NC AG’s office deny saying “Zeek Rewards is legal”
Yesterday North Carolina’s Channel 2 WMFY News ran both a printed and video segment on penny auctions, citing local company Zeekler as an example.
The print article, titled “Popular Penny Auction Website Based in the Piedmont”, was a general rundown of how penny auctions work and, using Zeekler as an example, attempted to break down the auctions and associated costs to bidders.
Reporter Liz Crawford wrote the piece and as part of her research for the story contacted the North Carolina Attorney General’s office, noting that
The North Carolina Attorney General’s office told News 2 they have received a handful of complaints when it comes to Zeekler and their sister site, Zeek Rewards.
A court has not yet ruled whether this operation is legal or illegal.
On the accompanying video broadcast however, the filming of which Zeek Rewards described on a promotional press release as “a reporter from Channel 2 popp(ing) by home office”, Crawford threw in a somewhat of an ambigious line towards the end of the broadcast:
I did get in touch with the North Carolina Attorney General’s Office, just to do some fact checking.
They told me they have received a handful of complaints when it comes to Zeekler, as well as their sister site Zeek Rewards – however Frank, it is legal.
Out of context, it does appear as if Crawford is stating that the Attorney General’s Office has certified that Zeek Rewards is legal, but given the report was about penny auctions and the use of the singular “it” (in reference to “penny auctions”) rather than “they” (in reference to Zeekler and Zeek Rewards), I maintained the AG’s Office were solely referring to penny auctions:
The report was about penny auctions citing Zeekler as a local example. It wasn’t about Zeek Rewards and the MLM business model.
Here’s the opening paragraph:
“Lexington, NC– What if you could use a penny to buy an iPad? Turns out, you can, if you use an online penny auction. However, placing your bid will cost you more than pennies.”
And the video segment opens with the anchor referring to a “penny auction craze”.
Penny auctions are currently legal in the US. Maybe they’ll do a followup in more detail specifically going over Zeekler/Zeek Rewards maybe not.
Furthermore “it” is singular, referring to penny auctions, not two separate companies and/or the MLM business models. Also there’s a segment at the end about addiction and gambling, again reaffirming the story was on penny auctions.
Nonetheless, seeking further clarification I sent off an email to the NC Attorney General’s Office seeking explicit clarification on the matter. To date I haven’t heard anything back but Patrick Petty over at PP Blog did, and the response he got from the AG’s office makes for some interesting reading.
Pretty contacted the AG’s Office this morning and was told “it never said the Zeek MLM or auctions programs were legal“.
Additionally,
The agency said it had asked a local television station to issue a corrected report, and the station has removed (the offending) video report.
Indeed if you click on the video link on the Zeek Rewards News blog,
you are presented with a server application error from WFMY’s video hosting provider ‘DigTriad’:
Possibly more interesting than that however was the elaboration from the AG’s Office on the aforementioned complaints the office had received on Zeekler and Zeek Rewards.
As detailed by Patrick Pretty,
“We do have concerns about [Zeek],” said Noelle Talley, a spokeswoman for Cooper. No determination that Zeek is operating legally has been made, Talley stressed this morning.
Cooper’s office supplied the PP Blog with a list of complaints the state has received about Zeek.
(Note: The paragraphs below do not take into account all of the complaints Cooper’s office has received about Zeek. There are at least 10 complaints on file.)
One complaint that originated in Utah on May 16, 2012, alleged that a customer had given Zeek $20,000 in April but never received credit and was unable to get any satisfaction from customer service.
“The customer service is non-existent and I am beginning to think Zeekler is a pyramid scam,” the customer told Cooper’s office.
Zeek responded to the complaint by informing Cooper’s office that it believed the Utah complainant wasn’t actually a Zeek customer.
Rather, according to Zeek, the complainant was the father of two sons who were Zeek affiliates and had contacted the attorney general out of “personal curiosity.”
This particular complaint stood out as a bit strange given that it appears Zeek Rewards are trying to brush off the concerns of the father because he’s not a member himself.
I know I’d certainly be “personally curious” if my sons invested $20,000 into Zeek Rewards and ‘never received credit’ on my investment nor was able to ‘to get any satisfaction from customer service‘.
Another complaint received by Cooper’s office from a Florida man in November 2011 was forwarded to the Securities Division of the North Carolina Secretary of State’s office for review, according to the correspondence trail. No final outcome is noted.
Another complaint Cooper’s office received on May 8 originated in the District of Columbia after being sent to the Office of the Attorney General of District of Columbia by an individual in Oregon four days earlier.
The District of Columbia forwarded the complaint to Cooper’s office, which opened a file.
“This is a Huge Ponzi scheme,” the sender complained. “If not [looked] at carefully and stopped by the US AG, [t]his would be a tremendous task to [sort] out to pay back the consumer. This is [n]o different tha[n] AD Surf Daily ([i]f you remember the [c]ase).”
Meanwhile, a Zeek customer in Miami contacted Cooper’s office and told the agency that he had sent U.S. Postal Service money orders totaling $1,000 to Zeek in April and that the sum never was credited to his Zeek account.
