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Behind the VOIP mask, e-commerce programs, hotels and whatever else TelexFree attach themselves to is a simple MLM compensation structure:

Affiliates pay TelexFree $299 for an AdCentral account and TelexFree in turn pay that affiliate $20 a week for 52 weeks. These AdCentral accounts can be bought in bulk, which then increases the $20 a week payout.

Additionally, those that recruit new affiliates who buy these AdCentral accounts earn a $20 commission, or $100 if they purchase a bulk lot (referred to as an “AdCentral Family” account).

Where do these $20 a week payments come from?

That much should be obvious…

Meanwhile one would think that offering a $20 payment for a week would constitute a guaranteed payment, however that isn’t the case and there seems to be some confusion on the matter

As of last month here’s how TelexFree were advertising their AdCentral MLM opportunity:

adcentral-marketing-copy-telexfree-usa-website

Be our promoter

Earn money doing announcements on Internet!

Through a ADCENTRAL, that you geot (sic) for the amount of US$299 (annually), the promoter will receive US$20 each week.

And here’s how it looks today:

new-promoter-spiel-telexfree-april-2013

EARN MONEY FROM ADVERTISING TECHNOLOGY VOIP TELEXFREE.

Through a ADCENTRAL.

Membership U$50 (Partner) + ADCentral Kit U$289.00

(ADCentral + 10 accounts of 99Telexfree) = U$339.00 (Annual)

The promoter receives a 99Telexfree account for US$49.90 every week s/he posts 7 different ads at free ad websites on the Internet, Monday through Sunday.

All in a fast, easy and standardized manner atin (sic) your Telexfree virtual office (BO).

Spot the changes? They removed mention of the $20 a week payment and added some copy about a $49.90 account.

Trouble is the $20 a week payment still exists. TelexFree did not alter their compensation plan. And why would they? It’s no secret that the AdCentral investment scheme is where the bulk of TelexFree revenues and commissions are generated.

Oh and if TelexFree are truly serious about their *wink wink, nudge nudge* compliance efforts, they might also want to modify their website HTML title. It still reads ‘Make money by posting ads':

website-html-header-make-money-post-ads-telexfree

It has been observed that nowhere in the TelexFree affiliate contract (Portuguese) does the company explicitly “guarantee” a $20 a week payment, yet.

Apparently affiliates buy VOIP accounts of TelexFree or some such and then sell them back to the company for their $20 a week payment (otherwise known as “*wink wink, nudge nudge* compliance”). Oh and they have to spam the internet once a day to.

That of course doesn’t translate over into the real world, where it’s much easier to just describe the TelexFree in the simplest yet accurate terms. Take this example from TelexFree affiliate, Leslie Mebane:

leslie-mebane-guaranteed-income-blog-telexfree

Telexfree guarantees payments!

Telexfree the company that delivers a guaranteed income.

GUARANTEED PAYMENTS!

Its is hard to resist talking about a company that guarantees you payments. I am a living witness of the fast and easy payments that regularly come in because I chose to register a new account and purchase my first packages.

This business can be done by anyone possessing no skills what so ever. Everyone is guaranteed payments and this alone, hands down makes Telexfree a goldmine.

Proponents of *wink wink, nudge nudge* compliance will naturally pooh-pooh Mebane’s description of TelexFree’s MLM opportunity, but is there anything practically inaccurate about her description?

No.

Rather what you’ll find is an objection not based on any inaccuracy in Mebane’s statements, but on the basis of the SEC’s view on “guaranteed returns” and investment.

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.

Many Ponzi schemes share common characteristics.

– High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.

The counter to this of course is ‘but Oz, TelexFree is not an investment opportunity. Affiliates buy VOIP services duh, *wink wink, nudge nudge*’

TelexFree even went so far as to have their attorney, Gerry Nehra, contact me in February and demand that I retract any statements made to the contrary:

I represent TelexFREE in the USA. I am not bi-lingual, and I do not represent, or comment on, TelexFREE operations outside the USA.

The TelexFREE business model in the USA is NOT an investment, uses NO investment language, and pays ONLY on the sale of its VOIP long distance product.

Any representative who uses investment language to describe the TelexFREE business model is violating policy, and if reported to the company, will be counseled and disciplined, up to and including termination.

We respectfully request you retract statements to the contrary.

Gerald Nehra, Attorney at Law

MLM Specialist Counsel to TelexFREE in the USA

The problem?

Well lets take a look at TelexFree’s own affiliate agreement all affiliates are required to sign (including those in the US), this time in English.

