How Zeek Rewards is marketed to new affiliates
When Zeek Rewards launched in early 2011, the company did so guaranteeing a 125% ROI on any VIP bids purchased by members.
Effectively you invested $x into the company and the company then guaranteed you a return of $x times 1.25.
In Mid 2011 Zeek Rewards removed this guarantee and shifted the compensation structure to a return paid out over a rolling 90 day period.
Although Zeek Rewards got rid of the 125% ROI guarantee, it is still generally accepted that in order for the profit-sharing side of the business to work, there still remains an unspoken ROI guarantee in effect.
This guarantee exists on the sole reasoning that nobody would invest in VIP bids to convert into bids if they weren’t earning more than a 100% return on their initial investment in bids after 90 days (and 90 days rolling after the initial 90 days has passed).
Despite being heavily advertised as a passive investment scheme for a year (buy bids, buy customers from Zeek Rewards, give bids away to the company rather than customers, publish daily ads and earn a ROI over 90 days), in January 2012 Zeek Rewards announced it would be rolling out a compliance course.
Additionally the company announced bans on its members using investment terminology to market and describe the Zeek Rewards business opportunity.
This was done because starting April, the company would no longer be selling customers to members, thus believing this meant Zeek Rewards was no longer a passive investment opportunity.
This despite the fact that the fundamental concept of the purchase of bids and the Zeek Rewards still paying out a 90 day ROI on bids converted to points remaining intact.
Despite announcing their compliance course in January, to date nothing has been released.
Zeek Rewards are seemingly satisfied that ordering their members to stop using investment terminology, without actually changing the business model is compliance enough.
And publicly their members have for the most part complied. But what about behind the scenes?
When we dive into the nuts and bolts of how Zeek Rewards is being marketed and described by its members, has anything really changed?
Since the compliance announcements were made in January I’ve had various people contact me who have had the Zeek Rewards opportunity explained to them.
Universally, this involves breaking Zeek Rewards down into an investment opportunity with investment return projections to lure them into investing themselves.
The following is an analysis of the most recent example I’ve had sent to me, just last week. The sales pitch is contained in an email dated 24th February, 2012 and opens as follows:
Remember Zeek is not a “get rich quick” program, however due to it’s systematic method of growing it can become VERY NICE AMOUNT in a year or longer depending on how much you want it to grow verses how many bids you purchase up front.
Defining Zeek Rewards not as a “get rich quick” program but rather a “get rich slow” program (it takes over a year of re-investment), the opening paragraph of the sales pitch essentially describes an investment scheme that takes over a year to deliver viable returns that can be withdrawn.
Of course as per Zeek Rewards compliance the term “investment” isn’t used, with the members instead explaining that sizeable returns are dependant on ‘how much you want it (your invested point balance) to grow verses how many bids you purchase up front‘.
Quite obviously product purchases don’t “grow” so the bids being purchased upfront is the investment here.
The sales pitch contunues:
Number one Zeek is a business, you are buying bids, you are selling bids, you are giving bids away.
This is true and I can’t argue with it. Bid being purchased by members equate to investments. Once given away, these bids convert to points and generate a 90 day ROI. Product purchases don’t deliver ROIs, investments do.
Members purchasing bids is legit, provided of course actual customers are purchasing the bids and not just dummy accounts a Zeek Rewards member has set up to make the most out of their investment into the scheme (via the purchase of retail bids).
As for giving bids away, that in itself doesn’t contribute to member commissions.
The money for the bids has already been paid to Zeek and as such they have capital to pay out ROIs. Whether the bids are given away or not contributes insignificantly to the daily ROIs paid out.
With Zeek if you post the simple ad each day, you are quilified (sic) to enter the “Retail Profit Pool” of money which is figured at the end of the day for the percent your current level in increased by.
It averages 1.4 per day usually not less than 1.25 and many times over 2.0. This is why we are receiving $500+ dollars per day 3-4 days a week and $200_ on other days of the same week.
Week days are surprisingly higher than weekends.
Equating the daily requirement to publish ads as qualification, rather than contributing anything of significance to the commissions structure, the sales pitch then goes on to bait the prospect with the average ROIs paid out.
Amusingly even members of Zeek Rewards admit the suspicious nature of Zeek Rewards paying out higher ROIs during weekdays than on weekends.
Logically if the majority of profit was coming from the penny auctions over at Zeekler, the returns should be higher on the weekends when people have more time to participate.
Of course if the money is being pumped into the profit-share is just coming from investments in VIP bids, during the week people are more likely to be investing money as this is when banks are open and people take go about their financial business matters.
This perfectly explains the abnormality in ROI payouts, yet is often ignored by those claiming Zeekler is a cash cow and bankrolling the Zeek Rewards ROI daily payouts.
Even if you start at silver $10.00 per month fee and purchare $100.00 worth of bids 100.00 in 90 days is 200, 90 more 400, 90 more 800, 90 more 1600.
That’s a year in another 4 90 day time period $25600. 2 years see blow with your $100 start
100
200
400
800
1600
3200
6400
12800
25600total cost you put in $100.00 plus ($10.00 per month 24=$240.) $240.00 = $340.00 and you make atleast $25,600, is this clear?
Crystal clear. I invest “put in” $100, pay a $10 monthly membership fee equating to $240 and if I re-invest my daily ROI for a year have made $25,600!
Let it get high enough where you take 10-20% out per month, the other 90 to 80- keeps growing….you now have a new way of life or a grand retirement plan because of just $340.00.
Course if you purchase more it would be a lot higher.
If you replaced “purchase” with “investment” above, does it read any different?
Nevermind the fact that what we’re actually talking about is 25,600 VIP points, rather than actual dollars (points are virtual currency used to calculate your daily ROI amount. They hold no value outside of the Zeek Rewards investment scheme).
Using average ROIs, the sales pitch then projects to new members what would happen if they invested $1000 into the scheme:
Lets bump it up a nothc (sic) or two for those who may be fortunate to have more to start with:
1000
2000
4000
8000
16000
32000
64000
128000
256000
And then finally, projects the maximum projected ROI paid out off a $10,000 investment (the maximum investment amount allowed per member):
Bigger even to the Max amount you caan start with:
10,000
20,000
40,000
80,000
160,000
320,000
640,000
1,280,000
2,560,000Yes we are talking about 2 Million in 2 years, now take 10-20% out per month for the rest of your life….every month, I think you could survice (sic) on that!
“I sure could!” is what the prospect is naturally supposed to state at this point, before running off to the Zeek Rewards website and investing their $10,000 to get started.
2 million dollars in 2 years? Why the hell wouldn’t you invest with Zeek Rewards?!
As you can see, despite the start of the sales pitch (which really reads like an annoying compulsory disclaimer), at the end of the day projected returns based on initial investments by members is what is still being marketed.
And why wouldn’t it? Zeek Rewards themselves measure the value of their members directly by the amount of money they themselves have pumped into the company.
If you are trying to build a big mound of dirt are you going to use a steamshovel or a spoon, the amount makes a big difference.
Simply put, the more you invest in buy into Zeek Rewards, the higher your return and the sooner you can hit that holy grail (yet unsustainable if everybody reaches it) 80/20% ROI withdrawal amount.
How anybody can construe the above as anything but a sales pitch for an investment scheme is beyond me. When was the last time someone tried to convince you to purchase and sell goods based on projected 2 year ROIs?
It just doesn’t make sense.
Well it does if we cut the crap and acknowledge that mechanically Zeek Rewards is and always has been used by their members as nothing more than an investment scheme.
I could of course forward the above sales pitch along with all email addresses involved to Zeek Rewards and they’d no doubt terminate accounts and pat themselves on the back for another compliance success story.
But is anything detailed in the sales pitch actually inaccurate? Apart from perhaps over or underestimating averages, not as far as I can see.
Sure giving points away and blah blah blah is not mentioned, but the basic idea of you put money in and earn a ROI is as true as it is presented.
Dated late February 2012, no doubt some people might be inclined to suggest that the above sales pitch is outdated and couldn’t possibly be how Zeek Rewards members are still marketing the opportunity today.
So how about a more recent example, as recent as say three days ago.
Troy Dooly over at MLM Help Desk was invited to Zeek Rewards’ “Red Carpet” event held in North Carolina last Wednesday in order to cover and report on the event.
A few hours ago Dooly spoke on the radio show ‘Aces Radio Live‘ and gave listeners a taste of what was to come in the following weeks.
The complete broadcast runs in at 75 minutes (Troy Dooly starts talking about Zeek Rewards at around the 37 minute mark), so to keep things simple I’ve extracted the relevant audio where Troy states how a member of Zeek Rewards described the opportunity to him.
To put the audio into context, Troy arrives at Zeek Rewards for a corporate event three days ago and, despite all the ‘we are not an investment scheme and you can’t use the terminology’ compliance talk since January, finds Zeek Rewards members declaring how happy they are with the return they’ve earnt after investing money into Zeek.
One can only imagine how the Zeek Rewards member that approached Dooly markets Zeek Rewards to prospects.
That is of course if he or she isn’t just treating Zeek Rewards as a passive investment scheme and buying customers from third party vendors to dump VIP bids onto.
Dooly states that rather than the Zeek Rewards business model and the company itself, it is the members alone who will make or break the company.
Be that as it may (but rather due to the fact that without member investments Zeek Rewards collapses as opposed to calling it an investment scheme), can you really blame members?
At the end of the day as demonstrated above the simplest way to market Zeek Rewards is to drop the whole compliance charade and market it for what it is, an investment scheme.
No other business model pays out ROIs nor requires members to continually invest and re-invest their earnings into the scheme in order to earn commissions.
Yes in other business you have business expenses but typical business expenses aren’t governed by 90 day ROI mechanics.
Since its conception Zeek Rewards has operated as an investment scheme and it’s only logical that, despite what the company claims, its members are going to refer and market it as such.
If I’m trying to sell a car, the makers can call it whatever they want. A tree, a chicken, a hot-air balloon – it really doesn’t matter.
I’m still trying to sell a car and no amount of ‘you can’t say this’ and ‘don’t refer to the car as a car’ is going to change that.
Footnote: I did think Dooly’s stance on not holding Zeek Rewards accountable for their business scheme (“It’s not gunna be Paul Burks, or Dawn Olivares, or Alex, or John, or any of the guys at home office who are going to make or break this company” (44:00)), was initially a bit odd, seeing as the members themselves didn’t come up with Zeek Rewards’ business model.
68 minutes into the Aces Radio call (click the previous “Aces Radio Live” link to load up the full show) however, Dooly mentioned that he’s “decided to make a commitment to this company (Zeek Rewards)”.
This commitment involves flying out to Zeek Rewards once a month for their VIP Wednesdays, and assisting with the training of Zeek Rewards members in compliance (which pretty much boils down to ‘don’t use the word investment when talking about Zeek Rewards’).
Of course this commitment will no doubt have a financial side to it.
So despite looking forward to Dooly’s yet to be published information on last Wednesday, a financial relationship between Dooly and Zeek Rewards and any potential conflict of interests that arise as such will be hard to ignore.
Of course I’ll continue to give Dooly the benefit of the doubt and I’m not suggesting otherwise in noting any such financial agreement between himself and Zeek Rewards.
How Dooly handles any potential conflict of interests that arise between what he reports and his work over at Zeek Rewards will be up to him to work out.
I’m sure going forward that whatever happens, I won’t be the only one keeping a close eye on any developments.
your a stone cold moron! how many times do you have to be proven wrong before you wise up. does this have some risk? yes as does every business venture.
the business model is new and is working amazingly.give credit where credit is due! you are doing your readers a great injustice with careless reporting.
Every business venture does not carry the risk that if the people who join after you don’t invest, you lose all or some of your invested money.
Ponzi schemes have been around for over a decade. There’s nothing new about them.
How is it possible that Troy Dooly doesn’t see Zeek for what it is? I know Troy has come on here and responded to my and others’ comments on his blog, but this is as plain obvious an investment scheme as there is.
Troy – you are going to lose a lot of credibility when this thing crashes. All you have to do is FOLLOW THE MONEY and you will see that it almost all comes from affiliate investments. I’ve tried to reason with Troy (as much as one can with blog comments), but at this point with his participation as a consultant and getting paid by Zeek, how can his reviews be at all objective?
His video interview with Dawn in Las Vegas were all softball questions and he did not challenge her on any of the issues that we’ve raised all over BehindMLM.
Time will tell, but I’ve personally lost a lot of respect for Troy as I had thought he was firstly objective and unbiased. That’s my opinion as an informed and critically thinking reader/contributor.
Well I can share my personal experience with the recruitment process. When I first heard of Zeekler/ZeekRewards late fall 2011, I viewed the videos that described the profit sharing and the penny auction.
Having been an experienced QuiBids customer and not being thrilled with normal MLM type companies, my main focus was on the penny auction and the ROI potential.
As with most Zeek affiliates, my “sponsors” were very focused on the ROI and especially the “no recruitment required” line was really big as well in their pitch.
They actually seemed rather annoyed with me on the phone when I observed that the Zeekler auctions seemed lame compared to normal penny auctions like QuiBids.
I was kind of skeptical, but since it was only $30 to start ( $10 silver, $10 VIP bids, $10 co-op ), I decided to give it a go just to see how things went before I made up my mind about the long term potential. When I first started, my sponsors were very encouraging and didn’t really push for front end money.
After I had been placing ads for about a month, I had more VIP points accumulated by then since I was at 100% repurchase and I had seen the profit percentage, but being analytical and understanding how penny auctions work, something didn’t smell right about the percentages being higher during the week and lower on the weekend.
Quibids and large penny auctions are always wall-to-wall busy on weekends and much less so during the week.
So, I asked my sponsors about what was the deal with the percentages. I got brush-offs like “that is just how Zeekler works”, you will learn to like getting paid, etc. Then, the pressuring for more cash started.
The sponsors started blasting out tons of Emails and many had the infamous spreadsheets attached, some showing you could become a millionaire/billionaire after just 2 short years if only you put in $10,000 to start.
Then they started leaving phone messages bragging about their personal point balances, and basically insinuating that anyone that was “serious” about the Zeekler needed to join/upgrade to Diamond level ($99/month ) AND should buy in for the full $10,000 immediately.
Red flags started going up and I got a bad taste in my mouth. After all, if this thing were real I should be able to start with anything I could afford and it should build up naturally, right? Why the rush to buy in for the max?
They were even insinuating people should get credit cards and max them out for $10K and do the 90-day plan where you cash out your initial money and end up with 5000 points at the end, then let it build up from there for free ( house money ). The whole thing started sounding like a con.
When I got the compliance Emails, I immediately knew it was time to cash out and quit since things were changing, the opportunity now involved recruiting which I had never been interested in (remember normal MLM is not my thing), and I was starting to notice the unprofessional IT stuff, and I realized the fundamental flaws in the system ( mathematical impossibility of success ).
I also started getting Emails and phone messages where the sponsors were intentionally misrepresenting VIP point balances as real dollars. In other words, they would say stuff like “I am up to $21,000 in VIP balance”.
Reality is you can only get 1.4% out per day and that is only for as long as it stays constant. But saying “I started 3 months ago and made $21,000 already” sounds a lot better than “I put $10,000 in and now I can cash out for $350 per day as long as it lasts”.
Anyways, I think there is a lot of intentional misinformation with this company. Zeekler is a crappy penny auction and has minimal revenue potential. VIP points are not real money despite attempts to confuse people on the issue.
Compliance is a necessary evil, not something awesome that ZeekRewards recently discovered and no other company has it. Banning 6 countries’ affiliates and dropping their VIP point balances without recompense is basically stealing.
And yet you can’t even name ONE thing he got wrong…
When can an affiliate switch to 80/20 re-investment?
After 90 days?
How do points expire?
80/20 can be done at any time.
Points expire after 90 days. (IIRC)
Remember in the movie The Firm when Tom Cruise joins a law firm only to discover that it has a sinister dark side? In the end, he makes an offer to become the lawyer for the mafia. As their lawyer, Cruise can’t divulge their secrets (attorney/client privilege) and the mafia is now protected.
If Troy Dooly was going to honestly review Zeek and ask the tough questions, considering he had some insider knowledge up until now, he could really do his readers a service and report on it with unbiased analysis. Now as a consultant (or whatever his arrangement is where he gets paid by Zeek), Zeek is now “protected” as they likely have a contract that includes non-disclosure and other terms.
Brilliant.
Which points expire?
Points that are invested in the beginning that weren’t compounded?
Sorry, the expiration has always confused me.
Hello all, I have been following behindmlm.com for couple of weeks now. I am also a Zeekrewards member for two weeks as well. I joined because I want to see if it is working. So far, it is going well for me (avg 1.5% over two weeks profit in VIP points). Obviously, I hope the Zeekrewards is for real, so I can get the $$. We will see.
Anyway, I thought this might be of interest to you. I was reading an article about football and I happened to notice an advertise of a woman with yellow shirt laying down on floor and using her laptop and smiling.
I realized that woman in the advertise is excatly the same woman and clothes as the woman on zeekrewards.com’s cover page. The zeekrewards.com has a little girl on the woman’s back while the football article’s advertise doesn’t have the little girl in the picture.
The reason why I mentioned is because the woman in picture from the football article is advertise for the “Super 8” motel (not zeekrewards).
I don’t know if it means anything or not. Maybe the Zeek just buy a model picture to use for their own advertise?
I saved the screen snap-shot. Wish I could post a picture here but I doubt it is possible.
According to Jimmy, all points expire. Here’s an example.
Say you got 1000 points into the system (buy bids), call that “day 1”.
On day 2, assume you earn 1.4%, you have 1014 points. 1000 of which has life of 89 days, and 14 of which have life of 90 days.
On day 3, assume you still earn 1.4%, you have 1028.2 points. 1000 of which have life of 88 days, 14 have life of 89 days, and 14 have life of 90 days.
Assume 100% reinvestment and 1.4% constant, your balance at end of 90 days is about 3494.
On day 91, 1000 expire, so you’re left with 2494, but you also add 34.9 (1.4%), to 2529
On day 92, 14 expire, so you’re left with 2515, then add 1.4% to 2550
blah blah blah
Got it!
Great explanation!
Yes, K. Chang, that is the correct explanation. All VIP points have 90-day expiration.
The only other type of points you get are the “bonus points” you get on signing (100 for free, 110 for silver, 150 for gold, 200 for diamond). These bonus points accrue the same daily profit share, but have the unique behavior of expiring in 60-days.
On day 61, your remaining Bonus Points (after the original given on day 1 expire) become VIP points which now have the normal 90-day expiration.
The purpose of Bonus Points was to allow free affiliates to see how the daily profit share works. In order to earn profit share on VIP points, you have to buy at least $10 in VIP bids. So there are a large number of Asian affiliates and those in countries where currency values are suppressed who have signed up hundreds and thousands (I have back office print outs showing hundreds and thousands) who are all free affiliates.
They are waiting until day 61, at which point whey will buy $10 in VIP bids. If you start with 100 bonus points, on day 61 you’ll have about 150 VIP points (after the original 100 bonus points expire). Add $10 that you have to buy yourself to activate the daily profit share for your VIP points, and now you have 160 points earning profit share, all for $10 and a little sweat equity.
Now let’s analyze this. Let’s suppose there are 50,000 free affiliates. On day 61, Zeek Rewards earns $1M in income (50k Free affiliates each pay $10 to become Silver + buy $10 in VIP bids). These free affiliates now have 160 VIP points which will earn profit share for 90-days.
So for $1M in come, Zeek must pay out daily profit share on 8M VIP points (50k affiliates x 160 VIP points). Now do you understand why Zeek started limiting the number of sign ups per IP address? Most low income countries have public kiosks for internet access.
What will Zeek do when the hoards of free affiliates in China and other low income countries start cashing out their virtual points? If you lived in China, you’re probably not waiting until you hit 50k VIP points.
At 1k VIP points you can cash out 80/20 and earn (1.5% x 20% x 1000 points = $3 per day). At 80% reinvestment, daily profit share still increases every day. $3 per day is pretty good income for some parts of China!
I’ve been pitched on Zeek Rewards several times. It’s always pitched as an investment to me.
As a matter of fact, everyone who’s pitched me even said “you don’t even have to do any work…I’ll even place those daily ad’s for you…you just choose an amount you want to invest. You don’t even have to recruit.” This is the only pitch I ever hear.
How many of the rest of you have heard that similar pitch?
New Information:
The “Repeat after me, ZeekRewards is not an investment” initiative probably came from Gerald Nehra, esq.
He submitted an affidavit to the court on the “Ad Surf Daily” case proclaiming that ADS, a convicted scam in the US (with 55 million seized by Feds and returned to investors), is NOT a Ponzi scheme.
Here’s the news item on Ad Surf Daily’s end
http://www.computerworld.com/s/article/9220290/U.S._agencies_to_return_55M_from_AdSurfDaily_operation
And here’s Nehra’s affidavit
http://asdjustice.wordpress.com/2011/04/21/gerald-nehras-curriculum-vitae/
There’s a report that Nehra appeared in court as an expert witness on ADS side, but somehow admitted that it’s a Ponzi when grilled by Federal prosecutors. I can’t find the transcript yet, I’m still looking.
And here’s the judgement from the judge, saying that Nehra is an expert, but biased for his client.
Link to very long PDF linked on Quatloos forum
http://www.box.net/shared/static/16v8keyrst.pdf
Inside, it was explained that Nehra himself claimed that Ponzi scheme have no distinction between member and customer, while real business do. (It’s on his website and in his testimony). Yet ASD’s terms of service and explanation by their own attorney indicated that there is no such distinction, thus Nehra’s affidavit is simply untrue.
Further similarities to Ad Surf Daily (convicted scam) emerges.
ASD promised 125% return (just like Zeekrewards used to)
ASD has NO separation of customer and member (in Zeekrewards the difference is minimal)
ASD has hired Laggos and Nehra for compliance (just like Zeekrewards)
ASD allow free members limited participation, but only paid members get full “profit” (just like ZeekRewards)
Have you read the Network marketing business journal for April?? Zeek rewards is the company of the month!
Direct quote from the publication “What has happened in the last 14months will be carved in the history books of business and technology along with business icons such as Microsoft, Apple, Facebook, Twitter, and google.
Interested in your response about what was said about zeek in that publication.
And here’s Troy Dooly himself admitted that Gerald “Gerry” Nehra advised ASD and clearly had a lapse in judgement:
http://mlmhelpdesk.com/mlm-attorney-kevin-thompson-files-class-action-lawsuit-against-efusjon/
(scroll down to comments)
The bottom line for me is that I have checks for up to $2500 showing up in my mail box every monday and we have all of our initial $10,000 back in our pocket in less than 6 months.
This is one of the best things we ever did. Good luck to ya all.
There’s a report somewhere that Laggos got slapped with a SEC judgement back in 2005 involving some companies, probably had something to do with conflict of interest (failure to disclose he has $$$ in the company while promoting it).
Otherwise the guy seem pretty clean.
One more note of similarity: ASD also trotted out the “you could lose money, there is no guarantee, business is risk” argument, something we’ve seen from Zeek defenders lately.
One last note for the day:
One of Gerald Nehra’s paper on his own website says that any MLM must offer products that has “intrinsic value”
http://www.mlmatty.com/intrinsic.php
Does bids have any intrinsic value? For a regular customer, probably, but most ZeekRewards members are NOT after the intrinsic value of the bids, but rather, only to add to their own VIP point totals. They only buy bids to “play the game”.
Could we interpret Nehra’s paper in saying that ZeekReward’s business model is illegal? Hmmm…
(the fact that some members are “dumping” bids by submitting 1410 bids for $100 cash could be interpreted as they view bids as having no intrinsic value)
By definition bids are supposed to have “value” outside the VIP point ROI system. In fact, they are SOLD for $0.65/bid. However, if someone is willing to bid 1410 bids ( 1410 * 0.65 = $916.50 ) to “win” $100, then we know people are getting primary value somewhere else, and the bids have an intrinsic value of at most about 7 cents( $100 / 1410 = $0.07 ).
Of course, even this estimate is way too high since the auction winner must also “pay” the winning bid price as well as spending the bids they used.
To understand this, look at how a typical Quibids auction goes, you will see something like this:
http://www.quibids.com/auctions/811708776-50-Home-Depot-Gift-Card
In this Quibids auction, the winner spent 15 full price bids which represented a value of $9.00, the total auction consumed only 217 bids amongst all participants, and the item was worth $50. So, the winning customer had to spend $2.17 + $9.00 (bid value) + $1.99 delivery cost or a total of $15.16 for an item worth $50. This is well worth it, as they netted almost $35 more in value than what was spent.
Notice also that there is a theoretical limit to how many real (you pay to buy them) bids can be used before the savings potential is gone. For a $50 gift card, a Quibids bidder should only spend a total of 83 real bids minus 1 bid for every $0.60 of auction price. You will also notice that this auction closed at a little over 4% of the retail value of the item.
Note that even Quibids is not a rousing success amongst the general public either, and they have a hard time keeping repeat customers, even when there are good deals to be had.
How many people will want to keep spending $0.65/bid for Zeekler when they are competing with people who have bids that are “worth” less than 7 cents to them and will bid accordingly? Only an idiot would do that after they try out their first bids and discover that they are in a shark tank full of bidders with near infinite supplies of bids.
Given that it is obviously a raw deal for retail customers to buy full price bids for Zeekler, let’s analyze what these bids and auctions are really about:
1. The auction exists as an excuse for a legitimate product in order to attach a compensation scheme.
2. The bids exist as a way of providing virtualization of the ROI to avoid investment registration issues.
The intention is not to get a bunch of real customers to bid in Zeekler auctions, it is to provide “cover” for the ponzi scheme. If anyone is fooled and buys retail bids as a non-affiliate, well all the better since that will keep the ponzi going longer.
Effectively, these auctions are like free prize drawings for the affiliates. It is like you are handed raffle tickets every time you buy VIP bids – you get VIP points and ROI ( the real value ), and you have “free bids” to play with on the off chance that you might win something in the auctions.
This explains why the auction prices are so ridiculous. If you were given 6000 bids to blow, why not setup an automated bidder to blow through 3000 bids in an attempt to win $100. I mean maybe the servers might hit a glitch and you get lucky.
Worst case, if you blow all the bids or “win the item” for more than it is worth, just fail to buy it and you have lost nothing but “free bids”. So it’s a freeroll for the affiliates.
Given that one of Madoff’s beneficiaries was forced to cough back up 7 BILLION dollars he had withdrawn from Madoff before the collapse, I sincerely hope you get to keep it. 🙂
So it was an investment for you as well, right? What *work* did you have to do to “earn” it?
Was wondering something…
What’s with all the deleted auctions at Zeekler? I keep seeing “deleted_” in place of a bidder’s name after an auction has been placed in the Winner’s Circle. Is this because the final bidder was a fraud or from a banned country?
Usually when you click on an auction sitting in the Winner’s Circle it will tell you how many bids the person won with. But when you click on the “deleted_” auctions it will say won with ‘0’ bids. So if it’s deleted and no one wins the auction, is Zeekler keeping both the items that people have bid on, as well as the bids used?
I know they don’t return the bids used (even the paid retail bids) because I was in one of those auctions that became deleted, and I certainly never got my bids back.
