One of the more attractive qualities of a Ponzi scheme is that for very little effort, if any at all, members can earn a substantial return on their investments.

Splice this in with a MLM compensation plan and let the word spread virally through the industry and sooner or later you’re bound to attract the attention of other companies operating in the same sector.

With no strings attached membership wise, it’s no secret that many Zeek Rewards affiliates are involved primarily in other MLM opportunities that for some, forbid the cross marketing of any other opportunity to their existing downlines.

The stricter of these affiliate/distributor agreements even prohibit the mere participation in another MLM company altogether.

Nonetheless, as VIP point balances swell those playing the multi-opportunity stakes in Zeek Rewards and other companies are no doubt finding themselves in the challenging position of weighing up their primary MLM business with that of Zeek Rewards.

Simply put, it’s hard to ignore the returns Zeek Rewards pay out daily for what can easily be deemed passive investment income (via purchased customers and ad placing automation). When you compare this to a traditional sales based MLM opportunity that relies on genuine customers (not harvested email addresses where the owners don’t even know they’ve been signed up and don’t have to actually purchase anything to be counted as customers), it doesn’t take long for the Ponzi’esque returns to overshadow the income derived from a legit opportunity.

With this unfortunately the inevitable happens and Zeek Rewards members look towards their own existing downlines  in an effort to grow their Zeek downlines. There’s no quicker way to boost your own investment returns than to convince people you know to also invest and reap the passive commissions this generates.

Eventually enough members are involved in multiple companies that management can no longer brush aside queries from their field and in the most extreme cases, even find themselves being called on to make a public statement on the opportunity in question.

Two days one such executive was Monavie’s President of their North American and European markets, Randy Schroeder.

Blasting Zeek Rewards on a July 16th Monavie “Leadership Mentoring” call, Schroeder (who credits himself as being “one who has extensive knowledge of the (MLM) industry“) claimed that Zeek Rewards was a company that “comes along and sweeps people into a trail that turns into a trail of devastation“.

Citing numerous requests “over the past several weeks seeking his opinion on Zeek Rewards (presumably from Monavie affiliates), Schroeder (photo above) declared on the 16th that Zeek Rewards is “illegal, a pyramid scheme (and) probably a Ponzi scheme“.

Elaborating on why, Schroeder states that “one of the best ways to predict the future is to carefully and critically study the past“. He then goes on to reason that

companies whose compensation methodology is even remotely similar to the way people are compensation in the program called Zeek Rewards, falls way outside of the FTC guidelines in terms of what’s legitimate in the network marketing or direct selling industry.

I mean way, way, way outside the guidelines.

My hunch is that Schroeder is speaking specifically about internal consumption and that in its current form (and for the past year and a half), Zeek Rewards has operated with near 100% internal consumption by way of affiliates purchasing bids to give away.

Once these bids are given away, or dumped onto customer accounts (created with an email address, and in many cases where the owner of the email address has not signed up themselves or is even aware they are being signed up to Zeekler, Zeek Rewards’s penny auction arm), the Zeek Rewards affiliate who gave the bids they themselves purchased away, then goes on to earn a 90 day ROI on their bid purchase.

The most notable company Schroeder compares Zeek Rewards to would of course be Ad Surf Daily, a Ponzi scheme that offered ridiculous returns claiming its members were purchasing advertising.

In Zeek Rewards, the company claims its members are purchasing penny auction bids and offers similar ridiculous returns, believed to be by and large funded by affiliate money. Zeek Rewards refuse to clarify if this is the case and/or release documentation proving otherwise. CEO Paul Burks claims that the make up of the daily ROI that Zeek Rewards pays out is a “proprietary secret”.

Based on this, Schroeder concludes that Zeek Rewards will “come to grief in the relatively near future, not far into the future“,

I think when people are being asked to invest ten thousand dollars into a program with the idea they need to do no work but will receive exorbitant returns, is screaming out in advance: “Don’t do it, don’t do it, don’t do it, don’t do it!”

