ricochet-riches-logoThe reason Ponzi schemes are illegal is because when you pay a return on an investment that is greater than the investment itself and your only source of revenue is the money being invested, sooner or later you’re going to find yourself having to pay out more than you currently have.

Ricochet Riches, a MLM investment scheme launched a few months ago, tried to offset this by requiring their members to re-invest 50% of their return back into the scheme.

This put off Ricochet Riches’ Ponzi scheme from crashing a great deal longer than it would have taken without the forced re-investment, but on February 1st the inevitable still happened.

Payments were suspended with the owner(s) promising to bring the scheme back online on February the 14th with some changes that would allow the scheme to continue.

Over the next fortnight the admin(s) of Ricochet Riches pondered how to keep their investment scheme going. Obviously paying out over 100% of what was being invested as returns wasn’t working so how do you keep the system going, without fundamentally changing it?

Promising that there would be no deductions to investments waiting a return or the current 150% guaranteed return rate – management were quiet about the finer details of their plans until finally the 14th rolled around.

So, what did the owners of Ricochet Riches come up with?

1. Forcing members to pay a monthly fee

Although not a major fee, Ricochet Riches are now required to pay a monthly $12.95 subscription fee, called an ‘Income Booster Pack’.

Ricochet Riches repeatedly stress that this Income Booster Pack ‘is NOT a subscription‘, however the pack only lasts 30 days and must be paid for if members wish to earn any income.

Short of the company itself automatically charging members every 30 days, in practice there is no difference between how a subscription works and the Income Booster Pack.

With each $12.95 monthly payment, Ricochet Riches throw in additional advertising credits.

Members who do not pay Ricochet Riches’ $12.95 monthly fee will only be paid out advertising rewards (that have to be re-invested into the scheme) and bid rewards (have to be spent on Ricochet Riches’ member-only auctions).

2. Severing the cash out percentage to just 20%

Whereas previously it was 50% the major change to Ricochet Riches’ investment scheme is that the cash out rate has been slashed to just 20%.

As it stands now,

  • just 20% of your Ricochet Riches return is cash outable
  • 40% is added to a bid rewards balance and
  • 40% is added to an advertising reward balance

The advertising reward balance can only be used to invest more money into Ricochet Riches. The bid reward balance can only be used to purchase bids to use in Ricochet Riches’ “member-only” auctions.

Effectively, $12 of each $15 ROI Ricochet Riches pay is absorbed back into the company. 40% ($6) is gone for good as member’s must¬†purchase crap they may or may not want from Ricochet Riches’ auctions.

Cash-out capped at $500 a week

I’m not sure if this was changed or if it was the same previously, but the company also is capping weekly cash outs to just $500.

I didn’t make note of this in my original Ricochet Riches review so unless I’m told otherwise I believe this is a new addition to the compensation plan.

Conclusion

As far as I can see, cutting back the actual cash-out to just 20% and forcing members to pay $12.95 a month to cash out inevitably is going to lead Ricochet Riches down the same inevitable path.

At the end of the day you cannot pay out a 150% return when your only source of revenue is the money members themselves are investing into the system.

Ricochet Riches attempt to portray these investments as “retail sales”:

Q: Do I have to refer people to earn passive income from Ricochet Riches?

A: NO! No referring is required to earn passive income in the ricochet Riches program. When you purchase Advertising Units from Ricochet Riches, you automatically become eligible to receive RR Weekly Rewards (dependent on net retail sales made throughout the network).

The definition of retail sales is that retail sales are product purchases made by customers who are not members of the company.

Whilst the company claims their advertising sales are retail, it is not possible to purchase advertising from Ricochet Riches’ members without signing up and participating in their investment scheme.

The company itself sells true retail advertising but members cannot.

Therefore 100% of the advertising “sales” being generated by members¬†are being purchased by members and and are not retail sales.

Furthermore these “advertising sales” are in effect investments, seeing as you can’t purchase advertising from Ricochet Riches’ members without¬†participating in the investment scheme.

Given that the basic premise of the investment scheme hasn’t changed, I imagine the admin(s) of Ricochet Riches have prolonged another collapse.

How far off the collapse is hard to determine as it depends on how much new money is being injected into the scheme and how well existing members take to the new changes.

Sooner or later it’ll happen though as at the end of the day it’s impossible to create investment returns out of nothing.