Can’t say I’m interested in bidding in their auctions anymore since they can result in no winners. Not even sure how that’s allowed, because some people do actually pay money for those bids.
So was wondering what was going on. Either way, more money for Zeekler I guess.
Posted at April 20, 2012 at 11:09 am in response to someone on his blog.
Keep “training” those bloggers too.
You buy bids
You trade bids for VIP points (give bids away)
You earn ROI on VIP points
sounds like investment to me. 🙂
It’s probably just stock photo. Two things you can do
1) Put it up on imgur.com, which is a free image hosting site similar to photobucket, but far easier to use.
2) Run it against tineye.com reverse image search engine to see if it’s stock photo
Looks like the ASD case have far more relevance to Zeekrewards than first thought. In the indictment document for ASD, Feds alleged that…
Any of this sound familiar with ZeekRewards?
ASD was only paying 1% per day on weekdays and 0.5% on weekends. Somehow ZeekRewards is outpaying even ASD!
source: http://www.justice.gov/usao/dc/programs/vw/pdf/adsurfdaily_Bowdoin_Indictment_FILED_Nov_23_2010.pdf
Seems the SEC defines “securities” as any sort of “investment contract”
http://www.wcl.american.edu/sba/outline_databank/outlines/SecuritiesRegulation_Quinn_Fall2004_Cases.pdf?rd=1
The question here is… can you really get around requirement (4) with that “posting one ad per day”? In case of ASD, where their lawyers claimed that because members have to click on ads, it’s should pass requirement (4), their argument was denied in court.
Thus, it appears that zeekRewards IS an investment contract, and ZeekRewards may in fact be guilty of selling unregistered securities.
And where is Troy Dooly on all this? Where was Troy Dooly on ASD… not after the fact, but during. Similar consultants and lawyers as before, hmm….
@schmidty
I think it’s just useless irrelevant waffle. Doesn’t address the business model, which all that really matters here.
I’d love to see Zeek Rewards’ legal team get up in court…
Yeah… about as relevant as Paul Burks’ hair color.
@Jimmy,
At no time did I say anything about being a paid consultant to help with training on compliance, or anything else for that matter.
You can read my full response to this question after Oz raised the issue, on my site.
@Jimmy,
Rod Cook and I called the whole Auto Surfing Industry out long before most. And that was long before Andy launched ADS.
@Troy,
Nehra was corporate attorney for eFusjon. Kevin Thompson filed a class action lawsuit against eFusjion (you wrote about it). Nevermind that I didn’t see any of money from the class action lawsuit, myself.
Nehra was attorney for Ad Surf Daily.
Nehra is attorney for Zeek Rewards. You, of all people, should have insight into what really is LEGITIMATE MLM and what is an investment ponzi disguised in virtual currency.
Remember, Troy, follow the money. Where is Zeek Rewards revenue coming from? Affiliates! Even the meager retail penny auction revenue that does occur is completely meaningless to the revenue ratios of retail-to-member because of the matching VIP points (which gain daily profit share). I’ve raised these issues in this paragraph to you several times.
@Troy,
Could I ask you to share a link with Paul?
http://businesslaw.ncbar.org/newsletters/nbinov2010/security.aspx
Now that is just a brief sort of thumbnail sketch of securities laws in the State of North Carolina regrading what sorts of buisness opportunities might need to be registered as a “security.”
I let you read it for yourself and draw your own conclusions but there is a very good recommendation at the end of the article I think Zeek should strongly consider:
@Jimmy — I would have to agree with Troy here in that you may have implied a little too much with that statement.
I have no problem Troy appearing at a Zeek event, as long as he’s not “endorsing” any company or any product (or being used to IMPLY any endrosements), and I’m sure Troy is careful about avoiding any show of alleged favoritism.
@Jimmy — Nehra was compliance consultant for ASD, and was called as an expert witness in the trial. He, however, was NOT acting as attorney for ASD when it went down.
They had the other guy (who was also called to the witness stand).
@Troy — I understand that those fine people you know like Gerry and such have no reason to lie to you, and it is true that Zeek have hired former SEC folks to check for compliance, but it takes a LOT to be NOT recognized as securities by the SEC. NOT calling oneself ‘investment’ is merely a part of it.
As GDorn have suggested, share the link with Burks and his former-SEC guy, and ask nicely how are they planning to comply with that 4-part definition, as we all know SEC defines “solely” rather loosely, and thus far, the “requirements” Zeek are pretty inconsequential and cannot be used to refute requirement 4: directed by others.
Most participants simply buy bids, trade bids for VIP points (by giving bids away to other accounts), then earn income on the VIP points. Any “work” done is insignificant. Money is INVESTED into Zeek. It is an investment, and it WAS at one time presented as investment.
It may not have STARTED as an investment, but it is ACTING as an investment, and this “compliance” order to NOT refer to Zeek as an investment, is, pardon the expression, “lipstick on a pig”.
To use ASD case, Gerry himself had opined that Ponzi schemes have no clear division of customer vs. member (or as Zeek puts it, affiliate). How many REAL PAYING customers are there for Zeek, vs. members with expectation of income?
Members are getting profit share, but profit cannot come from members, but rather, from “real customers” as Gerry put it. Does Zeek have enough real customers to pay out 1.5% A DAY, which is DOUBLE OR TRIPLE ASD had been paying out?
Or to take Gerry’s “intrinsic value”… bids have intrinsic value to paying customers, but do they have any intrinsic value to MEMBERS? It’s clear that they don’t. Members are only buying bids to convert them to VIP points. They are “pay to play”, and that, according to Gerry, is a Ponzi scheme.
Gerry had been fooled once by “Andy” of ASD. Another debacle like that one will do irreparable damage to his reputation. And similarities between Zeek and ASD are too numerous to ignore.
Just to clarify, I have NO ill will to Mr. Nehra. Indeed, in one of my explanations that TVI Express is a scam, I cited Mr. Nehra specifically, calling him a “Top US MLM attorney” (which is is).
Are they cash auctions? PatrickPretty.com had raised an issue I never noticed before: auctioning cash may cause Zeek to be considered an investment.
@Jimmy — how does “cash out” work when an auction is won? Say you win a $100 item.
@K. Chang
Some of the deleted auctions are cash, and some are various items. When you go to Zeekler and mouse over “auctions” then click on “Winners Circle” you’ll be taken to a page of the most recent wins. As you scroll down the page, you’ll see some auctions re-named with “delete_” instead of the final bidder’s name. (When you click on it then you’ll see who the final bidder was, along with other participants).
I’m just not understanding how it’s good business to delete an auction after it has ended (for whatever reason), and then not return the bids to those who participated.
I would assume that when they delete an auction there is no actual winner, which would mean they’re keeping the item along with the bids that were used in the auction.
Maybe an auction is “deleted” if the winner never actually goes through with the purchase? I believe you still have a choice whether to actually acquire the item even after winning the auction.
No one would acquire $100 cash if it costs them $200 to do it, for instance. Probably people are putting their ABE on auto-pilot with a ton of bids and by the end, the item is “won” for more than it is worth, so they don’t consummate the transaction.
Well while Mr.Dooly and zeek management and their compliance team are patting each other at red carpet events and bringing out new start up themes and terminology, here is what i see happening in the trenches.
Majority of affiliates are advertising zeek by word of mouth as posting a daily ad and earning high interest daily interest compounding over 90 days. The really disturbing part are these outside rotators that give affiliates the same method of dumping bids as the previous customer co-op into cyber space.
Wake Up everyone involved. ZEEK MANAGEMENT prove me wrong and give the daily amount of real bids being purchased instead of customer retirement points and quite trying to justify yourself with attorneys and MLM experts.
It is not the affiliates that only need to follow a compliance course, it is the masterminds that created the whole zeek rewards that main purpose was to promote zeekler. But what does it matter even if you believe you can enforce your new compliance terms you are eventually going to have more money going out than coming in.
If any high flying affiliate ask what exactly is a ponzi scheme, just answer zeek rewards.
In normal auction, if the “winner” don’t go through the item is usually offered to the next person on the list. In this case, I’d imagine it’s offered to “next to last” person.
However, given the option to “cash out” the winning, I don’t see why someone would NOT get the product then cash it out.
This is very puzzling, and potentially troubling.
I noticed this as well and posted in “Fraud still rampant in Zeekler’s penny auctions?”
I didnt notice the name had been changed to “deleted”
Also “Bidders in the last 15 minutes” is set a 0, when you can see the box filled up with bidders.
Here is one “deleted_” There are 6 more n the winners ircle right now
There are several possibilities why an auction was marked “deleted”, feel free to add more if you think of some
1) They don’t actually have the item (was hoping the “winner” would “cash out”)
2) The price was way too low and didn’t meet their (hidden) reserve price that NOBODY had ever mentioned.
3) Not enough bids was submitted to make them a profit (again, criteria unknown)
4) Some of these bidders are fakes or fraudulent
5) Some of the bidders are from the “banned countries”
6) Server glitch, price and stuff was wrong
Any other reasons you can think of? Once we got all the reasons we’ll analyze them one at a time.
The deleted auctions seemed to start happening around the time Zeek’s fraud prevention went into place, which is why I was guessing it is a problem of credit card fraud (or someone being from a banned country).
I think if someone doesn’t pay for an auction they’ve won, then Zeek puts it back up for auction at a later time – so maybe the same thing happens if someone tries to use a stolen credit card. But it makes me wonder how many people realize that their bids could be going towards auctions that won’t have any winners.
Someone else mentioned to me that they were also in an auction that was deleted soon after the auction ended, and they were the runner up. But they were never offered the item and they never received their bids back… and they used paid retail bids. I think they feel a little cheated, and I don’t blame them.
Oh well, at Zeekler it does say “There is no specific outcome of an auction that is guaranteed” so I guess that means ‘anything goes’ – including there being no winners.
That should be the standard way of saying you aren’t guaranteed to win. However, it should not be a cop-out to excuse server glitches, fraudulent bidders, bots, shill bidding, or anything of that nature.
Zeekler has some explaining to do to clear up this “deleted” auction thing. If an auction is determined to have been won by a fraudulent bidder or someone using a stolen credit card, then the auction results should be nullified and every participant’s bids restored.
Even Quibids will do that much. They have restored bids to people that were affected by server glitches, and if an auction is halted due to issues, the bids used are put back as if the auction never happened.
Nope, I haven’t read it, but I have read Troy Dooly’s review where NMBJ was used as a source.
From a professional viewpoint, NMBJ should be able to take care of their own business, like which material they will publish. I’ll guess they have done their own research before they published it, making the material become targeted towards their own audience.
NMBJ didn’t address any problems, instead they were trying to “outweight” the impression of problems by listing all the positive factors they could find.
I will often use a similar strategy when I’m writing something for a specific audience. I will often have to make adjustments in material and present it from specific viewpoints.
NMBJ didn’t hit any targets here, because we will usually analyse the information before we will accept it. Their main target is probably a less analytical audience.
From my personal viewpoint, I will prefer sources that are less misleading. I will prefer factual information instead of “marketing material”, and I will consider NMBJ’s article to be some sort of “marketing material”.
In a neutral review, they would probably have analysed the material before they decided to publish it. They would probably have made several changes (like adding more details), making the material become less misleading.
The differences between professional and personal viewpoints are because I have worked in sales-related jobs for 20 years, and I have become extremely critical as a person when people are trying to mislead me.
For me, NMBJ’s article was plain junk. Most of the information was already known, and they didn’t add much value to the stuff. It’s main value seems to be as marketing material.
NMBJ can be called a “cheerleading” magazine that gives Network Marketers what they WANT to read. I have no doubt it has facts, but it has a built-in bias (toward favoring Network marketing).
Hey all,
I know this is a bit off-topic, but I was wondering if anyone can answer this question.
You know how Zeek said you need zeekler customer to give away bids. Well every IP address is limited to 3 signup in Zeekler. Well, what if someone bypass the 3 IP signup limit, by using a proxy.
What if they sign up under you over and over and over again using a proxy. Would Zeek be able to detect this and have consequences? (Assuming the sponsor had no knowledge of this)
Because now there are many sites where you can buy customers, and I just wonder how they are getting leads for them so fast. I doubt it. I think they are using a proxy or something and am wondering if people are doing that.
The disclaimer that zeeklers are not required to post is interesting… Too bad they don’t exactly fit what the comp plan actually says:
The disclaimer doesn’t change the “Dewey test” 4 requirements for “investment contract”. They are hoping to get around requirement 1: money invested by putting in a disclaimer that “this is not an investment”, but SEC looks at INTENT and PERCEPTION.
If vast majority sees it as investment, it will be treated as investment, disclaimer notwithstanding.
As we don’t know how zeekler is implementing this check, we don’t know if they can detect abuses / workarounds. However, a proxy wouldn’t help in this case.
A proxy’s purpose is to act as “middleman” by relaying the traffic. So each proxy would add ONE potential customer (or each proxy’s IP address). It would take too much trouble to setup accounts on bazillion proxies.
A botnet, on the other hand, is a possibility. Botnet is basically a network of computers under a master control but spread around the world. A hacker, could, for a fee, “rent” a botnet out to someone to register bazillion customers, all automatically from different points of the globe, then sell those one by one to prospective cheaters.
Someone told me that we are not responsible how Customer signs up.
Since there are thousands of zeekler ads, wouldn’t someone could sign up, million account under you without the person knowledge.
There is no way of knowing if the Zeek affilate has the intention of cheating. Right? Its everywhere. And everyone like free stuff.
@Mr Troy Dolly
After ten days of trying I did not get my refund. I used recommended email ZeekOFACRefunds@gmail.com three times. After that I submitted support ticket with no results.
I sent all dates I was recommended to send in Mr Paul Bourke message to banned affiliates.I purchased bids using AlertPay and made monthly payments by credit card.
Here is my last ticket dates:
Might want to post on mlmhelpdesk.
Troy Dolly doesnt read all the posts here.
Sucks to hear about you and the other people being ripped off by this “legitimate” ponzi.
@gen3benz
in fact we are “so much important” for Troy, that he has also forgot to ask about our 6 countries in this meeting…
also if he has promised to all of us that he will do this….hm…. 🙁 …..so it is nonsense to write at him here, but also in his forum….he will never listen to us, especially not now, when he has decided that zeekrewards is so great….
And it is “Dooly”. 🙂
Hi all,
Thanks for all the comments. I have spent three hours toninght to read then one by one.
Chong and Jimmy, It is definately a key issue how could ZeekRewards create the profit for dividend or payout. I tried to persaude, however I couldn’t.
Since Dragica talked about refund. May I ask how to cancel or close the account and receive the refund from ZeekRewards? Has anyone seen any refund policy anywhere?
And also how to stop the monthly credit card charge? Could I simply change the account information in the back office and give a nonexist number instead of currecnt credit card number?
i’ve heard that nearly verbatim in the last couple of days
The quoted disclaimer I put above was embellished by that affiliate. Here’s actual copy off ZeekRewards website:
http://www.zeekrewards.com/disclaimer.asp
Is Zeek trying to “weasel word” their way around regulations? In their disclaimer they claim “income” is derived from bid sales and whatnot.
Yet, in the same paragraph they added
Note that income will depend on success of… those you introduce to the program doesn’t match there is no compensation for recruiting
Previously there is a requirement that to be compensation you need to have recruited a few folks under you who are paid affiliates. This requirement has disappeared from Zeekrewards. However, the “matrix commissions” under 6 ways to get paid remains. So you *are* paid for recruiting. It is just not “required”.
The disclaimer about “not an investment” is a joke.
* You buy bids
* You trade bids for “VIP ProfitPoints” (by giving bids away)
* You get “profit share” based on amount of VIP ProfitPoints
Sounds like an investment to me.
And where are you hearing this from? In or out of the US?
Burks can use that as more excuse to ban entire countries. 😀
If you remove the entire Matrix altogether, the investment ponzi still exists. The matrix is only there to get “MLM leaders” from other groups to bring their downlines over, as they can now earn revenue on more than just level 1 (10%) and 2 (5%) commission from daily profit share.
The vast, vast majority of people earn either nothing from matrix commissions or a small % (a few %) of total earnings from matrix. Only the “leaders” at the top with thousands below them earn meaningful commissions from the matrix.
The math is pretty simple. You put in $10k and grow it with compound virtual interest over time, vs. earning a few dollars per qualified affiliate in your downline once per month.
You’re going to need a really large downline (of qualified affiliates, not just free) to earn matrix commissions that really make a material difference in how you market or recruit.
@Jimmy — now that you’re here, how does “cashing out” an item won works?
You pay for an item and when checking out select either to have it shipped or payed out as cash.
If you want it shipped, you pay shipping fees, even though Zeek buys it from Amazon and gets free shipping… my last item won they charged me $11 shipping even though Amazon has free shipping with Prime.
If you want it cashed out, you select either to send cash to you via AlertPay or SolidTrustyPay.
Then to complete the transaction, you have to pay Zeekler either by credit card or AlerPay (SolidTrustPay not available).
You have to pay Zeekler first. Then they take 7 to 10 days to pay you. Say you won an item for $50 and want to cash it out for $50. If the auction closed at $32, instead of asking Zeekler to just pay you $18 (the difference), you have to first pay Zeekler $32, then wait for them to pay you $50.
I have heard others say you can open a Ticket with support to get paid the difference, but considering that retail penny auction customers have no support link (you need an affiliate to give you the support URL from their back office), and that I’ve had support tickets go UNANSWERED for over 60 days, it’s easier just to pay for it and wait for Zeekler to pay you.
On the Zeeknews:
I don’t understand how it is okay to use 3rd party provider like Zcustomers to get leads for Zeekler customers, but it is not okay to use pay-per-registration where you pay workers like ten cent just to sign up.
How do we even know Zcustomers is not getting and fulfilling affiliate payment from pay-per-registration?
In addition, someone told me that it is okay for the affiliate if someone try to break any rule in signing up like using a proxy server or whatever. Then, I could open a website like Zcustomers and then I could buy my leads from my own website, since it is a 3rd party. And then I could fulfill my payment on how I like and use payper registration.
Since it is okay to do, if the affiliate has no knowledge of how the 3rd party really gets their leads.
Even if I do use a pay-per-registration site, how would Zeek find out that it was me who is doing it? Maybe someone is trying to screw with me?
Maybe I pay a different site like Zcustomers, and their site use a pay-per-registration site. (since Zcustomers claims to be the old 5cc). But there are many like Zcustomers.
Unless Zeek actively enforces, their position has little value. They want to show regulators they are not a scam, but do little to stop the fake accounts.
For example, if they really cared about having real Zeekler customers, why not require email confirmation? What 15 year old online ecommerce company with 3 million customers doesn’t understand how important email verification is during registration process?
Zeek has not required email verification since day 1, and that is what allows CPA email submits to generate as many fake customers as you want, all from different IP addresses from real people clicking submit, but having no desire to actually partiticpate in thepenny auctions.
Both the American FTC and SEC values “intent” instead of “paper”. Enforcement is the key in demonstrating compliance.
In one case, FTC charged a company as a pyramid scheme as the “distributors” don’t really sell the stuff. Company claimed they require all distributors to sign statements that they will sell to retail customers. FTC asked was this ever audited and the company had no response. FTC told the company to produce records and it shows that most distributors don’t really sell stuff, just recruit new distributors. Needless to say, company lost.
SEC, in a similar case, charged a company of being a Ponzi scheme. Company pointed to their “agreement and disclaimer”, which says that this is not an investment, blah blah blah. SEC produced company’s own statements in online forums stated that they offer return / rebate / whatever if you put in this much money. Needless to say, that company lost
So “paper compliance” means very little. You can’t argue your way out of a court case with a few disclaimers and superficial changes.
Guys, except for the fact that Zeek acted very disrespectfully to banned country affiliates, it is totally clear that in most MLM businesses the bulk of money comes from the affiliates, who are simply put – “incentivized customers”.
Take for instance World Ventures that openly pays for recruiting people. To me it sounds a lame pyramid, yet it is in the list of most successful MLM businesses! But again, MLM business is pyramidal in its basis, so bullshiting about where the money comes from is pretty useless.
YOu never really know, as long as you own the company and you have the big picture.
What MLM does, is basically taking money from affiliates and clients and reorganizing it “more cleverly” according to the “leadership” traits of the incredible income earners. So what the hell? What is economy? What is money? Why, some lame “expert” selling shitty info product to millions and making millions is better?
The whole business world and marketing can be viewed as a bunch of “dirty tricks” selling shit to everyone. And how about the shit milk products that you are all sold?
Did you know that milk is totally unacceptable to human body?
Did you know that smoking kills?
Did you know that white flour is very unhealthy?
Did you know that all the sweets and snacks exist so that dentists and doctors can thrive?
Did you know that Coca Cola is the worst-poison-billion-dollar industry that gets paid literally for poisoning our damned bodies and creating more money for the medicine industries?
Did you know that nobody ever really gives a f**k about the product itself in MLM and mostly, people simply want to sell whatever shit the company offers just to make money?
I mean, guys – come one! The whole world is based on lame values, and shit and money circulate since the dawn of times.
What Zeek are selling is experience – a brand new personality – that gives many people fun and hope like most other companies. Enough of blah blah – it will lead nowhere.
I will myself condemn Zeek if it keeps on being a bitch to innocent affiliates, but I know that guys over there are making efforts!
Dragica, I really think and hope you will, as everyone else – eventually, but you will have to be patient. Re-submitting the same issue only creates longer delays for others. Please, update us here.
The affiliate services are slow because every few affiliates send in 20 issues a day – multiply it by tens of thousands every day and you will get where the response is slow.
Other than that, Zeek is a super genius, uber-wonderful ponzi-pyramid-mlm-schene-who-cares-what that is doing good to hundreds of thousands in the world! We humans, are paid millions for serving millions right? So her you are!
The efforts should not be on criticizing – as long as it is legal no bullshiting can do any harm to Zeek. They are huge and they are Good (mostly I mean).
The childish blabbing about legality will lead nowhere! Did you know there are black markets, mafia, drugs, whores in this world and they will thrive as long as the governments and people want/need them, and no blah-blah can ever change that?
Revolutions are not made by blah blah, but rather by very massive, focused and coordinated action. Unless you can do that, keep positive and keep away from what you believe is bad. YOU CAN NOT CHANGE THE WORLD!
I did not know that. I still think Milk is good for the human body.
@k.chang
Is that a reply to me?
Really, there is no email verification when signing up for Zeekler? Wow, I always thought there were. If you say that, then there really must be a lot of fake Zeekler customers.
In addition, if there were, they have stupid items that there is no way they can make any profit. I think it is just there as an excuse to say they are not ponzi. But in reality I think it is – it doesn’t take a genius to caluclate, when affilates are given 250 free bids monthly that everyone in the auction are mainly affilates.
Below is what I wrote to someone about the pay-per-registration to get customers. They said it is okay to use PTC and Zcustomers but not okay to use PPR. If Zeek said affilates are not responsible how customers sign up – if they have no knowledge. Then they will not face consequences. That not what Zeek told me, but a couple affilate have told me.
Excuse my grammar, and writing as you can see I am not so great at it.
The MLM component of Zeek is really inconsequential to its business model. It’s an investment ponzi that has caught on within the MLM community.
Most MLM’s as described in that wikipedia you still have to recruit. With Zeek, you can invest your $10k and do practically nothing and cash out some months later, assuming the ponzi hasn’t crashed.
In a legal MLM, you can just sell stuff and not recruit a single person, and still make money.
It is the lure of “passive income” (i.e. let someone else make you money) that induces people to recruit. However, someone still have to sell stuff, or the whole thing turns into a pyramid scheme.
And please don’t cite pseudo-science like “milk is poison”. NPR is about as neutral as you can get, here’s their take
http://www.npr.org/templates/story/story.php?storyId=91843992
(and that’s the last word on the subject)
Well, I guess what you and I think does not mean much. i have enough proof for knowing, but an argument is no the point.
I mentioned a lot of unhealthy shit that we as humanity consume every day. It’s funny you guys cite the milk sentence and feel like you “did it!”. I mean like, what about the rest?
Psychologically, people will pay and not complain as long as they get physical shit. If you can hold it or eat it, it’s OK. No matter that you should be paid for using that crap rather than the other way round.
The thing is, that people are not idiots – if someone is willing to pay or even “invest” into somethings, either he has chosen to do so, he is too dumb to care that he is being bullshitted.
So is in Zeek. There are those that know what Zeek is and they don’t give a f**k about it. It’s working? Cool.
And there are those that are too dumb to see, or simply don’t care! Whether it’s Zeek, or buying tons of bullshit.
If you think you have to stay away from it, do so. Opening up an “MLM anti-Zeek movement” is too much effort. We can’t stop the Tsunami, especially that we are totally unaware of the new directions and evolution Zeek is planning to go through.
You all fell into the pitfall of calculating the VIP Balance after two years. That’s crazy… Things are going to change.
You do not need to be a genius to realize that mathematically, things are not sustainable. And mind you – Paul Burks is not an idiot. that’s why he mentioned at one of the calls that the VIP Balance is going to be limits.
Zeek is in its launch state – it is very good, almost too good to be true, just to make the buzz – to build up dynamics. Eventually, things will change, or else, Paul and his team are a bunch of idiots that are heading for an abyss of blemish, disgrace and total business crush for the next few decades.
Ponzi? 🙂
Whatever.
If a legal Ponzi can improve the economical situation in the world, than let it be Ponzi. No fraud involved – no lives ruined.
People know what it is all about, and those that don’t need to go through their school years. In the end, it is a win-win-win situation, except for those that take life too seriously.
Too much drama about nothing.
Take it or leave it. Watch the process – enjoy the life.
Great stuff is coming.
P.S> Don’t like Zeek, go check out Bidify.
Don’t like bidify, go to the grocery or hi-tech. There are opportunities for everyone! That’s the beauty my dear friends!
Happy birthday everyone 😉
I was not trying to argue with you. I was just pointing out that I did not know milk was bad for the human body. I was just reading the comments. I actually didn’t have anything to say against your comment.
What you said seems all obvious and logical; but the milk part – which I never knew. I will do some research if it is true or not. Heard it but never really pay attention to it until today.
I would be in Zeek if I like. If it works, why not. As long as I don’t get prosecuted. Its obvious that Zeek is a Ponzi and there are people who knows and do not want to admit it.
And the 80/20 is so not true. Thats not the only way to keep the points growing. But I know why 80/20 works, its more for the company than the affiliate.
What I do not understand is that in one of the topic on Bidify here on a different page. The author said that people would be prosecuted if Bidify turns out to be an illegal invesment or w/e. I think someone gave me a comment of how it is possible. I didn’t get to read it yet.
But how would you get prosecuted? The company is the one that is illegal, not me. I was just participating in it. So how would the affiliate get prosecuted. Maybe if you recruit someone to convince them that it is legal. So if an affiliate recruits no one, then would he be prosecuted?
I think it was either Chang or Jimmy who commented this with a wiki link about the prosecution. Can you summarize please, of why you think that is possible. To me, it makes no sense.
This just came up from the post above me since, I saw Bidify lol.
Only “governments” can run “legal Ponzi”, if there is such a thing. Ponzi schemes are illegal, PERIOD.