Yet another Zeek customer — this one from California — told Cooper’s office that he had wired more than $2,000 in March from his account at Bank of America to Zeek’s account at NewBridge Bank in North Carolina.
Although the complainant said he’d confirmed both through his bank and NewBridge that Zeek had received the money, the money never got credited to his Zeek account.
The California customer also told Cooper’s office that Zeek closed his support ticket without providing a resolution, a circumstance that forced the aggrieved customer to open a second ticket.
Shortly after the WFMY news broadcast went live I identified the “it’s legal” line from WFMY’s Crawford and outlined concerns over the quote being taken out of context and used to promote Zeek Rewards:
The reason I mentioned ‘out of context’ because I can see it being used as a marketing point by affiliates:
‘The NC AG said we’re (Zeek Rewards) legal! Invest, invest invest!’
When the AG hasn’t stated anything specific about the whole compounder/VIP point investment scheme behind Zeek Rewards.
On the other hand, nothing will get the AG actually going over Zeek Rewards’ compensation plan faster than a few hundred thousand affiliates running around the internet claiming the North Carolina Attorney-General’s Office said Zeek Rewards is legal…
And sure enough, within hours of the broadcast going live BehindMLM began to receive spam comments from Zeek Rewards affiliates proclaiming that the AG’s Office had indeed declared Zeek Rewards legal, with a link back to WMFY’s video broadcast,
Jane: Oz, I thought this website would be a balanced website about MLM, but even when the reporter says that they have contacted the Attorney General Office, there have been some complaints regarding Zeekler and Zeek Rewards – it’s legal.
Ironically the North Carolina Attorney General’s Office aren’t the only authority Zeek Rewards affiliates are claiming has “signed off” on the legality of Zeek Rewards and Zeekler.
Buried in the mountain of recruitment spam comments left by Zeek Rewards affiliates on the WMFY article was this comment from ‘Tony Terborg’:
Is it legal? ABSOLUTELY.
Has SEC and FTC signed off on the company to date? ABSOLUTELY.
I’m currently unaware of either the FTC or SEC signing off on Zeek Rewards. That said, I’m happy to give Zeek Rewards affiliates the benefit of the doubt on their claims and welcome the submission of any evidence to the contrary.
Meanwhile another Zeek Rewards affiliate, Becky Gibbons Simmons, proclaimed the success of her return on the investment she has made with Zeek Rewards:
Simmons appears to be more than happy with the return on her Zeek Rewards investment and by attaching her Zeek Rewards affiliate signup link, seems keen to recruit others into the scheme and get them to invest too.
At the time of publication of this article, I was unable to find a “corrected report” over at WFMY News that the North Carolina Attorney General’s Office has asked for.
Update 22nd June 2012 – It seems that by the time I saw the print article it had already been updated, here’s how the original article ended:
The article now closes with:
The North Carolina Attorney General’s office told News 2 they have received a handful of complaints when it comes to Zeekler and their sister site, Zeek Rewards.
A court has not yet ruled whether this operation is legal or illegal.
Followed by a link to a North Carolina Dept. of Justice website on pyramid schemes.
Zeek Rewards corporate loves to spin and bend the whatever small slice of information they can weave into something positive, no matter how relevant, and their drones of cultist affiliates echo that message as if they just discovered the cure to cancer.
What is even more interesting to observe are the non-reactions. For example, the current ZRN post is pimping/begging for votes for Dawn to be ranked #1 at the current bubsinessfromhome.org poll.
These polls are meaningless anyways, but what is very interesting is despite all the pimping going on via Zeeksupport forums, Facebook, and now ZRN (to which every Zeek affiliate is heavily encouraged to subscribe)… what happens if Dawn can barely muster 5000 votes?
Surely with 800,000 affiliates (or whatever the claim is now) Zeek could muster at least 1% of the cultists to take action and vote for Dawn.
I also love the pretense on all of the pimping… “shhh… don’t tell Dawn” they say. Perhaps all in humour, but perhaps more cult-think where you must suspend reality to play along.
I’m hearing Zeekler has abolished USD cash auctions. Currently there isn’t one cash auction running on Zeekler as far as I can see.
This $75 cash auction appears to be the last cash auction Zeekler ran, although I can’t make out when exactly it ended.
No information yet as to why or when this happened.
I thought the last paragraph of the written article was rather odd:
“If you are unsure about buying merchandise from a retailer or operation, the NC Department of Justice recommends this website.”
with the website link being a page about pyramid schemes.
Probably because PatrickPretty and I mentioned it as potentially seen as “lottery”, which is illegal in all states unless ran by the state.
So I’ll update my hub.
The “corrected report” is within the last two paragraphs.
Instead of claiming “it’s legal”, it now has the statement “a court has not yet ruled …”. And they added the recommended link, leading to moneymaking schemes warnings.
WFMY made the corrections and removed the video rather quickly. It may qualify for “Guinness’ Book of Records”.
