually, there were a couple of the purchases that didn’t turn over profit. The administrator had not built a reserve fund into the model to cover times of losses. At the same time, people were migrating away to higher paying ROI, so a large number of them all wanted out and paid at the same time. The admin turned to investing in high paying ponzis to try to make up the loss, but lost more of the money. Although he didn’t intend to, he eventually had to turn it into a ponzi. He had to close.
So, obtaining the ROI from an outside source is possible. However, the ROI has to be realistic enough to cover payments and a reserve to cover times of losses. The easiest way to think of it is to pretend every spend is a HAR and needs to be paid and there will never be another new spend. If one person spends $1000 and your ROI is 130%. Can you return that 30% without anyone else spending? If your answer is yes, then you are not running a ponzi. If your answer is no, then you are running a ponzi.
JMO,
Sharon
cool, I was afraid my post wasnt recorded since the captcha image wasnt appearing for me.
i am not sure what models you are looking at. But our site allows for a percentage of the money to not need to be paid out immediately. Those extra funds are used to generate income offline. Couple that with existing funds in reserve that are working for us and that allows for us to generate income. I will not speak for CEP sites, I am speaking for mylef here.
We actually have salesmen selling advertisements and web design services to local merchants. We have ad agencies and other partners selling our ad services as part of their services. Generating income. We have moeny invested in existing offline and some online service businesses. Our main bulk of money is invested in Caribbean real estate. Our main contact has been doing this for 20 years and is extremely successful at what he does.
I probably wont be having any 3rd party verify anything, I simple dont trust too many people and I have been burned one too many times before.
I would like to imagine that having been around, upfront and honest for more than a year as an admin can speak for it self. I dont hide my identity like Andy from XLO did. I have all my info made available. I run a legit business with banking relationships and other partnerships. The surf site is just one part of it. I am not going anywhere. I still havent accomplished my 3 main goals for the surf world. Maybe once I do I will step down. But until then, I still have tons of work to do.
So my answer is yes, we can return the % without anyone else upgrading. Case in point, look at command last Decemebr: we shut off cashouts after we realized we vastly overpaid memebrs for previous months. During Decemebr we recieved about $100 in new upgrades. We used the money we had on hand to generate more income, then come January we paid out $60,000.
that is way more than $100 dont you think?
Look at 4newbies as well. There have been no upgrades for weeks, months. Yet payments are being made, and I can personally say that funds are actually being withdrawn to bank accounts. Becuase I need to do that in order to initiate transfers to alertpay and egold for the special list I have set up to pay members that did not want to open CEP trust accounts.
oh, and everyone, even free members are paid for surfing regardless of them upgrading or not. That is something we have installed into the script. For now its off, until we complete all payouts, that way there is no extra pennies being left in the system. But all members are paid for viewing ads regardless of their upgrade level.
i guess he has a point looks like a good one and a validation is on hand wish there more like him this is from an article that ponzi scam posted in his blog before he asked trevor to show his credentials and every thing else guess trevor can do this himself. for the rest of inf just show http://www.ponziscams.com/blog/ceptrust-stance-on-e-gold-and-my-thoughts/ his blog from day before he requested it from trevor this in case one read one and not the last [ Article 13-B of the New York banking law states that it is a felony to transfer money without a license if one knowingly transmits $250,000 or more in a year from a single client in a year; $25,000 or more in 30 days; and $10,000 or more in a single transition.] this are NY laws that might be a little tough being the capital of the world. just a little light might help.
And what is the site you are talking about, Is?
I missed the link…
HI Max,
Israel (Is) is the administrator of www.4newbiesmarketing.com and the forum www.4newbiesforum.com.
- Sharon
Perfect!!! Describes a favourite one out here called
PSX Aka Henry James Banayat
Mr.Pond Scum PHD,