Dubli direct lawyers to go after Troy Dooly
I’ve been called a lot of things over the years. The name “Oz”, within the context of BehindMLM, has been dragged through all sorts of mud and associated with any number of MLM companies (“you must be working for a competitor!”), government agencies, the media and even the Illuminati (I’m not kidding).
One person I’ve never been directly associated with though is Troy Dooly. At least not until now.
And thus the tone of a cease and desist Dubli had their lawyers send Troy Dooly a week ago is set.
The content in question is BehindMLM’s coverage and opinion of information Dooly posted to MLM Helpdesk on May 11th.
In a cease and desist dated May 21st, Richard Sybert of Gorden & Reese (not that Reese), wrote:
This law firm represents Dubli and had been engaged to take action against you for your false and defamatory conduct through your website mlmhelpdesk.com as well as in conjunction with or through (or as) “Oz” on the website behindmlm.com.
Putting aside the obvious, what exactly did Dubli object to then?
Dubli does have leader contracts but these go into effect only after the Business Associate has performed, never before.
The premise for your entire article, that Dubli pays for recruitment is damaging and flatly wrong. Dubli has never paid for recruitment.
With all due respect Mr. Sybert, that is an absolute load of horseshit.
BehindMLM reviewed Dubli’s current ecommerce incarnation in September 2014. Analysis of Dubli’s compensation plan found affiliates paying up to $12,000 to join the company, which was commissionable (up to 27.5%, depending on how much an affiliate paid in fees when they signed up).
This false charge is potentially highly damaging to Dubli within the network marketing industry and Dubli’s own ranks of Business Associates.
But you’re going to insist Dubli never paid recruitment commissions!? What a load of crap.
That Dubli paying recruitment commissions is damaging is self-evident and beyond my control. You want an answer? Ask Dubli corporate.
That US regulators might investigate upon learning affiliates are paying $12,000 and are/were getting compensated to recruit others who paid the same, is not my concern.
Sybert then took objection to my pointing out that Dubli is in decline:
There is nothing “disastrous” about the Dubli branding.
In fact, Dubli Network is not changing only the Dubli, Inc. corporate name.
Now this is where the semantic games begin, of which there are many.
The headline I ran with was “Dubli drops disastrous branding”. In light of Sybert’s objection, I’ll just let that sit there.
Further, Dubli has been anything but dormant since it elected to close its auctions.
Had you bothered to review Dubli’s actual financial statements, you would have seen that Dubli has continued its shopping mall business and Dubli Network all along.
I don’t dispute that, but cut the crap son.
After Dubli shut their auctions down they disappeared. I myself abandoned my planned series of articles covering Dubli’s auctions, as I felt there just wasn’t enough public interest to warrant my time.
Whatever was still operating on paper was negligible, with the company only entering the public eye last year – when they released the “pay up to $12,000 to sign up and get paid to recruit” business model.
This is entirely reflected in Alexa’s tracking off traffic to the Dubli Network website. Or hell, just ask anyone in or following the MLM the industry what their awareness was of Dubli post penny auctions.
Further, the Dubli auction was never a “penny auction” but rather a reverse auction.
Right. Because y’know, there’s no such thing as a “reverse penny auction”.
The existence of such a thing would pose such a revolutionary concept such to render the very fabric of the MLM industry we know today asunder.
My client operates Dubli Network and has a healthy shopping mall business. Calling the company a “recruitment-driven orgy” is false and slanderous.
Have you checked Dubli’s financial statements lately?
I mean really, if push came to shove and Dubli were required to publicly disclose how much of their 2014-2015 revenue was derived from affiliate fees versus that of non-affiliate (retail) shopping memberships – do you want to take a guess how that’d play out?
As for a healthy shopping mall business, what’s the renew rate on non-affiliate shopping memberships?
Oh, right. Nothing to see here, moving on…
There was never “hundreds of thousands of dollars” of recruitment by Dubli.
So uh, Dubli didn’t pay Tony Rush $163,000 within 60 days of him joining the company?
How much of that $163,000 comprised of affiliate membership fees, paid by affiliates recruited into Rush’s Dubli downline?
Actually why don’t I just tell you, because we all saw the video Rush rushed to delete shortly after posting it.
He has made $153,000 in less than 60 days. His commissions are for the far majority, if not all, recruitment based.