That’s how the article originally appeared isn’t it? I don’t think the legal claim was ever in the original print article, just the video broadcast (?).
They HAVE made changes in the article.
I believe they first changed the “it’s legal” to “a court has not yet ruled …”, and then sometimes later they added the link to pyramid schemes.
These changes are partly reflected in the comments. First you have no reactions other than the different reactions to other parts of the article.
* Then it pops up a question about “a court has not yet ruled”.
* Then it pops up a question about “why do they link to pyramid schemes?”.
I’m 90% sure about the first change, and close to 100% sure about the second. I checked both the video and the article several times when they first appeared here.
“Communication” and “marketing” are the only areas where I check details automatically, looking for the message people are trying to send out. They have clearly made changes in the message in the last few lines of the article.
Fair enough. I only ever saw the current print article and at that time the video broadcast was still up so I just assumed the problem was with the video broadcast.
Google cache of the original article: http://bit.ly/MHprjf . Last two paragraphs have changed.
Cheers for that. I’ve updated the article with a screenshot of the original.
You don’t want the AG’s office calling ANY business. 😀
I’m sure this is going to bring a lot of unwanted attention to Zeek.
You’d think with all the other complaints the NC AG has received from affiliates about not being credited with purchases, or warnings about it being a ponzi, that they’d do something by now. But perhaps an investigation is already underway.
Data posted by Troy Dooly today:
In the above post by Dooly, “conversion” refers to the number of first time visitors who decide to bid in one of the auctions. So what does 13.72% tell us in determining a % of real retail customers buying bids versus internal consumption?: ZERO.
It tells us nothing because presumably the bids being used are free. Furthermore, I did not know Amazon was giving away anything for free.
Troy Dooly finally did another review about Zeek. I thought he was going to bring back from the Red Carpet Event something of substance…like late payment issues, auction winners not getting their rewards, constant changes in how affiliates will be paid or when they will be paid, and why customer service simply doesn’t exist.
I at least thought he would mention the Channel 2 WMFY News article. But it’s the same ole talk about traffic and let’s blame the affiliates for Zeeks problems. In Troy’s video he mentions that some affiliates are still not in compliance.
http://mlmhelpdesk.com/mlm-penny-auction-news-zeekler-penny-auction-house-numbers-show-the-real-story-behind-zeek-rewards/
I really don’t give a rat’s behind what Troy says, and never did. It’s apparent that he’s their spokesshill, no matter what he claims about not being a paid representative.
Of course they’re not going to bring up problems about unpaid auctions, crappy inefficient and almost nonexistent customer service, not to mention all the problems about people not being credited with purchases and deleted accounts.
I’m sure the red carpet events are nothing more than Zeek pep rallies where everything is going good, the money is coming in hand over fist, and the sky’s the limit. If you can get away with blaming affiliates for any problems they may have, so much the better.
I *hate* to say this, but that is a fluff piece.
Alexa numbers is what’s known in the industry as “vanity metric”. It looks more official and better sounding than a hit counter, but it’s really the SAME THING.
Here’s one guy’s take on vanity metrics
http://www.startuplessonslearned.com/2009/12/why-vanity-metrics-are-dangerous.html
What’s more, Alex deBrantes is “internet marketing” guy at Zeek. When you go for real numbers, you do NOT talk to the marketing guy. You talk to the head of the company or the accountant or the IT guy… someone who has access to the real numbers.
Sorry Troy, you’re starting to let me down.
Troy put great store in the “conversion percentage” and how this is a strong indication that the Zeekler auction site can provide all the revenue needed to pay Zeek Rewards affiliates. I beg to differ.
First off the number Troy supplies was provided to him by a ZR employee and it’s unclear how much, if any effort Troy made to substantiate the statistic but that isn’t the real problem. If we, like Troy take the number at face value 13.72% of all first time visitors to the Zeekler site cast bids. Anyone see where I’m going with this?
Are these first time visitors indexed by IP addresses or is it by user names? They have to have a user name in order to even possess bids let alone use them so I’m inclining toward the latter. How damming a statistic would it be if less than 14% of people given free bids actually used them?
They mention Amazon dot com as the “gold standard” of conversion rates at about 17%. What would Amazon’s conversion rate be if each new customer was given free stuff? It’d be a damn sight higher than 17% I can tell you that much.
If free bids are only converted at a less than 14% level that tells me that all the fake customers sold by the various “we’ll sell you your downline” sites outnumber real flesh and blood customers by a good margin.
I’m trying very hard not to be overly critical of Mr. Dooly, I’ve been a regular reader of his blog for several years and want to think better of him. But if anyone out there knows of an online 12 step program for KoolAid addiction, please forward him the link.
Here’s my critique:
Way, way too much emphasis on traffic. Traffic != revenue to support the comp plan. Zeekler could be the #1 website in the world and still generate no revenue.
2. Uh, what? How are they measuring conversions? Given that it’s wholly possibly to sign up customers with an email address without their consent or prior knowledge, the only true way to measure a conversion is the amount of customers who have bought retail bids with non-affiliate money.