And if you think participating in such a scheme can’t hurt you as you’re not in the decision making process, think again. Just earlier this year, BurnLounge, a “music MLM”, was sued out of business by FTC, and several of its top promoters / affiliates / members / whatever are sued, along with its top execs, for fraud and bazillion other charges.
Here’s one promoter/member (not exec) who paid over 111,000 to settle the lawsuit.
http://www.wired.com/listening_post/2008/07/burnlounge-prom/
Here’s FTC’s final judgement ordered over 17 MILLION in refunds paid by execs and top three promoters
http://www.ftc.gov/opa/2012/03/burnlounge.shtm
I’ll preface by saying I haven’t read such horseshit in a long time… and that includes all the Speak Asia ‘ponzi schemes are legal’ discussions we’ve had over the last few months too.
@Joe
Where on Earth did you pull that from? It certainly wasn’t the Wikipedia excerpt you quoted.
Uh… not it isn’t. World Ventures is pretty much dead (except perhaps for some Asian markets where there’s a lag in recruitment drying up).
No son. That’s a Ponzi scheme.
What MLM does is facilitate the sale of products and service to legit customers. Everything else is a scam.
Did you know that none of this has to do with MLM or Zeek Rewards?
Experience is not a viable product or service.
No, but I can do my small bit to inform people and share my analysis. An educated world is a better world.
Especially when there’s people like you going around with your distorted views on what you think MLM should be.
Companies aren’t still in launch over a year after they launched… nor does future plans negate criminal liability for business models used in the past.
…and therein lies the rub.
What!!!! How can that be possible. Why do the affiliate get in trouble. They didn’t do anything. How are they accuse for fraud? If a person does not recruit, then they can not get sued right? Who sued the affiliates? What if you are not a top recruiter or anywhere in the top. Then you would be fine right? Ima read into the link you gave me now.
So JBP would be consider a Ponzi, so why aren’t they shut down?
So does that mean Zeek would soon be shut down? But that would be impossible as they would need someone in the Zeek HQ 24/7 for a while to see if it is or not.
If the government and everyone knew that the company was a ponzi scheme the whole time, why not shut it down a long time ago. Why not? Does it really take that long to shut down one company and bring them to court?
There are millions of Ponzi on the net, so what is taking so long? Why wait until the affiliate promote the company and then shut them down and then affiliate get into trouble.
It seems that only the top affiliates are the only one getting hurt, so the amateurs do not need to worry.
Also, it looks like if you are participating in a ponzi scheme and is not promoting but only there for the investment then there is no way you can get prosecuted. As it look like, you are not presenting any type of fraud.
Is this only in the U.S?
Participation, promotion and profiting off of ponzi schemes can bring about charges.
Not big enough to have attracted enough attention, based offshore (?) could be a number of reasons. First and foremost is a lack of manpower vs. the amount of crap launched. That usually means these things get shut down when they get big enough.
Up until that point the best people can do is educate themselves.
As for shutting Zeek down, if the authorities get involved the ‘waaah percentages are our proprietary secret!’ crap won’t cut it and they’ll just follow and track the money.
No. Here’s one in South Africa
https://behindmlm.com/companies/tvi-express/tvi-express-south-africa-owners-arrested/
And the same company, different people, in Indonesia
http://kschang.blogspot.com/2011/08/newsflash-tvi-express-leader-in-majene.html
And the same company, at their Indian headquarters
http://timesofindia.indiatimes.com/city/bangalore/2-held-for-taking-many-for-a-ride/articleshow/9241742.cms
Unfortunately, this company is still recruiting in Philippines.
Yes it does. Burnlounge case started in 2008, when FTC hit them with an investigation. They fought in court and the final judgement was in 2012.
In a similar case, “Business in Motion”, a Canadian Ponzi scheme, was investigated by the CBC (TV network) in 2009, but charges were not brought by police until 2011 (they haven’t gone to court yet, I think).
http://pyramidschemealert.org/canadian-police-bring-criminal-fraud-charges-against-mlm-business-in-motion/
Usually, they have to get to “millions of dollars” for the authorities to step in, and for people to start complaining.
(Guess what is ZeekReward’s annual revenue?)
Wow even profiting off a ponzi without promoting it,will get charged?
I don’t think the authorities will take in if Zeek stays “compliment.”
That would mean Bidify is more safe than Zeek since its offshore right? As they do not need any personal document in joining and upgrading.
The way I see it, the only people who will get prosecuted would be the top earners, because there are thousands and thousands of people. I don’t think the government will track every single person down.
I just can’t see how a government can charged an affilate if the affiliates are being manipulated in thinking it is a business. I don’t see how that is right. Sure some may know, but I think the majority actually think it is a business.
I don’t know about JBP, but JSS Trippler was declared illegal investment by CONSOB of Italy (their equivalent of American SEC)
http://www.patrickpretty.com/2012/04/23/urgent-bulletin-moving-jss-tripler-banned-by-italian-securities-regulator-consob-marketing-the-offering-is-prohibited-agency-announces/
@K. Chang
I have a question before I read those. To join Bidify, you need no document and the company does not report your earnings to the IRS or whatever you call them in their country.
Well, if Bidify get expose of being a Ponzi, then how would the government be able to prosecute affiliates and top earners, because they would have no evidence.
Wow this is amazing. I always thought that every business on Earth all started from some sort of Ponzi scheme; spending thousands on promotion and gathering agents to help.
If this is the case, then what is legal? And what online marketing is legal? This would mean every program online would be illegal.
What about small companies that ask for a couple of bucks to join? I know its a way to get leads, but are those legal?
I am sure those who are top recruiters know what is in store for them, but why are they working so hard to recruit so many if they have a higher risk being on top if the company turns out to be a illegal scheme.
In addition, why not just recruit a decent amount and earn a okay earning and be somewhere in the lower level to be more safe from the government in order to lower your risk of being prosecuted. Do these people really want to get into trouble?
I think you mean “compliant”, but you cannot be illegal and compliant at the same time. So far, all the “compliance” efforts are skin deep. Actual business changes are rather minimal.
No. The execs may be safer, but local participants are still gonna get arrested. In the TVI Express example I cited above, it’s based in India, yet other countries are arresting members in their own countries.
Probably not. The question is… did you turn a profit? And how much? If you profited, then you’re not really a victim, are you?
Ignorance is not a complete excuse. It may offer SOME protection, but prolonged participation in a business with plenty warning signs may not be believed, such as “1.5% ROI PER DAY!” (that’s over 300% in 90 days, or thousands of percent annually)
Wow it only been a few days ago that JSS has been illegal? Everything is happening so fast!!!
If JSS has been exposed, then that would mean JBP will be soon too – if its an illegal team, but I am sure the authorizes are doing checkups.
I’ll give you a very frank answer: I don’t know, as I am merely an amateur who has SOME sense of the subject I’m talking about, including history (unlike a lot of MLM fools). When I don’t know, I will tell you so.
Your answer will depend on which jurisdiction initiates the investigation, and may involve a “cease and desist” order that basically says “get out of town and don’t come back”.
Such an order was issued to “TVI Express” in the state of Georgia in the US back in August 2010, but no US members were ever prosecuted for TVI Express as far as I know.
This pattern is NOT universal. Australia, for example, went after “Team TVI Oz”, three members, even though there were plenty more members in TVI Express. That case was not resolved until 2011, when TVI Express was officially declared a pyramid scheme in Australia.
They don’t need to subpoena records from the business itself, though they could. All money have trails, esp. in the age of terrorism and money laundering. Government is very good tracking money.
JSS is illegal IN ITALY, and by extension, the entire European Union. That may lead to a state in the US shutting it down directly, but that hasn’t quite happened yet.
If you even profit a single penny, you will still be charged? What if you made million a year ago, and dropped out of the program a long time ago, and the company was exposed to be illegal, then would they get prosecuted?
Why can’t ignorance be a complete excuse. What if someone actually did not know it was a ponzi. What if people think it was legal and read no terms and condition or whatever.
I am sure there are many affilate like that and they see their friend make huge profit, why would they not join also? When you say warning signs? What do you mean? Like their terms and condition that you are suppose to read – but no one really reads?
Also what would be an excuse?
I read the links you cited, but it all seems to be just top recruiters and big earners. It don’t say anything about those who just started or not have been successful in those company.
How can you not be compliant and illegal at the same time? Well, I get it, but isn’t Zeek “illegal” and compliant at the same time? To me, its obvious that they are Ponzi, but the penny auction Zeekler is just an excuse to cover their scheme up. And they are compliant.
Sure we don’t know, but if they are compliant? Who in the world will check them up? Everyone think they are a business, and you see Quibids has been successful so wouldn’t the government and authority think that penny auction are big hits?
Quibids profits, Zeekler not a chance.
I am glad to have helped with your… education.
I don’t know about you or what programs online you’ve seen. There are plenty of legal ones, many are listed here on behindmlm
The key point is… are they making their profit by SELLING things (or services) and paying you out of profits made there? If not, it’s probably illegal.
Avon, Amway, NuSkin, Pampered Chef, etc. sell things. Multi-level is secondary.
I am learning a lot right now. BehindMLM was where it began and everything actually makes sense.
“They don’t need to subpoena records from the business itself, though they could. All money have trails, esp. in the age of terrorism and money laundering. Government is very good tracking money.”
Okay what if they don’t use a subpoena. How would they be able to track the money being sent if it was delivered to a Prepaid CC – as Bidify plans to do.
Those I have heard especially Amway. You are right, that does seem to be legal. Yet, I try to avoid looking into them, as they are not passive and required a lot of work to earn.
The one that seems to be illegal are the quickies and requires very little work.
@hi bye
Where there’s money, there’s a trail to follow.
You are half right, but you forgot about Physical money. Hard Cold Cash is not traceable – that is defiantly hard to track.
Which businesses pay out in physical cash?
@hi bye — You are correct, usually only the top level participants (those near the very top) are prosecuted, at least in the Western countries. Those that actively recruit lots and lots of people are the biggest targets.
However, the standards are set by law enforcement on how wide of a net they want to cast. I don’t have an answer for you in that regard. You’re talking about a very theoretical situation.
As for “ignorance” being an excuse or not, let’s set a theoretical situation. Let’s say you were in this “scam”, that you put in $250, recruit two people, and once you filled a “matrix” of 8 levels you get $10000. You got like 50000 already. If you appear before a judge, and have to respond to this question: “So you are telling me that the thought ‘it’s too good to be true’ NEVER crossed your mind. Is that correct?” What would be your response?
The point I’m trying to make is there is a difference between “believable ignorance” and “total ignorance”. If you are completely oblivious to warning signs, like “no product”, “pays out way too much money” (double your money in 1 month!), “recruit for money”, “unknown leaders”, and so on, or just the most basic “isn’t it too good to be true”, you may not be believed when you profess your innocence, esp. when you probably recruited dozens and dozens of people into the scheme (theoretically, of course).
As for ZeekRewards is compliant or not, I don’t know if it’s compliant. They hired compliance lawyers to review their business practices, and instituted some changes. Whether this will save them from being investigated, I don’t know.
As for ZeekRewards is legal or not, I don’t know either. It needs to answer a LOT of questions regarding customers vs. affiliates revenue ratio, how is it paying out usurious rates of return, why are there these anomalous bids (spending 1410 bids for $100 cash) and tons of other stuff. It has tons of question marks hanging overhead, and their behavior, like “6 banned nations” is NOT helping. In fact, it shares some VERY interesting similarities with a scam known as Ad Surf Daily.
The only one who CAN determine whether they are compliant or not would be a regulatory agency, which would be SEC and the FTC in the US. Though the local state attorneys general may play a role as well if they choose to launch their own investigations independent of any Federal actions.
I’m ambivalent about Quibids. At first glance it appears to be a clone of Zeekler / ZeekRewards. Furthermore, the owner had a run-in with the law in the US before. So I wouldn’t put any money in it either.
“Which businesses pay out in physical cash?”
I know one, hector vector. Sprint, Verizon, etc – but those I am not sure if cash may be an option.
Credit cards are still issued by banks.
I know one, hector vector. Sprint, Verizon, etc – but those I am not sure if cash may be an option.
They ain’t paying their employees with untraceable cash. They themselves have to file tax returns and what not.
And nobody is keeping salary level cash on hand, it gets converted electronically somewhere.
There’s always a trail to follow.
Yes, ‘its too good to be true’ may had come across my mind, but there are people who never used the internet before. Worked hard for their entire life. So hard, that you do not know and saved money up.
Then they were first introduce to lets say Zeek. They probably may have heard many many times over and over again that the internet does make dreams come true, and maybe they would believe it. And for that, they might had think Zeek?
Okay horrible explanation but do you kind of get what I mean? Because there are a lot of rumors.
Can you tell me like two sentence what happen to Ad Surf Daily?
Really? it had a run-in with the law? How so, I thought it was just a biding site. I thought there was no affiliate opportunity involved.
I have checked Quibids after Zeek, I don’t think there is an affiliate service. I think the company just advertise on their own – for all I know at least.
“There ain’t no free lunch.” You either make money with effort (either physical or smarts), or you make money with money (passive investment).
Exactly. “Make Cash Quick” is almost always a scam.
Ad Surf Daily? Short version: Put in money (buy “advertising packs”) click on at least one ad per day, earn 1% “rebate” daily (0.5% on weekends). Got busted as Ponzi scheme. Feds seized like 70+ million dollars in 2008 from the company and refunded them to victims in 2011.
As for bidify, read this, scroll down to Bidify.com
http://www.mlmwatchdog.com/SCAMS_BAD_MLMS_2012.html
Right, I forgot they need to file.
Well, if you are some sort of worker who earn tips, they actually can lie about their total income. I mean cash don’t always go to the bank. People use cash everyday, do you really think they will all eventually go to the bank. What about drug dealers.
Okay going a little off topic lol. But I do not agree that cash is always traceable, that is, physical cash.
But you are right about all MLM money is somehow traceable I guess, since there is a receipt for everything.
The “simple and naive” person you described would have never been able to recruit over 1000 people (8 level matrix = over 200 people each) directly or indirectly to get over $50000 in profit from mere recruiting.
Yes, I am aware of that. And you know, Frode is actually part of the company. Like for real, I know someone from skype that went on a road trip with Frode.
I know BehindMLM did an analysis to see if he is with the company, but it seems to be true. Affiliates knows him in real life, but he said he has change. Then again, words most of the time don’t mean anything without action.
That is just what I can’t seem to picture and is the right thing to do. Affiliate are the one who should be innocent since not all affiliates has knowledge of an illegal scheme.
Good, you are discounting “hearsay” already. 🙂
I don’t think it is impossible, but almost impossible. But what if it turns out there was someone that did. What if he has a good friend helping him?
Or the other excuse could be that it was the internet. Everything can become reality. What if you said, I actually thought money was easy to earn, since I saw a whole bunch of banners on the internet and I actually believed it. Like it was impossible to communicate socially online with Facebook – comparing it with technology.
The thing is that even though they witness this person face to face. They still choose to do business with him. They seem to believe that he have changed. Or an opportunity for them, but they would risk of being prosecuted, but its offshore so may not be as harsh or consequent. IDK.
But who knows.
Although here’s something bring up your spirits… US authorities chased down a Ponzi scammer all the way to Thailand and brought him back to face trial.
http://www.patrickpretty.com/2012/04/25/update-john-chiyuan-lee-scammer-whose-case-shattered-ponzi-board-myth-sentenced-to-california-state-prison-and-ordered-to-make-restitution/
The funny thing: his Ponzi scheme was less than 2 million dollars.
OMG, I think the U.S are over-reacting; almost for everything. Wow they are serious. Looks like its more serious for the Ponzi Scammer than the affilates.
I just hope Zeek is legal and not a Ponzi – even though I think it is.
Some people are like that: they can convince you to do almost anything once they get in your face. I believe we call them “demagogues”.
I’ve seen one guy (fortunately, not in MLM) described as “If you catch him in bed with your wife, in ten minutes you’ll be thanking him for his services and giving him an extra hour while you smoke outside.” (may not be exact quote)
People also behave differently if they’re face to face. Read this story from NPR, about a guy, who promised his dad to NEVER CHEAT ANYONE, yet 20 years later, faced the same judge that sentenced his dad for fraud, for… well, fraud.
He said that when he resorted to fraud to save his company, he found people in other places willing to help, as he approached them in person.
http://www.npr.org/blogs/money/2012/04/17/150815268/why-people-do-bad-things
I don’t mean to sound rude, but I think you’re… avoiding the issue, as you just keep coming back with
“but what if _____”
“but what if _____”
…
The point is very simple: there is “believable ignorance”. Can your theoretical “naive person” actually convince a judge and/or jury that he’s so naive that he NEVER suspected he was being lied to, and yet so successful to have attracted the attention of the law?
The point is he’s guilty, even if he doesn’t know he committed a crime at the time. That’s the nature of Ponzi and pyramid schemes.
In the Burnlounge case, one convicted was a former college football star Rob DeBoer, who was described as “all around All American good guy”, who believed in the free enterprise system. He’s pretty close to this “naive person” you described.
Yet he was also convicted of promoting a pyramid scheme, and pulled 45 people into it, and got a lot of money out of it.
He probably meant Prepaid Cards (Debet Cards). They are not directly connected to any ‘normal’ bank accounts, the card itself is like a bank account (using the card number as the only identifier for the client in transactions).
The cards can be prepaid with a minimum amount, and can be loaded with additonal money (from PayPal, STP, etc. or from a normal bank account). They can be used in any ATM to withdraw money, just like a credit card.
They are issued from Visa and MasterCard
* through a bank or similar institution
* through a prepaid card company * KYC is handled here
* through a sales organisation
* to the end user
KYC Know Your Client will be handled by one of the middlemen between the clients and the bank.
In Network Marketing, you can use the prepaid cards as retailable ‘products’.
Frode Jørgensen has used Towah Prepaid Card in a few of his previous projects, owned by Tor Anders Petterøe, a former top leader in WGI World Games Inc. (a James Gregor Kennedy scam). The ‘bank’ connected to Towah cards is Newcastle Building Society (when I checked it in 2009/2010).
One correction to the post about Prepaid Cards.
Towah seems to require membership, and money can be uploaded through a member account in Towah – NOT through the external accounts or solutions I suggested.
When I checked it in 2009/2010 it was only a superficially check. One of the disadvantages I pointed out was the customers themselves, being too many customers with ‘special needs’ and too few ‘normal customers’.
‘Normal customers’ is considered to be people looking for an electronic payment solution in general, while ‘special needs’ is considered to be people looking for a solution to separate parts of their transactions from their normal bank accounts (as a method for tax evasion or other purposes).
Reloadable VISA or American Express “prepaid cards” in the US must still be issued by a bank, even if it’s just sold in stores and such and can be reloaded elsewhere.
For example, “Green Dot” prepaid cards in the US, while handled by the Green Dot Corp, and sold in Walgreens convenience and drug stores, was actually issued by Synovus Bank.
And a bank keeps very good records. 🙂
Or issued by something similar to a bank with a banking license, like a Building Society. Some of them have a range of banking services for their members, but they are not ordinary banks.
I didn’t check any details for Towah, I only checked whether or not the business model was plausible and legitime. The connection with Newcastle Building Society was plausible, so the business model is probably legitime. The business idea also made some sense from NBS’ viewpoint as far as I could see, since prepaid cards have a very low risk compared to credit cards.
I did also check whether or not specially branded MasterCard PrePaid Cards were legitime products, and they were. MasterCard had a price list for specially branded cards. I did also find a few competitors to Towah in the market for specially branded debetcards.
Prepaid cards CAN be used for tax evasion purposes, but their primary function is to act as a payment solution. If used for tax evasion they will need some active or passive involvment from the user. The main problem will be the user, not the card itself.
45 people is a lot for a marketing? I thought those who get prosecuted would have hundreds or thousands.
So you are saying that Prepaid debit card from Towah are not really trackable in a way since it has its own seperate company?
Income paid to a prepaid card from a foreign country won’t show up as taxable income. The main problem is when too many people are using the same solution to avoid taxes, it will gradually increase the risk.
My main concern about Towah wasn’t the business idea, it was the customers. When they market the cards as “designed for Network Marketing companies” and “people with special needs”, they will mostly attract one specific group of people.
Network Marketing has too many people eager to post “income proofs” on the internet, or bragging on forums about “tax free income” and about the solutions they are using.
When I check something, I will usually try to detect the primary function, or “the true nature of something”. Prepaid cards are primarily designed to act as a payment solution, in a similar way as credit cards, cash and other payment solutions.
The solution is legal in itself. Any illegal use will usually be related to the user, not to the solution.
You’ll have to read the indictment and final judgment yourself, but I believe each of those 45 put up several thousands, perhaps tens of thousands of dollars.
@Norway so does that mean that people can avoid reporting their earning to the IRS since it is tax evasion would that also mean it is untraceable then
@Chang he must have been a topic dog who recruited the bests because 45 is not a lot the way I see it
Not really. If ZeekRewards reported it as expense on their end, then they would have filed 1099 (as clearly it’s not W-2). If the 1099 issued goes “unused”, then there will be problem for whoever’s name on the 1099.
If ZeekRewards do NOT report it as expense, then they can’t claim it as expense (and thus, their income would look a lot better than it really is).
Ok so after looking at your chart regarding how 100 bids could turn into 25600 bids in two years makes me wonder if that is actually the case.
I know after the original 100 expire in 90 days(the original 100 drops off)and you are left with what you accumulated over the 90 days. Every day after that the points you earned on that same day 90 days before drops off. So what I’m getting at is does your chart up above take into consideration that points drop off daily after the first 90 days?
The reason I ask this is because there are no points dropping off daily in the first 3 months and your chart seems to multiply with that exact number (the first 90 days)… which to me doesn’t make sense (just my opinion, I’m not a math wiz…)
Has there ever been any talk about capping the amount of VIP bids you can accumulate in your account?
@Chang
I meant Bidify though. They said they do not report any earnings from affilates and since Towah Prepaid CC seems to be able to evade taxes – according to Norway – then wouldn’t that mean people don’t have to report anything to the IRS?
Wouldn’t that be untraceable, even though they don’t even hold any document?
@Jack
I’ll let someone else crunch the numbers, but just thought I point out it’s not “my” chart. Rather it’s an example (taken verbatim) of how Zeek Rewards is being marketed to prospective new members.
If that maths is wrong than that only compounds the problem (no pun intended).
I recreated such a scenario, complete with 1.5% profit share, 100% reinvestment, points expiration, etc. and carries to max decimal places in spreadsheet. I came up with over 26000, (26470.1897980163 to be exact) I imagine if you round off at 2 decimal places you may accumulate a bit less.
Absolutely. The 1.5% growth and 100% reinvestment outpaces the points dropping off. The “balance” is about 1.1%. At 1.1%, the total value barely edges over 200 and grows from there VERY VERY slowly.
Here’s one part of the sheet I came up with at 1.1%
Daily Interest 1.10%
Day Start Expire Point Expired Actual
1 100 91 1.1 0 101.1
2 101.1 92 1.1121 0 102.21
3 102.21 93 1.1243 0 103.33
and here’s the 90 day cutoff
89 261.87 179 2.88 0 264.76
90 264.76 180 2.91 0 267.67
91 267.67 181 2.94 100 170.61
92 170.61 182 1.87 1.1 171.39
93 171.39 183 1.88 1.1121 172.16
The balanced reaches for 200 after like 2 years. I have to chop off decimals to fit them in table here. Your numbers should be close but may not be exact.
Results will also vary if you add then expire, or expire THEN add.
Looking at a 2-year compounded interest scenario, where 100% is reinvested, and you earn an average of 1.5%:
Day 1: Start with 100 free bonus points.
Day 60: 100 bonus points expire, remaining bonus points are converted to VIP points. You now have to spend $20 ($10 to buy 10 VIP bids to giveaway, $10 for silver subscription that you have to pay monthly, and you need some retail customers – go create some fake ones with a disposable email address). Total points = 151.
Day 182: You’ve compounded for 6 months total, is’t been 4 months since you’ve been a free member. Points = 512. Total membership fees paid = $50. Bids purchased = $10.
Day 365: You’ve been with ZR a full year. Points = 1742 (3.4x higher than 6 months ago). Fees paid = $110. Bids purchased = $10.
Day 547: You’ve been with ZR 18-months. Points = 6165 (3.54x higher than 6 months ago). Fees paid = $170. Bids purchased = $10.
Day 730: You’ve been with ZR 24-months. Points = 22,007 (3.57x higher than 6 months ago). Fees paid = $230. Bids purchased = $10.
Now you can either start withdrawing all 100% over the next 90-days which would net you less than $1 per point (due to daily point expiration of bids after 90-days). Or you switch to 20% cashout and reinvest 80%, hoping that sustains the point balance.
The above completely depends on the average rate staying at 1.5%. The “jig will be up” when ZR starts moving the rate down in response to increased cash out requests or less incoming revenue. If you think ZR will be around another 24 months + time to cash out, go for it.
Now if you replace the above 100 bonus points with say $10k in initial purchase, your point balance after 2 years is 2,196,583.
But how many people are really going to keep reinvesting at 100%? Many start shifting to 80/20 between 35k to 50k in VIP points. When you withdraw at 80/20, it will take you 5x longer to withdraw your money than if you withdrew over 90-days, but you have the benefit of maintaining your point balance “indefinitely”.
Ok so after the original 3 months you are up 72.16 VIP points. After that they accumulate at a slower rate because of the points dropping off.. Still seems too good to be true to reach that crazy amount in two years… I would love to know the formula you use in Excel to account for the points dropping off..
I don’t mean to be anal about this I just like to know exactly how things work…
About my question above as to whether they talked about capping the total number of VIP points in ones account. Wouldn’t that make it more sustainable for the long run?
I have 1 more question..
How many bids can you buy with your own money at the different levels… Silver, gold, Diamond I have looked all over the place and can’t find the answer to this… Please don’t guess.. A link to it would be great(if links are allowed) Thanks in advance!
Thank you for your detailed description but it still doesn’t look like you are accounting for points dropping off every day after the original 150 days other than the original 100 at day 60 (because you are working with the bonus points).
You also need to drop off the bonus points that were given to you at day 60 at day 90… Then after that you need to drop off the points you earned daily exactly every 90 days after earning them…. Maybe Im missing something there…
Sorry I meant to say “You also need to drop off the bonus poits that were given to you at day 60 at day 150”
The formula is pretty simple. Just setup the numbers in 6 columns as I did.
Put up one separate cell as “profit share percentage”
Then 6 columns
Day
Starting balance (start at whatever)
Expires on day = Day + 90
profit share =
Actually Expired points on this day (0 for first 90 days, then then 91st day = day 1’s balance, 92nd day = profit share of day 1 and so on
Net points = starting – expired points + profit share
Net points then becomes next day’s starting balance, repeat ad infinitum. Just copy the formula down and debug it a little.
I am not in ZR. I only created the speadsheet to see how this works. With 1.1%, the points dropping off eventually matches the points gained, even at 100% reinvestment. Though the “net gain” will allow it to grow very very slightly.
I want you to recreate it yourself so I can’t be guilty of passing you a rigged set of numbers, and for everybody to see how the formula *seems* to work, but logically makes little sense. (Why base the reward on amount of money you put in, instead of amount of work you did?)
