Over the past few weeks I’ve been getting a lot of requests to review some of the recently announced MLM penny auction opportunities that have gone into pre-launch.

Information on these opportunities is scarce and often quite confusing (as it’s pooled from multiple sources). With the ongoing controversies surrounding established MLM penny auction company’s investment like compensation plans, most of the soon-to-be-launched penny auctions that have been announced are keeping details close to their chest.

As such, I’ve simply been advising people that until further information comes to hand, writing up a formal review is not possible for the time being.

Where possible, if I’ve been able to see a compensation plan or piece together most of it from a variety of sources I’ve gone ahead and put up a review and analysis of the business. Existing MLM penny auctions that have already been reviewed on BehindMLM include Bids That Give, One Penny More, Zeek Rewards, Bidify and AwardsW.

Given the sheer number of MLM penny auctions that have been announced over the past month and the fact that they’re all in restricted pre-launch (one even claims to be in “pre-prelaunch”), I thought an article cataloguing each of these MLM penny auction prelaunches as they’re announced would be of value to people.

Below you’ll find the information I’ve currently got on a number of MLM penny auction prelaunches with the idea being that when they eventually launch (or a full compensation plan is made available for analysis), that they will be formally reviewed with the review linked to from this page.

This page will be naturally updated as more information comes to hand. If you have information that is not provided here on any of the listed opportunities (or a new MLM penny auction opportunity I haven’t yet listed), feel free to leave a comment at the end of the article.

Bid With Integrity

Bid With Integrity was announced in the third quarter of 2012 and is headquartered in the US state of South Carolina:

BidWithIntegrity.com, Inc. (BWI) is a company with its headquarters in Aiken, SC. However, it has development/Administrative offices in several cities, including Nashville, TN.

At the helm of Bid With Integrity is CEO and President Shawn Wheeland (photo right).

Looking into Wheeland’s history, he seems to have positioned himself over the last decade at the head of a number of MLM training companies, both at a distributor and corporate level.

Through the 1990s, Shawn developed several multi-million dollar organizations, capping it off with Homebusiness.To, Inc. a company that grossed 2.5 million dollars in only 18 months.

Wheeland’s previous engagements include:

  • President of Success Center International (1988)
  • CEO of JGO, Inc. (2004)
  • CEO of HomeBusiness.to (also known as HomeBusinessGo, 1999)

Business model wise Bid With Integrity have announced they will be paired with a penny auction, with this appearing to be ‘BidLinkz’ (‘bidlinkz.com’).

At present BidLinkz’s auctions are not operational with most sections of the website having not been set up properly yet.

Information on Bid With Integrity’s compensation plan is scarce, with the company stating

We’re pretty proud of ourselves…we’ve been designing compensation plans for over 20 years. We know what works and what doesn’t.

No plan is perfect, but we’ve tested our plan against the best in the industry and we have to say it’s REALLY, REALLY GOOD. So good in fact we don’t want our competitors to see it just yet…

We’ll let them remain nervous for a little while longer while we “iron out” the wrinkles…

Right now, here’s what you need to know.

What is known about the compensation plan is that it includes

  • a matrix (typically associated with recruitment commissions and/or sales volume commissions)
  • the promise of “long term residual income”
  • “tons of bonuses”

Nothing else has been released as of the publication of this entry other than the affiliate membership options, of which there are six:

  • Starter – $25 a month with 50 bids
  • Executive – $100 a month with 225 bids
  • Bronze – $300 a month with 750 bids
  • Silver – $500 a month with 1425 bids
  • Gold – $1000 a month with 3300 bids
  • Platinum – $3000 with 10,500 bids

The Bid With Integrity prelaunch site indicates that the joining fee for Bid With Integrity will be $149.99 ($99.99 till October) and ‘provide (a) full e-commerce business’.

Looking at the information currently available, it appears Bid With Integrity will be a monthly fee based MLM penny auction opportunity although how the bids fit into the compensation plan and how affiliates will get paid is currently unclear.

Business volume is mentioned with each of the monthly membership options, indicating that bid sales volume will be a significant part of the compensation plan. The inclusion of a matrix however is a bit worrying, but whether it’s used to recycle membership fees or track bid sales volume is yet to be seen.

