Zeek Rewards Exposed: OFAC, DDOS and compliance
As a result of our continuous coverage and analysis of the Zeek Rewards MLM opportunity here at BehindMLM, over the past few months several questions have arisen that to date have remained unanswered.
Today we take you behind the scenes at Zeek Rewards and reveal some of the more pressing issues that have surfaced:
Did OFAC really have anything to do with the recent banning of members? What is behind some of the relationships between well-known figures in the MLM industry and Zeek Rewards, exactly how much fraud are Zeek Rewards dealing with, how do they address it, is the company still vulnerable and if so, why?
Read on as we explore these very questions and more.
Probably the most pressing question regarding Zeek Rewards these past few months has been “why exactly did Zeek Rewards start banning members from various countries?”
For those who missed the original controversy, back in early April Zeek Rewards abruptly enforced a blanket ban on members from several countries, including Serbia, Slovenia, Belarus, Egypt, Croatia and Macedonia.
Initially the reason given for these bans by Zeek Rewards support suggested that international politics were behind the bans:
We do not have total knowledge of what happened. What I do know is that it is something with your countries government policies (not the Serbian people itself), that has required us to not list your country anymore.
Under mounting pressure over the vagueness of this reason, Paul Burks (CEO of Zeek Rewards and Zeekler) then put out a press release explaining that
The United States Government has established an Office of Foreign Assets Control (OFAC) through the US Treasury Department.
This Federal agency maintains a list of “sanctioned countries” (and) under US law it is illegal for a US based individual or company to do business with individuals of companies in those countries.
After I contacted OFAC, they refuted this claim stating that they do “not currently administer comprehensive sanctions programs against the countries listed in your email“.
Since then, to date there has been no official explanation, clarification or explanation as to what exactly happened from Zeek Rewards.
Until now.
Information recently received by BehindMLM explains in detail what prompted the bans and why they happened:
It had nothing to do with OFAC. For a sustained period of time in Feb the company experienced 85% of all site transactions as fraud out of asia/indonesia.
In January 2012, 1.5 million visa/mastercard numbers were breached by hackers – that means 1.5 million stolen card numbers were being sold for fraud purposes.
Fraud was taking place on Zeekler auctions and through the bid purchases before then (and still is), but not on this kind of scale because there weren’t this many numbers out there in the hands of fraudsters before.
Fraudsters all scrambled to find places where they could cash in on the stolen cards and because of the way Zeekler operates – the business model and technology was easy to exploit for that purpose.
Zeekler probably would have been fine if they had fraud protocols in place so they didn’t identify it immediately and they didn’t have the technical capability.
Visa/Mastercard was taking responsibility for the breech and their zero liability policy protected card holders. Payment gateways that have fraud protocols in place WERE ABLE TO IMMEDIATELY IDENTIFY FRAUD AT THEIR CUSTOMER LEVEL, so the payment gateways cut Zeekler off because of the amount of fraud being processed through the site.
Zeekler had to reduce the fraud to get the payment gateways back. The majority of the fraud was coming out of a select number of countries, so their solution was instead of solving the problem, (to) just block entire countries from transacting on the site.
They compounded the problem by instead of telling the truth, taking responsibility with some of the language Visa/Mastercard provided to corporate customers, or deferring the answer they blamed OFAC, when that failed, they said it was a DDOS attack.
This again compounded the problem because once you publicly say a large site can be downed with DDOS, every amateur hacker in the world wants those bragging rights.
It was also indicated that whilst there are definitely ongoing DDOS issues affecting Zeek’s sites, that my source hadn’t seen anything indicating that these issues existed prior to Zeek announcing the DDOS attacks on their news blog.
How bad were the DDOS attacks? Alberto Mujica (friend of CEO Paul Burks) sent out an email on April 10th detailing the full extent at the time:
Hello Dan, Dawn and Paul,
Attached is a sample list of IP addresses seen attacking Zeek Rewards today.
The offending IP addresses are found to be consuming roughly 2.5Gbs of bandwidth. There are roughly 4000 IPs so far attacking the site.
