Cash Texts Review: SMS opp with several grey areas
One of the newer niches to emerge in the MLM industry this year has been the combining of SMS advertisements with MLM compensation plans.
Definitely still a fledgling niche, to date two major players have emerged in the niche: Text Cash Network and Cash Texts.
I’ve already reviewed Text Cash Network back in early November and found it to be a risky venture in that they were paying out monthly commissions for recruitment ($1.50 a member), based on the presumption they’d be able to cover costs by attracting advertisers.
With no other income streams, Text Cash Network are employing a pretty risky business model to say the least.
Today we’re going to take a look at and review the other major player in the SMS MLM niche, Cash Texts. Read on for a full review of the Cash Texts MLM opportunity.
The Company
Cash Texts launched on November 25th 2011 and is headed up by CEO John Benham.
Cash Texts claims Benham has ‘over 26 years of experience in the marketing, direct sales, and networking industries‘, including stints at Primerica, World Marketing Alliance, World Financial Group, World Leadership Group ‘and many others‘.
Whilst Benham is CEO of Cash Texts however, he doesn’t appear to actually own the company;
Who owns and operates CashTexts.com?
A small group of marketing experts collaborated on this project. For the time being they wish to remain anonymous to members.
However, advertisers will have direct access to them.
No reason is given as to why the owners of Cash Text wish to remain anonymous other than ‘because they want to’.
Why Cash Texts’ owners are making themselves known to advertisers but not members remains a mystery, but by doing so the owners only invite suspicion on themselves and the Cash Texts opportunity at large.
As far as I’m concerned, in the world of MLM this is just not good enough. As always, be extremely cautious of signing up to any MLM company that does not clearly reveal who owns the business (even free to join ones).
Killough is listed on the ‘about us’ page of Cash Texts as CTO (Chief Technology Officer?) of Cash Texts, but the company refrains from clarifying that he is the primary owner of the business.
Why Cash Texts have choosen to do this remains unclear.
The Product
Cash Text Network don’t have any tangible products to retail themselves, but being an advertising network members are able to sell access to the Cash Texts advertising network to potential advertisers.
Note that this advertising network is currently only open to US based advertisers.
Cash Text Network also do not reveal the cost of advertising on their network, or what options are available to potential advertisers.
The Cash Texts Compensation Plan
Cash Texts pays out a commission each time a member receives an advertising SMS from the company, what is effectively a recruitment commission as well as commission based on advertiser spend.
For each advertising SMS a Cash Text member receives from the company, Cash Text will pay out a 5 cents commission to the receiving member.
Whereas a standard recruitment commission is usually paid out monthly at a flat rate, Cash Texts’ recruitment commission is tied into how many SMSs those in your downline receive.
Cash Texts use a unilevel structure which means that every person you bring into the company is placed directly under you (forming your first level). If people you’ve recruited recruit new members, they form your second level and so on and so forth.
Everytime one of these members receives a text via the Cash Texts SMS advertising network, you receive a commission. Cash Texts pay out their recruitment commission down 5 levels, with payments being as follows;
- Level 1 – 5 cents
- Level 2 – 4 cents
- Level 3 – 3 cents
- Level 4 – 2 cents
- Level 5 – 1 cent
I’ll go over this particular commission more in the conclusion as even though this is a recruitment commission, due to the mechanics of the greater Cash Text business model it’s not necessarily a legal negative.
If Cash Text members attract advertisers to the network, Cash Text promise to ‘give (members) a percentage of what they spend with us for LIFE’.
Cash Texts do not disclose what this percentage is or detail any further conditions that may or may not apply.
Joining Cash Texts
Cash Texts is free to join.
Conclusion
How do I know this is not a scam?
You are not paying anything…scams want your money.
The above is the rather simplistic answer Cash Texts provide their members with to address their concerns that Cash Texts might be a scam.
Whilst I agree that it doesn’t appear to be an outright scam – there are some serious problems with their business model that need addressing.
I think the best way to discuss this is to split the business opportunity currently available to US based members and international members.
US based members of Cash Text can join the company for free, market the advertising network and earn commissions off advertisers who join, SMSs they receive themselves and from members they sign up (when they receive an advertising SMS).
Due to the mechanics of their recruitment commission and the fact that membership is free, I’m curious as to how this plays out legally.
The traditional problem with recruitment commissions traditionally is that they are funded by membership fees, which in the case of Cash Texts, don’t exist.
That said without recruiting, you have no members in your downline (unilevels don’t have spillover so you have to recruit yourself) to receive texts and thus cannot earn any commissions.
I suppose technically given that you can join and receive 5 cent commissions yourself and attract advertisers to the network without recruiting, the recruitment commissions of Cash Texts might be justifiable (again, only because there’s no membership fee).