The Bid With Integrity prelaunch website currently features a timer counting down with 11 days to go. Unless delayed, that should mean further information will be available around September 30th.

 

Update 4th October 2012 – Well September 30th has come and gone and after the timer displaying “0” for a few days, yesterday Bid With Integrity appear to have pushed back their launch date roughly another month.

The timer on their website now displays 26 days till launch.

 

Update 1st November 2012 – Bid With Integrity missed their prelaunch deadline again, with the counter having been reset and a further 21 days added to the countdown timer.

 

Update 22nd November 2012 – Once again the Bid With Integrity launch counter counted down to 0 today, before being promptly reset to add another 7 days and 19 hours (at the time of publication) to the launch.

The “rollout indicator” is also now showing the rollout as being “92% done” and in the “Phase 1 rollout” stage.

 

Update December 19th 2012 – Bid With Integrity’s full compensation plan is finally out so a full review of the Bid With Integrity opportunity has now been published on BehindMLM.

Bidxcel

Bidxcel is currently in prelaunch and apart from claiming they are going to share “up to 50% of the net profits taken in every day” by the company and that there will be “multiple styles of auctions”, not much else has thus far been revealed.

The domain ‘bidxcel.com’ was registered on the 3rd August 2012 and lists an Andrew Bracken from ‘Win The Hunt LLC’ as the registrant, operating out of the US state of Colorado.

Win The Hunt (winthehunt.com) is a penny auction site offering penny auctions that specialise in hunting and outdoors equipment (‘95% of hunting trips, giftcards, guns & gear!‘).

Launched on July 24th 2011, Win the Hunt was co-founded by Bracken and Dave Hofer. At launch, Bracken claimed Win the Hunt came about due to ‘a desire in the outdoors for a penny auction site that is legit and customer focused‘.

At the time of launch, Bracken projected that Win the Hunt was ‘on track to be the one of the largest penny auctions sites in the industry‘ and that they’d be going into 2012 with ‘a solid customer base of over 100,000 registered members‘.

A visit to Win the Hunt today reveals a mostly dead penny auction site, with many of the penny auction having no bids placed.

Seemingly unable to attract retail customers, it is unclear whether or not Bidxcel will be a simple re-incarnation of Win the Hunt with a MLM compensation attached, or an entirely new penny auction site. It is also unclear how the company plans on attracting genuine retail customers as a MLM company, given the evident failure of Win the Hunt.

 

Update 4th September, 2012 – BidXcel recently published further details of their compensation plan, with a full review of the company going live on BehindMLM on September 4th.

Blue Bird Bids

Blue Birds Bids has gone into prelaunch recently and are calling themselves ‘Blue Bird Bids 2.0’, with the domain ‘bluebirdbids.com’ (the penny auction) only having been registered in May 2012.

Ownership wise both the Blue Bird Bids penny auction site and affiliate site (bluebirdbids.biz) domain registrations are set to private. Furthermore no information is available on either website indicating who owns or runs the business.

Location wise it appears Blue Bird Bids is running out of North Carolina, with the company providing a mailing address there:

Blue Bird Bids, Inc., 2302 NASH ST N, STE E. WILSON, NC 27896

Curiously though, the same terms and conditions also make mention of the US state of Oklahoma:

Your use of Blue Bird Bids shall be governed by the laws of the United States of America and the State of North Carolina.

Without in any way limiting the “Dispute Resolution” requirements set forth above, any court proceeding related to this website or these Terms & Conditions may be brought only in a federal or state court sitting in Oklahoma.

Even more curious is the inclusion of the terms “malaysia” and “malaysia online shop” in the Blue Bird Bids website meta tags, possibly indicating a link to Malaysia:

No idea what’s going on there but it certainly looks suspicious.

Also in the Blue Bird Bids website sourcecode is reference to something called “Green Apple Fridays”:

Not surprisingly Green Apple Fridays is also a penny auction website, who claim that they are

the first Penny Auction site to specialize in Apple products.

Green Apple Fridays doesn’t appear to have a MLM opportunity attached to it and the domain ‘greenapplefridays.com’ was registered on the 2nd of May 2012, 21 days after Blue Bird Bids.