The list detailed as described about 4000 IPs which were then presumably blocked from accessing Zeek’s online properties. This IP blocking protection, whilst largely ineffectual due to the obvious deployment of botnet swarms, was the primary defense method deployed to deal with the attacks.
So, what started with 1 fire is now 3 and the first fire was never actually put out because blocking ips doesn’t solve the hole in the system that allowed the fraud to begin with.
In the midst of all this – because there was so much fraud on the site and they failed to follow visa’s guidelines handling it, the payment gateways ceased doing business with Zeekler so affiliates couldn’t get paid unless someone manually processed them.
Not being able to use credit cards has been a huge thorn in the side of Zeek Rewards as to date they’ve failed to adequately or sufficiently explain why members cannot use credit cards to perform certain actions within the company.
Furthermore Zeek Rewards has only ever suggested that they themselves made the decision to stop accepting payments from credit cards, rather than acknowledge that they were cut off by payment processors.
In February 2012 Zeek Rewards did admit that hundreds and thousands of dollars of fraud was occuring through the company, but this was after the fact and failed to mention that around this time constituted 85% of all transactions being processed by the company.
Around this time payment delays were starting to be noticed by Zeek Rewards affiliates and shortly thereafter
all hell broke loose… Dawn called in O H Brown to get other payment gateways and in their mind it solved the problem but, again, the root cause was NEVER addressed – the technical infrastructure that allowed for the fraud and the DDOS (still) existed.
Since then Zeek Rewards and Zeekler have been up and down like a yo-yo with the company citing repeatedly that they are either under DDOS attack or are upgrading or maintaining their systems.
This in itself is questionable when you consider that
everything comes down to politics and cronyism. Dawn’s son and Paul used old code from Free Store Club written in ASP (a very old language with distinct limitations and security issues) to start Zeekler. They just modified FSC code to be an affiliate penny auction site and used that db to market it.
Paul (and possibly) Dan (don’t) know modern languages or platforms like .Net, PHP or Ruby on Rails or work with big data solutions like hadoop – and they can’t really get new developers to jump in and fix what’s there right away because the code isn’t documented and they didn’t use SVN so they can’t work in development teams.
Basically, only 1 developer can edit in the entire code base at one time. If they used the proper systems and protocols they could work with a team of 3-5 developers and a big data guy to redevelop the system in a few months.
The code is very old, very insecure, undocumented, never reviewed before pushed live, etc and the database is a complete disaster that has to be optimized before it will ever perform properly – so the site is slow, unstable and almost impossible to secure and control.
They also host out of a single datacenter in Miami on 6 servers that is owned by Paul’s friend Albert. You cannot run a site of their size or traffic at a single datacenter. Their choice of hosting in miami is the reason they were taken down by the DDOS.
They should, like everyone else, host in the cloud on something like Amazon S3 so they can balance server load across multiple data centers in multiple geographic locations and have a dedicated server admin that would manage the bandwidth so they wouldn’t have outages if they have DDOS attacks.
The technical infrastructure is completely inadequate for the traffic and transactions on the site and they KNOW it. But they refuse to do what any other company that expects to be around in 5 years would – redevelop their infrastructure to handle their explosive growth with solid technologies.
They are using ASP code (a very old scripting language) from paul’s previous venture, Free Store Club (i don’t even think he transferred the IP rights on it) and modifying it to be an affiliate penny auction site.
With all the financial success Zeekler and Zeek Rewards claim to be enjoying, why none of the above has been actioned or addressed remains a mystery.
Are Zeek Rewards really exposing their affiliates and entire business operations to ongoing risk and uncertainty due to internal company politics and cronyism?
Moving on, much was made recently of some positive commentary in the Network Marketing Business Journal back in April. Published by Keith Laggos, turns out this wasn’t the glowing independent third-party endorsement many touted it as:
Dawn said she bought $100K worth of prints of NMBJ and Keith’s personal consulting time to review Zeekler for compliancy and in return Zeek gets good play in the mag.
I would not call the coverage in NMBJ anything other than an advertorial it is not journalism – Keith’s name might be on the piece but Dawn wrote most of it.