The next most important statistic are the number of customers who have made a repeat purchase with non-affiliate money.
Those the only metric that matters when analysing Zeekler, yet they are noticeably absent.
3. The country statistics are very telling. Freight costs are garbage on auction winnings so all of these people would just be cashing out (a bargain is useless if you have to pay 2x, 3x, 4x etc. the cost of the auction price in shipping).
4. Another revealing statistic would be the percentage of products shipped vs. won auctions cashed out. If the latter is the vast majority it indicates that people aren’t bidding for the items they’re bidding for cash, which would mean the motivation behind participation has nothing to do with winning auction items.
Sidenote: I don’t think we’re ever going to see those red carpet interviews…
Troy, you’re an embarrassment to the network marketing industry. Us real distributors and wealthy network marketers think you’re a joke.
Sorry Oz, maybe he’s your friend, but for you to even consider him a valid mlm reviewer peer does nothing for your name. Oz, you’re a smart respectable guy. Troy is a jackass and he know’s nothing about mlm.
I also believe he’s a liar. I would bet he has a money making spot with Zeek on a wink and a nudge, maybe not under his name. He says he could care less about internet ratings and then blathers on about internet traffic ratings for zeek.
Sorry Oz, I’m pissed at this loser.
Asked Ted Nuyten and he said he’s too busy to look into it now. 😛 Yet he had TWO reviews and interviews about Zeek on his website.
Since Troy can check statistics, then I’ll guess I can do it too. Alexa siteinfo for behindmlm.com and mlmhelpdesk.com:
The comparison was just for fun. It’s always possible to draw “interesting” conclusions from statistics, like the one about “So, he wasn’t very popular before we started to post some comments there?” 🙂
It’s not about “being friends”, it’s about being in the same business and being professional. BehindMLM is an MLM review site, not an anti scam site. So the audience who visits this site will also visit his site in many cases, and some of them will actually prefer his site more than this site.
Both sites offers solutions to some information needs in a market, and in most cases we will cover different needs (instead of being a copy of each other).
Troy is doing a skilled job in getting inside information from companies’ managements, but that will also create some limits in the viewpoints he can have as a professional. And it will give him another audience than we have.
So for us, he’s first of all a valuable source of information, in that he’s adding information we don’t have. He is not in conflict with my professional viewpoints.
The digtriad/WFMY website receives a few comments, but it’s not very active. So people have probably dropped using the article in marketing after the changes were made.
They have received yet another comment about “Why do they link to pyramid scheme warnings?”
An obvious answer to the comment could be something like this:
But I didn’t bother to post any comments there, since I don’t have any active Facebook accounts (the system they’re using for comments).
Patrick Pretty found an interesting case from January 2012 involving a Zeek Rewards affiliate and their previous company:
In a nutshell a ZR affiliate cloned a website of eAdGear on a Canadian domain and used it to promote Zeek Rewards and trash talk eAdGear. Zeek Rewards were listed as one of the defendants in the case.
Wonder who’s at the NY address?
As far as I can tell, that should be “Ave”, not “St” and that’s an “office condo” according to the search results. Can’t find “former occupant” for that specific suite number as it doesn’t seem to be valid.
Searching the name doesn’t bring up anything useful.
In other news, apparently the so-called “Zeek Squad” out looking for compliance is only looking at US affiliates posting in ENGLISH. Foreign affiliates are still posting ads featuring terms like compounding, interest, dividend, and so on.
As long as they don’t post in English, they don’t need to be compliant, apparently.
Here’s one example: (translated by Google from Chinese)
http://taichung-changhua-nantou.kijiji.com.tw/c-Start-Up-Franchise-multi-level-marketing-Zeekrewards-W0QQAdIdZ387827879
The NY address belongs to XINZHENG COMPANIES ( AMERICA ), INC, which was a defendant in the lawsuit:
http://dockets.justia.com/docket/california/candce/3:2011cv05398/247433/
IF you click on the link “22” there you will also find the court order, a 30 page PDF.
I believe you can access the document directly by adding 22/ to your link …247433/22/.
Page 13:
So the judge seems to have dropped the case against ZeekRewards.com, because it’s not an entity in itself. You can’t sue an URL-address. 🙂
@ GlimDropper
hahaha
Taking Dooly’s claims regarding Alexa and conversion at face value, one could easily conclude that Quibids, Zeekler’s main competitor, would always be twice as profitable as Zeekler since they’re not giving half of profits out to affiliates.
Apparently Zeekler spends tens on millions per month for marketing while Quibids spends probably a few thousand and yet ranks higher on Alexa. Real smart, Burks.
There’s some rumors that Zeek will soon revise their language that they will not be sharing “profits”, but instead, sharing “sales revenue”. Not that they post any numbers to prove any of that, of course. More “word-smithing”?
Apparently they *are* implementing a call center in Georgia and island of Mauritius. On the other hand, it should have came online already… just in time for them to hide the support forum from public view.