The Green Apple Fridays domain is registered to a ‘Dwayne Golden’ of ‘Dwayne’s Domains’ in the US state of Pennsylvania.

I originally thought this might just be a domain registrar service contact however Dwayne Golden (photo right) appears on Green Apple Fridays’ Youtube marketing videos, indicating that he runs and owns the business himself.

On his blog, Golden refers to himself as a “consultant” and claims to have ‘helped business owners to quadruple their profits‘ and ‘taken companies with sales in the hundreds of thousands of dollars and moved them into multiple millions‘. No specific examples are provided.

Due to Green Apple Fridays being a penny auction and the relative short difference in time between its launch and Blue Bird Bids, it appears as if Blue Bird Bids 2.0 is actually a relaunch of Green Apple Fridays, this time with a broader auction item base and attached MLM compensation plan.

Why Golden doesn’t disclose any of this on the Blue Bird Bids website is a mystery.

As far as the Blue Bird Bids penny auctions go, bids cost $1 and are sold in packs of 10, 25, 50, 100, 250 and 500.

Membership to Blue Bird Bids comes in three pricepoints:

  • Affiliate Starter – $99 a month
  • Affiliate Super – $199 a month
  • Affiliate Pro – $299 a month

Prospective members are unable to sign up as Blue Bird Bids affiliates unless they sign up under an existing affiliate.

Each Blue Bird Bids membership comes with penny auction bids and shares in a global bonus pool (the more you pay in membership the more bids you receive and the more shares in the bonus pool).

The specifics of the Blue Bird Bids compensation plan are yet to be published but thus far it’s been announced that there will be

  • initial bid purchase commissions when recruited affiliated purchase bids for the first time
  • 20% retail commissions on all customer retail bid purchases
  • a Matching Bonus on recruited affiliate earnings
  • a 3×8 matrix used to pay out unspecified commissions to affiliates
  • something called the (wait for it)… “Buddy Bid Package Revenue Share Pool” which Blue Bird Bids claims is ‘50% of the core revenue of the company’ split amongst affiliates. No mention yet on what the qualifiers for this pool are
  • a car bonus
  • a “Business Builder Global Bonus Pool”, which from the name sounds like a recruitment based bonus pool
  • affiliate only auctions for ‘dream vacations, condo’s, cars, jewelry and more

On the topic of the Buddy Share Pool (think Zeek Rewards’ Profit Pool), there is mention of “180 days expiration on all Buddy Bid Packs you purchase” as part of the $499 founder positions currently on offer.

This indicates that qualification for the Buddy Pool has something to do with affiliate purchases of “Buddy Bid Packs”. What affiliates do with their Buddy Packs after they’ve purchased them (or what Buddy Packs are) is at this stage unclear.

 

Update 18th September, 2012 – Blue Bird Bids have released their compensation plan and a full review of the opportunity has now been published on BehindMLM.

Falkito

All that’s available on the Falkito prelaunch website is a video that claims Falkito offers something “new and unique”. The video also claims Falkito ‘works 100%, grows automatically and is absolutely ensured to be successful‘.

Falkito appears to be European focused, with most of the information regarding the opportunity currently only being available in German (the site also uses Euros rather than the USD).

The company itself is owned and operated by CEO ‘Thorsten Albers’, who according to a German language Falkito presentation is operating out of Panama. The domain Falkito are using for prelaunch, ‘falkito.info’, is registered anonymously through a Hong Kong (China) based domain registrar.

As far as I can tell, apart from the same 50% profit share penny auctions everyone is offering their members, Falkito will differ in that they’ll also incorporate advertising revenue into their compensation plan. The other major difference looks to be the ability of members to be able to auction off their own items via Falkito’s penny auctions.

The specifics of how these user-generated penny auctions will work have not thus yet been disclosed.

One red flag the video raises is that members 35% of all membership fees paid to Falkito will be added to the daily revenue share the company promises. This would mean Falkito members are directly paid on the acquisition of new members.

Falkito membership options revealed thus far are only a ‘Bronze’ membership option, which is going to cost 99 Euros a month. As far as a launch date goes, October seems to have been slated in although a specific date has not been set.

Funky Shark

Launched in mid September 2012 and advertised as “literally a license to print money”, Funky Shark is currently little more than an email capture page.

