World Ventures a pyramid scheme in Norway
Whilst it’s true that World Ventures don’t directly financially compensation you for bringing others to the business itself, you still have to bring others to the Rovia business to get anywhere in the compensation plan. And this, despite being a third party recruitment is still recruitment dependent MLM.
Just under a year ago the Norwegian Gaming Board announced that they had launched an investigation into World Ventures. At the time the investigation was revealed, this is what I wrote:
Concerned that World Ventures might be a “pyramid” and in violation of Norway’s “Lottery Act”, the Norwegian Gaming Board issued a press release yesterday stating
(The) Gaming Board has established a supervision of the company World Ventures’s activities in this country. We shall consider the Company operates in violation of Lottery Act which says that the pyramids are illegal.
Lottery Act § 16 states that it is forbidden both to create, operate, participate in or distribute pyramids.
The Act defines the pyramid as “pyramid sales system where the consideration paid for the opportunity to earn income, mainly because the other offices of the system, and no sale or consumption of services or other benefits.”
Looking at World Ventures’ compensation plan, it’s pretty much a given that they are going to fall foul of the Lottery Act’s pyramid scheme definition.
Nine months later and the Gaming Board’s investigation has concluded.
World Ventures is an illegal pyramid scheme.
The company World Ventures markets memberships in a travel club that will provide discounts on vacation accommodation throughout the world. These holiday are sold through the company Rovia.
World Ventures also offers these memberships to sales representatives. The company’s sales representatives receive commissions and bonuses when they sell company membership. In addition, they also receive commissions from memberships sold by other sales representatives in the levels below them, akin to a pyramid structure.
In determining World Ventures to be a pyramid scheme, the Norwegian Gaming Board has ordered the company ‘stop all sales activity in the country‘. The Board also reported that
At the end of May 2013 had WorldVentures 3654 members in Norway. About 95 percent of the members were also sales representatives.
With 95% of the company’s revenue in Norway being sourced from affiliates and paid out on recruitment of new members, it’s clear why the Gaming Board reached their decision. No doubt similar figures are evident in World Ventures’ business operations elsewhere in the world, revealing that without the recruitment commissions, that the World Ventures so-called product offering is not viable at a retail level.
The Gaming Board concludes that World Venture’s activities in Norway are an illegal pyramid game because revenues almost exclusively come from recruiting members and not the sale of travel residence.
For those curious, the Gaming Board’s analysis criteria (from Norway’s Lottery Act), is similar to what I use here at BehindMLM when I review MLM companies:
According to the Lottery Act, at least half of the revenues (of a company) must be real product sales. If not, the company is regarded as an illegal pyramid scheme.
As it stands World Ventures has two weeks to comply with the Gaming Board’s order, with failure to do so resulting in further actions against the company locally (to be determined should World Ventures not comply).
World Ventures response to all of this?
Håkon Juell Hassel, a lawyer from the firm “Elden” (recently hired by World Ventures to replace their regular Norwegian lawyers), told Norwegian media outlet “Dine Penger” that
World Ventures dispute sthe basis the ban is imposed on. The company looks forward through the legal process to a thorough and objective review of the basis on which the Gaming Board has made their decision.
It is our opinion that the Authority’s basis in both fact and law is untenable.
Yeah… 95% affiliate funded revenue and recruitment commissions? Good luck with that fellas.
Whether or not the Gaming Board decision will have a wider effect on World Venture’s global operations remains to be seen. But I think it’s pretty clear, based on the facts and figures made public by the Gaming Board, that World Ventures are indeed a global pyramid scheme.
You pay your membership fee and then get paid to recruit others. Follow the money people, it’s as simple as that.
This case can go on for weeks and months before we can expect a final decision.
Current stage is a warning about a negative decision. The party can file objections to details in the warning, i.e. there may be some objections and replies to the objections (with some related extensions of time). For WMI, that process took 3-4 months before a final decision was made.
Then the party can appeal the final decision to a “Gaming Appeal Board” (“Lotteriklagenemnda”, “Lottery Complaint Board”). For WMI, the appeal took 8 or 9 months before the appeal was denied.
If the company has a weak case, the current stage is the right one to withdraw voluntarily from that local market. It has only received a warning, not a final decision. A final decision will have much more negative impact than a warning.
Oh and guess who WorldVentures use as their payment processor?
Paging Kevin Thompson to the scam aisle…
The verdict in its full.
The average Norwegian member travels at a cost of NOK 500 and pays NOK 6,000 to join first year. Second, 4,000.
95% of turnover comes from recruitement. Naturally, WV will take the Board to court.
The fact is that of the 3.500 active members in the end of May 2013, 50 % had already terminated their membership when the decision was announced to WorldVentures in the end of January 2014.
If you consider that 50 % of the members quitting within 8 months is a local phenomenon, you are right. Globally, the average member quits within 4 months. In other pyramid schemes the same phenomenon has been observed; Norwegian participants continue their memberships a lot longer than the average participant, obviously because they are a lot richer and can afford a greater loss.
Since May 2013 the Norwegian participants have left the ship a lot faster than they have recruited new members. Even if WV should manage to postpone the final decision for several months, the collapse is already begun in Norway.
The interesting thing is not if the decision will be changed, but what company Steinar Husby, Eric Gusevik and Erlend Vatne will choose as their next scheme.
I found, somewhere on the internet, information about that lawfirm Elden DA (John Christian Elden) has filed a request for an injunction (or temporary restraining order) against the Gaming Board, on Monday 24 (yesterday).
Source for that information seems to be Steinar Husby, one of the Marketing Directors for WV Norway, interviewed by that local newspaper while he was on vacation in Thailand.