I’ve updated my own review of Zeekrewards to explain the different problems Zeekrewards faces:
* possible Ponzi scheme
* possible unregistered security / investment
* possible illegal lottery
* possible incomplete/bad tax advice
* unexplained “banning” of countries
http://kschang.hubpages.com/hub/Analyzing-ZeekRewards-is-it-a-legal-and-viable-business-and-can-it-provide-long-term-income-for-you
Jimmy have previous commented that there are a handful of people with 500000 points or more (one of them is probably the VP of Ops, Dawn, who would be other two be, hmmm???)
IMHO, they won’t cap the points as that would interrupt their own cash flow! 🙂
Silver max purchase is 1,000 bids; Gold max is 5,000 bids; and Diamond max is 10,000 bids with external funds.
There is a little about in the FAQs but only mentions the overall 10,000 bids max. Otherwise, an affiliate needs to log into to their back office and will see it mentioned in the Getting Started Guide.
There is also an article at ZeekRewardsNews.com that announces the new purchase limits that started in November 2011. Just type in ‘Policy Updates’ in their search box for the article.
Ok thanks Ill try to play with that a bit…
If anyone can answer this question.
Are affiliates responsible for their customers – how they decide to sign up; using a proxy or not; violating the terms and conditions.
Ok so If I decided to buy 10000 bids all at once how many VIP bids would I have in two years at 100 percent repurchase? Roughly 100 times 26000 = 2600000 VIP points not accounting for any commissions?
I’m basing this on your 100 staring bids formula and 100 goes into 10000 100 times. At that point could I take out 7280 a day using the 80/20 rule? Please tell me Im wrong here…. LOL
I should mention I used the 1.4 daily profit share number when determining that 7280…
I got 2329201.89241554 at end of day 730
Power of compound interest. 🙂
At that point, you’re gaining 32427.5263962738 per day and 19477.5194288585 are expiring. So your “net gain” is 12950 (roughly), which is 40% of 32427 (roughly)
So you can actually do about 70/30 and still “make money”, theoretically.
The question is… will ZR be around that long? Do you really think there’s THAT much real profit from the “retail customers” to pay out this much, much less couple HUNDRED other people doing this? Remember, there are already people with 500000 pts, and they are way ahead of you.
I guess if they are actually sharing half of the daily profit daily with affiliates that are mostly repurchasing 100% bids every day that is a lot of money recirculating back into the program each day.
Each day it is getting cut in half as well because the company keeps 50%. That money plus the Zeekler auction profits including bids bought, bids being purchased by members with outside funds and monthly subscription fees would probably keep this going for awhile.
I definitely can’t see it sustaining itself 10 years down the road because it has to level off eventually.(in my opinion anyway)
You have to wonder though how the heck are all those bids that are given away ever going to be used in the run of a month on just a few qualifying penny auctions per day you can use them on. I wonder how many new bids are given away daily at this point…
The hidden observation here isn’t so much asking the question about sustainability, it’s the the claim that Zeek pays out 50% of profits daily. Just looking at that one projection, and then multiplying by hundreds of thousands, if you took Zeek at its word and assume the daily payouts are indeed 50% of net profits, wouldn’t Zeek be generating fantastic revenues?
You know, enough revenue to hire a competent IT staff so upgrades don’t require hours of downtime during peak business hours for weeks.
Enough revenue so the cut & paste classified ads don’t have spelling hours.
Enough revenue for a back office or penny auction web page that isn’t circa 1999.
Enough revenue to have a “red carpet event” at a high end hotel and not the Holiday Inn Express.
Etc, etc, etc.
Exactly… Are there actually any NON-AFFILIATE customers buying bids? Because only those are “real profits”, so to speak.
If affiliates are getting paid mostly from other affiliates buying bids, then it’s a PONZI SCHEME, because it’s basically “robbing Peter to pay Paul”. There is no “profit” to be shared, merely money shuffled from members to members (and company taking 50% cut every move).
As we don’t know how many “real customers” (i.e. non-affiliate) are there, we have NO IDEA whether ZeekRewards is sustainable or not. Personally, I don’t see it last more then 24 months, 36 if they’re lucky.
Guys, obviously it’s fun talking about ZeekRewards – and we actually are socializing here after all.
“If nobody is talking about you, either you are too uninteresting or too boring”. ZR, definitely is NOT.
Oz and K. Chang have been sharing here very important insights and rumination, which many of us here truly appreciate. As you might guess, myself included.
I just want to ask a question:
Has any of the dishonestly violated or suffering affiliates tried to consult authorities like FTC on this subject?
Because the bottom line in our human world is this: There are rules – there is law.
As long as something or someone complies with the rules and the law, you can not do anything to stop the something or someone.
“You are not a robber unless caught red-handed”.
As we know, cigarette business is a total damage to humanity – and so are many other things as well.
Can anyone sue companies for spreading cancer instead of love and selling “death” as their ultimate product?
Now, try to understand my point guys. I am trying to be most neutral here.
I see ZR as a revolutionary, super fun and super cool business model – no offence guys. I want things to be fair and clear, but another one of the unwritten rule of the world is:
“When the overwhelming majority is having fun and enjoying it, the minority can not stop it.”
Coca Cola, cigarettes, much modern junk food belongs in that category.
Now I am not saying that to imply that ZR is bad, but only a minority can understand that. No. What I am actually saying is: ZR is great and a minority does not like it.
Sometimes new things are born – those things revolutionize the future and as a rule, it is hard to accept it in the beginning.
ZR might be a hybrid of marketing models, and a combination of illegal and legal elements that form together a new, super-cool LEGAL model, and so it remains, unless proven otherwise by AUTHORITIES.
One can not be accused of being a murderer only because a corpse was found in the room next door. Investigation is done. Here too. So far, nothing. ZR is ROCK SOLID and affiliates are happy (excluding the banned countries, part of which were banned understandably, the other part being UNCLEAR or rather, the details INACCESSIBLE to simple mortals)
SO, has anyone tried to get an AUTHORITY’s opinion on ZR besides the fun socializing with Oz and other guys that do not necessarily know the business from inside but take the freedom to criticize it as if they were a 100% sure of their correctness?
Oz, why don’t you start your own ZR business just for fun and see what it REALLY is? That would be cool. You are a great guy and I would even gladly sponsor you myself.
When Authorities *do* get an opinion, ZR will be frozen and everybody will get their money frozen along with it.
When Ad Surf Daily went down in 2008 due to FTC action, no refund was issued until 2011, and only because Feds seized ASD’s bank account back then and had a court action of forfeiture.
Same with BurnLounge. Sued by FTC in 2008, final judgement in 2012. Defendants, including three top promoters AND company execs and company ordered to pay back TENS OF MILLIONS.
If you really want to take the risk on the PRESUMPTION that ZeekRewards is “innocent until proven guilty”, go right ahead. Just keep in mind that the risk is much greater than you may suspect.
As for the rest of your non-sensical declarations:
“You’re not a robber unless you’re caught red-handed”…
Bogus. You can be convicted of murder even without a body. UK did that in 1954, and US did that in 1960. Circumstantial evidence is plenty enough.
“When the overwhelming majority is having fun and enjoying it, the minority can not stop it.”
Bogus. Governments do that all the time. Junk food and sodas have been abolished from plenty of schools. Cigarettes are taxed and outlawed bit by bit. Can’t smoke inside. Can’t smoke near entrances. Blah blah blah.
The rest of your argument is basically “I’ll enjoy ZeekRewards which can make me money.” With the unstated corollary “I don’t give a **** whether it’s illegal, even though I see all the warning signs.”
Well, good luck to ya. Remember, top promoters in a Ponzi scheme can get burned just like the corporate folks. Go read Burn Lounge verdict that came out in March 2012. I hope you don’t make it big, at least not big enough to attract the Feds.
Hats off to Joe though. At least he put some thoughts into his missive, something his fellow Wazzub-ies seem to lack. Most exchanges with Wazzub-ies end up like this:
Wazzub-ie: You are wrong!
Critics: care to explain why?
Wazzub-ie: You just are! You must be working for ______ out to destroy Wazzub!
Critics: So you don’t know why I am wrong?
Wazzub-ie: You #$&(%)*$!
I like this scenerio….
mlm cultist: OZ, Jimmy, K. Chang, M. Norway, you guys are just jealous! If you could only think of this great idea you would be raking in the cash like me. But you guys are dummies!
Im a marketing genius doing so much hard work and you guys prolly flip burgers! Zeek is the greatest thing ever and you’re to damn stupid to see it!!!
For a second you got me going there, gen3benz. 😉
But even MLM Attorney Kevin Thompson have realized it’s an illusion… self deception, if you will.
http://themlmattorney.com/self-deception-a-cancer-holding-the-mlm-industry-back
I made a minor correction to your statement, replacing “money” with “balance”. This is the major flaw in the business model, when they are counting the balance as money and are using it to calculate revenue and profit.
When people are reinvesting their balance, ZeekRewards will only be able to pay balance. When people are investing real money, ZeekRewards will be able to pay out real money. Most people will end up with worthless points in their accounts when investments in real money slows down.
The real value of your balance will disappear faster than the daily profit share is able to increase it. The value will decrease each time someone withdraws money from the system.
Joe, ZR’s business model isn’t that hard to analyse. If you’re expecting some miracle to happen here, then you should probably stick to religion rather than business. You are simply lazy when you’re expecting miracles.
We will usually NOT contact authorities, but we did check the facts about the banning of 6 countries with OFAC. This website is meant to be a neutral review site for MLM, not a scam chaser site. Contacts with gov’t agencies are mostly to GET information, not to GIVE it.
I will only recommend people to contact gov’t agencies if they specifically are asking for a solution like that. They will have to ASK for it first in one way or another.
@Joe
All you need is a business model to analyse, and that we have.
Forget about compliance or ‘the company says blahblahblah’, what about analysis of the buisness model is wrong?
The purpose of BehindMLM isn’t to shut down companies, it’s to analyse business models and share information. If you don’t like the information… well, fortunately that doesn’t affect its accuracy or relevancy.
No thanks, I’m happy where I am.
Ok I see what you did there…. But isn’t the money converted to points when you buy bids with it?
That is the daily profit share awarded to you based on how many VIP points you have… So really it is money going back into the system since you have the option to take it out as cash or purchase new bids with it to receive VIP points.
So in fact it is money going back into the system.. If tons of people decided to take that daily profit out then the daily reward percentage would be lower.. This is how I see it..
And if the reward percentage drops low enough that people can’t at least sustain their VIP point balances via re-investment over a 90 day rolling period…KABOOM!
(we’ve had this discussion before with other ZR affiliates).
That’s an assumption, actually, that VIP points are based on “real money”.
The reality is VIP Points are not based on ANYTHING other than whatever’s in Burks’ head. The fact that they can just cancel, with no reason, VIP point balance of unknown number of affiliates in foreign countries should illustrate that quite clearly.
In other words, the money was traded for empty promises (that can be broken at any time).
The bids are fixed to real money but only when it comes to purchasing. 1 VIP bid is $1.
After the bids are effectively converted into points for the ROI though, then it’s raffertys rules as to how much of a ROI you get on the dollar.
Yes but chances are if this is growing as fast as they say it is then that scenario probably wouldn’t happen…
This seems like a good system as long as it keeps growing and people don’t start taking out 100% of their daily rewards…. and why would they?
I also realize that it seems crazy and too good to be true to have 26000 VIP points after 2 years starting with 100 bids but I think it would be safe to say most people would miss placing that daily add quite a few times in that time frame slowing down the process..
The perfect case scenario is out there but I doubt it is achieved by most of the people trying to milk the system with those 100 bonus points. I’m pretty sure they would just give up after awhile..
I’m sure if there are any Zeekrewarders reading this with at least 10 people in their Matrix they would confirm this scenario having a few inactive spots in their down line..
Yes… wouldn’t it be a wonderful world if we could all join Ponzi schemes and enjoy infinity percentage ROIs on our investments…
No business, Ponzi or otherwise has indefinite growth – time to wake up son.
They don’t need to. With VIP points having to increase to stop people jumping ship, so too do the daily payouts to ensure people make enough to re-invest in enough VIP points to sustain and grow their balances.
Overtime this grows… and eventually Zeek won’t be able to pay out enough. People don’t need to cash out for ZR to fail, the cashing out is an after effect of not paying out enough such that people start to experience a loss on their overall VIP point balance in a 90 day rolling period.
By what… a few days/weeks? Still doesn’t solve the problem of sustainability.
If you lived in some crappy third world country and your alternative was working 24 hours a day in a factory making iPhones, would you give up?
I think Ive just been told… and you called me son… haha
I meant to say I didn’t think that scenario would happen any time soon…. Down the road maybe…..
Well I’m not going to shy away from Zeekrewards just yet. I’m not going to remortgage my house to buy bids either.. haha
So as long as you make your money, fuck ’em right?
Had this discussion with Zeek Rewards affiliates too. We discuss opportunities in whole here with disregard to individual finances.
Your concerns and analysis might have different objectives.
Hey the language…..
I’m not saying its perfect and I’m not asking/encouraging anybody to join. Just my opinions.
Sorry if I offended…
The option to cash it out as money doesn’t make it similar to money. ZeekReward’s business model is based on a scenario where people put in $10K in money, and let the balance grow to 50K before they start to withdraw money following a 20/80 or 10/90 plan, or even put in some additional money.
If your initial investment was $10K, it won’t be worth more than $10K even if your VIP balance grows to 50K, if the profit share is based solely on your own reinvestments. The balance grows, but the money doesn’t grow when people are reinvesting points instead of money.
This is the major flaw in ZeekRewards’ business model, when they are counting reinvestments (derived from points) as “revenue” and “profit”. Revenue and profit should only be counted from external customers, paying for bids in real money.
To make your $10K investment grow to $50K, you’ll need to drive $80K-$120K worth of external customers to the auctions, real retail customers buying bids for money. ZeekRewards is following an opposite idea, they are mostly trying to attract new investors to the investment scheme rather than retail customers to the auctions.
The pool of VIP Points is probably 10 to 20 times larger than the pool of money, or even worse than that. It means that new investors immediately will lose most of the value when they are investing money. Their investments will be used to pay off old investors.
ZeekRewards will collapse when investments from new investors now longer are able to support payouts to old investors, when the balance between money IN / money OUT turns red instead of black. They will be able to support it for some time using accumulated money, but the business model is deemed to collapse.
Before a collapse happens, you can probably expect major changes in the Terms and Conditions, like capping the amount you can withdraw per week and other methods trying to delay a collapse. You can probably expect other changes too, making it impossible to withdraw money for groups of investors.
Jack, you’ve been lulled by the numbers. Remember, VIP Points IS NOT MONEY. It “entitles you” to money, but only in dribbles (the daily profit share).
They *say* it’s based on profits, but there are plenty of signs that suggest it may NOT be, such as unaffected profit during days with outages and so on, or this sudden “cancellation and refund” of all the international affiliates.
Furthermore, without published stats of how many “customers” (non-affiliates) are there feeding money into Zeekler, who knows how much real profits this thing really earns? And how much is just affiliates throwing in money in hopes of growing their VIP points?
If it doesn’t bother you that you don’t know where the money’s coming from, then why are you asking these questions?
Another factor to consider…
Can the VIP point pool be allowed to grow indefinitely? It’s easy to set enough reinvestment to maintain VIP point level (80/20 or even 70/30 depending on your target horizon). But if you’re not growing, other people are. So the VIP point pool is ever expanding, at some fraction of the profit share.
Let’s make an assumption: that the “average” reinvestment is 80/20, and the average profit is 1.5%.
80% of 1.5% is 1.2%. So VIP points pool of EVERYBODY will grow at 1.2% PER DAY, which is MORE THAN that 1.1% breakeven I’ve shown you before. Which means VIP points pool will keep growing, unless AVGREIN * PROFITSHARE < 1.1%. And we are NOT counting any new enrollments (we are counting expired points with that 1.1 breakeven)
Can the PROFIT of Zeekler maintain this DAILY increase? Or can new enrollments offset any dips below this 1.1% threshold?
If new enrolls is needed to offset this threshold, that proves that Zeekrewards is NOT self-sustaining. Without new enrollments, the whole thing will collapse. That means it's a Ponzi scheme.
Or are we supposed to believe that Zeekler's profits will match the growing VIP point pool growth INDEFINITELY?
Or the average reinvestment and profitshare will NEVER fall below the threshold to maintain that 1.1% breakeven?
Even if you consider it from mathematical point of view, you should realize that there are TOO MANY VARIABLES you just do NOT know that will affect the viability of this thing.
And the odds of Zeek got hit by FTC as a Ponzi scheme or unregistered securities is incalculable. Yet it is big enough for them to spend tens of thousands of dollars to hire compliance teams. (and even THAT haven't affected profitability)
The odds are NOT in your favor. Remember, if each of the variables has only 1% chance of happening, if you have ten of them, you are down to 90.4% of it not happening.
And even if Paul Burks publishes these stats, we would immediately call them meaningless because for every retail dollar spent by a retail penny auction customer, the sponsoring VIP members get 20% commission PLUS matching VIP points per dollar spent.
The only way for ZR to bring in NET REVENUE is to not have to pay matching VIP points on retail purchases.
How many retail customers are there that buy penny auction bids who are not affiliates, AND also have no sponsoring affiliate who will receive matching VIP points? The number of real retail penny auction customers is small enough as it is, let alone those that bring in NET REVENUE with no matching VIP points.
I tried to get Troy Dooly to address this fundamental flaw. My suspicion is that Zeek knows affiliates are purchasing retail bids as “their own customer” (mom, dad, friend, fake customer account) just for VIP points and they are subtly encouraging it so they can later claim “look at all this retail revenue” (but don’t look at all the VIP points we gave away).
@Jimmy — the amount of money spent by affiliates, vs. non-affiliates into Zeekler would IMMEDIATELY prove or disprove whether ZeekRewards is a Ponzi scheme or not. VIP points aren’t even needed for the calculation.
According to Nehra (the guy Zeek hired), business must have real division between customers (non-member) and members, and by extension, real money spent by customers to go into the system as profit then back out to members.
It is very much like SpeakAsia: do they have another source of revenue other than panelists join fees? If not, it’s clearly a Ponzi scheme.
ZeekRewards put a layer in between: the bids. However, if there are no outside customers, only members bidding on stuff which is paid out to other members as “profit”, then the whole thing is merely a DISGUISED Ponzi.
The only thing VIP Points affect is how this profit is divvied up, when we need to know how much EXTERNAL revenue it is getting (from real non-member bidders).
One thing that bothers me is the location address from Zeekrewards.com claims at 803 West Center St., Lexington, NC 27292
I used google map and I don’t think that address exist.
Thoughts?
Zeek are holding monthly events and the are not “virtual” people.
In case you’ve done good work searching, it is a bit intriguing though, even that the motive behind it can not be to remain a faceless, body-less corporation.
I have added something to your original statement. Zeekler has probably lots of “customers” spending bids in auctions, even customers paying for the bids (i.e. family members using retail bids for affiliates, in order for them to earn commissions and VIP Points).
Only a few of the customers are able to generate any real profit, making the pool of money grow without growing the pool of VIP Points.
ZeekRewards’ most important problem is the huge and growing pool of VIP Points, compared to the smaller pool of money. These two pools should have an exactly equal size.
Well, M_Norway, the only thing VIP points affects is “profit” distribution: the more points you have, the more $$$ you get. It doesn’t change the SIZE of the overall profit. If there is no income from non-affiliate customers, then it’s a Ponzi.
As ZeekRewards *do* supposedly give out VIP points based on “customer purchases” (we’ll need to check with Jimmy or such) your criteria may be somewhat flawed. Easier to leave it out. 🙂
Then each ZR member is actually running on a MUCH LOWER PROFIT LEVEL then expected, as they (and whoever they recruited for real) are basically paying themselves. Which would make it a Ponzi scheme.
If you earned $500 in commission, but spent $2500 on buying bids and whatnot, you have a net loss of $2000. But you have gained some VIP Points, which may entitle you for future “profit share” (from other people doing the same thing).
The basic criteria is still the same: how many “real customers” are there in Zeekler? That are NOT ZR members? And how much revenue did they generate?
And a nod to Jimmy, how many are fake customers generated by ZR members? Though that’s a much tougher question, as ZR seem to have no incentive to investigate this at all.
If someone chooses to create dummy accounts to feed money into Zeekler and hope to take out more money from ZeekRewards by “gaming the system”, is that ZR’s responsibility to stop him? After all, to ZR, it’s revenue (and profit).
Or is ZR being USED AS A PONZI SCHEME, though it may not have started that way?
Or is this merely a philosophical question, as it doesn’t matter how it came to be, only that it is what it is?
Or what the heck am I posting? 😀
Wow, my ZeekRewards analysis was cited all the way in Czech republic web forum! 🙂
http://www.emimino.cz/diskuse/privydelek-pro-zeekrewards-108000/
(note: it’s in Czech, and they are weary of such “opportunities”, good for them, admin appears to have already killed one spam, but spammer may be private messaging some members)
This is exactly the case. For anyone claiming that commentators here are just outside spectators, I AM AN AFFILIATE. I was pissed that Zeek stopped taking credit cards in Dec.
When they announced the BOGO deal in Jan, where you get 2x matching VIP points and 2x bids, I loaded up all my credit cards and purchased VIP bids as my parents, sister, wife, two kids (not 18 but they only required a credit card, they didn’t check for age), and several friends. You could only max out at 1000 VIP points per retail customer so I needed many accounts.
I did not care what the VIP bids were worth. I only wanted the commissions and the VIP points. I let the VIP points compound for about 70 days then started cashing them out. My sole purpose of buying VIP bids was to take advantage of the matching VIP points.
I did this because I was “playing the game”. I knew it was very likely a ponzi. The only question was if there was a chance it could be in the slightest legal, I may use a more conservative cash out strategy. When the OFAC issue arose, and the Zeek explanation didn’t make any sense, I switched to 100% cash out.
I’ve listened to almost every corporate call going back to May of last year, with the exception of the 4 days a week opportunity calls intended for total newbies who don’t know MLM or penny auctions (I got tired of listening to DD spend the entire call “educating” the newbies about how penny auctions is the next eBay).
I’ve been on many team calls with other “leaders” the occasional corporate guest speaker who knew these leaders from other MLM’s. They say the same thing on every call and don’t address any of the issues we highlight here.
They focus on the usual cheer leading, “ra ra go team” comments, and they have testimonials from other passive investors who came in early and now have over 100k points… the calls are all the same in essence “I was laid off/had a low paying job and purchased $10k in bids and trusted and now I have over 100k points and “.
The most common line you will hear is “Zeek is changing lives” because of course those who have shifted to 80/20 cashout with high balances are living high on the hog. It changed their lives just like any ponzi benefits those who are early in. You will hear this over and over again… “Zeek is changing lives”.
Wait until it crashes and see how many lives it changed.
I came here to post about those pie in the sky dreamers that populate facebook/zeekrewardsnews. I see the above poster beat me to it.!!
Recent posters on the zeek gravy train includes an 18 year old, a laid off AA flight attendant and people using ZEEK to pay off their debts. And they earn the money just by posting one ad a day. Did the Obama economic team miss an opportunity to end unemployment?
P.s. I’m having a running battle with zeek heads regarding the deducting of ZEEK BIDS. I say that if there is no IRS ruling that ZEEK BIDS are legit deductions, it will be disallowed. Can a real CPA comment on this?
There are so many problems with zeek i questioned since aware of it last spring. Here are a couple.
-First WOT AND CRAIGLIST banning the ads.
-Not recieving the won auction product just its retail value if outside of th United States because of shipping cost.
-The banning of credit cards because of fraud then not the use of paypal for transfers.Changing the retirement from 90 days to daily.
-Charging for compliance course,lawyers and third parties to pay and get rid of bids.
-Database problems more cash auctions than before and the list goes on and on.
Iam sure that are not the exact reasons why some of the above mentioned happened but they did happen. Starting to think they should turn Zeekler into the new improved Ponzi 101.
@observer — Paypal Acceptable Use Policy specifically bans suspicious MLMs
You can get an exemption from Paypal for #6, but apparently Zeek decided not to as it would look bad if they failed.
Given that FTC has warned people about penny auctions, and penny auctions may be considered “gambling” or “lottery”, Paypal wouldn’t touch it with a ten-foot pole.
@lui
General consensus is that the tax returns were only due April 17th. People with abnormally high business expense claims will most likely get audited and then we’ll get a concrete answer.
Till then it’s just hope.
Well done to Paypal, because this mlm definately fails 3-4.
The problem is not “are bid purchases valid business deductions”, but rather “how do you report VIP Profit Points”.
You see, in ZR, you purchase bids, then “give them away” as promotion, and in return for giving the bids away you received VIP ProfitPoints. And your “profit share” depends on how much VIP ProfitPoints you get.
So how *do* you report VIP ProfitPoints on your tax return? Are they income? Dividend? Interest? Other? Or are they NOTHING? (i.e. don’t report it?) You received it for giving away bids. It is worth something to you.
As they say it’s NOT investment, it’s not dividend or interest. (or their entire disclaimer is bull****).
IRS says income can be money, property, or services. VIP Profitpoints is not money, and is not services, therefore it is “property”.
IRS rules says very clearly that even if you are paid in property, i.e. “bartering”, that must be reported as income. Else you are guilty of tax evasion.
That’s the part they’re NOT telling you.
The big risk factor with VIP points is similar to what happened to people that exercised stock options leading up to the dot com crash in 2001. They had an asset worth something which was taxable, yet they didn’t sell it immediately (trying to reach a long term capital gain) and the value dropped precipitously.
In the end, they owed tax liability on money they couldn’t cash out, and they were stuck amortizing a loss at $3000/year.
People with huge VIP balances are in for a rude shock if the IRS decides these are worth $1/point when credited (note, this is what ZeekRewards is doing on the 1099 forms). Then if ZeekRewards crashes before they can cash them out, or the profit percentage drops below 1.1%, then they owe tax on money they never received.
Also, even if you are able to create a loss on Schedule C, it will only offset up to normal income and is basically a near-automatic audit when it shows up as a huge loss.
I did some searching and found this.. Seems to be a Q&A about what you are talking about….
http://zeekrewardsnews.com/2012/02/questions-answers-call-schedule-this-week/
Yes, and Kaplan managed to skip around the real issues… Are VIP ProfitPoints on the 1099 or not? Until we see one, we don’t know. It almost sounds like the Points are on the 1099, but the points that “retire” would also counts as “expense” and deducted.
So your paperwork would appear as
1. Bought $1000 worth of bids (expense)
2. Gave away $1000 worth of bids (expense?) ??????
3. Receive 1000 VIP Points (income)?
4. Receive “profit share” as points (income)
5. Receive “profit share” as $$$ (income)
6. Points expire (expense)
Even assuming you don’t “double dip” the expense part (1 and 2), how exactly *do* you count VIP Points? (3, 4, and 6)
We won’t know until we see a 1099. These “guidance” doesn’t say anything useful.
Assuming all VIP Points counts as “income”, 1.4% average daily profit, 100 bid buy-in for VIP points. 80/20 reinvestment, on Jan 1.