The company’s domain (‘funkyshark.com’) was registered on the 12th July 2011, however the domain registration information is set to private.

The capture page serving as the current Funky Shark website does make mention of a ‘Scott Walker’ and in a Funky Shark promotional video, Walker (photo right) states he was the “original founder” of Funky Shark, but is now co-founder.

After eleven years of creating nine MLM and affiliate marketing companies, I’ve decided to let other people get a taste for what it’s like to own a multi-million dollar online business,

Walker does not disclose who the other co-founders of Funky Shark are or how many exist. He does however claim that ‘every single online company (he’s) ever founded on the internet, has been a multi-million dollar success’.

In the video, which appears to be marketing material for Funky Shark Founder positions, Walker also claims he’s selling ‘stocks, or shares so to speak‘ in Funky Shark.

Funky Shark’s Founder program pays out like a pyramid scheme, costing $1000 a position and paying out $500 per new founder member recruited. Founders also earn ‘a share of the monthly membership fees (Funky Shark) collect worldwide‘.

On Funky Shark’s capture page describes the Funky Shark as an income opportunity where no “selling, recruiting or sponsoring” is required. Funky Shark do however claim that they “handsomely reward” affiliates who recruit new members.

The company claims the “backbone” of Funky Shark is a penny auction, however the company does not disclose the name of their penny auction or a launch date. They do state however that won auction items will be drop shipped from ‘Amazon, NewEgg, Overstock, Lowes & more‘.

Bids are advertised as costing between 70 cents and $1 with commissions being paid out to affiliates via two primary methods.

The first is a ‘Retail Value Bonus’, which is a commission paid out to the affiliate who referred an auction winner. Funky Shark claim that this bonus ‘can be up to 100% of the retail value of the product being auctioned‘.

There is also a matching bonus component of the Retail Value Bonus, which Funky Shark state pays out ‘five levels deep‘.

The second commission payout is a “Global Profit Share Pool”, which Funky Shark claim is a cut of company-wide profits, redistributed between company affiliates (including affiliate bid purchases and membership fees).

One red flag I noticed is the mention of Zeek Reward’s infamous Mustang car auction, which Funky Shark claims netted Zeekler $350,000 in profit.

This claim is misleading at best, given that the liabilities against each bid actually used in the auction resulted in a net loss upon consideration of the Zeek Rewards compensation plan. This plan paid out >100% of the bid price to affiliates over time and was a key mechanic in determining whether or not Zeek Rewards’ business model was a Ponzi scheme.

Yet Funky Shark appear to be advertising this as a selling point.

Further details of the compensation have not been published as of the time of publication of this update.

 

Update 31st October, 2012 – In an email sent out to members, Funky Shark today announced that they had abandoned their proposed income opportunity.

Management stated that they could not in “good conscience” launch Funky Shark due to a “lack of confidence” in the ability for a MLM penny auction to generate true retail (non-affiliate) revenue.

Global One

Global One (GlobalOne Companies LLC) went into prelaunch a few weeks ago under the campaign name “Ultimate Power Profits”. Global One is owned and operated by “Scotty Evans” but the location the company is based out of is currently unknown.

There was some initial confusion amongst members in that those who signed up as “founders” of Global One noticed ‘Signature Life LLC’ appearing on their credit card statements. Signature Life also appeared on the credit card statements of members belonging to the pyramid schemes QLXchange and OneX, indicating that Evans might be involved in both companies.

As I understand it, Signature Life are a payment processor owned by Evans who processed membership payments for OneX and QLXchange. Any further involvement between Evans and OneX and QLXchange has been denied.

Despite prelaunching weeks ago, much confusion still surrounds the opportunity and how Global One’s business model will actually work and pay out members. This is largely due to the way in which Global One have presented their compensation plan, namely the claim that it’s three compensation plans in one, and that members will be paid eleventy billion times per month.

Inside the Global One compensation plan you have three ways members get paid, rather than three separate compensation plans. The most difficult to understand out of these three is the ‘Spinfinity PowerProfits System’.