And yet so alluring is the idea of fast money for which one need not work that alot of people are getting swept into that trail.

Now I would just to give you all my word of caution, it’s gunna blowup, it’s gunna be an ugly blowup, it’ll probably happen sooner not later and it will leave a trail of devastation behind it.

It’s illegal, it’s a pyramid, it’s probably a Ponzi scheme, it’s going to get shut down – don’t get swept up into it.

Adding even more weight to Schroeder’s words is a brief look at the types of people the MLM penny auction niche has attracted thus far:

  • Zeek Rewards – it’s no secret that many of the top earners in Zeek Rewards were top players in the Ponzi scheme Ad Surf Daily. Presumably a fair chunk of the initial investment seed money pumped into Zeek Rewards came directly from Ad Surf Daily
  • Bidify – Bidify’s Chief Creative Officer, Frode Jorgensen has a history with being involved in offshore income opportunites that strongly resembled Ponzi schemes. Several other founders exist, however they are shrouded in secrecy with Bidify to date not revealing the exact corporate structure of the company
  • Bids That Give – CEO and founder Randy Jeffers has had multiple MLM businesses shut down by US authorities

The most recent MLM penny auction to pop up on my radar is ‘Igobidwin’ (also being marketed as “Global Paradigm Shift”, “Ultimate Power Profits”, “Power Profits”, “Spinfinity” and “MyTurnOnTop”), which is being launched by GlobalOne Companies LLC.

Not much is known at this point (the company is supposed to launch sometime in the next few weeks) but there appears to be potential ties between GlobalOne Companies LLC and the pyramid scheme feeder OneX.

Members of Igobidwin who paid for their membership via credit card, noticed they were being billed by ‘SIGNATURELIFE QLX’, the same company that appeared on OneX member receipts.

OneX was a feeder into QLXChange, which in turn fed members into a world of shady closed-door investment opportunities, with participation only allowed if a non-disclosure agreement was signed.

At the end of the day whichever MLM penny auction you’re considering, they all operate on the fundamental principle idea that members invest $x, get some sort of virtual currency points and then earn an effective ROI >$x based on how many points they have, with the points expiring after a certain period of time.

Members can of course increase their points (and effective ROI) by re-investing the returns the company pays out daily, and/or recruiting new investors (affiliates) and getting them to invest.

Nearly 100% of the revenue generated by these companies is via member purchases (investments in bids with the sole purchasing motivation being to convert them into points for the daily ROI offered) and thus the same is true of where the money these companies are paying out comes from.

This alone is sufficient analysis of the common core business model used by  MLM penny auctions (you won’t ever see one of these launch that just pays out standard commissions on the sale of penny auction bids, because there are no genuine retail customers), but when you consider who is involved at the top levels of the companies in the niche, either at a management level or as top earners, the writing is on the wall.

No doubt efforts will be made to simply brush off Schroeder’s comments as “jealousy”, “negativity” or other dismissive labels, however little can be said to refute his claims.

I mean you can do the whole pseudo compliance song and dance and *winkwink nudgenudge* call a wolf in sheep’s clothing a zebra, but functionally this changes nothing.

No matter what front business you attach to it, no matter what you call member investments and no matter how hard you punish your members for using investment terminology under the guise of “compliance”, an income opportunity that pays out returns (guaranteed or not) based on how much seed money a new members injects into the scheme, which is made up of the money new and existing affiliates have both initially invested and continue to re-invest so as to grow their daily returns, is a Ponzi scheme.

How anyone who has been or is involved in the network marketing industry for more than ten minutes and can appreciate the idea of selling products to genuine retail customers and earning a commission on said sales can think otherwise, continues to baffle me.

 

Footnote: You can hear Randy Schroeder’s comments regarding Zeek Rewards in their entirety below:

Note that the above audio was taken from the July 16th Monavie “Leadership Mentoring” call which in its entirety ran for 53 minutes and 38 seconds. Zeek Rewards was not mentioned or referred to in the rest of the call.