And Tony Rush’s recruitment earnings are just one example.
But uh yeah, “healthy shopping mall” with no recruitment commissions being paid out. Right.
Next up we’ve got more semantics, with Sybert arguing that Dubli never changed their compensation plan.
Dubli has not changed its unilateral plan at all, which remains in place.
In fact, Dubli has added to it with the Dubli binary plan, which has not “tanked” at all – the company’s Business Associates like the binary plan and are making money from both compensation plans together.
First up, MLM 101: You have one compensation plan. And newsflash: It changed.
The words “unilateral plan” have never appeared on BehindMLM, because it’s marketing jargon some hack at Dubli invented.
Dubli might still have a unilevel compensation structure in place, but it’s not the $12,000 affiliate fee commissions they were offering when BehindMLM reviewed the opportunity.
As for Business Associates liking the plan, here’s what happened after it was implemented:
And do I really need to mention the general sense of disillusionment the Dubli affiliate-base went through when the changes were implemented?
Be sure to read the comments from #142 onwards in our Dubli review.
Not to mention all the drama between Dubli’s affiliate marketing coops as they attempted to hastily salvage what was left (read: supplement their slashed recruitment commissions with co-op training fees).
Now we’re almost done, but I’ve saved you the best for last:
The MLM Cashback model has been hugely successful.
Dubli’s compensation plan has passed regulatory review.
If there’s one thing you don’t do in MLM, it’s assert (via insinuation or otherwise) that regulators have approved your compensation plan.
Why?
Because no US regulator approves business models or compensation plans, MLM or otherwise.
But, there we have it in writing. Dubli’s lawyer asserting that Dubli’s compensation plan has passed US regulatory inspection.
Most of the rest of Sybert’s letter pertains to Troy Dooly’s comments I quoted in the BehindMLM article. To that if you’re reading this Troy and wish anything quoted to be amended, an email will sort that out.
Otherwise I trust I’ve adequately responded to Dubli’s lawyer’s concerns.
Oh and I will clarify that I had no idea Troy had been sent the cease and desist until today, when he published Sybert’s letter on MLM Helpdesk.
On behalf of Dubli, we demand that you immediately take down these articles.
We demand also that you issue an immediate retraction of each of the defamatory and false statements set out above.
Fat chance chief. Nobody is going to apologize for reporting the facts.
i guess that as dubli is rebranding and relaunching it’s recruitment driven scheme which was almost dead in the water, the new management has to fluff its feathers and do the cat walk.
message- this New Management is a tough mama and wont be taking no shit from all you internet hate mongers 🙂
scary shit! on the other hand, if this new rebranding to ominto, continues to be a recruitment driven scheme, they’ll have to send these threatening letters every year, when their business splutters to an end and they take it all out on MLM reviewers!
Clearly they hired the wrong lawyer, since KT would have told them “sending C&D to a blogger only ensures it’ll blow up in their face”.
Or perhaps that’s what they wanted?
coff Streisand coff Effect coff
Dubli uses an accrual accounting method where revenue first will show up when the product or service has been fully delivered.
From one of the 10-K (there’s 5 of them):
Those 5 10-K:
10-K August 26 2014 936 Kb
10-K December 24 2014 790 Kb
10-K April 15 2015 709 Kb (I believe I looked at this one)
10-K/A April 22 2015 39 Kb (Amended)
10-K/A April 29 2015 287 Kb (Amended)
Source:
ir.dublicorp.com/sec.cfm?DocType=Annual&Year=&FilingType=Annual
Some relevant parts from the 10-K (April 15 2015):
Part IV (page 38+++)
→ Revenue recognition (page F9) quoted in post #4
→ E-commerce and memberships (page F10)
→ → Business license fees
→ → Membership subscription fees
→ → Advertising and marketing
The question is whether a business license fee can be seen as a commercial product or service.
Same question for that membership fees (only the Business Associates).
Same question for marketing campaigns.
Dubli seems to be operating an “reversed MLM model”. The customers are income opportunity seekers looking for opportunities to join.
Dubli seems to be selling the opportunity itself in the form of “Business license”, “Membership fee” and “Advertising campaigns”.