That said, as far as advertisers go, currently Cash Texts are (at the time of publication) not offering a personalised advertising profile to potential advertisers which puts them miles behind the competition (other advertising networks).
Currently Cash Texts are advertising member profiles as ‘coming soon’. Why Cash Texts launched without this is beyond me, as it seems to be a fundamental feature needed to attract advertisers to the network.
Advertising networks these days are highly targeted, and sending mass SMSs to Cash Texts members nationwide just isn’t going to be competitive (no matter the cost), when compared to other advertising options available to advertisers.
International members are able to join Cash Texts but they do not receive texts and cannot earn commissions themselves for receiving texts.
Realistically, not being based in the US they aren’t going to attract any advertisers to the Cash Texts advertising network either – despite this option being available to them.
That leaves the recruitment commissions, which essentially strips down the international business model of Cash Texts into a ‘recruit US based members and make money’ scam.
Even without a membership fee, with this being the only option currently available to international members – as a business model the commission payouts for international members solely boil down to how many US based members one can recruit.
Unless there is a means for international members to earn a commission other than by the recruitment of others (directly or indirectly) – Cash Texts membership should not be open internationally.
Given that the owners seem quite happy for this to be, this casts a negative light on the rest of the business and perhaps the true motivations and legal ethics of the anonymous owners of the business.
Why they’d invite that on themselves I’m at a loss to say.
Problems that not only severely cast doubt on the long-term sustainability of the businesses themselves, but also over the fundamental legality of the compensation plans in question.
As an international member I see no point to joining Cash Texts and as a US based member, the lack of personal profiles will make it difficult to attract advertisers which ultimately means a reliance on recruitment commissions (I don’t care what anyone says, relying on getting paid 5 cents a text you receive yourself is not a viable MLM business by itself).
Combine all of this with the fact that the owners of Cash Text refuse to identify themselves, in my mind you’re left with a pretty big question mark over the Cash Text MLM opportunity.
December 22nd, 2011 at 6:59 pm K. Chang(Quote)
It’s not a scam in the sense that it wants $$$ out of the members. However, there’s no proof that this will ever develop into any sort of significant income opportunity.
After all, who wants to advertise to a bunch of random people? You need a huge database of people, narrowed down to specific range of profiles (assuming everything’s true), then blast only THOSE people with the SMS ads.
The whole thing relies on signing up advertisers to pay commission, which depends on recruiting a lot of people through MLM like structure with promise of FUTURE pay. it’s the chicken and the egg all over again. What comes first? Members? or Advertisers?
December 22nd, 2011 at 7:11 pm ozsoapbox(Quote)
Chicken and the egg, that’s a good way of putting it.
I’m going to do a writeup tommorow on SMS MLMs in general, that analogy will come in handy cheers.
December 23rd, 2011 at 11:42 am Troy Dooly(Quote)
Oz,
Excellent review on Cash Texts. I have raised concerns with the niche in general because it is new. And as you know I have really raised red flags and legal issues with the other company leading in this niche.
As for Cash Text, I agree with you on the red flags, and have told the owners and John Benham this personally.
With that said, I have also done a short video where I share the names of the owners, as was also done on a call I hosted for them a week or so ago.
Here is the link to the video I shot this week where I do mention the name of the majority share holder and creator behind Cash Texts.
http://mlmhelpdesk.com/mlm-news-editorial-does-troy-dooly-endorse-cashtexts-and-the-cash-for-text-niche/
I am going to link this review to my current article in order to provide fair and balanced info.
You do an excellence job in your reporting.
Living An Epic Adventure,
Troy
December 23rd, 2011 at
[...] Cash Texts Review: SMS opp with several Grey areas [...]
December 23rd, 2011 at 2:03 pm Bryce(Quote)
I’m an international member and I have a network of over 700 – most of whom are Americans. People who are able to utilise the internet well can do well with this opportunity.
December 23rd, 2011 at 3:14 pm ozsoapbox(Quote)
Cheers Troy, your video blipped Cash Texts onto my radar and I remember you mentioning Atticus by name but must must have missed the majority owner part. I’ve updated the article with that info.
Strange they don’t just outright list the owners despite the fact they readily feature on the site. Why not just come out and say they’re the owners instead of being all cryptic in the FAQ.
So… as an international member of Cash Texts, your primary source of income with Cash Texts is not possible without the recruitment of others.
I think that’s pretty much a working example of how Cash Texts is going to function as an global opportunity at this time, a simple recruitment game.
To put it into perspective, the minimum you would make with 700 members (you have over this) in the unileval would be 1 member on levels 1-4 and 696 members on level 5.
This equates to recruitment commissions of $7.10 a month. Again, this is the minimum using the above theoretical unilevel configuration.
To earn more from the SMSs you receive, at 5c a pop you’d have to be receiving 142 SMSs a month, or just under 5 a day.