As I understand it, the basic idea behind Spinfinity is that the memberbase of Global One is split into three groups. These groups are stacked vertically (which group you are placed in depends on when you join (think of it like a straight line)), and every 3 days these groups rotate. After rotation, the top two groups are designated pay groups with the bottom group missing payment for that rotation.

As for how much money is paid out, a “mystery algorithm” apparently organises members in each group from top to bottom with the top ranked member in a group earning the most down to the bottom.

Where this money comes from or what criteria the Spinfinity algorithm uses to rank members in a group, to my knowledge, has yet to be properly explained by the company.

The second component of the GlobalOne compensation plan is the ‘GoGlobal Profit Pool’. Using the yet to be launched penny auction ‘iGoBidWin’, this is your standard “revenue share based on the amount of points you have” most of the MLM penny auctions are using.

Points are generated from member’s own purchases of bids (giving them away themselves or dumping them on the company to give away) or when customers purchase bids. Rather than a daily payout, they are instead calculated on a three-day basis.

One interesting mechanic that sets the GoGlobal Profit Pool apart from the usual MLM penny auction model is that apparently every three days everyone’s generated points resets back to 0. Note that this will be clarified once further information regarding their compensation is put out by GlobalOne.

Finally you have the ‘GoToInfinity’ component of the compensation plan, which appears to be a recruitment incentive. Using a 3×10 company wide matrix, members are paid based on how many members they have in their matrix every 3 days.

Members are added to a GlobalOne member’s matrix either by direct recruitment or the recruitment of other members.

As for the whole ‘you’ll get paid 8 trillion times a month’ marketing hype, this is just an over-exaggeration of the matching bonuses offered on all three components of the compensation plan. Basically GlobalOne are counting every potential matching bonus, paid out down five levels using a unilevel compensation structure, as an individual payment rather than a lump sum.

Due to the three-day pay periods, they’ve then just gone and tallied up all the individual commissions and matching bonuses available and individualised each payment. Confusingly misleading? Definitely.

GlobalOne have announced they are going to launch “sometime in August” but as of yet have not fixed a launch date. At present the company is busy trying to sign up as many Founder members as they can.

 

Update 25th August, 2012 – Last night Global One had a webinar where they informed members that they have dropped their penny auction plans.

Despite indicating they would launch in August, the company currently has no publicly known business model or launch date.

GoFun Rewards

GoFun Rewards went into prelaunch early October 2012 and is owned by the Hong Kong (China) based company ‘eAdGear’.

Confusingly, eAdGear market themselves as a “SEO Company”, however if you click on the “company” link on their website, a series of “products” appears on the right side of the page. Amongst these products are “GoFun Places” and “eAdBid”, which appear to be connected to GoFun Rewards.

Buried away in the GoFun Places website FAQ however, the company clarifies that GoFun Rewards is ‘the official advertising and marketing arm of GoFun Places’.

Back in 2011 eAdGear launched as a MLM income opportunity, promising to pay members “passive income” if they visited around 30 specified websites a day.

Due to the fact that this income opportunity doesn’t appear anywhere on the eAdGear website today, I can only assume that it failed and was pulled sometime between now and mid last year.

There’s nothing on the GoFun Rewards website indicating specifically who is running things but a marketing video reveals that Randal Williams (also known as Randy Williams) is company President and Mike Driggers Vice-President.

Randy Williams (photo right) founded the recruitment based Fast Profits Daily back in September 2011. Six months later the company was relaunched as Profit Racer, however also being a recruitment based scheme it didn’t take long for Profit Racer to collapse too.

Following Fast Profits Daily and Profit Racer, Williams then tried his hand at cash gifting with the launch of Resort Cruise Club in May 2012.

Resort Cruise Club was not only membership based, but paid out 100% of the membership fees paid by new members to existing members (effectively cash gifting).

Less than six months after launch, today Resort Cruise Club is also no more with the company domain (‘resortcruiseclub.com’) redirecting to an EPXBody affiliate signup page belonging to “jvpartner”.

Having failed with cash gifting and pyramid scheme exploits, now it seems Williams is after a slice of the MLM penny auction market. Unofficially I’ve read that Mike Driggers, Randy Williams and eAdGear “own 50%” of GoFun, with the other 50% being owned by a secretive unknown party (big red flag right there).

