What Exactly Is a Fraud?
First, check Webster’s definition to see what it means. Check out the Best info about Cryptocrime.
A process or action that is false or deceptive
VERB:
First: to trick or cheat
secondly, to get (something) by deception
We now know what Webster thought a scam to be, but I believe there is a difference of opinion among Internet marketers about what constitutes fraud.
Many years spent in scam-related online forums have led me to conclude that the overwhelming majority of participants consider a program, company, or business opportunity fraudulent if they do not benefit financially. That’s the only legitimate requirement for crying scams on the internet. But not everyone who tries and fails will succeed in building a network marketing firm, whether online or offline. The individual who died might have been unable to do something correctly, worked hard enough, or even tried. Many people believe that by enrolling in a scheme, financial success will automatically follow. When things don’t go as planned, it’s easier to blame the firm for fraud than to examine why things didn’t work out.
Some people hold marketers responsible for spreading the myth that they can get rich quickly by doing nothing rather than working hard to build their businesses. However, they only blame themselves because they were too naive to see through the scam.
Consider the following: Imagine someone invests in a TrueValue(TM) franchise but fails because they need to get the word out or promote their business in the correct places. Is it fair for them to label TrueValue(TM) a fraud because of this? No way, no how. Or, let’s assume someone places an order for a product through the mail, but the billing gets mixed up, and they end up being charged twice… Does that indicate that the mail-order firm is fraudulent? Of course, not. Due to the inherent fallibility of human interaction, both paperwork and data entry might need to be corrected. So, things do.
No one has a right to complain if the rules and regulations aren’t to their taste. The corporation can set policies as it sees fit, so long as they don’t break the law. The company’s legal department is only competent if the procedure is legal or you’re dealing with a scam.
Let’s return to Webster and look up a few common frauds there.
PONZI:
Dialect: pän-ze
Noun – in function
Origin: American (Italian) con artist Charles Ponzi died in 1949.
Date: 1973
A Ponzi scheme is a fraudulent investment scheme in which early investors are rewarded with funds from later investors to induce the latter to take on more significant financial risks.
MODEL OF THE PYRAMID
Function: noun
Date: 1975
: an illicit business model in which initial investors make money off of future investors’ investments
Then there are the insurance, investment, insurance, and infomercial scams. It’s a long list.
The matrix scam is the most prevalent of the numerous forms of scams that exist. Unfortunately, this is the most common fallacy, too. It’s called a powerline by many companies engaging in this kind of fraud. One is led to believe that they will reap enormous financial rewards from the purchases and subscriptions of subsequent customers or members. Or, they are informed that if they purchase product A for a price that is inflated far beyond its actual value, they would be eligible for a larger prize if they recruit a particular number of people to purchase product A using the same promise of wealth. Both situations resemble a pyramid in that the person at the bottom eventually spends all their time and money for no return.
The issue is that a limited number of spots are available, meaning someone will inevitably be left out. Even fewer people can be targeted because fewer people in the globe are of legal age to agree to be ripped off or have the financial resources to take the risk of doing so. This means that any such program is doomed to fail from the start. That’s why laws against them exist: somebody always loses, typically a lot.
Researching a company thoroughly before becoming involved is the most excellent way to avoid being taken advantage of. It’s like an interview but backward. Instead of being interviewed by a potential employer, you conduct the discussions with them. Verify that the product is authentic, that the pricing is reasonable, and that you enjoy using the product before investing in the company. Similar to the Prosperity Automated System fraud, no actual product was sold. Instead, members were offered a website, an autoresponder, and the promise of financial success.
They paid for access to a contact list and an individual to recruit new members for the program on their behalf. A lot of money was spent on PAS leads. The top guys got rich, while the bottom guys got taken advantage of. The government eventually shut them down, and I’ve heard that program participants who lost money are now challenging the government’s decision in court. The 12DailyPro fraud is another example of a get-rich-quick scheme gone wrong.
A network marketing company is not necessarily a scam if an individual does not immediately begin making money. Show the fine print to a lawyer if you want to know if a business opportunity is a fraud.
Generally, if the only option to get a commission is to sell memberships to something, not a product itself, you should look elsewhere for your earnings potential. This is because there is a limited supply of subscriptions available for purchase. Products with a high potential for repeat sales and further commissions. Also, at least in the United States, it is against the law to participate in a program requiring you to pass up sales to an upline member to earn a commission.
Successful businesses provide goods or services worth more to customers than what it costs to get them. Customers who are pleased with your service will continue to buy from you.
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