August 26 2014:
For the fiscal year ended September 30, 2012
– – – – – –
December 24 2014:
For the fiscal year ended September 30, 2013
– – – – – –
April 2015 (my source):
For the fiscal year ended September 30, 2014
– – – – – –
April 22 2015 (Amendment 1):
For the fiscal year ended September 30, 2014
Correcting a date only, April 14 → April 15
– – – – – –
April 29 2015 (Amendment 2):
For the fiscal year ended September 30, 2014
The same correction
– – – – – –
they pulled this with another guy years ago when he exposed the reverse auction scam that only one person won all the time.
@Oz
You should probably ask Troy Dooly to share the email, to make it easier to quote from?
From the C&D letter:
He doesn’t clarify what “leader contracts” are about, or what “these go into effect only after the Business Associate has performed, never before” means.
Since that is the primary argument for why he see the review as defamatory and false, he will need to be much more specific in his counter arguments.
“Recruitment driven orgy”
He has a point there. There’s no need to spice up the story with words like “orgy”.
He has missed the point there. “Recruitment driven” isn’t about paying new recruits for joining the opportunity. 🙂
It’s about the opposite, about new recruits paying a recruiter directly or indirectly (via the company) for the opportunity to earn an income that derives primarily from recruitment of other participants.
It has probably been covered that BA also can earn commission from purchases related to the VIP memberships (the cash back part).
– – – – –
What I have done here is about trying to identify some relevant parts where it will be correct to ask for additional information, to make sure both parties have understood it correctly.
or just ask him if their check didn’t clear.
Troy published the email on Scribd (he linked to it in his article) – scribd.com/doc/266933478/DubLi-Inc-Threatens-Legal-Action-Against-Troy-Dooly
Did you see that Alexa traffic graph? When they kicked off this $12,000 fee recruitment nonsense I was getting nothing but requests to review Dubli for a few weeks or so. Dubli was was being heavily promoted everywhere until the leaders made $100,000+ and the plan was changed.
I could have used a different word, but that doesn’t make the impact of the sentence (or the sentence itself) any less valid.
I generally don’t aim for bland when I’m at my desk writing…
We should probably clarify what “recruitment driven” is about …
“Recruitment driven”
* New recruits (“Business Associates”) paying the company or the recruiter a fee directly or indirectly for the right to participate in the opportunity. It will include both “joining fees”, “monthly fees” and other types of fees.
It may also include purchases of over priced products or services, marketing material, training, “success tools”, internal or external “Success Academies” and other types of products or services.
* That fee is largely unrelated to normal purchases of products or services (the commercial meaning of it). “Normal purchases” won’t include all types of purchases.
* The recruiter and others related to the recruiter (typically the upline) receive commissions or other rewards based on that fee.
* The newly recruited Business Associate receives the opportunity to earn commissions or rewards in a similar way, by recruiting new Business Associates into the opportunity and be rewarded for it.
“Potential exception”
* We may not see it that way if the recruiter’s primary function is to sell goods or services to consumers outside the network of Business Associates, i.e. when the recruitment is about enrolling additional sales people.
“Multiple countries”
* Since modern commercial markets usually are globalized or may include multiple countries, terms like “recruitment driven” will be used to make it easier to understand for the consumers in multiple markets.
* “Consumers” and “internet users” are presumed to have relatively normal levels of knowledge, understanding and rationality, e.g. to be able to know the difference between a court and a blog, or the difference between a back office and a bank account.
Thanks. I had to write it down manually in my other comment. 🙂
But then again, it also caused me to decide to ignore some irrelevant parts.
The rest of the C&D letter doesn’t contain anything I can look into. It focuses on some details I’m not familiar with, but most of them seem to be rather unimportant.
According to that lawyer, Dubli never paid out “hundred thousands of dollars in recruitment commission”. A relevant question will be to ask him to specify how much they paid out, and offer to correct the statement.
It will require to have the amounts specified so they don’t group different types of payments together as something unidentifiable.
OTHER PARTS
* DubLi did not change its compensation plan, Dubli added something to it (a binary pay plan). 🙂
* It wasn’t short lived.
* Dubli didn’t pull up any ladder.
I have no idea what the “Dustin Mitchell case” was about, so I will stay away from that one.
* The board did not resign.
* Affiliate promotion is not dead in the water. The problem here is that he’s referring to the company’s financial results, without saying anything about the accounting methods used. Relevant question?