And Zeek has hired a “compliance investigator” or compliance officer by the name of Ken Kilby
https://plus.google.com/100855485274971541794/posts
http://www.linkedin.com/pub/kenneth-kilby/37/64a/424
(Complete coincidence? BB&T, the bank that Zeek left? Has a Ken Kilby also!
http://www.linkedin.com/pub/kenneth-kilby/a/59/536
)
That is, if Zeek’s business model really were on the level.
Zeek questions to ask before you join, or in deciding when to get out:
Interesting, that lawsuit thing says the guy who’s infringing eAdGear and poaching eAdGear affiliates advertised that ZeekRewards is just like eAdGear and iNetGlobal.
The problem is eAdGear and iNetGlobal looks very much like clones of Ad Surf Daily. Not that I’ve looked into it much…
@K.Chang
The court order is here:
http://docs.justia.com/cases/federal/district-courts/california/candce/3:2011cv05398/247433/22/
A 30 page PDF. ZeekRewards isn’t directly involved, so the judge dropped them as party in the case. A web-address is not an entity, so you can’t sue it either.
From the footnote on page 13:
I have already posted the information here, in a comment awaiting moderation.
I have also made a few attempts to post the information at patrickpretty.com, but for some reason the inputbox there won’t accept inputs from me.
The plaintiff partially won the case against the main defendant, but the judge reduced the amount from $1.9 million to $100,000. Can be found near the end of the 30-page court order.
Hello M_Norway,
Sorry you had trouble posting this link at my Blog. I posted to your post here, so my readers will get the benefit of reading the document.
PPBlog
I have been approached by two very excited guys. Each one had the same story but one invested 1K and the other one invested 10K. I turned both of them down.
I said I was encouraged that they had decided to get involved with MLM and they would probably make some money but in my opinion they had better get it while the getting was good. Since they do not have a product and it is money generating money I doubt it will survive long.
What it will do is hurt the MLM industry and keep people who will get hurt, by falling for something easy, to miss a legitimate business. Do research and find a proven company before falling for the hype.
I heard the next red carpet event is in Nashville Tennesse in late July. I doubt zeek has held this at a more prestigous location if it is held at the grand facility.
What a perfect time fot the authourities to move in on many of these con artists. FOR 150 dollars you can even be in their presence. With Zeek putting pre paid ads and speaking for AG, Iam sure it is in the not too far future, from the authourities and zeek clashing head on.
A point for people to understand: Affilliates continue to prop the attorneys as proof of the credibility and viability of the company.
Let me remind you that they are paid to advise. They are not necessarily correct, and furthermore they are not sitting in a Zeek cubicle everyday as affiliates may delude.
The attorneys represent other clients. In case you missed it, they get paid. And they are attorneys.
The stupidity of some of the things many affiliates say continues to amaze me. Sandusky had an attorney advising him. Where is he now? 99% of the prison population had an attorney.
Man, I’m sure getting bashed on the ZR Facebook’s page today for asking what’s up with NX Pay. Any of you guys ever post there?
@MB and Al — if affiliates are NOT getting the answers they want from corporate, then they will ask ANYONE related to the company they can find.
The way to solve the problem is to answer the questions, not to yell “EVERYBODY SHUT THE F*** UP!” (or leave)
Zeek is so stuck in “SHUT THE F*** UP” mode it’s now a company policy. Dawn herself made it so.
Seems like Zeek is trying every credit card processor in the f-ing world. Got reports that they’re using Lamda EC from Cyprus as well as CCBILL, in addition to various other places around the world seen before for those eWallet thingies.
Troy Dooly, April 21st 2012:
Troy Dooly, June 25th 2012:
I wonder at what point in the last two months was the shaking of hands and Dooly’s promise to Burks deemed not enough. And why.
Al: if you post negative comments on ZEEK facebook, your post will be deleted. You will be de-friended by ZEEK.
What is worst, you will be chastised by affiliate CJ for showing negativity.
You’ll likely be chastised by HippieDiva (i.e. Dawn Wright-Olivares) herself and all her disciples, the Zeek Squad, for not following the ToS (i.e. no negativity). Yes, it’s in the TOS.
Hehe, I think you’re right. I sure hate to lose all my money due to my account being hacked for speaking out, but for some strange reason I don;t fully understand yet, truth and justice are like guiding lights to me.
I am sure this has happened before. But.. FYI
Momentary lapse of reasoning. Let friend sign me up for ZR. Posted like 5 ads. Since have stopped. Haven’t posted ad for 2 days. And, even though I upgraded, the same day I signed up, to Silver my account was never debited $10.
A few days ago I changed my cc info to bogus #’s. Yet I am still accumulating “points?”. Strange?
Not strange for Zeek. All too often the left hand doesn’t know what the right hand is doing.
Zeek processes the monthly membership in batches once per week if you use a CC. Not sure what the frequency is now as they are still behind in CC processing for past membership fees.
When the next run occurs and your credit card bounces, you’ll be dropped to “free” and then you’ll have to upgrade. You can repeat the cycle
@ Mitch McDeere
Okay. But that doesn’t explain why I keep accumulating bonus points without posting an ad. Back Office says I’m not eligible for points.