Peter Mingils is the Executive Vice President of the Association of Network Marketing Professionals (ANMP) and also seems to have a strong relationship with Zeek Rewards:
he is a paid consultant to build out a training system for affiliates – he attends every marketing and training meeting and while I do not know the exact arrangements if there is new work on the table he almost always gets it.
Many questions have been made recently regarding the nature of the relationship between Troy Dooly from MLM Helpdesk and Zeek Rewards. Beginning a few months ago, there was a noticeable shift in attitude in Dooly’s reporting which seemed to stem from nothing more than attendance at a Zeek Rewards VIP Red Carpet Event and talking to Zeek Rewards management.
Troy Dooly is listed as a Committee member over at ANMP and on his involvement in Zeek Rewards my source had this to say:
I believe he was initially critical of Zeekler, but I think it was Keith Laggos that reached out to him and sat down with Dawn and him in Vegas.
Troy and Peter were brought to the table by OH – after they learned that Troy was negative on Zeek, they held a meeting with him in Vegas. He comes to all events and is favorable on the company now.
I do not know if any money is exchanged for consulting or other services but he does attend all the Zeekler events, speaks at events to affiliates on Zeek’s behalf and now gives positive reviews on the company.
Based on the fact that they pay everyone…
The thought was left unfinished at the time but at a later date the source further elaborated:
(Dooly) is now paid. – he comes to all events and is favorable on the company now.
In the past Dooly has denied being paid directly by Zeek Rewards (and I still personally give him the benefit of the doubt) but at the same time has hinted at a possible financial relationship existing between the ANMP and Zeek Rewards:
when a company is willing to have me speak on issues surrounding network marketing to their distributors as a Board Member of the Association of Network Marketing Professionals, then I will gladly do it.
Observing the strong implication of a financial arrangement between the ANMP and Zeek Rewards, I contacted Dooly for further information and received this reply:
None of the companies Rex Venture Capital, Zeekler or Zeek Rewards, or any other company or entity controlled by Paul Burks or anyone else for that matter who might have some form of vested interest in any of the above companies are members or sponsors of the ANMP outside of Dawn & Alex.
Dawn and Alex are paying member. She paid the $50 annual individual membership fee.
That said, I’m still finding it hard to not read between the lines when it comes to the relationship between ANMP executive and committee members and Zeek Rewards but for now I’ll leave it at that.
In summation,
- O H Brown does videos
- Troy Dooly – general advocate and speaks at events
- Peter Mingils produces affiliate training materials
- Keith Laggos is paid huge sums for the prints and reprints of his mags.
Looking forward, with compliance clearly taking centre stage as Zeek Rewards struggles to avoid being referred to as an investment scheme without actually changing the core of their 90 day ROI business model, I’ll leave you with some parting insight:
Their biggest concern right now is not the tech or fraud but the compliancy course.
The affiliates are continuing to sell the opportunity in a way that seems like a security because honestly – put the penny auction and the mlm thing together and how can it not be construed as such? It’s the easiest way to explain it.
They are investing all this money into compliancy because they already have a number of State’s attorneys sniffing around.
Stay tuned…
Footnote: In order to protect my source(s) discussion regarding their identity(ies) will not be permitted in the comments below. Members of Zeek Rewards who are able to are wholly encouraged to verify the information published above for its accuracy with the company itself.
I myself have verified the credibility of the source(s) used and am satisfied at the time of publication with the accuracy of the information provided.
Interesting. The story fits too well to be a total fabrication. Troy Dooly himself have said multiple times that it’s credit card fraud that’s the root cause. He may or may not have known it’s this deep.
Of course, the best narrative fits every bits of evidence available, but it may not be the complete truth either.
I have to point out that ASP *can* be done properly and securely, but if it was done without using any sort of framework like Simplicity, or Simple MVP, and nobody else knows the code, then it’s likely spaghetti code that’s impossible to develop for.
A real team of developers *can* rewrite much of the application in a proper format, but it will take months… and cost an arm and a leg. Possibly as much, if not more, than what they spent on compliance.
Given that they actually embed session ID and whatnot in the URL string it’s a joke programming wise.