* There were no time sensitive contracts with leaders.
* There is nothing tainted about the DubLi brand.
It may be wise to clarify that we don’t see vouchers or discounts as retailable products or services (“bona fide sale to end users”)
From the review:
A trial VIP customer subscription should normally be seen as “marketing material” or “promotional tools”. The $0.99 activation fee should be more than enough payment.
It will also make the timing of the payment more correct = pay when the product is sold or distributed to an end user.
Partner registration vouchers are primarily designed for recruitment purposes.
We believe that a court will see it in a similar way, that the commissions derived from those sales will be seen as recruitment rewards. No sane consumer will pay for multiple subscriptions “for personal use”.
From post #11:
Most comments or articles will be written from the perspective of a rational mind. We know those other types exist, but we can’t write specifically for them.
If I were Troy, I would call their bluff and tell them to sue me.
Discovery would be hilarious. Bet the suit would be dropped faster that a burning coal when Discovery starts by Troy.
Lyndndel, that’s the plan. It’s about to get interesting!
Oz, I know you’re flattered when someone thinks you’re the alter-ego of Troy Dooly.
Yo it should be the other way round. I still got my hair and youthful looks damnit!
It made it rather confusing to read parts of the C&D letter. 🙂
Ya know, I’m not 100% satisfied that Troy Dooly is not in fact Oz. I ask anyone, have you ever seen the two of them in the same place at the same time? The more skeptical among us might wonder why that might be.
I do purpose a solution. It is easier to fake an accent than to pretend to fake an accent. I want Troy Dooly to post a video where he quotes from that seminal achievement of Australian cinema, the 1979 movie Mad Max giving a dramatic recitation of the following lines from the script:
In reading that on video Troy could prove if he is or is not Oz of BehindMLM and at the same time give Dubli a clear indication of the likely outcome of their litigation.
great! call dear dubli out on it’s drama queen act.
[off topic apologies]
KT, why is ruja ignatova of onecoin getting her US affiliates to announce on FB that she has signed you up for US compliance? is it true?
onecoin is purportedly launching in the US in june, 2015, and they may use your name for getting people to sign up blindly!
It’s nice to see Dubli is monitoring these sites. Do they have any comment on guys like Tony Rush, Kristian Hoenicke, John Lavenia, Matt Trainer, Tarlese Rideaux getting compensated to cross-recruit people from other companies?
Thank you Oz.
Thanks for the support Fred!
anjali, send me some links and I’ll check it out. OneCoin is no longer a client. I had a limited engagement with them a few months ago. The crypto-currency space….be careful out there.
well that should explain the claims of onecoin US affiliates :
similar claims have been made at other sites and these are a few:
facebook.com/fullthrottlecashback/posts/1607396842813306
lilyharvey.com/2015-powerful-tools-to-success/onecoin-pre-ipo-opportunity/onecoin-updates
scoop.it/t/onecoin-is-the-future
youtube.com/watch?v=VK8QNNW2j7w
the above posts were all made in the jan/feb 2015 period, which may coincide with your dialouge with onecoin.
onecoin claims that it is launching on june 4th, 2015 in the US. if the hucksters continue to sell your name, i hope you will issue a clarification and save some people their money!
thanks mr kevin thompson! your prompt response is appreciated!
ps : loved your burnlounge appeal order interpretation on seeking alpha – seekingalpha.com/article/2270643-battle-over-burnlounge-both-sides-claiming-victory
[back to topic]
Regarding KT, it’s probably they paid KT for “one lookover”. Then the followers started playing “telephone” and distorted the message. Given how they distorted the “Forbes piece” it wouldn’t surprise anyone.
2 corrections to my post #8.
Correction #1:
He had interpreted it correctly. He referred to this section of the Ominto story:
The article linked to a source:
businessforhome.org/2015/01/dubli-has-paid-1-million-sign-up-bonus-for-a-top-leader/
Correction #2:
That wasn’t covered (no link to DubLi review in that article). I expected to find a link somewhere in the article.
Riddle me this.
Dubli (according to business for home) reported 3.8M in revenue (i am sure its gross) for the most recent quarter. So lets say that will round to $16M for the year. That is revenue from signups and VIP memberships. I would guess that 90% of that number is from signups or even 100% since the memberships are bundled. Who knows if they sell them at all.