Compensation plan wise GoFun Rewards appears to revolve around a MLM penny auction. Go Fun Places on the other hand appears to be some sort of shopping portal that revolves around the selling of vacation packages and cruises.

If I didn’t know any better, I’d say that most likely Go Fun Places is simply a relaunch and rebranding of William’s failed Resort Cruise Club:

GoFun Places “Premier Lifestyle Membership” members also get access to “Exclusive Member Only”, access to over 2,000 Luxury Resorts with 1, 2 and 3 bedroom condos for as little as $599 for 8 days and 7 nights!

GoFun Places, Inc. is NOT the “Seller” or “Booking” agent for travel services. Any disputes or refund request for travel services is handled with the “Seller of Travel” or “Booking Services” that is listed on your credit card receipt or confirmation receipt when you book your travel.

Please understand all travel related products and services are non-refundable.

This is most likely an attempt to lend some credibility to Go Fun Rewards given the controversy and red flags surrounding the MLM penny auction niche of late.

The name of Go Fun Reward’s penny auction hasn’t been disclosed however the company is claiming their penny auctions will be somewhat different to the industry standard:

We have created a exciting and fun auction platform that offers a brand new auction shopping experience and a lot more excitement, without the “Risk” of traditional “Penny Auctions”.

Of course despite making these claims, at the time of publication GoFun Rewards fail to mention the specifics of this “brand new shopping experience”.

At the time of publication a screenshot of an auction site displaying the name ‘Go Fun’ appears on the Go Fun Rewards website. The domain ‘gofun.com’ currently appears to belong to a Hong Kong based entertainment portal so it’s doubtful that’s where the auction will be hosted.

The GoFun Places website is a possibility and seems to be the strongest candidate with the company requesting visitors to ‘visit (the) GoFun Place retail web site for more details and to shop at our Lifestyle Mall and Auction’.

Misleadingly, despite having not even launched yet (‘Shopping Mall Coming Last Quarter 2012‘), GoFun Places is already claiming that

GoFun Places is quickly becoming the #1 web destination for vacation, travel and online shopping for travel, lifestyle and leisure products and services.

Meanwhile eAdGear’s penny auction site eAdBid appears to be non-functional (or in testing) with no auctions listed. Although with eAdGear’s involvement in the company, will most likely form the code backbone of the GoFun Rewards penny auction.

Wherever it launches though, marketing material indicates that the auctions will revolve around “Lifestyle Dollars” and “Lifestyle Credits”.

As I understand it real money is converted to Lifestyle Dollars which is the currency used to bid on GoFun Rewards’s penny auctions and shopping portal.

Purchases from our travel site, auction and shopping mall, are made with “Lifestyle Dollars”.

As these Lifestyle Dollars are used, the referring affiliate then earns Lifestyle Credits. GoFun affiliates themselves appear to be able to purchase Lifestyle Dollars directly, with GoFun Rewards encouraging its affiliates to ‘help us market GoFun Places and share Lifestyle Dollars with your friends and family’.

Claiming that Lifestyle Dollars have “real value”, upon giving away their purchased Lifestyle Dollars, GoFun Rewards affiliates also earn Lifestyle Credits.

Lifestyle Credits are tied into what GoFun Rewards refers to as its “Daily Business Builders Bonus Program”. This is effectively a daily revenue share with a fancy name that GoFun Rewards claims will consist of ‘up to 50% of the company’s commissionable sales volume” (including affiliate purchases of Lifestyle Dollars).

Lifestyle Credits are treated as “shares” in the Daily Business Builders Bonus Program with GoFun Rewards stating that each share “retires after 100 days”.

Commissions paid out via the daily revenue share appear to be in Lifestyle Dollars:

Each and every day that the company rewards you with a Daily Lifestyle Reward, you receive Lifestyle Dollars as your “Daily Lifestyle Reward”, giving you additional Lifestyle Dollars.

With GoFun Rewards affiliates having the option to “withdraw” up to 60% of their daily Lifestyle Dollars commissions:

You have the option to convert a portion of your Daily Lifestyle Reward, up to 60% into commissions.

The other 40% of daily Lifestyle Dollars paid out (or higher if the cash commission percentage is set lower) is ‘credited to (an affiliate’s) Lifestyle Dollar balance‘.

