What are they and what do they have to do with NM?

 

To be able to determine whether NM (or a specific NM company) is or is not a pyramid, scam, Ponzi scheme, or chain letter, you will need to understand each of them. Only then can you differentiate between them.

When my son was young I would point out a car and say the word “car.” He soon picked it up and would point to a car and say, “Car.” Then he pointed to a bus and said, “Car.” I said, “No, bus.” He didn’t believe me. Why? Because he had assumed that a bus “looked” like a car - therefore it was a car. Specifically, anything that moved on wheels was, in his mind, a car!

 

To solve this, I found a bus and a car that were parked side by side and pointed out those things that make them different from each other and those things that make them like each other. Only then could my son determine if what he was looking at was a car or a bus. If someone cannot see how things are different and how things are alike, they are dumb on that subject.

 

What I’ve just described is how the media (and many people) have confused the world  about NM and pyramids - because they can’t differentiate between them. They have lumped them into the same category, evidently thinking that anything that pays on multiple levels must be a pyramid. If that were true, franchising would be a pyramid.

 

Let’s start with a couple of definitions, since many people do not really know correct definitions to these words.

 

Scheme
1. Someone’s plan for achieving something.
2. A secret or devious plan.
Scheme comes from Latin word schema, which means figure.
Therefore, a scheme can mean either a plan for something good or something devious.

 

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A fraudulent scheme.
Fraudulent comes from the Latin word fraud, which means deceit.
Deceiving someone means to trick them.

 

FACT: There is no industry (including stocks, charities, legal, medical, religion, MLM and government) that does not have a history of fraudulent activities. Fraudulent activities of some people in an industry does NOT constitute a fraudulent industry.

 

In looking at scams, it is important to locate the actual source that is carrying out the scam; there is ALWAYS at least ONE person.

 

Source

One that causes, creates, or initiates; a maker.

 

If a person kills someone with a rock, don’t blame the rock! The rock isn’t thesource and didn’t kill the person. A person with bad intention is the source and USED a rock to do damage.

If a scammer uses telemarketing to seduce its victims into a scam, don’t blame the telephone. The scammer (a person) is the source and USED a telephone to deploy his scam.

If a scammer (a person) uses NM to deploy his scam, don’t blame NM.

 

An industry can’t be a scam as it’s not capable of tricking people. People are the only ones capable of tricking people.

 

NM is not the culprit in scams, pyramids, investment fraud, chain letters or Ponzi schemes. The culprit is the unethical activities of a person or a group of people. The reason scams sometimes use NM is because NM is a powerful way to distribute anything. Just as a telephone or the Internet is a powerful way to reach people.

Confused

1. Being unable to think with clarity or act with understanding and intelligence.
2. Lacking logical order or sense.

 

The government and the media have done a fantastic job of confusing people on the subject of pyramids and their association to NM. The government (FTC - Federal Trade Commission) has publicly sued companies for running an illegal pyramid scheme and announced it to media; then the media has announced it to the public with very accusative statements like, “(Name of company) is an illegal pyramid scheme - ACTION IMMINENT!”

 

Then, after researching the company, the government drops the case because of no wrongdoing. But the media doesn’t announce this - therefore the public continues to think that a particular company is a pyramid scheme when it’s not. Pretty soon people just generally think that all NM companies are pyramids when they are not.

This is the primary reason for the “controversy” around NM. The controversy comes from people being confused on what is a legal and ethical NM business and what is a pyramid. I will remove the confusion below.

 

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The ability to perceive things in their actual comparative importance.

 

How “fraudulent” is one industry compared to another industry? To try and calculate this you’d have to ask the question, “What is the damage done by the fraud?” In the case of pyramids it would be loss of money. So in order to quantify how fraudulent one industry is, you’d have to compare it to another or other industries where people lose money. A news reporter can claim, “People have lost millions of dollars in these pyramid schemes.” Is that a lot? Compared to what?

 

NOTE: I am not discussing MLM here, I’m discussing illegal pyramids.

In the US during the 2000’s, I was able to find:

TC vs. BigSmart - $5 million
Gifting Clubs - $16 million
Professional Resource Systems - $13 million
FTC vs. Skybiz - $20 million 

That totals about $54 million
 

Is that bad? If so, how bad? Let’s compare it to some other “losses.”

The largest financial losses to mankind in the 21st century (and throughout history) have been in the US stock market.

The stock market lost 9 TRILLON dollars of people’s money (January 2001 to October 2002)!