On december 31st, you would have
100 “buy bids” as expense
5636 VIP points in your “pool” as “income”
1189 dollars as actual profit in your pocket
2560 retired points
So your net income is 6825 and your expenses is 2660, for “net” income of 4165, even though the only money in your pocket is 1189.
the “advantage” of having bids as deduction is actually negligible.
The daily profit share is the only “income”, available for withdrawal or reinvestment.
The deduction will happen when you BUY bids, not when they retire. In accounting they will usually use the cash-principle, “register the transaction when it actually happens” (when the customer PAYS for goods, not when he’s ordering it or when you send him the invoice).
VIP ProfitPoints are more like “assets” or “property” than income. They are not available as cash, if I have understood the descriptions correctly. I have never focused on the exact details here. They may or may not be taxable in some ways, but they are not taxable as “income”.
Im no accountant but I don’t see how VIP points can affect your income.
The way I see VIP bids is a way for the company to measure a way to pay you based on your performance.. You already bought bids and gave them away showing an expense. Based on the amount of bids you buy you get VIP points which are used to calculate the amount of daily profit the company shares with you.
This money is then turned into more bids to give away (write off) or taken out as cash (income). Seems pretty straight forward to me. Like I said though… I’m no accountant. I would leave those decisions up to them.
I highly recommend going through an accountant at least in your first tax season you are in the program just so you know exactly what to do the next time.
ZeekRewards doesn’t agree. The FAQ you linked to mentioned that expired points are deductible proves that points GAINED are income, and are reported as such on 1099.
Your instincts, in this case, is wrong.
Thank you Jack for responding. You ask ZEEK for advice and they tell you to consult an accountant. Why can’t ZEEK’s accountant provide an explanation for everyone.
I filed an 1099 and I’m not sleeping well.
Interesting how they phrased that FAQ: they NEVER said VIP Points are considered income, but the conclusion is inescapable form their answer that “expired points” are deductible as expense!
It is also interesting that IRS instructions on “part I, line 2” on Schedule C: Business income and loss is blank.
As points are neither returns and allowances… Did Mr. Kaplan just gave bad advice? Or completely irrelevant advice?
Yes that is confusing to say the least. I hope some people start getting their tax returns back and post here just to clear up those question marks…
I still don’t see how VIP points are considered anything at all other than means of keeping track of each affiliates contribution and how to distribute the daily profits… Just my opinion….
Actually, Jack, you NEVER get your tax return back. You only get a letter from the IRS that says “your return has been chosen for an audit” if you got picked.
Oh, I agree with you in principle: why do you have to PAY in income that you did not receive, but IRS rules are quite clear! Anything you receive as compensation for work done is considered income, even bartering and “constructive income” (i.e. they’re holding it for you).
Or are they going to argue it’s NOT really “work”, but an investment? 😉
It’s my opinion too, but I haven’t studied the details.
The points or whatever they call them that has been made available in your backoffice during 2011 is taxable as income.
Expenses can be deducted when they are PAID (not when something retires).
VIP Points BALANCE is neither “constructive receipt” nor “cash equivalence”.
**********************************
Accounting can either use the cash principle or the accrual principle. The first one is most common for most tax-payers.
http://en.wikipedia.org/wiki/Comparison_of_cash_and_accrual_methods_of_accounting
Here are some of the basic information from the Wikipedia-link
1. Identify the method used = cash principle
2. Identify the main rules
3. Check the exceptions? Point 4 in the list is the only possible exception.
4. Return to the main rules:
Ok Im big time confused here…..
You receive a cash reward from the RPP(income)
You buy new bids with it and give them away(expense)
You receive VIP points for giving away the bids(income)
Okayyyyy am I missing something? You are taxed twice on every RPP run if you buy new bids with your daily reward? Buying the bids cancels one of those out so you are taxed once no matter what? I realize every VIP point expires in 90 days so I guess that helps….
So at the end of the year will you be taxed on the amount of VIP points you earned in the last 3 months of the year since all the other ones expired?
Wow what a brain scrambler….
@Jack — Well, actually you have to account for ALL the points: EVERY last bit of VIP points earned, as income, THEN you can deduct the points that expired as expenses. The NET result is just the VIP points that remained, but IRS really wants to see the paperwork… if you ever get audited.
The IMPLICATION in the Q&A I quoted is that ZR considers VIP Points to be constructive receipt income and will give you 1099 for it. The question is “Is it constructive income” and the answer is “you report it”. They didn’t say no, so you have to assume it means “yes it is”.
The income reported on your Zeek 1099 is the sum of all CASH paid to you.
Whether you used to withdraw the CASH, or reinvest by buying more bids, the income that is reported is based on CASH paid to your account. This includes:
– Daily profit share (paid to you as cash, but you can auto-reinvest-it)
– Commissions from those affiliates you sponsor (10% for level 1, 5% for level 2, includes commissions on their daily profit share and monthly subscription)
– Commissions on any retail penny auction bids (20% commission). You get matching VIP points as well, but the only time income is counted on your 1099 is when those points are paid out as CASH in daily profit share.
More problem with the Howard Kaplan advice… “Line 2 Schedule C” is ONLY used for rebates, refunds, returns, and such allowances, and only for a business that sells products, according to IRS Small business tax guide. As VIP Bid Purchase is NONE OF THE ABOVE, and a ZeekReward member “business” doesn’t sell bids, it seems Kaplan REALLY gave some bad advice this time.
Some more thoughts on the IDS
It says that active members are only about 15000, which is about 24% of all members, so total members is 68000 or so.
Doesn’t that suggest a CHURN RATE of 76% in 2011?
@K. Chang, the 24% of members are active does not mean there is a high churn rate. Two notes:
1. The definition of “active affiliate” is one who has sponsored two, meaning they are eligible for matrix commissions in the MLM portion. Many people have not sponsored two but have invested in the ponzi.
2. Over half the affiliates are “free” members riding their 60 day bonus points. When those bonus points convert to VIP points in 60 days, then they usually become Silver members ($10/month) or decided at that point to invest having “proven” to themselves that the compound interest of daily profit share “works”.
There really is no concept of churn because few people quit, but just continue to compound virtual points by reinvesting at 100%.
@Jimmy — hmmm… this hybrid model really throws a monkeywrench into things.
In a regular MLM, a person “quit” by simply not making any sales, thus keeping his starter kit and leaving the money with the company. He is replaced by new joiners. Thus, “churn”.
In Zeekrewards, a member can’t “quit” per se. Even if he doesn’t sell any bids he can still grow VIP Point balance through downline’s efforts and through “profit share” reinvestment. But the point is ZR keeps the money (except any “profit” he chooses to cash out)
Which only proves ZR is indeed a Ponzi, not a MLM.
First I’d like to thank you Jimmy. Your contributions here have added to my understanding and I appreciate that.
I do however wonder if the “few people quit” number should be factored against the “how many real people join” percentage. How many “buy your Zeek downline here” websites are there out there? Do we hazard to pretend that none of the “leads” being sold are bot generated completely fictitious dummy accounts?
It may not fall into the central buisness model but it seems that ~some~ Zeek affiliates are paying better than a buck per “fake Zeek member” to add to their downline. Churn does exist.
Oh, special note to Zeek’s crack compliance team: selling 5cc customers did raise the red flags which caused you to discontinue that part of the program. And it still does, even if you aren’t selling them but if the people who are, are using your FaceBook page to do it.
You can argue the law but don’t forget what context that argument might take place in, not to mention in what venue.
Also keep in mind that Zeek itself used to sell customers through “Customer Co-op”. They simply “outsourced” the whole operation and disclaimed responsibility.
One problem here is that Howard Kaplan was hired by ZeekRewards to solve THEIR problems, not the problems of each and every affiliate. This is probably the main reason why he was so VAGUE, and mostly was focusing on general advises.
Howard Kaplan’s metods seems to protect ZR’s own definition of “purchasing products”, as one of the basic ideas when he choosed which method to use – cash or accrual accounting.
Tried calling customer service for the heck of it to ask about the tax questions here. All I got was something like “we are experiencing higher than normal call volume, we will keep you informed of your status” then it hung up on me… haha
@M_Norway — agreed, and it’s going to cause a ton of affiliates an audit if they followed that advice and put “retired points” on line 2 if they don’t have other income (such as all profits from profitshares) to put on line 1 to deduct from!
That is not true. I know those who got 1099’s even though they had not received any cash in 2011.
I don’t know if it is the same but back in 2011, you could not draw out under 90 days and yet they called it constructive receipt and “more bids were purchase”.
@ofonemother -it is still earnings even if you do not put any cash in your bank account. Zeek pays you daily profit share in CASH. If you have your auto-reinvest setat 100%, you are choosing to buy more bids with your CASH.
CASH paid to you = earnings. That is exactly how it is represented on your 1099.
Income is pretty straigtforward. It is the categorization of your deductions that is the questionable/risky part. Cost of goods sold? Marketing expense? Inventory?
@Jimmy — oh, that part makes sense, but aren’t the VIP Profitpoints worth SOMETHING too? And wouldn’t IRS want to tax THAT?
After all, if the expiring points can appear as deduction, then gained points would be taxable, right? 🙂
I would probably have ignored most of the tax-solutions from Zeek and Howard Kaplan, as a tax payer with normal job as the main income source, and considering ZeekRewards to be investment rather than work. 🙂
When THEY prefer to post something in a specific way, it can probably be related to THEIR interpretation of the business. I would have used only some parts of their methods, and ignored other parts.
When it comes to tax returns, you are allowed to make corrections if you believe something is presented incorrectly. When it comes to ZeekRewards, you probably SHOULD make some corrections.
A. The investment part of ZeekRewards pays ROI, not INCOME.
B. The network part of ZeekRewards pays INCOME.
C. Selling bids pays INCOME, but it should be possible only to post the NET COMMISSION here (not calculate any costs of goods sold).
D. Membership fees are EXPENSES.
E. Buying bids is only a method to generate VIP Points, so it shouldn’t really be counted as expenses.
F. Paying for customers are EXPENSES.
G. VIP Points is only a measurement for how to calculate the daily Profit Share, so they shouldn’t be counted as investment.
H. As documentation, I would have provided a printout of ZeekRewards’ own “How it works” (and other similar stuff).
http://www.zeekrewards.com/howitworks.asp
I. I would also have added some short explanations as documentation, about how ZR has been marketed and the different changes they have made in the rules.
J. And I would have started all this with a letter, “I have made several changes to the 1099 from Zeek Rewards”, and WHY I have made those changes (showing that the daily profit share is more similar to ROI than to income, etc.).
@M-Norway
A. The investment part of ZeekRewards pays ROI, not INCOME.
The trouble is – ZeekRewards says this is not an investment -if not an investment how you claim an ROI?
The way it works is that the daily profit share pays you cash that is available for you to do whatever you want. You can withdraw it in a variety of ways, or reinvest it.
Since most people are at 100% reinvestment, it feels like any other HYIP or AdSurf, but the way in which Zeek treats the daily profit share is to give you cash, and then make it easy for you to reinvest it automatically.
It would be the equivalent of a money market fund with fixed asset price ($1 per share) that pays you interest daily, and the brokerage firm automatically reinvesting that interest for you.
Even if you don’t “withdraw” your earnings from the money market fund at the end of the year, the earnings as reported to the IRS is the sum of the daily interest payments.
Of course, Zeek has expiring points and don’t report capital gains, but that’s a separate issue than what I’m addressing here which is you need to classify the daily profit share as income, even if you decide to reinvest it and buy more virtual points.
My plan includes withdrawal of all the money, and quit being a member of ZeekRewards. I forgot to mention it because I was focusing on the tax-related issues.
And I haven’t analysed all details yet, only listed some suggestions for some of the details I was able to identify.
And the analysing was made from a specific viewpoint, “an ordinary tax payer with a normal job as the main income, mainly using ZeekRewards as a passive investment”. Other roles will probably give different solutions as the best alternative.
An ordinary tax payer will have very few benefits from being counted as a “small business owner” when it comes to taxes. I consider ZeekRewards to be a short term investment, and an ordinary taxpayer will probably return to his normal role this year or next year.
It can also be interpreted to be some sort of “system”, where the main purpose is to build up VIP Points, and the method to build up the points is reinvestments. You don’t make any profit before you have withdrawn your initial investment.
People are showing spreadsheets where they are calculating compound and other stuff. They are discussing 80/20 and 90/10 plans in forums. This sounds very much like an investment to me?
The system is designed for reinvesting some of the daily profit share, 100 percent in the first period until you reach the balance you want to have, then 80/20 to keep the balance slowly growing while you withdraw money gradually. Most people will be lucky if they are able to withdraw their initial investment.
Point H was meant to document how the system works as a whole.
ZeekRewards isn’t equal to any real investment schemes. It’s more similar to a typical Ponzi scheme, but with a “system” for how the ROI is generated.
As an investor, all money invested or reinvested can be considered to be LOST from the moment they are invested. The investments are not backed up by anything of real value. It means you haven’t made any ROI before you have withdrawn your initial investments.
Troy Dooly reports that ZR has FINALLY launched “stage 1” of compliance course in his weekly report (go to 3 minute mark). Any one want to share the TOC or syllabus of that “course”?
And just to be fair to Troy Dooly, when he suspects a scam, he hits it hard. JustBeenPaid, suspected Internet Ponzi, was listed as “DO NOT JOIN / DEFINITE LEGAL TROUBLE IN NORTH AMERICA” by Troy on his mlmhelpdesk. As it’s not about ZR I am not linking it, but you can find it on his website.
He’s just a little soft, IMHO, on opportunities that “seem” to be doing the right thing, like hiring lawyers for compliance.
The links in my back office are still grayed out. They’ve been gray ever since the compliance course was first announced in Jan.
Isn’t the whole compliance training just window dressing? They will “train” affiliates that this is “not an investment”. Right… let’s all just wink and giggle as we invest $10k at a time.
The reality is any real conversation between affiliate and prospect is entirely focused on the investment aspect, with an occasional disclaimer thrown in.
It begs the question on something this obvious, why did it take Troy Dooly until May 2, 2012 to send out an alert?
@ofonemother
MAIN RULES BEFORE THE DETAILS
I would have ignored some of the rules the IRS use for details. Profit share “available as cash” is NOT income, the money you can withdraw here is your own invested money.
IRS should first be able to identify the system as a whole, before they decide which rules to use on the details. Starting with the details is using the rules in the wrong order. In a hierarchy of rules, the rules for regulating details will normally have a lower rank than the main rules.
I haven’t identified any main rules, except for “they probably have some main rules that can be used, for how to identify something as investment or income.” 🙂
My idea is to force IRS to evaluate some “main questions” before they evaluate which rules to use. Forcing them to do so can be done by going one step UP in the hierarchy of rules.
MAIN QUESTION, INVESTMENT OR INCOME?
The main question is whether the profit share is similar to income or similar to interests, and the answer here should be pretty obvious.
* the daily profit share is vaguely connected to posting 1 ad, a 2-5 minutes “job” that doesn’t affect the amount they pay in profit share. It only affects “YES, you can get paid” and “NO, you can’t get paid”. It’s more like a rule to keep people active than real work.
* the daily profit share is closely connected to the number of VIP Points you have in your balance. The VIP Points balance is directly used to calculate the amount they pay in daily profit.
NOTE:
I’m not familiar with U.S. tax rules. I have focused more on “the true nature of something” than on taxes and tax rules, identifying whether something is income or investment. I have tried to identify it more correctly than ZeekRewards and Howard Kaplan have done it.
People should of course have withdrawn all the money before using this method, or be close to have withdrawn them. This method shouldn’t be used if you have plans about continuing in ZeekRewards.
Don’t over-complicate what is income. Daily profit share is paid to you in CASH. You decide what you want to do with it. Put it in your bank account, or buy more bids. It’s really that simple.
If you are in the US, many have 401k plans with their employer, where a portion of our paycheck is automatically invested in the 401k. The amount you are paid is INCOME (just tax deferred up to a limit). If you have to pay alimony or child support, it is deducted automatically from your paycheck.
In other words, just because you don’t actually see the money land in your bank account, doesn’t mean that income wasn’t generated.
Daily profit share => paid to you in CASH = income = earnings = what is reported on your 1099 from Zeek.
I believe the daily profit share derives mostly from the members own investments and reinvestments, the members own money paid back to the members in small portions.
I went one step UP in the “hierarchy of rules”, and tried to identify rules with a higher priority than the “cash vs. accrual”. I’ll guess they have rules for FIRST to decide whether something should be considered to be income or people’s own money paid back to them, before they apply the other rules.
Something been made available for you as cash doesn’t automatically make it equal to income. I will consider the daily profit share to be more equal to interests on investments. IRS will have to look at the whole “system” before they decide HOW and IF to tax something.
And you can of course back up your own claims for the metod used by sending a letter to SEC, ask them to look into this matter. Comparing the pool of money with the pool of VIP Points will give a clear indication for where the money derives from in the daily profit share.
And remember this method is used for the tax year 2011, before most of the changes. The system they used in 2011 will have importance.
Statements from Zeek Rewards about “This is not an investment, you are purchasing products” can be used as documentation, along with other documentation showing most people treating it as investment.
I just completed the compliance course. I didn’t need to as a non-US affilliate but I thought it’d be interesting.(but I won’t get that hour back)
For those who are ZR affiliates it may still be greyed out in the back office but is clickable. It takes about an hour, there are 10 videos of 3-5 minutes length each followed by 2-5 multiple choice questions. It’s not difficult if you listen to the videos though I got a few wrong when I wasn’t concentrating (eg in which state are product certificates not compulsory?)
The content is on MLM law in the US, not zeek specific.
Actually thought it was pretty good, though it does highlight just how many times I’ve seen ZR affiliates being non-compliamt
The back office links are up, but most affiliates can’t even pay for the compliance course because the backend processing is not working. How does Zeek manage to mess up every “launch”?
@Colsta — in other words, the compliance course is cookie-cutter and irrelevant, since ZR doesn’t need you to sell a product (it’s available, but nobody seem to use it).
ZR affiliates are consumer of bids, not reseller (they could be, but that doesn’t get you profit-share). Thus, MLM law regarding product (bid?) sales is mostly irrelevant.
Much like Mr. Nehra’s “we’re not an investment” this looks like window dressing.
Hello,
I am from Serbia and my account was deactivated without explanation on Mart 28. Two weeks after deactivation I received a message from Paul Burks and was recommended to ask for refund.
I gave them all the dates they asked but I did not get my refund yet. I submitted support ticked but there was not any answer. I want people know the way Zeek threats their affiliates.
One thing just occurred to me.
If you cash out only 20/80, and your tax bracket is 25%, you actually paid MORE in taxes than whatever you got.
If you got 5700 “profit share” all year, and did 20/80, you got 1100 in cash, but have to pay taxes on 5700 income. Assume you are in 25% tax bracket, you pay 1425 in taxes (but you only got 1100 in your pocket).
NET LOSS!
Which means everybody is going to use the “expired points” as deduction (and/or bid purchases), and that’s going to trigger plenty of audits.
If you deduct 2300 expired points from 5700, net income 3400, tax is 830, so NET profit, after tax, is mere 250.
This thing is MUCH LESS profitable than people assume.
I have been pondering over this same scenario for awhile and even brought it up to an affiliate in Zeekrewards… They really didn’t have an answer because they haven’t started taking any money out as of yet…
I am still confused as to how these VIP points are worth anything at all. They aren’t anything other than a daily profit share based on the amount of VIP points you have. Its not like you just withdraw them for cash because the company doesn’t actually have enough money to match every VIP point accumulated.
This is why you can only take out what you are awarded every day(profit share). So wouldn’t it only make sense to claim as income what you are awarded every day and not these virtual points(which expire) that really aren’t worth anything other than your amount of the daily profit?
I really can’t understand how they are income or a write off. Do you have to claim air miles/aeroplan miles rewarded to your account? Maybe I’m missing something obvious here…. Maybe Dawn can post and let us know how she filed hers and put this question behind us….
Actually Jimmy explained it pretty well… your profitshare is all income. Whether you reinvested it or not it’s still counted as income. The *sucky* part is what you invested in will EXPIRE (sarcasm) but it’s not really an investment! (sarcasm off)
I stumbled across this interesting conversation between a zeekreward affiliate and a tax consultant:
http://www.justanswer.com/tax/6keyn-need-tax-expert-what-zeek-rewards.html
@vermillion777 — aha, a “real” professional. 🙂
The tax guy’s basically saying “you can’t report ‘income’ from a Ponzi except as a loss / fraud”
Seems what all the Zeekheads are doing is claiming all the “reinvestment” is considered an “expense” as well, as those are considered “bid purchases”.
Use the scenario above,
5700 gained throughout 1 full year
2500 expired
out of 5700, 1100 cash and 4600 as reinvestment
So they want to claim 4600+2500 as expenses
and 5700 as income. So net “loss” of -1400. (we haven’t counted the monthly dues and initial bid purchase yet, add another, oh, 220 or so)
Even though they pocketed 1100 in cash.
This is going to trigger an audit FOR SURE.
Noticed ANOTHER potential IRS problem… “gift expense deduction” is limited to $25 per person
http://www.irs.gov/publications/p463/ch03.html
Give that most Zeekheads buy 100 bids at a time, which is $65, and only $25 is deductible, this is going to cause even more problems if they tried to deduct all $65. And when you buy bids to give away, do you actually keep documents of how many people you gave it to for IRS purposes?
Jimmy, is that in the backoffice?
If there’s no documentation of the actual bids given away to individuals, thus allowing the calculation of that $25 limit, IRS may disallow the WHOLE THING.
It’s not a “purchase” as bids are not purchased for retail/resell. You can ONLY treat it as a gift deduction.
Any way you look at it, this is a MAJOR headache for the affiliates.
A Forbes article in 2011 highlighted Schedule C and excessive “gift / entertainment expense deduction” as audit triggers.
http://www.forbes.com/sites/robertwood/2011/04/05/avoid-irs-audit-triggers/
And gift expense deduction is the heart of Zeekheads. Indeed, it is the ONLY expense other than membership dues (and initial bid purchase) In fact, such expense vastly outweighs any income.
We’re looking at a LOT of audits in the next few months.
so giving away sample bids is considered a gift and that a max of $25 total value is acceptable?
zeekrewards caps it at 1000 per customer/prospect, not in lump sum but in increments…so not all 1000 sample bids are deductible? Yikes. Then those who joined thinking its going to be a passive investment are going to need to generate legitimate expenses to offset their income claim.
“Buying” customers/leads and posting ads won’t cut it anymore?
To say what Jimmy said to me, “Don’t make things too complicated”. 🙂
Giving away bids are marketing expenses, if you consider bids to be “products” (I don’t, for me they are mostly part of an “internal system” for how to earn profit points).
so there is a difference between gift and samples as deductible expenses?
@vermillion777
Giving away free sample bids is more similar to marketing efforts than to gifts. You give the bids away to let people try the auctions for free, in order to attract new customers.
But since many of these customers are family members, friends or fake customers, the process is more closely connected to the “system” where you can earn Profit Points.
Sample bids are neiter “gifts” nor “products”. They can only be used in specific auctions, and they are more similar to marketing material than to products.
But I will consider this part of Zeek Rewards to be an investment (Ponzi sceme). Affiliates are mostly trying to attract new affiliates (investors), NOT real customers.
@M_Norway — There are *some* merit to the idea that the bids are given away as “free sample”, but since NO SALES IS REQUIRED BY AFFILIATES, any such giveaway is UNRELATED TO THE BUSINESS of selling bids (which is really sold by Zeekler, not the affiliates).
Zeekreward affiliates are NOT giving away bids in order to secure customers to sell bids to and get profit that way. Thus, it is questionable whether the “free sample bids” would count as promotional, or merely as gifts.
IRS defines it with a few examples:
Free sample packs you received in the mail — fully deductible for whoever made/mailed it as it’s considered promotional expense
Gifts you received in the mail such as “thank you for being a loyal customer for 1 year” — $25 limit per customer
So there is SOME merit in the idea that giving away bids as “free samples”. However, look a little closer.
Giving away free samples is as promotion to induce customer to BUY the product. In case of Zeek, you give customer bids so he will buy more bids. THAT is promotional and fully deductible.
But are you affiliates selling bids? I.e. if you give bids to A as samples, do A then buy bids from you? The answer seems to be “no”. Bids are bought from Zeekler (and you get a commission).
So what product are you supposed to be selling? NOTHING.
If you’re not selling anything, how can you have promotional expense?
This is the sort of legal gray area that ZeekRewards is not addressing. If Zeekler is selling bidpacks to affiliates to be resold to customers, no problem. Then affiliates give away free sample bids, then take bid sales difference as profit.
But no, you don’t get profit directly because you don’t actually sell anything. You get profit “shared” by Zeekler. It’s Zeekler that’s making the sales (and thus, make the profit), while YOU pay for promotion, selling NOTHING.
And as we analyzed before, they are NOT paying you to promote Zeekler, as your “profitshare” is dependent on how much money you have put into the system, NOT how hard you’re working. So you’re not working for Zeekler (i.e. as promoter), and you’re NOT selling anything FOR Zeekler either.
This is a Ponzi, not a business.
To restate the above in a more coherent manner
Based on how Zeekrewards is SUPPOSED to work, ZR pays affiliates for
1) affiliate’s “work” in promoting Zeekler
2) affiliate’s sales of Zeekler bids
though we have to throw in a third way (which we will discuss later)
3) affiliate’s “money” left in the system
A. Is ZeekRewards paying for affiliate’s work in promoting Zeekler?
This assumes the following business model: affiliate is merely a “marketer”, and stocks nothing. It is paid for its promotional efforts (to be measured by ZeekRewards) like a PR agency.
IF this is true, you are “paid” for your promotional efforts, and thus the bid purchases for giveaway are fully deductible as it is indeed part of the promotion.
As we analyzed earlier, based on how they are only refunding the money put in, no VIP profitpoints, for the international folks, the answer is “no”, the work is NOT PAID AT ALL. The fact that they pay based on amount of profit points, not amount of work, proves that beyond any doubt.
As this is NOT the business model, we can’t use this rationalization.
B. Is Zeekrewards paying profit for amount of bids sold by affiliates?
This assumes the following business model: affiliates are bid resellers, who needs to give away bids to promote the bids so prospective customers become real customers by buying bids after trying the free samples.
If this is indeed the business model, then the bids are again, fully deductible as promotional expense.
However, while you are paid commission based on bidpack sales, you are also paid (a much greater amount) for this “profitshare” thing. In fact, bidpack sales is NOT REQUIRED.
Thus, you can’t use this business model to justify the sample bid purchases as “promotional” either.
As both ideas are nixed, a ‘mix’ of the two ideas above (i.e. you are BOTH a reseller AND a promoter) would not work either.
So… what does *that* leave you?
Up **** creek without a paddle.
The “real” affiliate business model: buy bids, turn it into profit points (by pretending to give them away to shills) wait for ZR to “share” profits from money you put in.
The bids are NOT promotional in any way, but is instead an “investment”. It passes the Howey 4 point test. It is NOT deductible.
@K. Chang,
Thank you for taking the time to expand and provide an elaborate explanation (had to read it several times to sink in hehe).
When prospects do buy retail bids from zeekler, don’t they purchase it from the affiliate’s zeeklerstore/storefront (myname.zeekler.com)? even though affiliates don’t really keep retail bids inventory so I see how this may not work…just like you said.