Additionally GoFun Rewards affiliates also earn

up to 12% Commissions and Reward Credits on every Lifestyle Premier Membership, Lifestyle Dollars and Lifestyle Club Cards purchases by your personally sponsored affiliates and your personal customers.

Residual commissions are also paid out on the recruitment and sales efforts of an affiliate’s downline:

Plus earn up to an additional 9% Commissions and Reward Credits on purchases made by your team and customers up to 6 generations for a total of 21%.

Despite claiming that they have an “industry first compliant revenue profit-sharing program”, in all honesty I’m not seeing much of a difference here between GoFun Rewards and the recently taken down $600M Ponzi scheme Zeek Rewards.

Zeek Rewards had members convert real money into virtual currency (VIP bids) –> GoFun Places do the same with Lifestyle Dollars.

Zeek Rewards allowed affiliates to convert VIP Bids into VIP points –> GoFun Places do the same with Lifestyle Dollars and Credits.

Zeek Rewards pegged VIP Points to a daily revenue profit-sharing pool, expiring after 90 days –> GoFun Places peg Lifestyle credits to a daily revenue profit-sharing pool, expiring after 100 days.

The problem here is that Zeek Rewards was exposed as a Ponzi scheme, primarily because each day, the company was paying out 98% “invested” affiliate money.

With GoFun affiliates able to invest in Lifestyle Dollars themselves, give them away (as in Zeek Rewards) and earn Lifestyle Credits which dictate how much of the daily revenue share they’ll receive (made up of other affiliate’s Lifestyle Dollar purchases), unless I’m missing something history appears to be repeating itself.

The 60% max withdrawal is slightly different but only seeks to keep more affiliate money in the scheme (if the money was indeed going to come from customers (which although possible, has already proven to not be feasible with Zeek Rewards), why would GoFun Rewards care how much of their Lifestyle Dollars affiliate’s were converting to cash each day?

We are of course in the last quarter of 2012 now, so in stating this I get the sense there’s no immediate plans to release the shopping mall now until the feasibility of the penny auction model has been established.

Membership to GoFun Rewards has been announced at $25, $50 or $100 a month (no further specifics were available at the time of publication).

In all likelihood what happened with Zeek Rewards is just going to happen again here with GoFun Rewards. That is the exchange of money within the scheme primarily between affiliates, with daily ROIs paid out directly proportionate to how much real affiliate money has been converted into Lifestyle Dollars by affiliates and their downlines.

Finally I’ll leave you with the following link to GoFun Places’ “Anti-Money Laundering & Anti-Terrorist Financing Policies and Procedures”.

GoFun Places, Inc. has several policies covering Anti-Money Laundering Acts, Client Due Diligence, Terrorist Financing and has implemented policies, guidelines and processes to ensure compliance with new anti-money laundering laws and regulations in various jurisdictions that meet with Financial Action Task Force (FATF) international standards.

Regulatory obligations cover the reporting of suspicious transactions, large cash transaction reporting, electronic funds transfer reporting, reporting of cross border movements of cash and monetary instruments, client identification and verification as well as terrorist financing reporting requirements.

When was the last time you heard of an MLM company feeling the need to have anti-money laundering and anti-terrorist financing procedures? Wouldn’t it be much simpler to just not run a business model that lends itself to either in the first place?

 

Update 24th February 2013 – GoFunRewards has removed their “prelaunch” notice on their website sometime over the past week or so.

As such a full review of the GoFunRewards opportunity is now available on BehindMLM.

Penny60Pro

penny60pro-logo

Penny60Pro went into prelaunch November 2012 with an official launch date set for February 1st, 2013.

Details surrounding the company are currently sketchy with the Penny60Pro “About Us” and “Our Team” pages revealing nothing about who owns or runs the company.

The Penny60Pro Terms and Conditions do make mention of the US state of California,

Any claim relating to Penny60PRO’s web site shall be governed by the laws of the State of California without regard to its conflict of law provisions.

however no further information is provided. Additionally the Penny60Pro website (penny60pro.com) domain registration is set to private.

Prelaunch or not, it is always a red flag when an MLM company is not upfront about who is behind and running the business.