Possible but given the above unilevel configuration is highly unlikely, it’s guaranteed you’d be making much more than $7.10 a month which would in turn push up your required received SMSs a month to earn more from the opportunity itself, rather than from straight recruiting.
See the problem?
December 23rd, 2011 at 10:38 pm hamguy(Quote)
@ozsoapbox
he said he has a network of 700
level 1 is where you recruit under you.
so lets say about 100-200 people he would recruit under him.
that is level 1
the people recruiting under the people he recruited is level 2 and so on
it goes-
YOU
L1
L2
L3
L4
L5
lets say he receives 5 texts a day. 5x (0.05)=0.25×200=$50x (a month ex:30)=$1500
Plus you get paid level 1(0.05), level 2 (0.04), level 3(0.03), level 4(0.02), level 5 (0.01).
it adds up and you get good deals with advertisers.
lets see if this is legit or not.
——
why would you do minimal when he has such a large group he can make contact with?
December 23rd, 2011 at 11:15 pm ozsoapbox(Quote)
@hamguy I was making the ppoint that as an international member of Cash Texts no commissions are possible without recruiting people.
The 1 person on level 1 was just to illustrate the minimum commission available off 700 members. A moot point I guess seeing as as an international member he can’t receive ads anyway.
December 24th, 2011 at 3:41 am Kajun(Quote)
Oz,
Cashtexts does not just accept international members just to earn on the unilevel. The idea is to pre build the database in other countries so they can move into sms advertising in those countries once they have enough members.
Also, My understanding is all the people listed on the about us page (http://cashtexts.com/about) are owners.
They told me they didn’t update FAQ on the beta site because they are updating the whole front end and the content is already in place on the new site.
As far as the advertising model of Cashtexts, you have that wrong as well. They do offer targeted advertising on a level never before seen in mobile/sms marketing. the advertiser can target based on age, sex, location (down to zipcode) and also a wide variety of keywords or demographics.
Also, something else you missed is NO COMPANY currently offers targeted SMS leads with a system/network in place to advertise to them. Do a Google search, most companies just offer the system or a bunch of junk leads based on zip code alone.
My question to you is how can you review a business, while apparently never creating an account or contacting the owners to answer your questions? Troy knows the owners of Cashtexts and I am sure he would be glad to help you contact them and answer your questions.
Please do more research/due diligence when reviewing companies. If this is how you review every company on your site, I doubt I would personally take anything you say into consideration.
Kajun
December 24th, 2011 at 6:21 am K. Chang(Quote)
Come to think of it, chicken and the egg problem is even WORSE for these SMS networks.
In a “real” business, that sells things, you can run a “promo period”, i.e. run at a loss, to build awareness and chalk it up to “customer acquisition costs”.
In this sort of SMS network, you can’t really pay people for recruiting as that’s likely to bring down the wrath of FTC and state attorney generals investigating you as pyramid scheme (though the fact you’re NOT charging for membership says a lot in your favor).
Or… CAN you pay for referrals? Hmmm…
December 24th, 2011 at 10:56 pm ozsoapbox(Quote)
@Kajun
I don’t care what the idea is. The reality is international members who join have two options available to them;
1. The miniscule chance they’ll attract US based advertisers
2. The mass recruitment of US based members over the internet on the promise of earning income via the opportunity itself
That’s a pyramid scheme, any way you cut it – regardless of the excuses Cash Texts might have.
So why don’t they just go ahead and say that. Why do we have to guess?
Not my problem. If Cash Texts want to present outdated inaccurate information on their website, don’t cry when it’s written about as such. We’re updating is just a fluff excuse for laziness.
I hope they’re not this lazy in other aspects of their business.
Then why does their website repeatedly state that personalies profiles are ‘coming soon‘?
I didn’t miss this. With Cash Texts stating their member profiles are coming soon, I agree that no company currently offers targeted SMS leads.
Because I don’t need to join a business or get to know anyone to review and analyse a business model – which is the core of any MLM I do.
Spare me the marketing crap and lame excuses, I don’t have time for it. Nor do I need to join a MLM to analyse the nuts and bolts of it anymore then I do to drive a car to understand how it works.
If anything, you’re criticising me for being too diligent and not just swallowing the fluffy marketing excuses Cash Texts have sent you regarding the red flags raised in this review.
If Cash Texts are providing misleading information on their website that’s their problem, more worringly it could also be fraud.
December 25th, 2011 at 2:34 am K. Chang(Quote)
Technically, Oz, international members recruiting US members is NOT a pyramid scheme, because one does NOT need to pay to join CashTexts.
It’s bordering on a very grey area, but technically, you need to PAY TO JOIN to count as a pyramid scheme, and thus far, this doesn’t qualify.