Even choosing Model A is not good enough reason to justify Zeekrewards as a business…which I’m sure some affiliates are doing.
While we’re on the subject of taxes, since ZR affiliates are technically not an “employee” of ZeekRewards, and this is supposedly not an “investment”, then by definition any money earned must be considered earned income subject to self-employment tax as well.
So, in summary you have dubious “expenses” in the form of bid pack repurchases/giveaways which are questionable writeoffs likely subject to audits, you have very likely earned real “income” on VIP points which you may not even have cashed out yet ( or ever if ZR crashes or is shut down before you can get paid ), and the liability grows exponentially as time goes on.
Glad I am rid of this mess…..
@Vermillion — well, there’s the question… what if you have had NO SALES? Then how do you deduct ANY bids as promo?
It is possible to claim the business is a loss, promo is a bust, but it’s not. You’re getting profit share ANY WAY.
Is ZeekRewards going to give you a list of all the bids you have SOLD (not bought yourself) to “prove” to IRS that you actually “tried” to sell bids? Or is there going to be a FLOOD of ZR affiliates all claiming to do ONLY promotion, not a bit of sale, get income, but claim to be bid sellers?
(this sort of headache and uncertainty should be enough to give everyone pause before joining such a scheme!)
Is there anybody here at all that has actually acquired customers from posting their daily ads(total strangers) that have actually bought bids after using up their free ones?
A few people have claimed to. Usually they’re mixing up customers with affiliates though. Also the fact that this wasn’t via their daily required spam ad, but rather via a proper advertising campaign.
Let’s face it, nobody is searching for penny auctions in free classified website directories full of spam.
Interesting, had TWO separate people came to my Zeekrewards analysis hub that insist that one must invest money to earn money. Apparently the idea of “work” never crossed their mind.
They must be Ferengi. 😀
Maybe it was the same guy Troy Dooly spoke to at the red carpet event.
Speaking of Dooly… where’s his red carpet reports? It’s been a fortnight now and nothing apart from a few minutes on a radio show.
Weren’t these interviews with Zeek Rewards management supposed to clarify things?
Hi Oz,
First off, this is a great website you’ve got here. Very informative logical arguments are being presented.
I’m also from the great land down under, but unfortunately for me, my father gets continuously sucked into these types of things, and it’s up to me to spend countless hours researching them to ensure he doesn’t lose ALL his money.
BehindMLM has been a godsend for me in finally getting some good, unbiased information.
Dad has been dabbling in MLMs for a while now, and was eager to join this after some ‘friends’ in his community told him about it.
So far, we’ve been able to come to a compromise where he’s created a diamond affiliate membership, but I’m not allowing him to buy any bids till I do some more research.
It seems everything we read about ZR (besides the unsubstantiated posts of praise) indicate that the company, even if legit, isn’t running very well and efficiently. The unexplained account deactivations is a big red flag.
Even if they do eventually make payments to members, you need to keep your VIP points in there for at least half a year before you can start taking out anything decent whilst maintaining the balance – and who knows how long the company will be around for?
Correct me if I’m wrong, but from all the articles and comments I’ve read thus far, are these the issues that raise red flags so far –
* Not knowing how profitable the Zeekler website is and therefore not knowing whether or not 50% of its profits can sustain the daily cash rewards.
* Seemingly random account deactivations with no proper explanation
* The assumption that (due to the lack of transparency)the only way the cash rewards are sustainable are if new member fees and purchases are used to pay existing members
Sorry for the long post. I need some very solid ammo to show the old man why he should put his money elsewhere.
Cheers.
I remember reading somewhere that they only send you a 1099 if you make over $500 for the year. So is that basically saying that the VIP points are all pretty much useless until you take actual money out? Why wouldn’t they have to send the 1099 either way if VIP points are considered income?
So it’s probably 1099-MISC, where the limit is actually $600 for year 2012.
http://www.irs.gov/businesses/article/0,,id=243429,00.html
But if you only invest $100 at beginning of the year and do 80/20, you’ll easily exceed 600 even in just a few months.
@HereWeGoAgain — technically you can start taking out money at as soon as 60 days, it’s just that you won’t get as much out.
I’d also welcome you to read my take on Zeekrewards, which echos what Oz did, but also added some new areas
http://kschang.hubpages.com/hub/Analyzing-ZeekRewards-is-it-a-legal-and-viable-business-and-can-it-provide-long-term-income-for-you
Zeek Rewards is both MLM and a passive investment scheme, where you buy bids, give them away or sell them to customers, which generates VIP Points which is used to calculate your share of the daily profit, which is paid to your backoffice each day as Profit points, which can be reinvested or withdrawn as cash. You also have to post 1 daily ad to qualify for profit share (2 minutes work each day).
“Normal behaviour” in the passive investment scheme is to invest an amount of money, let the VIP Point balance grow for some months (reinvest 100%), then start to withdraw 20% of the daily profit as cash (80% reinvestment, 20% cash).
The investment pays an average of 1.4%-1.5% per day, for a period of 90 days before the points retire. The VIP Point balance will grow slowly with an 80/20 plan, and grow rapidly with a 100/0 plan.
“Not normal behaviour” can be something like this (follow the link to another thread):
The most serious red flag is that the investment part is very similar to a Ponzi scheme.
* the affiliates are mostly trying to attract new affiliates (aka “investors”), not retail customers.
* the most significant source of money IN seems to be the affiliates’ money.
* most of the bids spent in auctions are probably affiliates or their family members and friends, not real customers.
Using lawyers and other advisors haven’t fixed this problem.
I’m not sure I have been 100% correct in my description, but it’s probably close enough to give you an overview.
You will find ALL the articles about Zeek Rewards under “Companies” (the menus to the right, close to top of the page). They are in the order “newest –> oldest”.
Troy Dooly is doing a “penny auction primer” on his mlmhelpdesk.
I put in a comment. We’ll see if he publishes it.
He published your comment and replied to it…….
He was slightly dismissive of my views, but overall, a good reply. I’ll respond over there.
K. Chang: You make a very good point on how the SEC may view the purchase of bids, regardless of what the window dressing Zeek wraps around it.
Another point to consider – in what other business do you have to pay a PREMIUM to buy sample bids? An affiliate pays $1 for a bid that is eligible to earn ROI. When that bid is given away as samples to a “customer” to activate the ROI (let’s assume they are real customers), the bids are ‘free bids’.
In other words, a retail customer pays $1 for 1 VIP bid (or 2x depending on the BOGO promo and if they are a premium customer, but for the past 6 months, $1 = 2 retail VIP bids).
But an affiliate pays $1 for 1 free sample bid, which are practically worthless and definitely worth a lot less than a VIP bid.
So the business model is flawed if it is based on giving away sample bids, because an affiliate drastically overpays for the samples (the reason is because the samples are meaningless and is just a disuise for the ponzi).
Interesting, forgot about that portion… You buy VIP Bids, but when you give them away they become free bids.
What if zeek decides to do away with the retail free bid auction category and just uses one type where sample bids could be used, while also limiting, to a very conservative amount, the free sample bids distributed to prospects?
That actually is irrelevant to the “real” question: are there significant number of bidders who consistently buy bids over longer periods of time (several months), thus generating “real” profits?
The “free bids” is a problem, but not a “primary” problem. It is one of the signs of ‘shadiness’ or ‘oddity’, but not a “smoking gun”.
Troy Dooly acknowledges that there may be a *hint* of similarity between ASD and Zeekrewards. 🙂 I guess I made a pretty good case. 😀 He promises to ask some hard questions.
We’re still waiting for answers from the last round of questions he was supposed to ask management at the VIP day!
(joke mode on)
Didn’t your mama teach you that honey works better than vinegar?
(joke mode off)
I think I’m learning from M_Norway a lot on how to phrase my arguments in a certain fashion.
By portraying authorities as zealous and ZR as “vulnerable” Troy seem to be more receptive. Troy is anti ASD and describing ZR as being somewhat similar to ASD then explaining that ZR may be being ‘gamed’ by the members, i.e. ZR may be a victim (now twice) Troy seem to understand our position better.
Well I thought I would try some free bids at the penny auction and here is how it went…..
Within 10 minutes I won 2 items that will make me around $60.00 if I use the cash out option. Both of them went for well under the retail price.
I have 1 question though… If the price of the auction is well above the cash out price can you still cash out instead of buying the item for much more than the cash out value?
P.S. I know a few people on here are going to be mad at me for saying this but I’m actually tempted to buy some bids after this…
I’m not sure if you *can* cash out as a free member… can you? Jimmy?
Hey, it’s your money, and I never questioned the “legality” of the auction side. I only have problem with the ZR side, more like a ton of unanswered questions.
Im pretty sure you can because when I was bidding on it the cash out amount was showing… I haven’t gone through the checkout process yet so Ill update after I do.
When I said I was tempted to buy bids I was just making a point that maybe people playing the free auctions will actually buy bids to play in the paid bid auctions….
@Jack
It’s perfectly normal to feel tempted to try something. I could easily be tempted to try the auctions just to see how they works, to be better able to discuss the topic.
I would have become less tempted if I actually had participated in some of the auctions where the auction price ends up at a higher price than the retail price. I would have become more tempted if I had won some auctions with a reasonable number of bids, to a low or reasonable price.
The examples were meant “in the role of a normal customer”, because I’m not very interested in the auctions in the first place. I would have spent too much time on them, and I’m already spending too much time on other activities on the internet. The reason why I’m not interested is partly because I don’t want to add some extra time on the internet.
If I should SELL the auctions, I would definitely have spent some time trying them, to better be able to communicate them when I’m talking to customers. I would probably have bought a book about “Penny Auctions strategies” too, just to be able to communicate something of interest.
The problem in Zeekler (the first times I checked the auctions) was that too many auctions ended up with too high price, and where the winner spent more than 1000 bids to win an auctionfor a $100 to $150 item. This scenario isn’t easy to “sell” or communicate to a customer.
Affiliates spending tons of bids makes the auctions become less attractive to normal customers. Very often they are outbidding the normal customers.
As a sales-man, I would have preferred to avoid selling the auctions to normal customers, and this is actually what happens in Zeek Rewards, too. Most people are trying to attract new “investors”, rather than marketing the auctions to retail customers.
The combination of Penny Auctions and recruit driven MLM is simply NOT a good idea. In recruit driven MLM, most participants will focus on creating a downline rather than on sales to retail customers. They will ruin the market rather than making it sustainable.
Zeek Rewards isn’t a real “Marketing Division”, it’s more similar to a recruitment mill trying to attract new participants into an opportunity. And that’s why they will fail sometimes in the near future, when they run out of new investors.
There are a couple of other serious problems which will discourage penny auction customers:
The lack of a “Buy it Now” feature on Zeekler means that you either win the auction against every other bidder, or you get nothing except the “thrill” of watching your bids flush down the drain.
With auction sites such as Quibids, there is a “Buy It Now” feature which gives you credit for the bids you used on the auction towards the purchase of the item. Therefore, if you lose the item, you are effectively able to buy the item at its retail price plus a small service charge ($2) minus the value of the bids you used in the auction.
Example: a $15 gift card with bids worth 60 cents each ( Quibids ). The fair value of the gift card is 25 bids minus 1 bid for every 0.60 of auction price. Quibids auction closing at $1.20 => break-even price of 23 bids (not including the service charge).
To save any real money, though, one must win the item for <= 19 bids, to cover the $2 shipping service charge (= 3.33 bids). Losing the auction after using 15 bids, one can buy the gift card using Buy-it-Now for $15 + $2 – (15*$0.60) = $17 – $9 = $8, meaning it is a risk of $2.
The net effect of Quibids Buy-it-Now feature is risking only $2 in an attempt to win the auction, not the full price of the auction. Without Buy-it-Now, it is really easy to flush cash down the drain and that discourages repeat customers.
Speaking as a Quibids penny auction customer, one of the most annoying experiences is encountering an auction where a bidder has accumulated a ton of voucher bids (free bids), and they effectively lock out other bidders using real bids from winning the item by massive overbidding ( bidding 100+ bids for a $15 gift card), since normal customers cannot spend more than 24 bids in the auction. The existence of Buy-it-Now is essential to reducing risk from these kinds of auctions.
I have been a customer on Quibids for over 1 year mostly bidding on gift cards, and there is a lot of variability to the auctions. Sometimes you will see auctions closing for ridiculously low prices such as $0.20 for a $25 gift card, other times they will get more in the range of $3 to $5.00 before closing. This depends greatly on the number of participants (day of week/time of day) and how many people have accumulated free bids (vouchers) that they are willing to use in the auction.
However, even in worst case scenarios, I have NEVER seen a Quibids auction closing for more than retail – in fact the highest one I ever saw was about 50% retail. The stats indicate that the vast majority of Quibids auctions are less than 30% of retail. "Normal" is in the range between 5-20%.
The other serious problem with Zeekler is the crappy IT department which is running the auction servers, the customer service, the subscription renewals, and supposedly dealing with firewall issues, security issues, etc – basically the computerization of the system.
A few months ago, there was a big hype over the Zeekler auction of a Mustang automobile. Interestingly enough, that auction ended due to a server glitch preventing any bidders not using auto-bidding from getting through to bid before the timer ran out, and the auction was "awarded" to a bidder who was using the ABE auto-bidding tool when the glitch happened.
That really leaves a bad smell when you consider that anyone bidding on Zeekler better always use ABE, or else they are subject to being locked out of winning auctions due to server glitches and losing the value of their bids through circumstances beyond their control.
The major red flag explained in more details
1. Zeek Rewards affiliates will “invest money” (or “purchase bids”) as an initial investment. This involves fresh money paid IN to the company.
Whether we call it “purchase” or “investment” isn’t important at this stage. We should only focus on whether there are some real money involved or only virtual points.
2. Then we have the process where they recruit or buy customers, someone to dump free bids onto or sell retail bids to. They will both generate VIP Points, the points that are used to calculate the share of the daily profit. You will generate 1 VIP Point for each dollar (or Profit point) spent on bids.
3. Then we have the process of daily profit share. The daily profit is average 1.4%-1.5% per day (higher in the first 4 days of the week, lower in the weekend).
If the daily profits were connected to the bids spent in auctions, it would have been affected by downtimes and the number of bids spent in the auctions, but the percentage is not affected by any of these circumstances.
If they’re calculating the daily profits from bids sold (both money invested and profit points reinvested), the percentage will be relatively stable as long as people continues to reinvest their Profit points. It will be stable even if people follows an 80/20 plan, since more “currency” seems to come in than what they are paying out. But they will gradually be drained for real money, while the VIP Point balances will continue to increase.
The problem is exactly here. Profit points isn’t real money, so they won’t generate any real profit either when people are using them to buy bids. If they include bids bought for reinvested Profit points in their calculations, some of the profit will only be virtual and not supported by real money.
4. If we compare the “pool of money” with the “pool of VIP Points”, the “pool of VIP Points” will probably be many times larger than the “pool of money”. It means they won’t be able to support payouts in real money if the investments in real money slows down. They will be able to pay in VIP Points, but not in real money.
Conclusion?
Your father’s money will be used to support payouts to old investors with huge balances of VIP Points. He will probably lose his money if the recruitment of new investors slows down before he has withdrawn his money.
Technically, no, you still have to spend at least $10 somehow. A typical approach is this – and I’ve seen many in third world countries do it:
1. Sign up as FREE account with 100 bonus points
2. On day 61, those 100 bonus points are converted to 150 VIP points (assuming 1.4 to 1.5% average daily profit)
3. At this point, in order to earn ROI on those 150 VIP points, you have to qualify. Qualifying means you buy at least $10 in bids using your own money, and then sign up a fake free customer to give bids away to. Just 1 customer is good for the next 1000 bids so that’s all you need.
4. Now you have 160 VIP points (150 from the bonus, $10 from what you just purchased) that will earn ROI for 90 days. You can cash out as much or as little as you want.
You have to pay $10/month to maintain your silver status. I’ve seen many third world country free affiliates ride their balance to about 500 or 1000 points then start withdrawing at 80/20. They make sure to set aside $10 to pay or the monthly subscription. It’s “free money” after the first $10.
Probably not worth the time for most in western countries, but if you are in a country where manual labor pays $1-3 a day, then 80/20 withdrawal of 500 or 1000 points is pretty good deal for placing spammy classified ads per day.
I think he meant cash out the item you won in the penny auction instead of buying it for the final price. The answer is yes you can cash out.
I went through the process and they will send it to Solid Trust or Alert Pay(I think it was Alert Pay). There is a small fee to take the money out of Solid Trust onto a credit card so in the end its a pretty good deal for just using free bids (well not really free because somebody already paid $1.00 each for them)
Oh, yes, certainly for the penny auction you can be any random free retail customer and cash out anything you’ve won.
You have to pay for it first, then it takes about 10 days for Zeek to send you the proceeds.
Not all items have a cash out value, but about 99% of them do. There are some items that have no cash out option and you must take delivery if you pay for it.
Oh ok so when they give you the cash out price they deduct the auction price from it and give you the rest? I just went to the screen where it said they would send the entire cash out to solid trust pay but didn’t go any farther with it…
You have to pay for the auction first. Say you won an item worth $75 with closing price of $40. You have to pay $40, then wait about 10 days for Zeek to transfer $70 (net gain of $35).
You can pay by credit card, Alert Pay, or SolidTrustPay. Previously you could only pay by credit card or Alert Pay, but they added STP for auction winnings recently.
I have heard that you could open a ticket to have just the difference paid to you (so you do not have to ‘buy’ the item first), but I have never done that. I have had 3 tickets opened for 45, 65 and 90 days then they were ‘autoclosed’ without being resolved. The ticket said ‘closing out outdated issu. You can open a new ticket if this has not yet been resolved.’ Total BS.
I had 3 Diamond affiliates that joined under me and mysteriously moved to another sponsor. The affiliates are still active and I have missed out on all those commissions. I tried eveything: live chat, emails, called in by phone, opened ticket. No one could help and I kept being told it was being forwarded toa different dept.
How many depts does a company with 11 employees (as of Jan) have???
Honestly how can anyone with any conscience market this to new members. Lately the retired vip points are higher than the daily profit. Zeek rewards is starting to bleed bad and they will never have enough tech suppoert to handle the outcry of why are my points going negative to eventually why are they worthless.
There is a large pool of money from subscription and member fees, its now the masses will be taking out because of slow growth and difficulty at finding members that will recruit or pay more for monthly requirements.
The writing is on the wall and they know it.
My prior math model says the balance is roughly 1.1%
So whatever your reinvestment ratio is, if the daily profit percentage multiply by the reinvestment ratio is over 1.1% your VIP points should not decrease.
But then, the whole point is to earn profit, so the closer they fall to 1.1% they more people will pull out (f*** the VIP points, I want my $$$!).
Which leads to the death spiral / negative feedback loop that Jimmy warned us about.
My in-laws and a bunch of other people around here got involved in Zeek recently, and all they can talk about is how much money they’re making. Unfortunately, they don’t ever question where all this money is coming from.
If I understand correctly, ostensibly all the ROI comes solely from the profits of auctions on zeekler.com. However, when you have hundereds if not thousands of people claiming they’re making $2500 a week, I would think that the auction site would have to be making hundreds of millions of dollars profit each day to pay out to the big fish, not to mention all the little fish members who would need to be paid as well as normal operating expense, wages for staff, etc.
Then you have to factor in that people’s share of the wealth continues to grow each day, while income is probably going to remain about the same.
I just keep hearing so many people claiming that if they cashed out they’d be getting something like $300 a day, and those are the people who just got started in it less than a month ago. If they have 50,000 members making $300 a day, That would require $15 million dollars profit a day from the zeekler penny auctions.
Of course some will be making more and some less, but I just can’t see a penny auction site being that successful.
Maybe I’m not understanding it correctly or else people’s claims of how much money they’re making are overblown, but color me skeptical. I think as long as people see their virtual money increasing, they don’t question where it’s coming from.
Oh, another thing which makes me suspicious of Zeek Rewards is when I googled “zeek rewards scam” just to see if it was on the up-and-up, there are hundreds if not thousands of websites and youtube videos with the heading of “Zeek Rewards SCAM!” but when you click on them they give a glowing recommendation of the Zeek Rewards program.
I’ve noticed this too when my sister got involved in an MLM (not zeek) and I was doing some research on it. It’s like they flood the internet with positive hits showing how much money you can make with their program, so if anyone is suspicious and wants to see if it’s a scam or not they’ll be flooded with a bunch of websites claiming it’s a valid money making opportunity.
Do many MLM’s do this? Just seems suspicious to me, because if I were running a valid business the last thing I’d do would be to have a hundred websites talking positively about it with “scam” in the header.
@Joe
It’s a common enough reverse tactic used by MLM marketers these days. It does tend to be more prevailent in search results for MLM companies that do indicate they are dubious upon analysis.
What will be really interesting is what happens when the Zeek Rewards mandatory compliance training period is up. Zeek Rewards, as they have continued to do from day one, has very poor communication with its distributors. Zeek Rewards assumes that all distributors are calling into the weekly calls or religiously reading ZeekRewardsNews (which often doesn’t have all the information anyways). ZR has never emailed anyone about their compliance training. It’s just a greyed out link in the back office that many have ignored.
So it will be interesting to see what happens if Zeek decides to cut off distributors with no warning or send them one of their famous “you have less than 1 day to comply or be deactivated” emails.
One thing that I haven’t seen addressed in this thread is that zeekler.com does rank at around 1600-1700 on the alexa.com rankings. This is not traffic from affiliates posting ads. Posting ads does not generate affiliate traffic to the website. Giving away bids to dummy accounts does not generate traffic to the zeekler auction website.
This proves that there are real customers that visit the auction site and buy bids. Plus there is advertising potential.
Facebook is having the biggest IPO in history because they have 900 million members but they sell very few products and most members don’t ever make a purchase but somehow the company is worth $10 Billion because a lot of people passively visit the site.
True fact.
This is conjecture / premise, not fact. We don’t know where the traffic come from.
The dummy accounts visiting Zeekler to use up the bids would.
No it doesn’t. It doesn’t point either way. There is not enough data.
Unfortunately, yes. They call it ‘search engine optimization’. I call it “chaff throwing so nobody can find the wheat”.
Affiliates visit zeekler.com to “dump” their bids. Part of the premium subscription results in VIP bids. For example, as a Diamond member for your $99 per month you are also given 250 VIP bids that can only be used in the auction or expire. This adds to bid inflation, but also means that affiliates will visit zeekler.com periodically to bit on auctions. You also have people typing in “Zeekler.com” but wanting to log into Zeek rewards to post their daily ad. I probably do this myself 1 in 6 or 7 times. You also have all of the daily spammy classified ads that get verification and bot follow click through, though these are probably not browsers with Alexa toolbar.
My guess on the majority of traffic are the prospects. Affiliate are recruiting others into the ponzi, and as a result, the prospects perform their research and go to Zeekler.com.
But regardless of the reason, it is very clear that while Zeek Rewards traffic has growth dramatically, Zeekler.com traffic has been much more gradual over the same time period. Overlay both domains and see for yourself. What this divergence proves is that the retail penny auction is not the primary revenue generator and this is clearly a ponzi – with new investor money coming into Zeek Rewards paying for previous affiliates growth.
I have been a member for over a month and have been to zeekrewards.com over 100 times because it shows a count. But, I have only been to zeekler.com around 5 times. There is no reason to visit zeekler.com while posting an ad.
Dummy zeekler accounts for dumping bids don’t generate traffic and the bids expire and aren’t used. I have a few real customers and a few dummy customers so I know those dummy accounts aren’t being used or generating traffic to zeekler.com.
I doubt there is a very high percentage of diamond affiliates paying $100 a month. I would guess that the majority are free or silver. If charted it would probably look like a pyramid with Diamond affiliates at the top. /bad humor
The traffic to zeekrewards.com is mandatory to earn points but there is no mandatory traffic to zeekler.com. Spam or not, advertising and marketing is working because a high volume of unique people are visiting zeekler.com every day which means zeekler.com does have value.
Even though zeekrewards has more traffic, the site is probably less valuable because it is forced traffic. I am surprised that there aren’t any ads (that I have seen) on either site.
Zeekrewards in my opinion is a type of ponzi scheme and it could get shut down. But, I also believe that all MLM’s are types of ponzi schemes.
There are plenty of legal ponzi schemes in the US:
All types of insurance (You just don’t want to receive a large ROI)
401k with guaranteed company match
Social security with forced participation
Public and private pensions with guaranteed rates of return even when billions in the red
The US tax code is the biggest ponzi scheme ever as it is trillions of dollars in the red
In my opinion eventually zeekrewards will be shut down either by the company or by regulators. The company can dissolve the mlm at any time by declaring that VIP points are now worth $0. In 90 days, all points in the system would expire. They can also put caps on total volume or caps on how much can be cashed out per day to keep it from going under as fast.
As I understand it, Madoff’s ponzi scheme collapsed and he went to prison because he was paying fraudulent returns. Everybody was making money even if the stock investments were losing money and that is fraud.
I agree that the daily profit share numbers do look odd but that doesn’t prove fraud. They can manipulate the daily numbers all they want because they decide when to deposit the checks or payments. But, as long as they are virtually “paying” out 50% of actual profit as profit share during the fiscal year, then there isn’t any fraud.
I only put in what I am willing to lose. I think it is fun and worth the entertainment value. If I lose money then so what and any profit I might get is just gravy.
I have lost plenty of money to mlm’s over the years but it was worth it to me. I was able to dream and have hope of getting ahead financially. I still dream and have that hope and this is much better and more fun for me than buying lottery tickets, going to Vegas, or playing in the stock market.
If you don’t use the bids you lose them, so you may as well use them and maybe you may win something. Your evidence points both ways.
Slight correctly. MLM and PYRAMID schemes are close cousins, but MLM is legal because it does NOT pay on recruiting, but pays on SALES (your own and your downline’s).
Irrelevant, but thanks for trying.
Correction. He lied to everybody that everybody is making money when he actually spent a chunk of it and paid some of it out to the participants. So SOME people gained, but many more lost. It’s fraud, on a MASSIVE scale, largest ever in US history.
Sorry, but you started with the wrong premise. A Ponzi scheme is illegal at ALL TIMES, not just when it collapsed. We found most Ponzi scheme AFTER it collapses because there is no hiding it any more, but it is illegal at all times.
Thus, your explanation that as long as it pays there’s no fraud is, for lack of better word, bogus.
What about the fact that ZR was paying out returns even on days when the penny auction site was down?
All the ZR investors were still getting shares of the profits for those days even though there were no profit to be made. I believe that is fraud, also.
So you admit to participating in fraud in the system. If the system is so viable, why do you need to create dummy customers?
I overheard my in-laws talking about signing up my brother-in-law as a dummy customer. If zeekler.com is such a tremendously successful penny auction site, why would anyone need to set up dummy customers under them? They should have customers lined up waiting to buy bids from them.
To be fair here, profit is mostly generated when the bids are purchased (or repurchased daily), NOT when the bids are used.
True, but then they wouldn’t be selling any bids if the site was down, would they? Or do they actually sell bids from the zeekrewards.com site?