Business model wise as of yet specifics haven’t been made public but the company does mention that “75% of all auction profits” will be shared with affiliates.

Other commissions mentioned include

  • 20% retail commissions
  • 20% wholesale commissions and
  • a 20% retention bonus

Unfortunately none of the above commissions (or the rest of the Penny60Pro compensation plan) are explained any further to prospective affiliates.

Possibly predicting the overall success rate Penny60Pro expects its affiliates to achieve however, the company’s Income Disclaimer states that ‘it is rare for the Penny60Pro Affiliate to earn much income at all‘.

The Income Disclaimer also contains the following line,

enny60Pro wants to be clear that compensation plan is NOT an automatic means to acquire wealth even if you do get 5 sign ups quickly.

which hints at the possibility of recruitment requirements for Penny60Pro affiliates if they wish to earn commissions.

Unlike most penny auction prelaunches, to their credit Penny60Pro appear to already have their penny auctions up and running over at Penny60 (penny60.com).

Similar to the Penny60Pro website, the Penny60 auction website contains no information about who is running business and the domain registration is set to private.

Bids on Penny60 cost 60 cents each and are sold in bid packs. The cost of these bid packs is not revealed to visitors to the Penny60 website unless they sign up as members. It’s also worth noting that participation in the Penny60 penny auctions is restricted to residents of the US.

Affiliate wise Penny60Pro’s “Affiliate Agreement” states that affiliate membership to the company will be an initial signup fee of $39.95 and then $19.95 a month.

In addition to the monthly affiliate fee,

affiliates are to purchase 100 bids each month that they can use in any penny60.com auction. The bids are 60 cents each; this totals $60 for monthly bids.

These bids are to be used in a 30 day period and do expire upon every monthly renewal. Any bids purchased over the requirement will not expire.

At the fees quotes, this puts the total monthly affiliate cost for Penny60Pro at $79.95 a month.

With MLM penny auction companies in the past having huge problems with a lack of retail revenue, I find it worrying that Penny60Pro are seemingly going to force their affiliates to purchase bids every month.

This naturally leads to the strong possibility that affiliate money will be used to prop up the Penny60Pro affiliate commission payouts, rather than the actual sale of bids to retail customers (recruit new affiliates and earn bid commissions due to the mandatory monthly bid purchases).

This is blatantly evident in the “compensation details” provided in the Penny60Pro Affiliate Agreement:

The affiliate earns a 20% commission off of bid packs purchased by any retail client or new affiliates that the client signs up directly.

The Affiliate Agreement compensation details also provide a bit of insight into the 75% penny auction profit share, stating that

Affiliates also share in the 75% profit pool from the auctions.

The revenue share that the affiliate earns depends on how many points the affiliate has earned, and how much each point is determined to be worth at the end of the month.

How affiliates generate points however is not disclosed. If affiliates are awarded points based on their own mandatory monthly $60 bid pack purchase and that of their downline, then the clear potential for a Ponzi scheme mechanic exists (assuming that bid purchases count as “auction profit” rather than Penny60Pro revenue).

As is the trend with most prelaunch MLM penny auctions these days, Penny60Pro also has a “Founders Club” option for the first 500 affiliates who decide to take it.

Charging a “a non-refundable, non-guaranteed $500 fee”, affiliates can sign up as Penny60Pro “founder” and only have to pay the $60 mandatory bid purchase each month.

Founders Club members also qualify for participation in two additional revenue share pools, 2% “of all the auction profits” and “1% of all bid pack sales”, with shares in each pool divided up equally amongst Founders Club members.

Curiously, despite Paypal’s notoriously negative stance on involvement in MLM companies and the industry at large, they appear to be the only payment processor Penny60Pro are currently using:

Penny60Pro only pays commissions via PayPal at this time, we may change where or who we pay out from at any time in the future without notice.

Naturally we expect more information to be surface on Penny60Pro and Penny60 closer to their launch date.

 

Footnote: Due to the prelaunch status of the companies featured in the above list, not only will the list change as new companies are added to it but also the specifics on each company are likely to change as more information about each company is released prior to a full launch.

Upon official launch (or availability of a finalised compensation plan for analysis) a full review will be conducted with a link placed with the company listing.