Oh but I guess I am. No need to do anything just sign up and make money… what a deal.
Due to all of the IT problems that Zeek had since March, they are awarding RPP no matter what. Rather than deal with tickets from affiliates who could not login and post an ad, they are just awarding everybody RPP, thereby making the daily work of posting an ad meaningless.
Some say you can go 2 days without posting an ad and still get RPP, but I haven’t verified how many days you can go without posting and still get RPP.
Well I thought I would reply here as you may find it interesting. Troy Dooly has been ‘on the surface’ forewith in providing adequate replies to a few of my questions.
His answer to my question is fascinating, in that he ADMITS the comp plan looks like a ponzi setup (as alluded to by many including kschang with the Howey test and his blog, PatrickP, scam.com and realscam.com, and here).
What is also interesting if reading between the lines, is that he denies the whole thing is a ponzi, but more like a pyramid as seen in the ” FTC v. BurnLounge Saga” case which resulted in Burn Lounge being sued for $17 million.
So Zeek might just get off with a fine if brought to justice. It looks to me like Troy thinks it’s a pyramid set up with a ponzi comp plan, but not a ponzi (his words not mine). I dont disagree with him on the ponzi comp plan set up, however I do feel the whole thing is a ponzi with a pyramid structure.
Of course only a court can decide such things, but if the alarm bells are not already ringing please see an audiologist, fast. One last thing, don’t forget; even Charles Manson had attorneys.
Quoted question and reply below.
Gabe June 25, 2012 at 1:58 pm #
Reply Troy Dooly June 25, 2012 at 8:54 pm #
http://mlmhelpdesk.com/mlm-penny-auction-news-zeekler-penny-auction-house-numbers-show-the-real-story-behind-zeek-rewards/#comments
Troy, you say that you don’t believe that Zeek’s comp plan doesn’t fit a ponzi comp plan structure. How do you mean? Can you legitimize that, or is it your mere feelings? Please explain, because you’ve never done that.
You’re in a tough position Troy, one that I don’t envy. You’re an “mlm expert” that has publicly endorsed an obvious Ponzi Scheme. Ouch. Might be tough to recover from.
How will you spin it when Zeek is shut down? Troy, I’ll bet you $1000 right now that they won’t last. Man up and take the bet.
So he doesn’t see it as a ponzi but could be a pyramid, obviously I read that part wrong. I am disapointed that Troy failed to provide any reason as to how the Zeek comp plan does not fit a ponzi scheme.
My reasoning is simple, the only money coming in to zeek is via the employees (affiliates) themselves (subscription and bid purchases), and that money is then used to compensate said employees (affiliates) with those higher up the chain or with more invested, I mean deposited, getting more return.
Their is potential for Zeek to not be a ponzi if Zeekler had real customers paying for bids, this may be where Troy is confused/ blinded, but as far as I can see bids are given away for free. I didn’t think anyone could be that naive, unless they had a motive.
Troy is wrong. Zeek is firstly a Ponzi and secondly a pyramid.
In a pyramid scheme scheme, you get paid by recruiting others.
In a Ponzi scheme, you can “do nothing” and get paid. In Zeek’s case, the ad placement is the passive busy work that is the equivalent of “doing nothing”.
From http://money.howstuffworks.com/ponzi-scheme3.htm:
I wholeheartedly agree Jimmy. I only came across this since a friend put 10k into it a week ago and then tried signing me up. Pity he didn’t research and consult me first (he happens to be Russian which poor english so that didnt help). That’s when I knew Zeek has a pyramid structure (recruiting).
After further delving it became clear there is actually no profit being made by Zeek rewards which means it is a very high risk of collapse, a slow moving train wreck ponzi.
Question: If the Zeekler Penny Auction didn’t exist, would it effect the current Zeek Rewards business model at all?
Accept for the obvious disguise reasons of Zeekler, I say no. The revenue’s from the penny auction has absolutely nothing to do with the ill gained profit the current members are enjoying.
In theory, Zeekler penny auctions could stop tomorrow, people would still buy bids as their “product” and so called give them away to people that don’t exist.
The whole scheme would keep running like it is today, with or without a penny auction website attached. duh.
Another epic Zeek call Mon night.
Huh? Zeek can’t fund NxPay with their own checking account but instead wait for funds to accumulate from affiliate purchases so they can then pay affiliates?
Why not just bring back the paper check?
Paul Burks lectured all the critics as exacerbating the problems of the 0.1% while 99.9% of Zeek affiliates are happy. I guess the 6 banned countries due to non-existent OFAC sanctions are just 0.1% of the affiliates?
Well, you can see from the Zeek support forums there are more than just 0.1% with issues, concerns and problems.
Rule #1 – you don’t mess with payments.
This is what the key “critics” that Paul Burks lambasted in his blog post 2 days ago have been saying for awhile. When ordinary affiliates start asking these questions, Zeek is in trouble.
It makes sense if Zeek is a Ponzi.