I’d think that would be inconvenient for their customers to have to go to a different site from zeekler.com to purchase bids.
Joe Mama,
I don’t need dummy customers now because I have real customers. Most junk mail gets thrown away too and never used or looked at. But, companies still spend millions of dollars to send out junk mail. Why is that? Same with Spam. Most people filter out spam but it is a form of advertising that does generate a profit for somebody or they wouldn’t bother sending the spam.
Zeekler spam does generate traffic to the zeekler site which increases the site’s value and brings paying customers to the auctions. The sample bids also help in promoting the site even if a large number are “thrown away” like junk mail. Throwing away bids or just letting them expire isn’t fraud.
The bids do not have to be used but a large number of bids are being used based on the traffic and bids on the auction site.
Even if the auction site is down, checks are still being processed that were sent in to purchase sample bids by affiliates.
The real question is whether or not ZeekRewards is an illegal ponzi scheme. I participate in the other ponzi schemes I listed such as other mlm’s, 401K, insurance, and social security so I have no problem participating in Zeek Rewards. I fully understand the risks.
But, the government and the courts get to decide if they even decide to get involved in the first place.
For example, I believe that Obamamcare is unconstitutional. But, until it is declared unconstitutional by the Supreme Court, it is the law of the land. Your opinion and my opinion doesn’t matter because we don’t get to vote on it or take a poll.
Zeek Rewards will continue to operate until it is shut down or implodes. This is true of every company.
I think this site is a good service because I like to know the pros and cons of any company I do business with and then make my own decision as to whether or not I do business with them.
I choose to do business with Zeek Rewards. I will not do business with Bank of America because they charged me fees that they admitted were wrong but would only refund half the fees. They also have a huge mortgage settlement against them yet they are a “legal” company and the government hasn’t shut them down. I guess they are too big to fail.
Another moral example is that all of us buy a lot of products that are made in communist China. The very computers you are using to say that Zeek Rewards is illegal and fraudulent were built in communist China. I find that ironic. I guess we all pick our battles.
@lurch – no one is denying that th spammy ads aren’t bringing *some* traffic nor that the penny auction isn’t generating *some* revenue. But based on the business model, data shared to date from Zeek, and all observations from actual affiliates including myself, the revenue generated from the penny auction is a small fraction of overpay revenue. Meaning it isjust a front to try and legitimize the ponzi.
Note that the opportunity calls spend 75% of the time talking about the retail auction as if it is some new revolution, but affiliates only sell the investment seme. I have debunked the theory that the penny auction produces any meaningful revenue external to the affiliate ponzi on several comments on the various Zeek posts.
As for the common defense of ponzi’s and pyramids that “socical security is a ponzi” etc., that comment is meaningless because: social security is not illegal, insurance is not a ponzi whatsoever, and most importantly, none of those things you mention include deceit and fraud nor do they lack governance and transparency.
Even an honest ponzi is still illegal, but ZR is far from honest. ZR has proven itself to through its own corporate actions not to be trustworthy (citing OFAC sanctions as a total falsehood, have made many poor strategic decisions, and seem clearly in over their heads).
Remember that the daily profit points isn’t real money, so they won’t generate any real profit either when you’re using them to purchase bids?
They will generate some profit if you’re SELLING the bids to real customers, but most bids will be given away for free to fake or real customers.
We are probably talking about two different matters here. You are talking about checks being sent in by affiliates, while we are talking about the automatic reinvestment option in the backoffice. You must have a different agreement than most other affiliates, requiring you to pay for the bids in cash each time?
Most other affiliates will have an initial purchase of bids where they pay in any “cash equivalence”, and then they won’t pay for more bids in cash unless they want to invest more money. They will use the daily profit share to buy more bids, using the settings in their backoffice.
The issue that was raised here (initially by me) wasn’t that some daily profit share was being paid, it was that the profit share was smooth.
I had linked to several charts showing time series charts of daily profit share ever since ZR switched to the 90-day expiration in Aug 2011. The admin of the site sent me a reply saying ZR corporate made him take the site down, as apparently showing time series charts of profit share over time made it look like an investment (you know, like all those stock charts).
The key issue was that the daily rate was SMOOTH and CONSISTENT no matter what the problem-of-the-day or week was. It didn’t matter that it was a 3-day weekend, or that it was Christmas, or New Years, or that the site was down, or when ZR stopped processing credit cards, or when AlertPay stopped processing credit cards, or when ZR put a hold on all check deposits for 2 weeks due to the office move, or when SolidTrustPay API callback integration with ZR was broken for a week and you had to manually open a ticket and send ZR a cut & paste of the entire SolidTrustPay transaction screen (not just the transaction ID, but the entire screen).
During all of these events… the profit rate showed little variance between its historical pattern of 4-days high and 3-days low. It also showed the inverse result as expected from other penny auctions where most of the activity occurs on weekends, not on weekdays.
Take ANY other online or brick & mortar business and compare its revenue streams. I don’t care if it’s Amazon, Staples, eBay, PayPal, a restaurant, or your local WalMart. Their day-to-day and week-to-week revenue are much more variable and they show seasonality differences (winter vs. summer; Easter week holiday vs. summer when school is out; etc).
And what about all of that fraud? Not a blip in the daily profit share. You would think if there was massive fraud it would show up a temporary increase.
Apparently ZR is completely immune to ANY VARIATION in revenue. I even suggested on some comments here that ZR corporate should add some random noise to the daily rate to trick analysts like me (I assume they read every comment, okay maybe not).
This is why I proposed that either Zeek’s revenue formula has a built-in “buffer” where revenue is queued and later released to smooth the rate; or they are just lying to us. Considering that all the corporate videos and opportunity calls say that they are sharing 50% of the daily profits and heavily implying that it comes from net daily profits only, I have ruled out the buffer theory, and believe ZR is just making up the daily number like a typical ponzi.
At some point, when the cash flow gets tight and growth slows, they will arbitrarily decide how to lower the daily rate (that’s when the rush to withdraw will begin)
This is not true at all! Some days stand at 0.87% profit pool, other days are at about 1% and weekdays have variation of 1.87%-2.1%.
ZR shares 50% of its profits which include membership fees, bids purchased from zeek rewards website for VIP balance. My point is that the profit does not have to come only from zeekler.
Not true! I have in my Matrix over 1100 affiliates, about half of them are diamonds. This means that people invest a lot of money because few of them go down to silver after their first month.
Why should there be a dramatic variation if the number of affiliates as well as profits keeps increasing at a more or less constant rate.
If you are familiar with stats when you flip a coin 10 times it does make a difference percentage wise whether it is heads or tails, however, when you flip a coin 10,000 times there is a lot less variation in the percentage of heads and tails and it stands at roughly 50%.
The same can be applied here to the number of people joining and those that take their funds out.
Agree.
I also appreciate what Jimmy, Chang, Oz and M_Norway have to say. I do believe that you are doing an excellent job analyzing the companies.
Another point that was not considered. It can be possible that the company in the future includes a limit on how many VIP points one can accumulate.
If it were a pure ponzi masked behind penny auction, why would they have a limit on maximum vip bids one can purchase for a diamond (max VIP bids=10,000=$10,000)?
Some people would buy a lot more than 10,000 bids and the company would only benefit from that.
@Liquid
The $10,000 number is the answer to your question. The BSA, the American Bank Secrecy Act names $10,000 as the point where a bank or payment processor must at a minimum file a CTR (Currency Transaction Report) with the IRS or if circumstances indicate, a SAR (Suspicious Activity Report).
SARs can be mandated for smaller sums if there is enough of a reason to suspect some manner of fraud may be going on and by the companies own admission there is plenty of fraud occurring in ZR.
The FTC and the SEC have something of a reputation for being slow acting but by nature of their organization the Secret Service can at times be far more proactive. When Andy Bowdoin’s Ad Surf Daily was raided, it was the secret service knocking on the door.
Who are one of the agencies who monitor bank Suspicious Activity Reports? The Secret Service.
Paul will do anything he can to most sharply limit the number of financial transactions of $10,000 or more.
Besides, if you max out one account at 10k there isn’t anything stopping you from opening a second account, in your own down line.
If it REALLY IS for PROMOTION, why should there BE a limit? A daily limit, sure. Lifetime limit? Are members supposed to stop promoting? Phooey.
Maybe they did it exactly for the reason you stated: so that it does NOT look like a Ponzi. We just don’t know.
As evidence, I would say it points 70% no 30% yes. It points both ways, and that’s IMHO. It *can* be argued both ways.
Your response lacks precision. You have to compare the daily profit share on day-of-week by day-of-week basis.
The site zeekanswers.com which corporate made the admin take down tracked time series charts since Aug 2011 of daily profit share and had frequency charts showing day of week variation of DAY OF WEEK.
Even for the days where there was some variation between 1.8% to 2.1%, the standard deviation over time for the same day of week was anomalous by itself. For example, there was no change from prior weeks for Christmas or New Years.
I’m sure the revenue was the same for both the penny auction and affiliate bid purchases during those days as others. There was almost no change on Mondays of 3-day weekends, or Friday on Easter Friday… or much difference on Easter Sunday vs. all other Sundays.
The change I am talking about is RELATIVE and based on variability over time, which you can measure using standard devication.
BULLSHIT. I’m calling it. I’ve seen lots of genealogy reports and a density of 50% diamonds in a matrix of 1100 is total BS. Absolute, total bull.
@GlimDropper: The $10k limit is artificial anyways. Many top affiliates invested heavily by buying retail bids, getting the 20% commission (which doesn’t count against the $10k) and buying bids with those, then getting the matching VIP points.
Based on Zeek’s own US tax reporting guidelines, since all daily profit share is considered income earned and paid in cash anyways, what’s the difference between investing $25k of my own money vs. “earning” $25k daily profit share over time and buying more bids? What if I withdrew $25k at 0% reinvestment then put it all back in?
The $10k limitation is just an artificial rule Zeek put in to limit the damage a single investor, or group of investors could do if acting in unison, when they decide to cash out. It’s a standard device used by many ponzis. Distributed cash flow is easier to manage in a ponzi/pyramid than single large investors.
This also brings up a good point… if Zeek Rewards is such a great business opportunity, why couldn’t I put $100k worth of it? Why put artificial barriers in place? The money is the same whether it comes from 10 people at $10k each, or 1 person at $100k, right? Zeek’s goal is to increase the number of purchasing bids, right?
The answer: the only reason to artificially limit bid purchase maximum is to control the ponzi cash flow distribution.
But isn’t that max limit worthless because VIP profitshare points have no upper limit?
Yes, the $10k limit is meaningless in the context of this response:
Most people who hit the $10k limit buy more over time rather than a single bankwire of $10k. Most people surpass the $10k limit if you include “original funds” (money from your bank account) and “earned income” (money from commissions and daily profit share).
And if the BSA was the reason why there is a $10k limit, why not limit it to $9999 or allow multiple deposits over time, say limit to $9999 in any rolling 45 day period. Further, if this is a legitimate business, why does the $10k limit even matter? There are many purchases over $10k that occur in all sorts of online businesses on a regular basis.
And the $10k limit is further made meaningless because affiliates can just create their own customers and buy retail bids and get matching VIP points. Of course, if you were one of the 6 sanctioned countries, you would only get refunds for your initial “original funds” and if you did “buy retail bids as your own customer” workaroud you would be stuck with worthless bids as VIP points were not paid out for affiliates in sanctioned countries.
The only reason for an artificial maximum is cash flow control, which is why all the ponzi’s including HYIP’s and AdSurf that Zeek was modeled after.
I am not going to argue with you. That is what I have. The main reason for that is that those people that were silver affiliates at one point switch to Diamonds once they reach a certain number of affiliates where it is worth being a diamond and get $3.50 for each diamond than $0.25. This exactly what I did.
There are some affiliates that remain free after 2 months, but it just means that they are inactive and will not upgrade.
Frankly, both of you are guilty of using anecdotal fallacy.
Yes, my observation is anecdotal becuase I don’t have access to all of Zeek data. But I have seen many backoffices and genealogy reports including that of several mid-6 figure and one 7-figure balance.
No where in any 1100 group of any matrix did I see 50% diamonds. So while it is theoretically possible, I am extremely skeptical. The natural distribution of things says this is highly improbable.
Only about 8.5% of all Zeek affiliates are Diamond in the US (and assume that US affiliates are more likely to be diamonds than outside the US). So to say there is a > 50% distribution of diamonds in a 1100 cluster is unlikely assuming normal distribution.
Even if you are at the top of the matrix, there are going to be many free and silver affiliates that occupy space, even if they have become inactive.
I just look at two leaders in one of my uplines who have over 250k VIP points and 860 and 1020 people in their matrix. They both have less than 20% diamonds and they have been actively recruiting diamonds.
So I do admit I have no proof, but based on my own observations and the data Zeek has shared that only about 8.5% of affiliates are diamonds (in the US), you can do the math on probability of 1100 person cluster in Zeek’s forced matrix that over 550 are diamonds.
The burden of proof for such a claim should be on the one that makes it.
When did they gave that 8.5%? (just wondering)
From the 2011 Income Disclosure Statement, you can tell what the maximum number of possible Diamonds are based on PV. Since all Diamonds have a minimum rank of Executive (they get 100 PV for themselves), then the maximum possible number of Diamonds is 8.75% (% of Executive + Sr. Executive).
There are some Executives who are not Diamonds, such as Gold members who recruited another Gold and earned enough PV to become Executive. So that’s why I said “about 8.5%” just rounding a little bit. If you assume that there are no Executives with 100 PV who are Gold or Silver (and earned PV by recruiting) then the best case is 8.75% are Diamonds.
Of course, the ratios could have changed since the IDS.
i am a member of zeekrewards for about a week my money is building but i have a problem the VIP bids point is the place where your money goes and i don’t think that u will be able to take that out as cash.
the person who sponsored me for zeekrewards she didn’t told me much about it that is why i have some problem hope i will get some help from you thanks.
Your money is not building – it was spent to buy bids and you were given “points” in return. The “points” are building dependent on the daily profit share rate, but you will not be able to turn those back into your cash for at least 90 days and the rate will be dependent on the daily profit share percentage over that time and Zeek’s ability to continue paying out. Apparently, you will also need to open an E-Wallet to get any money back out, since Zeek is no longer writing checks.
So, please don’t get too excited over how big your “points balance” is growing. Points are NOT equal to cash, despite constant misrepresentations of such by many individuals in Zeek. You have basically taken a bet that Zeek will still be around and able to pay out the same profit share percentage for around 3 months (at least > 1.1% daily on average), since your “points” will all expire after 90 days.
@Monawara
You’re right. You’re not able to take the VIP Points out as cash. But you can withdraw the daily profit share as cash, emptying your balance in 90 days if you’re using 100% withdrawal.
This is easier to SEE in a spreadsheet than writing about it, but your sponsor isn’t allowed to use spreadsheets. I can try to copy a few parts of a spreadsheet into this comment.
Using a FIXED daily return = average 1.5% per day. Initial investment = $1000. The spreadsheet shows what happens in the first week of your investment, and in the days around day 90. I have used 100% reinvestment in the example.
The 1000 in Day 1 and Day 90 is your initial investment, the first one is when you buy bids and give them away, the second one is when the points retires. The 2830 is your VIP point balance after the 1000 points has been deleted.
The 17 in day 1 is your first daily ROI (called “RPP” in my spreadsheet), and they retire on day 91. The 1017 is your first daily ROI added to your point balance.
TOO RISKY?
From my viewpoint, this plan is too risky now. But higher risk will also mean higher reward (if you’re lucky). And too low risk can make it boring, so the best idea is to find a balance between RISK and REWARD.
We’re pretty sure ZeekRewards is a Ponzi scheme, but we don’t know anything about how close it is to it’s end.
You can withdraw the daily RPP as money whenever you like by adjusting the settings in your backoffice. I’ll guess it’s currently set to 100% repurchase. You can adjust the percentage you want to reinvest/withdraw. The money you withdraw will be paid out once a week, with a 14 day delay before payout.
USE A SPREADSHEET?
A spreadsheet will make it easier for you to SEE what happens in different investment/cashout scenarios.
I found a online zeekrewards-calculator at zeekcalc.com. It will give you an idea on how a 90 day investment works, followed by 9 months with 30% withdrawal. But the scheme will probably collapse long before that. 🙂
People will usually have different needs when it comes to setting up a spreadsheet, so I haven’t bothered to write any “How to do it”.
This does appear to sound shady, but I have been studying it for 6 months now and 12 of my friends have become affiliates, and all 12 of them have had their initial bid purchase returned to them and are making commissions on the remainder of their bids daily.
Why is working for a company as an affiliate an investment? I look at it as a second job. I do a job for them and they give me a commission. Yes there is risk….look at the banks, the car companies etc….did people lose money “invested” in them.
One can call it whatever they want, but it is a nice way to add to the bank account, if you just place your ads, take the compliance test.
My one friend bought 800 bids to start and 7 months later she is up to 54,000 bids from rebuys and is banking 1300.00 a week. Take advantage of it as long as possible.
@Monawara
The zeek-calculator probably has some errors in the programming.
The calculator is USELESS, except for the first 90 days without payouts. You can clearly see the programmer has cheated if you try a 100% withdrawal (the balance will start to grow again from day 180). I believe he has cheated with the payouts too.
Your “money” is not growing. Your POINTS are building.
Think of each VIP point is a voucher ticket that entitles you to 1 “share” of profit. By itself, it is worthless. Each has a life of 90 days.
Your VIP Points are entitles you to RPP daily profit, which gets you some money. However, you are heavily encouraged to put most of it back into the system as “repurchase”. So you get out much much less. Usually 1/5th of RPP.
So you put in money yourself, and get it back in dribbles, and hopefully take out MORE than you put in.
Good summary of Zeek Rewards, they should market this! I added two bits, though might make it too wordy:
If I have 10,000 VIP points on day 1 and set my repurchase % to “cero” in order to cash out completely in 90 days, how many dollars would I have received at the end of the cash out period (90 days)?
$10k purchase at 100% cashout, assuming average return of 1.43% = $2,870 profit after 90-days.
But it will take you 3-4 weeks for Zeek to process the cashout to our eWallet, and could take another 2-4 weeks to get money from your eWallet. SolidTrustPay is running 3 weeks behind now.
Some affiliates are reporting on the support forum today that withdrawal requests made week of 5/28, which was supposed to have been processed on 6/18, are still unpaid as of today, 6/25. So that is a 4-week delay right there even before it lands into your eWallet.
You are also taking the risk that the daily profit rate won’t drop during the next 90 day period.
Can I sponsor my sister? We live together now. If not, my sister can under my friend, just be my second level referral? Please advise. Thank you in advance.
I wouldn’t. With all the problems members are having getting paid right now, it would be extremely risky to be putting any money into Zeek at this point in time.
Even if they weren’t withholding payments right now, it’s still risky to put anything in because it’s unlikely Zeek will last 90 days.
Wendy go ahead and sign up your sister under you its fine. dont worry about people say this company will be around for a while.
@Wendy F
Of course you can sponsor family members, like in most other MLMs. But most affiliates will prefer to use family members as “customers” rather than as affiliates if they have that choice.
Zeek has suddenly become much more risky in the last few weeks, so I would be careful signing up family members as affiliates. “Much more risky” can be seen in the number of people who have visited this website, and in how that audience has changed from being optimistic to looking for solutions to withdraw their money, or in the change from “general questions” to more specific questions.
The audience here has changed significantly between June 1st and now, in a direction where more people are looking for a way out than in. It’s possible to SEE the difference from May 15th to June 15th to now. I have followed this topic since January, and there has been more changes in the last few weeks than in the 5 months before.
SIGNING UP YOUR SISTER
If your sister really wants to join, sign her up under yourself or under your friend, instead of signing her up under someone else.
* Signing her up under yourself will give you 10% commission, and your sponsor 5% commission.
* Signing her up under your friend will give him 10% commission, and yourself 5% commission.
I’m not an affiliate, so I haven’t studied the compensation plan very deeply, but I know other affiliates have signed up family members in their downline. You can probably get a more qualified answer from one of the affiliates.
And on what do you base your OPINION? Hmmm?
well i guess from my experence i been in it for a while every thing is working out well for me, yeah there are some risk like any other business there are going to be ups and downs but from the view of things there getting on the right track.
So your reason for believing it’ll be fine is “it had been fine, it will be fine in the future.” Is that right?
Unfortunately, that’s a fallacy. It’s called “hot hand fallacy”.
http://www.fallacyfiles.org/hothandf.html
Except when those risks are a result of fraud, deception, and an illegal business model, your true risks are much higher than what you’re being sold by affiliate and corporate.
If I had a compounding bid for every time someone said “all business have risks” or “it has its ups and downs like any business”, I’d be virtually rich.
any business can have those risk my friend right ? do you own any businesses jimmy ?
No. Most businesses don’t have to worry about being a Ponzi scheme, because they aren’t. You’re naive if you think the world of business (let alone MLM) revolves around affiliates investing money and being paid returns out of new investor money.
Of course this naivety explains why you’d profess the legitimacy of Ponzi schemes on the assertion that you’re getting paid, but I digress.
haha and yes most business do face most of those risk that mr chang said. i know many business owners and i my self have business i own many kiosk in different malls and if you know ANY thing about business you would see it from a business stand point.
Sorry but how does a kiosk in a mall present the risk that the owner of the kiosk is paying ROIs with new investor funds?
Y’know… given that I can hardly walk up to kiosk and invest my money. What a silly comparison to make.
@Kassim,
You own businesses at the Maplewood and Southdale Mall. As a customer, when I buy something from our store, I have a good faith expectation that your products are genuine and they aren’t fake brands.
Similarly, when you enter business with an online opportunity, you would hope the company is operating in good faith. Unfortunately, Zeek has done nothing but that.
They deceive you into believing that there is significant penny auction revenue – this is a Ponzi.
They deceive you into thinking that FSCstore is price competitive and that FSCstore and Shopping Daisy would produce any decent revenue. It’s less than 1/100th of 1/100th of Zeek Revenue.
They deceive you into thinking that the act of placing spammy classified ads are 1) effective and 2) drive traffic to Zeekler. The act is just “busy work”. The “busy work” is the key deception.
They lied about the banking situation – the banks shut down the accounts which is why the checks had to be cashed by June 1.
They lied about the non-existent OFAC sanctions and banned affiliates who had been promoting Zeek in good faith, some for over a year, and only offered to refund the initial investment, not any value for points earned. Some affiliates are still unable to get funding.
They force a mandatory compliance & video marketing fee of $30 that will eliminate most of the free affiliates working from third world countries who have dutifully posted their daily ads but cannot afford or do not want to pay a $30 annual fee on top of their $10/month for Silver. They were happy earning a $1-2 dollars per day which is a living wage in their country.
They lie about giving you customers whether you bought them from 5cc, get them now via qualified PRC’s, or buy them from a third party. These were “fake customers” with emails taken from mailing lists and user names created with Christian name + 3 digits.
They falsely imply that the 25:1 customer ratio is significant when in reality it is meaningless as the vast majority of these customers never heard of Zeekler, never signed up, never selected their own user name, never even logged in, and certainly never verified via email that they wanted a Zeekler account.
They lie that Zeekler is not an investment, when clearly the business model has all along been an investment, and the Zeekler website still leaves clues to do this day with “investing language” in it. Just because you use different words to describe something doesn’t change its true nature.
They lie about how an eWallet works, as caught on tape twice and a ZRN post.
They lie about why a revenue ratio is “proprietary”.
They are deceptive in not disclosing that the officers of the company are also the top earners, and as a Ponzi where everyone competes against everyone else to cash out before the money is gone, they have a huge advantage in that they see the entire revenue flow and every affiliate’s cash out percentage.
They are deceptive in not whitewashing the true risks of using eWallets which are linked to many fraud and Ponzi scams. The reality is that a legitimate business would not use these eWallets unless they were forced.
They are deceptive in now revealing the $100k that they spend with Laggos and NMBJ for the quid-pro-quo positive article that Dawn wrote. They make it seem like it was an independent review. The deception is to try and gain false credibility.
They lied about the true situation with the credit card processing and the reason they can’t keep a single credit card processor and have to use multiple third party business names in different countries is tat they are extremely high risk and deemed illegal by many card processor/banks.
They lied about credit card processing being set up in Hong Kong.
They hide the support forum in secrecy because of all the negative feedback. As an affiliate, you do not want to risk your affiliate account by “talking negative” on the forum.
Once you get past the lies and deception, and even if you gave Zeek the benefit of the doubt in every case, you still have completely incompetent business, IT, and software development execution.
Their video marketing company, USHBB, has produced content for a virtual who’s who of known HYIP Ponzi scams, including Ad Surf Daily, AdGateWorld, BizAdSplash, Ad-ventures4U, TVI Express and Global Verge/Buzzirk Mobile.
So yes, there is considerable risk. Now when I shop at your stores in Maplewood and Southdale Mall, I’m not taking nearly the same risk, am I?
This is where kasim now tell us he’s getting paid and doesn’t care, because y’know… where the money comes from is irrelevant. Until of course he stops getitng paid.
Then suddenly he cries victim and claims he had no idea what was going on *wink wink nudge nudge*. Because after all, investing money in Zeek Rewards to earn a ~1.5% daily ROI from new invested money really is the same as purchasing a product or service from a kiosk machine in a mall.
we were talking about RISK smart guy. kiosks are like stores except margins are high VERY good money haha but like i was saying like every other business there lies problems some where down the line. do you nto see all these companies getting sued for alot of things especially fraud
Yes, yes we are. And to assert that all risks are the same is naively idiotic.
Only a complete moron cannot see the inherent difference between the risk of nobody buying your product vs. new investments drying up and owed returns not getting paid out.
…or someone desperately clinging onto the irrational hope that a penny auction with no retail customers really does generate millions of dollars a day.
haha im not gonna say im getting paid so i dont care i know some people in it high up there so i know some things and it always looks real bad from the out side.
i can tell you that there has been issues with me paying my employess not because i didnt have money some crap always goes wrong if its not my merchant account messing up or payrol lady giving me a hard time.
i dont just own those kiosk i have businesses back home and you wouldnt belive the little problems that show its head. If there was proof that the penny auction doesnt make money then you guys would be right but it does .
ha i won things before i even got into in i know some kids my age who win little things off there and there not even in the marketing program
Outside, inside, it akes no difference when analysing a Ponzi scheme.
Unless this was because you hadn’t received any new money from people investing with your business on the guarantee of a ROI, your experience and poor business skills are wholly irrelevant.
Oh dear. Really?
Alright then, as a Zeek Rewards member, how many legitimate retail customers do you have who regularly purchase bids and are not related to you and/or dummy accounts you created for friends who never use them?
lol your right im the moron.
So I take it none then.
Cheers and best of luck on your quest to convince gullible idiots to invest with Zeek Rewards on the premise that a penny auction with no real customers generates millions of dollars a day.
There is plenty of proof. We’ve discussed it over numerous articles and hundreds of comments.
Firstly, the revenue is nothing close to the what is paid out to affiliates. You can do the math yourself – just track the number of auctions per day and estimate a final price and cost per bid.
Secondly, the revenue into the penny auction is all redistributed into the Ponzi anyways. You buy $1000 in bids, Zeek pays out $200 in revenue + 1000 matching VIP points with increasing ROI !!!