Now they finally admit in the same article that they only do approx $44M a year in affiliate transactions. Lets be generous and say they get 4% of that on average from the affiliate comission. What does this mean?
$16M in revenue from signups and $1.7M from sales.
How is this NOT a ponzi/pyramid recruiting deal?
I have looked at all relevant sources:
* The C&D letter (Troy Dooly)
* The Ominto story
* DubLi review
* BusinessForHome
* Parts of DubLi’s 10-K annual report
I wouldn’t have wasted my time on defending myself against a lawsuit. Lawsuits have time consuming phases, they don’t just jump directly to the results.
I would have used a factual style, showing that “recruitment driven” actually is correct. A court will most likely see it in a similar way, his client has a really weak spot there.
The Ominto story has some issues. It revolves around “DubLi drops disastrous branding”, the different factors leading up to a conclusion like that. It’s written from a very specific and very onesided perspective, trying to “prove” a theory rather than analysing the facts. But it doesn’t prove that theory.
There’s no facts supporting that the brand “DubLi” is about to be dropped. The “Ominto” brand can be (and most likely is) an additional brand designed for a different market than the “DubLi” brand.
the dubli press release from may 5, 2015 says:
the company’s very Name and Brand ie dubli, is being changed to ominto.
so, one could very well say that they are dropping their brand name.
if dubli remains a subset brand of ominto who cares? the company is not ‘dubli’ anymore. dubli is not the primary brand of the company anymore.
so, why the name change? did some astrologer give them advise? the brand dubli has some negative market perceptions, so a name change is nice for attracting fresh investors.
That “weak spot” is the elephant in the room. If Dubli is stupid enough to take this to trial I imagine that among the things Mr. Thompson will be asking for in discovery will be:
A: The Total amount of income generated by Dubli’s cash back partnerships.
B: The total amount of income generated by affiliate membership fees.
And:
C: The total amount of commissions Dubli payed out to their affiliates.
If C turns out to be a larger number than A I suspect the percentage of B used to make up the difference will be mentioned in court.
Cash back is probably fairly easy to sell to consumers (non affiliates). Much easier than “unique bid auctions” and “online shopping mall”. But the main focus has always been on recruitment of Business Associates.
VIP memberships are not “bundled”, but the BAs will need to buy that one too to become BAs. But VIP can clearly be separated from “business license” and membership packs and be sold to external consumers.
When you’re looking at Quarterly Reports, you must also look at the accounting method DubLi is using. It won’t solely reflect the last quarter, it will be affected by the last 12 months.
An elephant in the room will only have effect when the elephant actually is inside the room, i.e. you must be reasonably sure that you have identified the room correctly and clearly can see that the elephant will be there when you need it.
Currently the door to the room is open. A skilled elephant trainer may be able to lure the elephant away from the room and place it at a distance. A “far away elephant” isn’t very useful as a weapon. 🙂
A defamation based C&D letter doesn’t need to lead a defamation based lawsuit (“the door is still open for other types of lawsuits”).
One way to handle this is to apply some “Press Ethical Rules”.
It means update the original article with a short notice about that some conclusions have been disputed. List some of the disputed points (I listed some in post #13). Link to this article and to the C&D letter.
In addition to that, link to the DubLi review from 2014 in a relevant place in that article, to show that “recruitment driven” actually is based on something.
“Freedom of Speech” is based on that we respect that others have a similar right, rather than see it as a right reserved for oneself. 🙂
Note that this suggestion won’t be relevant for all types of disputes about factual content of an article. “Those who have been the subject of an attack” is a very specific group.
In this case that will be DubLi itself or a formal representative for DubLi. And it must also be about a situation where an update of the article itself actually is the best solution.
“Disastrous brand” was more of a type of comment than a type of factual content. It was primarily based on personal experience over a short period of time.
Questions about DubLi have popped up a few times in the last few years, each time they have had a new marketing campaign for “the next big thing on the internet” in some market.
DubLi was a hot candidate when people jumped ship from Liberty League International in Australia in late 2009 / early 2010, and it has popped up a few times after that. It has always used that “marketing campaign driven model” = visible on the radar for a few months before it disappears again.
Update:
facebook.com/troydooly/posts/10205913656714337
Also apparently MLM Helpdesk is up for sale. Not sure what that’s going to mean content-wise.