December 25th, 2011 at 9:50 am ozsoapbox(Quote)
Yeah it’s definitely a grey area without the membership fee.
On the flipside, looking at long-term sustainability, if international members are generating enough income by solely recruiting you can bet there’s people in the US doing it too, and thus completely ignoring the ‘get advertisers to advertise on the network’ side of the business.
If nobody is attracting advertisers nobody will get sent SMSs and commissions will grind to a halt, or become not worth it which means members will leave.
Personally I think there’s just too much to gamble with in this niche.
December 27th, 2011 at 2:21 pm Kajun(Quote)
Oz,
I cannot wait to come back in 6 months and really prove just how wrong you were. Not worth discussing here.
If you google those guys on the about page for Cashtexts, I do not see a list of people who have failed in business.
I wish you the best!
P.S. Kevin Thompson, who is also Troy Dooly’s attorney, is Cashtexts attorney and a member of the DSA board. I am sure if they were a pyramid scheme that he wouldn’t let them post his name everywhere.
December 27th, 2011 at 2:34 pm ozsoapbox(Quote)
Why do we have to wait 6 months? Is it because CashTexts don’t have enough advertisers right now to cover costs and you think this is going to change in 6 months?
It looks to me like you’re implying the success of Cash Texts business model based on the history of those on the about page in other opportunities and business models.
Their experience will no doubt help, but it by no means guarantees success – I still think it’s a gamble that Cash Texts are guaranteeing monthly recruitment commissions against attracting enough advertiser revenue.
Don’t really care. As we’ve discussed here the fact that there’s no membership fees involved might make it legal, but that doesn’t mean the buisness model itself is flawed.
Then there’s the huge issue of international members signing up to what is essentially a pyramid scheme.
December 28th, 2011 at 2:46 am K. Chang(Quote)
Oz, thought you agreed that if there’s no pay-to-join it’s not a pyramid scheme (per se)?
December 28th, 2011 at 9:12 am ozsoapbox(Quote)
Yeah I’m still struggling with this.
Even if you don’t pay to join, if all you can do is recruit other people by marketing the opportunity itself… that still doesn’t sit right in my mind.
This is from the FTC;
As far as I can tell, even without a joining fee that’s exactly what the international business model is for Cash Texts.
Their attorney, Kevin Thompson himself even quotes this.
December 28th, 2011 at 10:33 am K. Chang(Quote)
I’ll have to rely on a different attorney… Gerald Nehra
“The pyramid scheme involves a person making an investment for the right to receive compensation for finding and introducing other participants into the scheme.”
http://mlmatty.com/ponzi.php
As there’s no “investment”, it doesn’t qualify.
December 28th, 2011 at 10:55 am ozsoapbox(Quote)
I’m gunna go with the FTC over Nehra.
And I don’t know about legally, but time is an investment!
March 7th, 2012 at 4:17 pm Rubber-grip(Quote)
any news on cashtexts?
June 11th, 2012 at 5:55 am rivers(Quote)
Sir,
I appreciate your review. The allure of making money with no monetary investment is appealing to many in this world and I am no different. I believe the investment of time, these days, is worth more than money and to work ANY business well you must invest time.
I have read several reviews on Cash Texts and find yours to be a breath of fresh air. You seem to present your case plainly and while you present your opinion of the opportunity as not being investment worthy on your part, you allow your readers to determine their own path.
This, to me, is refreshing as you do not bash the company, but offer, what I believe to be, legitimate analysis.
For the record, I am a member of Cash Texts here in the U.S. and have and will receive what I put into this business.
I thank you for the write up.
Respectfully,
August 1st, 2012 at 12:29 pm Joe(Quote)
“Pyramid scheme” may or may not involve ‘investment’ and, as has been pointed out, ‘investment’ can be “time and effort.”
“Pyramid scheme” is just as the FTC states: To summarize, it is where top-level people recruit lower-level people, who recruit more lower-level people, in order to further the income of the overall organization, and not necessarily via investment at the various tiers.
It is also known as “Multi-level-marketing” aka MLM.
And always the “top-level” of the pyramid makes the most money from residual payments from the “down-level” or “down-line” folks underneath them.
Pyramids are not always ‘bad.’
To identify a ‘pyramid scheme’ (aka MLM), just remember the old shampoo commercial, “I’ll tell 2 people, those 2 people will tell 2 people, those 4 people will each tell 2 people” and, BOOM, just at the 3rd level, you already have 8 + 4 + 2 +1 (top) involved (15 people in the pyramid.
August 1st, 2012 at 1:42 pm Oz(Quote)
When analysing a business model, unless you’re being directly paid for your time and effort (explicitly, and not effort in generating product sales), then they are both irrelevant in assessing whether or not a business model is a pyramid scheme or not.
Where the money comes from dictates whether a MLM business model is a pyramid scheme, not time and effort.