Umm… it does add up if Zeek is a Ponzi. Troy, are you paying attention?
And the cash flow situation will only get worse as more affiliates freak out and increase withdrawal %. Wait until the RPP drops, that will be the sign of the Zeekapocalypse.
Not if they aren’t making the millions in profits from the penny auction as claimed. Why can’t Zeek just send checks?
Let’s see… growing pains… phenominal growth….stay positive…programming issues…bank issues…DDOS attacks….affiliates pestering banks….E-wallets don’t work….affiliates shouldn’t ask questions in public forums….support outsourced to incompetent personnel….affiliates should not be bothering support with items like getting paid….quit calling the E-wallets….
Anyone else think this thing is dead within 90 days? I think the cash flow is already gone, or else the head honchos are cashing out at a secret bank account, whilst they are stringing everyone else along with E-wallet nonsense. Something is getting real fishy here…..
Only an idiot would put money into this POS….
I *seriously doubt* they actually check whether you post the ads at all. When Chapman and gang opened a Zeek fan site and tell other affiliates to post their ad in his comments, you know they’re conspiring to… “game” Zeek.
Chapman’s site was taken down shortly after it showed up on BehindMLM. Zeek corporate is reading this site daily (for better or for worse).
Theoretically, no. Compare that model to ASD: you can easily substitute “bid” for ASD’s “ad units” (or any of the other HYIPs that are clones of ASD that also claims to sell ad units).
However, without Zeekler, the whole facade falls apart. Right now the whole thing is very well disguised through obfuscation and confusion. Bids have TWO purposes… as legitimate bid tokens, and as money transfer mechanism (trade them for VIP points). And they have “plausible deniability”… We don’t really know who are buying the bids: customers, or affiliates (though they can find out easily). Without auction, it’s a naked Ponzi.
The most ingenious Ponzi that I’ve seen was Pigeon King International. The perp, Arlan Galbraith, sold millions worth of pigeons to 1000 farmers across Canada and the US, promising to buy back all the offsprings for the next TEN YEARS at 1/10 the price he sold the original “breeding pairs” for. As he had NO external market for them (though he insisted he did, and changed stories several times, and keep saying he had some for the future) it’s a Ponzi scheme. He paid for the early joiner’s pigeons with the late joiner’s money, and shipped those pigeons to the late joiners.
He’s STILL IN COURT as of now even though PKI declared bankruptcy in 2008, and never spent a day in jail. All those farmers ended up spending like 100K to build barns and buy feed, and end up with useless pigeons they can’t sell and had to pay extra to euthanize. A lot of the victims were Amish and Mennonite farmers, who never suspected a thing until it went kaput.
http://amlmskeptic.blogspot.com/2012/06/scam-study-pigeon-king.html
In that case, I’ll have to update my hub. I wonder why didn’t any of the Zeekheads on my hub noticed that. Usually they pick on any “mistakes” they can catch, but it seems the two Pennsylvanians on there are playing “how can we insult K. Chang about him not showing his face” instead.
Remember Madoff? A few months before it all went down he was out soliciting investors, but nobody wants to give up cash when times are tough. He even turned away a guy who was asking too many questions though that guy represented someone with money, potentially lots of money.
A few days before it did went down, Madoff told his sons they should pay out the year-end bonus two months early… using up the remaining cash in the company. When his son asked why would you do that, he admitted it’s all a Ponzi.
Apparently Burks didn’t learned his lesson from earlier when Paypal froze his account leaving him to mortgage his house or something. That was the story, right? Apparently cashflow still is a problem at Zeek / RVG.
Someone is going to be in SERIOUS trouble. This is one of those slow-motion train-wrecks, or Titanic sinking.
Confirmed, now COO Dawn Wright-Oliveras was caught in a lie just like Burks did with OFACS.
Following is an exact quote (except the “uhs” and “okay”) from the June 25th leadership call, starting at about the 3:30 mark
However, this explanation DIRECTLY CONTRADICTS what NXSystems says on their website:
http://www.nxsystemsinc.com/direct-marketing-multi-level-marketing/
You *do* deposit funds to eWallet provider and distributes them to people you want to pay, who also have eWallet accounts with the same provider. Everybody works this way, including AlertPay, SolidTrust Pay, Payza, Liberty Reserve, even PayPal, the granddaddy of them all.
So either Dawn Wright-Olivares is crazy and left a recording explaining absolutely bullsh__, or she lied. You decided which one. Either way, she’s ABSOLUTELY COMPLETELY WRONG about how eWallet works.
And the only logical explanation (we can’t say she’s ignorant, right?) is that she lied, and she’s hiding cashflow problems at Zeek.
Also on the training call on 6/25, Dawn said:
From the 6/25 leadership call at 9:30pm EDT, Dawn says:
Doesn’t this confirm directly from Oliveras’s own mouth that ZR is nothing but affiliates paying affiliates?
Al, yes it does!
More on the boondoggle known as ZeekSquad… apparently they only read English, and the “official” stance is that Zeek only allows English ads and English websites by affiliates.