Again, they are NOT acting like a company that earned TENS OF MILLIONS in 2011.
As for Troy Dooly’s involvement, if any, I am willing to give him the benefit of doubt, though I would ask him did he know that Dawn also bought 10000 copies of NMMJ.
There is a perfectly innocent explanation: Dawn bought that many copies because she expects to give them away at seminars and whatnot as souvenirs. It probably does not mean anything.
I guess the real question is… when was the order placed… before or after the review / consultation was completed?
I think Dawn’s wording gives away the nature of the $100,000 paid off to Laggos. It was very much implied as a ‘I did this and got this in return’ payment.
I don’t think the article and payment are co-incidental. Especially when you consider Dawn wrote most of the article herself.
I don’t quite follow the credit card payment gateways cutting of Zeek. Look at the timeline: credit cards for bids were cut off in Dec 2011 and never reinstated. Why did they ban countries in Apr 2012, 5-months later? There couldn’t have been any fraud with bid purchases from Zeek Rewards back office after Dec 2011 since that was already cut off credit cards. So what was it they were fighting Dec to Apr?
Also, why were credit cards for penny auction and monthly subscription fees were unaffected? Do they use different payment processors for each?
The overall FUD about 1.5 million credit cards being stolen doesn’t tell us anything as to how many of those stolen cards were directed at Zeek Rewards. Credit cards are stolen all the time, all over the world. If they were concerned about the Global Payments 1.5 million credit card breach, what about all the other ones that occur? 3.4 million credit cards were breached in 2011. 4.6 million in 2010. These happen all over the world.. where was the fraud from those cards, and how can you limit them to just a few countries?
Also… I don’t get it. Global Payments went public about the 1.5 million credit card breach in Apr 2012. But Krebs and bankinfosecurity.com has confirmed that the breach happened in Jan 2011, a full 13 months before the announcement.
One of the card issuers told BankInfoSecurity: “I can tell you that since these populations are so old, most of the fraud has already been incurred.” One of the most important rules of the underground community is stolen credit cards degrade in value quickly over time. They commit the fraud as soon as possible. So when was this fraud occurring, exactly?
Or was the news story of Global Payments 1.5 million credit cards being stolen being made public in Apr 2012 enough for Paul Burks to take action based on a news story of past activity?
Finally… Google for (with the quotes):
“global payments” breach “north america”
The 1.5 million credit cards that were stolen from Global Payments, which was made public April 2012, were confined to North America. So what’s this about banning fraud from those 6 countries using stolen credit cards again???
^^ That should have said “made public April 2012” (not 2010) typo on my part.
The point is the 1.5 million credit card comment seems like Fear Uncertainty and Doubt (FUD) to me, because the cards breached were all from North America. I don’t see North America countries being banned…
What I don’t get is why doesn’t Zeek Rewards spend some of the amazing daily profits (that it pays half to affiliates in daily profit share) on outsourcing the development?
Zeek’s back office is not that complicated. You could literally pay for 3 top notch developers in either India, China, or Phillippines for under $10k/month and rewrite the entire back office in that time. Their back office is a very simple system.
The callbacks to payment processors and ewallets are easy to implement. They don’t even do live verification of the URL’s for ad placements, but even that could be added with little programming.
The only thing challenging would be the Zeekler auction itself but that runs completely separate from the Zeek Rewards back office.
I have questioned this lack of focus on the back office from day 1. It’s a simple solution and costs a small fraction of the claimed daily profits.
This is nothing new, and in fact, I am surprised Troy Dooly didn’t mention a general disclaimer when he called attention to NMBJ. Many MLM’s in growth stage play the magazine-as-an-advertisement game to build credibility once they have the early adopters on board.
Success from Home magazine is another frequently used by MLM’s. Troy Dooly surely knows how thsi game is played, but touted the story as if it was some major milestone. (But then again, Troy did call out meaningless metrics as I debunked here, so I don’t think he was quite being objective, just sharing a selective view.)