Lawfirm Elden DA is a well known Norwegian lawfirm with 44 attorneys or lawyers. John Christian Elden is mostly known as a defense attorney in criminal cases.
I had great difficulties interpreting the injunction as a part of a legal strategy.
The initial strategy was to file a 60 pages complaint about factual errors, 4 weeks ago when the preliminary report first was delivered. It was written by Elden DA’s attorney Håkon Juel Hassel. He has some types of experience with pyramid scheme cases, e.g. EuroSmart in 2006.
The only conclusion so far is that WV has hired experienced lawyers, but the current strategy is difficult to interpret.
Probably Herbalife strategy, except we have NO IDEA what strategy that was.
Since EuroSmart collapsed the MLM market has changed and the law has changed, which means that his experience is not worth much – maybe excepts that he has learned that advance payment is preferable when dealing with network marketing.
The funny thing is that Torgrim Aartun from Eurosmart was one of the Norwegian participants in WorldVentures – together with a bunch of Norwegian pyramid veterans like Helge Normann, Per Gunnar Hoem, Tore Geir Nilsen, Tor Einar Olaisen, Elin Yung Larsen, Reidun Bøhn, Tor Hallaråker, Kjetil Dreyer, Kenneth Bakkejord, Frode Sønstebø, Rune Fjørtoft, Kenneth Kraakstad, Lena Bjorna and Fredrik Harald Skjoldt.
The big guys that still hold the fort are Erlend Vatne, Eric Gusevik, Steinar Husby, Reidar Furuholmen, Tor Magne Refsland and Børge Josefsen. Behind them we find Tore Strømsholm, Alexander Gusevik, Charles Joachimsen, Arne Tangen, Geir Jensen, Kim Stensbøl, Jørgen Slettbakk, May Hege Olsen, Kari-Anne Haugan, Vegard Dotseth, Kjell Fisknes, Aksel Sandstad and Benita Skogmo. These people have all made a good sum of money by recruiting big downlines into the scheme.
I imagine it’ll be similar to WMI.
“We’re not a pyramid scheme, how dare you!”
“What about your business model and compensation plan then?”
“Oh right… that. Well uh… heylookoverthere, donuts!”
That’s what I thought too, but the attorney actually sent 60 pages of corrections to a 17 pages report. 🙂
Well I hope it’s more readable then the waffle Lyoness sent Troy Dooly. My god that was mountains of pages of waffle.
Actually a fullofcrap response like that might work in favour of the Gaming Board. Too easy to tear apart.
BusinessForHome appear to have republished a press-release issued by WorldVentures corporate. They’re claiming to have filed an appeal, during which in the meantime they’re able to continue to recruit new participants.
I checked the Norwegian Gaming Board’s website and there’s been no update since the February decision.
BusinessForHome’s article opens with
Yet the report was handed down back in February. So I’m thinking somebody might be telling porky-pies.
Anyone fluent in Norwegian care to get in touch with the Gaming Board and find out what’s going on?
As I understand it, appeals against Gaming Board decisions don’t fare too well (WMI tried it and lost).
Additionally the appeals appear to be filed with the Gaming Board itself, yet BusinessForHome are claiming:
I smell fish.
Lawfirm Elden DA filed a lawsuit for an injunction in February. That may have delayed the final order (the order isn’t valid as long as the case is handled in court). It was posted in post #6.
I have checked the oep.no database, but documents of interest are sealed. Lawfirm Elden DA seems to be sending 3 copies of each letter for some reason. 🙂
(2013/1662 is the case number in oep.no)
Here’s the press release from Lotteritilsynet (Gaming Board):
“World Ventures must stop illegal pyramid”
It’s a standard press release.
* February was a warning about the report
* April 30: The final report
* 3 weeks to complain about the report
The court case seems to have delayed the final report for 2 months time.
Any indication as to the success of an appeal?
WorldVentures is quite obviously a pyramid scheme. Hell, they’re BusinessForHome press-release pretty much equates to “Don’t worry everyone, you can still recruit!”
It’s actually correct enough.
Gaming Board (Lotteritilsynet) is first instance, Gaming Complaint Board (Lotteri-klage-nemnda) is the Appellate board.
I just read the Facebook comments at BusinessForHome. People are clearly delusional in the MLM world. 🙂
WV has just been labeled being a pyramid scheme, and people interpret it to be a victory? In 6-8 months we probably can read “Yeah, we got kicked out of that market!”.
It will be up to Lawfirm Elden’s lawyer Hakon Juel Hassel to inform the company correctly. His current message is that they can continue to sell memberships until the final decision in the Complaint Board.
Pertaining to comment #8, Frode Sonstebo has been in touch and advises:
Tor hallaraker is still active in scams. Currently (still) recruiting for Cashfx norway freedom team.
Thank you @Sonja this is exactly the information I was looking for!
My research is about Cash FX. There are a lot of investors waiting for their payout. And this has been going on for a year.
All of my group were recruited by a Pamela Warnstädt or Pamela Warnstadt. Many from Germany, Spain, Austria and Switzerland.
Now this Pamela Warnstädt wanted to distance herself. Dissolve the telegram channel. All the people are left with nothing.
I was able to find out who Pamela Warnstädt’s sponsor is. Namely, this Tor Hallaraker.
This Pamela Warnstädt is a partner of this Tor Hallaraker. So I looked him up on the Internet. And found all sorts of things. Ponzi scheme with an upside company in Norway. Then here at this adventure, and at this CFX Cash FX Norway, etc.
Why are such people still at large? With CFX, Cash FX it’s again a matter of X million victims! And money worth X million, if not more.
Many, many thanks! for this information and to all those who are making it public!
Greetings from Switzerland Monica