Okay, explain WHY there are like a HALF MILLION mentions of ZeekRewards on NON-ENGLISH websites?
http://i.imgur.com/CpqUG.png
Not quite. If I were ZR I could reduce payroll expenses by avoiding depositing funds and letting affiliates recycle funds instead. It is interesting that potential cash flow issues could be hedged by the recycle effect.
@MB
You can recycle a part of the payouts, but not ALL. The main stream of money should go from customers
–> Zeekler/ZeekRewards
–> profit share account
–> company’s eWallet
–> affiliates’ eWallets
If they have payday each Monday, they can recycle all the amounts they have received FROM the affiliates’ eWallets to the company’s eWallet during the last week. The rest will have to come from the profit share account.
“Profit share account” can be the company’s main bank account or any other bank account.
I believe Dawn and the other “leaders” had a conversation in which it was explained that not enough people are buying through NxPay. She asks them why does that matter. It is explained to her how ZEEK has to use the eWallet.
They assume all present know this is behind the scenes “keep this thing going for as long as we can” discussions. Dawn thinks she just learned how eWallets work and goes on to educate everyone else. Oops!
I can’t think of any other reason for her to say these things. I mean really…no magical spring? How about this…what if the money got there from the company we work for?! I have a feeling we are going to need that magic after all.
How long will it last?
Hard to say how much life Zeek has left in it. I gave it until the end of the year, but it may not even last that long, what with all the indications of problems paying people lately.
This either points to massive problems trying to move money around, or else there’s not much money left to move around.
At any rate, when you have problems paying people who have invested into your scheme, people are going to want to leave and it’s going to be hard to get new money in via new recruits. Either way spells collapse for a ponzi scheme like this.
The entire *idea* of ZeekRewards is you suck profit from this magical spring call “Zeekler”, hopefully by driving people to it. That’s the *official* narrative.
How can the COO make such a blunder and imply it’s NOT that way is difficult to imagine. What’s even MORE surprising is how many people are willing to “give her a break” on this.
Of course they are. What choice do they have when Zeek has their money and they hope to get it back and then some?
So it’s part fear (if I don’t support her I’d be declared non-compliant), and part wishful thinking? 🙂
Looks like “threatening” Zeek with going to the AG is the only reliable way to get support.
This thing is going down before the end of the year. I know for a fact the authorities are carefully building their case and will lock it down when it happens.
The AG’s have been hammered with complaints in many states and they’re taking notice. I’m pulling my money now.
I’m betting August.
From zeeker fb page:
Al, I’m betting August too. And, if you do open your account and find the middle finger picture, you can bet it will be a shitty pixelated image!
LOL e!
If it goes down, do that mean affilates do not need to report their expenses as the company will not report our earnings to the IRS; and therefore no 1099?
STP and NXPAY are back up and running. I wouldn’t think Zeek is done yet; unless the authority steps in.
Hi, Jimmy, What is the zeek customer support phone number. My account of zeekreward has been locked on 7/2/2012. 888-972-9335 and 336-243-1123 seems useless. How to get ticket and how to email Ms Dawn?
I maybe follow your sample to call AG of NC what is the AG phone numbers?
Thanks.
S.Wang
Good luck getting any support with either a support ticket, phone call, or live chat. I’ve had tickets open for months with no reply that have cost me several thousand dollars in lost commissions I’ve just given up on.
Now, hacked account are getting some priority attention on the Zeek support forum, so I’d go to http://zeeksupport.zeekrewards.com/zeeksupport_private and post about it.
If you cannot login because your Zeek login credentials were changed, create a new free affiliate under yourself in order to login, or ask someone in your upline or downline to post on your behalf.
Thanks Jimmy. S.W.
bonus points have nothing to do with retail points until they expire
…because “retail points” don’t exist?
No idea what your point was there. Bonus points also have nothing to do with flying octopuses, or cars that run on orange juice.
I thought “bonus points” is what free affiliates accrue, and they can be converted to VIP points if they upgrade their membership before 60 day deadline?
They have a seperate name for them?
Fair enough then. I thought they were all vip points, with free affiliates not being able to cash out a daily ROI until they pay Zeek Rewards money.
Bonus points are what the free affiliates build upon and are given 100 such points when joining. They earn the same rate of ROI and can be converted to VIP points after 60 days. However, free affiliates get paid only when they upgrade to a paid affiliate.
Bonus Points are given on initial sign up. Free affiliates get 100, you can get more if you upgrade within 15 minutes of becoming a free affiliate. Bonus Points compound for 60 days, after which the original points (100 for free affiliate) expire, and they are converted into VIP points. A free affiliate will have about 140 VIP points on day 61.
These VIP points are not eligible for profit share until you upgrade to at least Silver, buy at least $10 in compunding bids, and sign up a (fake) customer to give bids away. This requires total outlay of $20 on day 61, then $10 a month therafter as a Silver member.
A lot of affiliates in second/third world countries use this method to build up a balance with minimal investment up front. The $29.95 mandatory annual marketing system makes this strategy now unprofitable.