Either issue by itself makes it a fraud and a ponzi. Taken together, it is a clear sign that Zeek will fall as did Ad Surf Daily.
poor business skills lol your doing alot better then me in life im 21 you are ?
any ways like i said i know PEOPLE WHO were using the penny auction site before i even joined zeek and they still UP TO THIS DATE ARE ALWAYS ON IT
you dont have to belive me remember your smarter haaaa
dont think its like ad surf the money coming into the program was what like 97% of members money going back and forth ?
the penny auction makes money i have i have bid and won even money ha i know people who have won things i just found out some weird guy has been winning things for cheap then reselling at the malls dudes like 17
You’re an affiliate, case in point. And if this was before you were an affiliate, be honest – you were justing using free bids an existing affiliate dumped on you.
How much of your own money did you spend on Zeekler bids as a non-affiliate (genuine retail customer bids) and after becoming an affiliate, how many Zeekler customers have you signed up who regularly buy bids with their own money and aren’t just dummy accounts you set up for family and friends that you run for the affiliate commissions/vip points?
I assume he too is an affiliate and if not I’m calling anecdotal bullshit. Nobody uses penny auctions as a reliable source of stock to flog somewhere else. Solely for the fact that it’s not reliable given the chance of winning is so low.
It’s even worse on Zeekler due to bid inflation because of the Ponzi investment compensation plan.
who cares if im an affiliate ? lets focus on the PENNY auction side.
walmart employess can buy from walmart right ? i bit alot of there sales comes from employess on break or off the clock.
I BID to win things i pay for my item the company makes there money would you like to add him on face book and talk to him ill give you his name and you can talk to him why should i lie ? IT MAKES MONEY !! 🙂
But Walmart doesn’t pay out 120% in referral commission for every $1 in sales, now do they?
Walmart employees are not told that if they buy products from Walmart they get a share of Walmart’s profits.
COMPARISON FAIL.
focus on only the penny auction PEOPLE that i know bid on ALOT of items some win some lose either way the penny auction makes money.
Why? You’re not paid by Zeekler. You’re paid by ZeekRewards. You Buy giveaway bids from Zeekler, and give them to ZeekRewards to be passed out. And in return, you get paid by the amount of bids YOU BUY.
Let’s put it this way: How many giveaway bids vs. retail bids have YOU bought, respectively?
How about the people you gave bids to? Or the people you recruited?
What is the ratio of RETAIL bids, vs. giveaway bids purchased by affiliates?
The issues are NOT with Zeekler. The issues are with ZeekRewards. You’re arguing the WRONG ISSUES.
im not aruging my friend can you answer me does zeekler the penny auction make money ?
If penny auction makes so much why don’t you try opening one up
Those people using the auctions, are they real PAYING customers or affiliates? Affiliates spending their own money in auctions isn’t very profitable for Zeekler, because of the matching VIP points and the commissions.
In the 6 months since January 2012, not a single affiliate have come forward claiming to have any REAL customers, customers who actually PAYS for the bids themselves other than as a “test”.
For the free bids, only 2 real customers have posted comments here in 6 months. Real customers are the ones who primarily are interested in the auctions.
“The penny auction makes money”? Have you checked if that is true?
Customer BUY bids = money coming IN
Customer spending bids = no money coming IN, except for from the winner of the auction.
1000 bids spent in a penny auction will raise the price of an item with $10, and the winner will have to pay a higher price for the item. But your own examples shows this is not very profitable for the auction site.
Ok, they made $1,000 when the bids were bought, but they have to pay the affiliate $200 in commission and 1000 matching VIP points. The affiliate will withdraw all of the profit in 2-6 months if he uses any kind of “normal” withdrawal plan, from 20-100% withdrawal for the 1000 VIP points alone.
nah there real people mostly my age or younger. i also know i few older people but im not sure if there in zeekrewards but the ones my age for sure some of there friends too.
I can give you a clear answer:
A. The penny auction IS profitable because people pay money IN when they’re buying bids. But it will only be profitable if the affiliate doesn’t withdraw money from the matching VIP points, and never will withdraw the points as money either.
B. Most people will prefer to be paid in money rather than “points”, so most affiliates will eventually try to withdraw money.
A + B means the penny auction isn’t profitable. After a few months the affiliate will have withdrawn all the profit the auction made when the customer paid for the bids.
So you’re saying people 17-21 years old are spending their own money in penny auctions, regularily buying VIP/retail bids to spend in auctions, without being affiliated to Zeek?
Then you’re the first affiliate (in 6 months) who have come forward with real customers, customers spending their own money.
@Hi bye
The quote from your comment in my previous post was only a miss. I thought I was quoting Kasim’s comment.
Then pardon me, you are FOCUSED on the wrong issues.
The problem with the whole thing is ZeekRewards, NOT Zeekler.
If Zeekler can make so much money, WHY DOES IT NEED ZeekRewards?
yeah but im not sure if they still do it or not now but from about a month ago they were… we all really do our own thing to try and make money so i dont keep in touch as much haha
To make help me and MAKE EXTRA $MONEY$ haha
i mean to help people make money and also to make extra money
we gotta spend our money on something haha even my mom now spends ALOT of her money on penny auctions :/ but qubits is her sh*t haha
But so far all you admitted to is you help people SPEND money (buying bids).
If the “customers” are using FREE bids, that part of the business model isn’t very profitable either.
The business works like that:
1. Affiliate pays money IN, and get VIP points in return.
2. In the middle, you have a system where the VIP points generates daily ROI for 90 days, where the affiliate buys sample bids and give them away to customers, and earn VIP points in return.
There’s absolutly NO money involved in point 2 here, only points that generates other points. The only money involved in this process is the money paid IN by the affiliate for the initial investment in point 1.
As someone who was familiar with Quibids and penny auctions long before this Zeekler thing got started, the Zeekler auctions are basically sh*t for retail customers ( non-affiliate people actually spending their own money to buy bids ) for the following reasons:
1. Bid inflation = massive overbidding means much less chance of winning, and minimal savings if you do win.
2. Zeekler auctions are not reliable due to IT glitches and malfunctions (there are threads that talk about this). They have ABE which is like Bid-o-Matic on Quibids except there have been documented cases of people having an ABE running with bids left on it and still lose to single bidders – this should be impossible with correct server programming.
In another shining example of sh*t auctions, the Ford mustang auction ended due to a server/network glitch preventing anyone from bidding from the outside, so one lone bidder using ABE was awarded the Mustang.
3. The lack of a Buy-it-Now feature is a major negative compared to other auction sites which have it.
4. Zeekler is run by incompetent people that do not set up their IT dept correctly so either you can’t pay for your winning auction, can’t use a credit card to pay, have to use some random EWallet with fees all over it, and if you jump through enough hoops to pay for it then you don’t receive delivery for MONTHS if ever. There were many complaints in forums about this until Zeekler shut down the forums to non-affiliates.
Given these points, even if some retail customers stumbled on Zeekler and bought some bids, they aren’t going to stay and buy more bid packs unless they are complete idiots, since they get a much better deal at basically most any other penny auction, and Zeekler is run like some kind of clusterf*ck operation.
no disrespect but your a little wrong for the fact that i was real close to winning the mustang haha i was pissed i ran out of bids i bought BIDS i dont understand why its so hard to believe ?
there was so many people bidding for like 4 or 5 days. I HAVE said i know people who use to do it alot( maybe they still do if you like i can find out for ya ?) i also did buy BIDS for the mustang maybe around 400 to 500 just for the mustang auction alone.
IT gets addicting IT MAKES MONEY
If you are buying bids for Zeekler you are wasting your money. Zeekler is at least 5x worst value for your money even if you assumed there was no bid inflation.
It’s like playing at a Casino with 5x worse odds, poor customer service, and ugly cocktail waitresses. Yes, you can still play there, and yes, that part of the business is legitimate, but it is not competitive and it does not generate enough revenue to sustain Zeek Rewards… that, my friend, is the deception.
Also, don’t forget about the Ponzi aspect of the business. For the bids that you purchased, your affiliate sponsor (if you didn’t sponsor yourself using a friends/family/fake customer), received matching VIP points.
If every bid purchase results in 20% commission + matching VIP points, where does the money come from?
nahh the odds are alright look the people who play those things dont really care about the value or how much the items cost.
at least from my point its like lazy shopping IF i see something i want i dont care about the price i want it so i buy bids and win it i havent for a while but my first auction was winning 100 dollars for 3 dollars they sent me a check.
there is alot of revenue coming in from different places which is perfectly legal as long as NOT all the money is coming from only MEMBERS
Mathematically when you have a bunch of people with bids they got for free, no they aren’t.
This is a myth.
This is also a myth.
When it comes to Zeek Rewards, this is also a myth.
except that it is. Houston, we have a problem.
haha if you say so oz
I see the discussion has gone around in circles while I was out. You’re an affiliate and what you spend in Zeekler is therefore irrelevant as it’s affiliate money.
Thus far all I’ve heard is claims by yourself that your mates (who are all affiliates) are spending money in Zeekler, again irrelevant as this is affiliate money. When directly asked how many actual customers you have you have repeatedly dodged the question.
First and last warning, the
circlular discussion ends now or you’re going in the spam bin.
I call spam!
@ oz
So if this Kassim person is real than it would seem Zeek Rewards may be full of blinded older mlm people and the younger inexperienced with $ instead of brains
… try and get a paper check now, affiliate Kassim! Ever hear of a bait and switch?
Sorry charlie 🙁
In the earliest days of the AdSurfDaily Ponzi case, one of the lies AdSurfDaily members spread on forums was that ASD could not be a Ponzi so long as it had so little as $1 in external revenue.
There also were vague claims about a lot of revenue coming in from different sources — in other words, some of the ASD affiliates simply repeated the company line and presented it as fact.
In actual fact, more than 98 percent of ASD’s revenue came from the members, meaning that ASD was a simple money-cycling scheme that tried to dress itself up as a legitimate “advertising” business.
Just prior to the collapse, ASD’s Andy Bowdoin moved several million dollars to Canada-based SolidTrustPay because he knew he was in trouble with the two U.S. banks he used and very likely no longer could issue checks to affiliates.
Prior to the U.S. Secret Service raid, undercover agents made contact with various ASD members pitching the program online. Here is what one of the members told an undercover agent:
“Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.”
The initial ASD forfeiture complaint and dozens of pages of evidence exhibits that accompanied it led to the seizure of 15 bank accounts and about $80 million. The complaint included an understated subhead for the ages:
“Federal Agents Join ASD”
At least two more forfeiture complaints followed, and Bowdoin was sued by some of this own members under the U.S. racketeering statute. The U.S. Secret Service pointedly called ASD a “criminal enterprise,” and the U.S. Department of Justice described it as “insidious.”
One of the reasons ASD-like schemes are insidious, IMHO, is that they effectively allow scammers to tap into bank accounts at the local level — and soiled proceeds consequently flow into those bank accounts.
Because polluted money tends to pollute other money, otherwise legitimate businesses — and even places of worship and charities — come into possession of radioactive funds.
For the sake of discussion, let’s say there was an ASD insider who was a “million-dollar earner” and that earner sent $100,000 to a church or charity.
That church or charity now is in possession of tainted funds that could make it subject to litigation and require it to hire attorneys on its dime. The church or charity has precisely ZERO knowledge that the funds directed at it were tainted and may have directed some of those funds, say, to the local soup kitchen for the homeless.
So, now both the church or charity and perhaps the soup kitchen are at risk. All of them were trying to do the right thing for society — and yet got drawn into litigation because a Ponzi scheme insider sent them money.
A poisoned money supply presents an untenable situation both economically and in terms of national security. The effect is similar to the effect of counterfeiting, meaning that faith in commerce and the marketplace itself is undermined.
“Earnings” of 1 percent to 2 percent a day are an ENGINEERED DELUSION foisted on the marketplace by magical thinkers who rely on convolutions and devices such as 80/20 programs to mask the mathematical realities.
PPBlog
@tkitty
The red carpet event photos I’ve seen appear to be rooms full of older looking people so I’m not sure what the demographic spread in Zeek Rewards is like. Maybe Jimmy can weigh in (he’s got a wider feel for the affiliate base).
Perhaps the internet savvy gen-y members don’t see any reason to attend such events, I couldn’t really justify $1000+ on an event for a passive investment scheme if I was a member.
I agree. It would seem the red carpet events are held mostly for the “professional” people. Probably to keep them believing. And to give them fresh ammo to bait with.
As for Kassim, he should listen to his mommy and play with Quibids (an actual penny auction site).
Hello just ran across this site and I like to say I am a happy customer with zeekler I have bought at least eight items all shipped to my address on proper time so I am one of those happy customers.
I don’t know about the rest of you tho instead of complaining about some company why don’t u try buy something your self and find some other things to worry about all of you that just like talk non sence least for your own good Health.
To find fault in others normally you’re the one that has problems as well (;
@Amy
1. Are you a Zeek Rewards affiliate and/or are any of your family members or distant relations affiliates with account(s) linked to your Zeekler customer account via the commissions system?
2. How much of your own money have you pumped into retail bids? This naturally excludes money the affiliate who recruited you as a customer gave you to purchase bids so they could earn matching commissions on.
No I am not that affiliate of any kind I just ran across the free bid ad while browsing one day signed up for that I used up all my free bids then I bought separate bid packs on occasions and then bought items from there so it does work for me as well just for all you to know now.
I do not have any family members in this business nor care just to make up something out of the blue I enjoy shopping online my husband and I have fun bidding on items trying to win them.thanks for asking (;
How did you buy items in a penny auction? Does your husband have any family members and/or friends in Zeek Rewards?And considering this is an article about Zeek Rewards what exactly are you doing here?
Either way, congratulations you’re the first retail customer we’ve seen in 9 months and over 3000 comments. I hope you’re spending millions of dollars a day on bids to keep Zeek Rewards legitimate and ensure people keep getting their daily ~1.5% ROIs.
PS. You didn’t actually mention how much of your own money you’d pumped into ZR retail bids.
@Amy
Nice try 😉 So do tell us… As a happy retail customer with no affiliation, what brought you to this site? What were you searching for?
We have no family members in the business what’s the rewards your talking about I am just a customer for the site you all were talking about.
I am a customer as well with eBay we shop online there and I like to shop online with auto trader so I just see this as another site where you can shop with.
ya your comment of spend a million on them not so nice I was just leaving honest comment so have nice day (;
…right. You don’t know what Zeek Rewards is, yet you’re here discussing it (Zeek Rewards is the MLM company being discussed, not Zeekler).
And you’re repeatedly dodging the question of how much of your own money have you pumped into Zeekler retail bids as well as other questions (how do you buy stuff on a penny auction?)
Time to call bullshit on this one.
@Amy I don’t believe you (: Now why did you come here again?
For what it’s worth, Amy did reply but instead of answering any questions she started crapping on about how much money people spend in bars and how nobody believed in Jesus when he was around.
She also mentioned something about being around penny auctions and quibids “long before Zeekler” came about and how “shit” Zeekler was for non-affiliates. This after claiming she had no idea what Zeek Rewards is.
Make of that what you will.
Zeekler don’t have affiliates… ZeekRewards have affiliates.
I think she just slipped up on her lie. 😉
From my own observations and compared data available from Alexa, Quantcast, Google Ad Words, and Facebook advertising, my estimate is:
Now, if you want yet another factoid to show how irrelevant Zeek’s penny auction is, pull up Alexa’s demographic for Zeekler.
– Compare Zeekler demographic on Alexa to Zeek Reward – it is identical!
– Compare Zeekler demographic to “real” penny auctions such as Quibids and Beezid, they are completely different!
So either Paul Burks has figured out a way to tap into the old people’s desire to play the penny auctions, or the Zeekler auction is all driven by Zeek Rewards affiliates and everything they say about how much revenue it is generating to pay daily profit share is at best heavy PR spin and at worst outright lies.
P.S. Even the small penny auctions auction more items than Zeekler, at lower average prices, and with much better UI interface.
Hmm… I just pulled doubleclick data (now Google) which shows a different picture. It says:
It’s probably more accurate than the Alexa + Facebook stats.
Those stat numbers could be the difference in demographics in just the last 2-3 months. I would not doubt the change.
I think if it were possible to determine Silver affiliate memberships from Diamond affiliate memberships, then discretionary money and younger penny auction players would also support the recent change. And, would also reflect the recent explosion in Zeek’s membership. The younger crowd has now heard of Zeek and joining at a faster rate than the older.
How do you predict a penny auctions daily profits solely on how many auctions were won that day and the price? That doesn’t even come close to telling you how many bids were bought that particular day.
I doubt all the bids bought on a particular day are used the same day. I could be wrong but I doubt it……
Every bid sold through Zeekler carries with it a >100% loss on the purchase price of the bid via Zeek Rewards referral commissions and matching VIP points.
With every bid purchase in actuality counting as a loss, what do bid purchases have to do with profits?
Does anyone know if Zeekrewards is allowing it’s affiliates to make subscription payments with it.?
Do you have to be referred by someone in Zeekrewards to buy bids for the Zeekler penny auction? How is it that every bid purchased is considered a loss?
The VIP bids really aren’t considered cash are they? They just determine the amount you qualify for in the RPP and in 90 days they expire… I agree that the commissions are considered cash though… I think I’m confused…..
Not as far as I know, but I’d put the number of non-referred retail customers of Zeekler at such an insignificantly low number it’s not even worth factoring in. There’s no organic attraction to it at all when you consider how bid inflation ruins the auctions at all bid levels.
No they aren’t, but “the RPP and in 90 days” they pay out is. In order for the compensation plan to work and new members to join and keep investing, this 90 day ROI has to be >100% of the cost price of the bids (remember, the ZR member earning the points has to invest in bids to replenish the points after they expire in 90 days).
If the ROI was 100% point balances would stagnate and new members wouldn’t join and invest so it has to be >100%. The referral commissions, if applicable, only further increase this loss.
Hence all the compliance wordsmithing and ‘you get paid to advertise’ rubbish. Zeek Rewards is much easier if people just invest $10,000 and blindly trust the system without understanding the mechanics of it or where their daily ROI comes from.
You mean the VIP points? They are only points, just as you described them. They are used to calculate your share of the daily profit pool, and they are NOT withdrawable as cash.
We haven’t agreed on that point. Jimmy consider them to be cash, and I consider them to be “points” when they are in the backoffice.
The difference between “points” and “cash” is how available they are as “cash equivalence”, something you can use directly to pay for something in the real world.
* You can’t use the RPP to pay for your electricity bill, you can only use them to pay for bids in Zeek.
* You can’t transfer them directly to your bank account either, they will have to go through additional steps in Zeek before they become “cash equivalence”.
So in my opinion, the amounts paid to your backoffice will fail most of the tests for taxable income. Amounts paid to your eWallet will be taxable, and so will other amounts withdrawn.
Howard Kaplan
For US affiliates, the basic tax advices from Howard Kaplan can be recommended. “Keep your own track of income, expenses and work” and “Understand the business model as best as you can, and make sure you can communicate it to your accountant or other tax advisors”.
“Keep your own track”?
* Use a calendar to make notes for work you have done, etc.
* Use a spreadsheet to keep track of the daily economical activity, including the the daily RPP and reinvestments.
* Organise your documentation, for other expenses etc.
So what he said was “spend a couple of minutes each day, or 5-10 minutes each week, to keep a track of your business”.
“Communicate it to your accountant”?
You’ll find HIS explanation on zeekrewardsnews.com, from around 20th February 2012.
* where he breaks down the 1099-MISC in it’s individual posts
* how to post them (very confusing)
So you can use some of his material, but other parts are very confusing. His methods are NOT designed for an ordinary taxpayer using Zeek as an investment, and there’s also some flaws in the logics used.
Tax discussions
The tax discussions here have been spread in different threads, in February, April/May and in June. None of them reached any conclusion. Closest to some conclusion can be found in the “Zeek Rewards admits $100,000 in fraud occurring” thread, where 4 posts from Dan Matthews contains some important information.
Since we don’t have any clear conclusions, I won’t recommend US affiliates to use the 20% extra commission method (withdraw money, use them to buy retail/VIP bids).
Some of the Zeek affiliates here can probably answer that, if you tell them what “it” means, the RPP, the eWallet or something else.
Oliveras’s weekly call for tonight cancelled. Hmmmmm…
Zeekler has 2 main methods for registering customers:
1. Referred through affiliates, via clicking on the daily ads or via the affiliates’ websites.
2. Directly via the auction site, “Get 25 free bids when you register”.
So in theory, most of the customers can be people who visits the auction site directly, and sign up without going through an affiliate. But in that case, the affiliates’ work will be rather meaningless. Why have affiliates posting daily ads when people signs up directly, anyway?
So I have focused on the part we know exists, affiliates signing up family members and friends, acting as real customers so the affiliate can earn 20% extra commission. THAT part isn’t very profitable because of the matching VIP points and the commission.
We have had very few comments from customers, only from one or two free customers in 6 months. The one I remember signed up through an affiliate, received 300 free bids and used an ABE to test them in an auction. She wasn’t very satisfied with the auctions.
I have been focusing on external income streams (customers) since early January 2012, but the auctions seems mostly to be used by the affiliates themselves.
Last week, Daryl Douglas took the call and gave just his usual introduction to Zeek with glowing implication of the great revenue being generated by the auctions.
Meanwhile, the Zeek support forums are still down. Troy’s promised updates on July 4 and then “first thing Mon morning” in response to some affiliate questions are late.
Word from affiliates is Zeek is paying, but it seems like they are content with hiding between the curtain until some future date. Maybe they are waiting for all the banking, eWallet, ACH systems, credit card processing, and everything else with the website that needs to be fixed are ready to go before coming back out on stage.
Ok so in your opinion you think the 20% extra income could possibly create a problem come tax time?
Wouldn’t the commissions from selling bids be the same as receiving commissions from matrix commissions(membership renewals)/bid repurchases from an affiliates down line?
How do you highlight green parts of a reply that you want to quote?
@Jimmy – Thanks for the update. I’ve been trying to gauge whether these pledges of ACH and the return of NX Pay in the near future are merely stalling tactics. I seriously doubt ZR would ever actually implement direct deposit even if they could. But if they do, hey, great!
So does anybody recollect when the last time was that Oliveras was heard from on one of those calls?
Ok wait a second… how did that turn green? Was it by me putting quotation marks or did a mod do it?
In the interests of readability I often slightly adjust the formatting of comments on BehindMLM.
Quoted text (in the green box) can be done automatically by clicking the (Quote) text at the top of any comment (near the author’s name) or by wrapping the text you want to quote in <blockquote> tags.
Eg. <blockquote>this is the text I want to quote</blockquote>
@Jack – On the post you want to quote, next to the date and time is a little ‘quote’ link, just click that. Looks like you’re doing ok though (:
Thanks for clearing that up guys!
A comment FAQ has been on my to-do list for ages now, just continously wind up with way too much content to write about though.
One of these days I’ll wake up and there won’t be anything to write about in MLM and I’ll get it done!
Thanks Norway for bringing up to my attention my omission.
My question should have read: “Does any on know if Zeekrewards is allowing subscription payments with Nxpay?”
I have started from a viewpoint where I consider the tax method used to be incorrect. I don’t consider the RPP paid to the backoffice to be “cash equivalence”. You CAN buy bids for them, but you can’t use them to pay your grocery bills.
In the method for earning 20% extra commission, I assume the affiliate will withdraw money first. And I consider money withdrawn to be taxable income. So I won’t recommend that method for affiliates in the US.
For the income year 2011, ALL the RPP paid to the backoffice was posted as taxable income. But they also had deductible expenses, where all the bids given to customers could be posted as expenses.
My opinion is that both the income and deductions are incorrect. RPP isn’t money, it’s only some internal “points” used in Zeek. So you don’t pay for the bids when you’re reinvesting RPP. And Zeek doesn’t pay you when they display RPP as “cash available” in the backoffice. They pay you when you’re withdrawing them as money.
Actually, I have started from a viewpoint where I consider Zeek to be a Ponzi scheme, and the RPP to be “points”.
So whats the deal with taxes come 2012? I “put in” 1500 on june 9th……what do I say come tax time?? I am doing 100% reinvest.
Also anyone have an idea on how long Zeek will last???
@Giggity
You tell the IRS you re-invested 100% of your ROI back into new investments. As per your own words.
Until new investors stop investing and/or the authorities step in.
I bought some sample bids and i go to give some away and i notice that i have no Customers and all i have are affiliates. i am aware that affiliates only earn me a 1/2 point which i dont want to do.
How does one sign up as a customer so i can retain a full point for every bid i give away?
Are you asking how to make a fraudulent customer to dump bids on?
Thats a first….
I can create as many customers you want right now for a fee…..and they wont be john334 or paul447.
I will actually make you legitimate sounding names as to not draw attention…..like it would anyways.
Just visit my site BSzeekcustomers dot com right now and i’ll start the zeekler printing press.
On another note.
These scam searchers make me sick. Gotta wonder what else in their lives involves a scam. The few I know in the zeek cult are always looking to go cheap on everyone and scam their way through life. /rant
im not asking how to create fraudulent accounts.. i want to know how to become a customer?
Easy, sign up on Zeekler.
@nino
You’re probably looking for how to sign up a customer under YOURSELF, not how to join as a customer yourself? So you can have a customer to give bids away to?
One of the affiliates here can probably tell you how to do it. I’m not an affiliate, so I haven’t studied details like that. Your upline can probably answer it, too.
A normal solution would be to check your backoffice, and see if you have some options to register customers through there. Or you can probably give them the link to your Zeekler.com site (username.zeekler.com).
@nino have your customer go to www. Your username . Zeekler dot com and sign up
Hi, I would like to know, how to delete the zeekrewards account.
Below are more examples from Zeek support site of affiliates having to use “compounding” even though they are told it is not an investment.
As hard as everyone tries, in the end affiliates still have to use “investment language” in order to talk about the business. Surely everyone, including Troy Dooly, can see that the virtual points disguise does not make Zeek magically pass the Howey Test.
@Rodney McKay and others
1) this is a business, and as such affiliates must be responsible for their businesses and be active rather than completely passive.
2) Affiliates should hold their upline responsible, if they are a prospect of someone, they should know from their sponsor what kind of training is available. If non exist traversing upline seek a sponsor that can train you or an organization such as ours that is active and trains daily so that all up and down line are on the same page.
a) Don’t start any business without a support network, that is not good business.
3) With the above taken to heart, affiliates would know where to get reliable information and how to take action when repurchased bids are not transferred to the company pool which is a service and not a guarantee.
a) but for those that want to know what they should have done this last week as their points built up over 15000 as one of our members did
i) The back office offers a Bid Manager it records the repurchased bids.
ii) within the bid manager you can select customers that are part of your business.
iii) select a customer that has not received their maximum allotted free bids for your subscription level, the manager will tell you up to how many bids you can give that customer
iv) enter the number of bids you wish to give that customer and click give bids.
v) the given away bids are immediately transferred into your VIP Balance.
4) It is the business owners responsibility to run their business, the account problems of July 2012 are unfortunate. A method existed where every affiliate could make sure that their VIP balance remained at maximum. This has been published through out the internet and on the AFFILIATE forum since it became a big issue.