First they hit you with a big scary warning:

investment-terms-prohibited-telexfree-affiliate-agreement

2.6.5 – THE PROMOTER agrees to respect all applicable local, municipal, state, federal and international laws and regulations, being exclusively responsible for any actions or omissions carried out with his password, including on the content of his transmissions through the System, agreeing moreover that in particular he must not:

m) use terms that distort the real meaning of products or the mechanism and functioning of multilevel marketing, including, without limitation, expressions that convey the idea of instant wealth for nothing in exchange, as well as speaking of registration costs as a “financial investment.”

Similarly, it is expressly prohibited to use the term “INVESTMENT” at meetings and in promotional materials in general, orally or in writing.

Later on however in the exact same document TelexFree write:

investment-terminology-telexfree-affiliate-agreement

5 –TELEXFREE ADVERTISING CENTRAL – ADCentral or ADCentral FAMILY

5.1 – MEMBERSHIP: A PROMOTER who wishes to enter the TelexFREE Multilevel Marketing system must establish his MEMBERSHIP as a “Partner Member,” and to such end, invest the equivalent of US$ 50.00 (fifty U.S. dollars).

10.6 – TELEXFREE shall not return, on any grounds or justification, the monthly payments made by the PROMOTER for the purchase of VOIP kits or other products, considering that he is fully aware that such amount was paid for the use of the resources provided by the TELEXFREE Network Marketing System as accessories in the conduct of the marketing campaign under way and/or, at the discretion of the PROMOTER himself, as an ongoing investment in the Network Marketing program made available, such that no request for reimbursement of amounts already transferred to TELEXFREE NETWORK Marketing System will be accepted.

Finally, I’d just like to reiterate one of Gerry Nehra’s claims again:

Any representative who uses investment language to describe the TelexFREE business model is violating policy, and if reported to the company, will be counseled and disciplined, up to and including termination.

And now provide you, in addition to Florida based Leslie Mebane’s TelexFree pitch above, with the results of a simple Google search for “telexfree guaranteed income”, performed today on Thursday the 11th of April, 2013.

Here’s how TelexFree is currently being advertised on LinkedIn by an “Amos H.”:

linked-in-telexfree-guaranteed-income

Although Telexfree is a weekly guaranteed income system for all those whom participate, referring new members to increase income still takes some talent.

Most newbies and some gurus are having a hard time believing a company can give a 52 week income guarantee.

The “Home Income Portal Blog” informs me that participation in Telex Free will get me

Paid Weekly… Guaranteed!Earn by simply posting 1 ad per day. This is the next Online GOLD MINE.

You get money weekly simple by posting online ads on free Websites. You are paid $20 each week for about 7 minutes of effort.

The company will continue paying you each week for 52 weeks. That’s a $1,040 raise in a year.

… and what is even better:

We have the KEY for Outsourcing your work. So, there is NOTHING to do anymore, just getting paid WEEKLY GUARANTEED.

home-income-portal-blog-guaranteed-income-telexfree

And then there’s California based Daneng Xiong who writes:

danen-xiong-blog-telexfree-guaranteed-income

TelexFree Opportunity, Make Money Guaranteed!

Can you really make money guaranteed! The answer is a resounding YES! With TelexFREE your income is guaranteed.

Here’s how it works. When you buy the adcentral package at $289, you have a contract with TelexFREE.

TelexFREE then promises to buy back the unsold software package from you for $20 dollars at the end of the 7 days of you placing ads.

This means by you paying $289 one time will allow you to make $1040 minimum for a 52 week period.

By the way, placing these pre-written ads literally takes less than a minute to do.

Here’s the bottom line. If you are sick and tired of joining deal after deal and not making any money then give TelexFREE a try. This is the only business I know of where you can earn guaranteed income and at the same time have an opportunity to make really big money.

They also have the best MLM lawyer, Mr. Gerald Nehra representing them in the legal department. If you dont’ know this guy you need to look him up. He’s worked with some of the biggest names in the industry including IBM and AMWAY.

His track record is flawless. No company that retains his law firm has ever been shut down by the regulators and he’s been practicing for over 35 years.

But TelexFree is of course not an investment scheme paying out a guaranteed $20 a week ROI on a $289 principle investment … right guys?

Right.

(*wink wink, nudge nudge*)

 

Footnote: I’ve only included a small sample size of the guaranteed income claims being made by TelexFree affiliates in this article. For even more guaranteed income claims from TelexFree affiliates, feel free to search the terms “telexfree guaranteed” and “telexfree guaranteed income”.