The specific instance of card numbers being stolen referenced might very well indeed be FUD, but the intel on ZR not following VISA’s guidelines and suffering the consequences is (as far as I know) legit. It’s from inside Zeek Rewards itself.
As for the timeline, December’s decision might have been seperate to early 2012 (but for the same general fraud reasons). I believe anything that happened post December 2011 was not Zeek’s choice but rather reactionary on behalf of the applicable payment processors.
As far as alternative payment processors go, I know NXPay is accepting money for ZR but despite announcements months ago they still are yet to be able to pay out using this processor (with no expalantion as to why).
As for countries, information I cited specificially referenced Indonesia and greater Asia. How this is connected to the six named countries I’m not sure (although as we’ve previously discussed it’s all too easy for organised criminals to reroute their activities to appear to be coming from any number of locations they wish).
At present this is the best information I’ve seen regarding this and hopefully those able to might be able to build on it and get us further to the bottom of the mess.
My personal view on this… the decision to ban the countries in April 2012 is separate from the credit card cut off in December 2011.
Why did it take this long (January 2012 to April 2012)? I think they were attempting to renegotiate with the payment processor (hoping the problem would go away) as well as shopping around for a processor that WOULD take them without asking too many questions. Unfortunate for them, no one did.
I wonder whose merchant services did they use, and wehther they had to switch banks and such. Normally when that amount of fraud hits entire accounts are frozen.
Update says Global Payments breach may be dated as far back as January 2011. According to sources, they only DISCOVERED the intrusion on March 23rd, 2012, and was not reported until a full week later (March 30, 2012) when WSJ broke the news. Now the potential exposure is 7 million cards, not 1.5 million.
http://krebsonsecurity.com/2012/05/global-payments-breach-now-dates-back-to-jan-2011/
If that’s the case, the fraudulent cards have been used on ZR for MONTHS and the the cutoff by processors occurred WELL BEFORE the revelation by Global.
Pardon, Krebsonsecurity broke the news, and WSJ picked it up.
Apparnetly KrebsonSecurity noticed two virtually simultaneous alerts from VISA AND Mastercard about potential breach of security and fraud patterns.
That’s one of those “POD” (publish on demand) magazines, right? They highlight one MLM per issue and announce it long in advance so the company can order a ton of copies (or encourage the members to order some) as promotional items.
The point about credit card fraud vs. compliance priority is also a very interesting point if you look at the time line.
They got cut off back in December 2011, but instead of putting money into fraud prevention, server and codebase upgrades they instead spend the next 2-3 months hiring compliance folks for compliance review.
Clearly, they judge compliance to be of higher priority than member support, credit card fraud prevention, server upgrade, and such. It also means there’s no way they paid “50%” of all profits to affiliates, as 58 million ought to be enough to pay for everything and have much left over. After all, programmers, server upgrades, and such can always be written off as expenses, along with compliance. Yet they “chose” to do only compliance…
The implication (not proven)… ZR is on MUCH shakier financial grounds than members would suspect.
@Jimmy — the breach “limited to North America” means only credit card numbers processed in North America may be exposed. It doesn’t mean the card numbers didn’t escape to other countries.
@K. Chang: Yes, that’s my point exactly – that the cards were processed in North America. When you purchase on Zeek Rewards backoffice with a credit card, you have to give a name & address.
If that address is from North America, how does the ban of 6 non-North American countries have any thing to do with the 1.5 million Global Payments breach?
@Jimmy — didn’t Troy Dooly said Burks told him about US affiliates “fronting” (not his word) for foreign affiliates or something? I’ll have to search through the the comments again.
The “fronting” was for paying the initial fees which is pretty common. But if the problem was fronting, and the fronting was using stolen credit cards from the Global Payments breach with N. American addresses, how is banning 6 countries solving anything?
If you were fronting with US credit cards from US addresses, couldn’t you use *any* destination country?
I still do not understand how the 1.5 million Global Payments breach, where credit cards were confined to US addresses, have anything to do with the ban from 6 countries.
@Jimmy — there is a link. I am *guessing* that some sort of matching/analysis was done on ZR’s end that highlighted those six countries. Maybe this covered like 80% of the frauds or something.
@K. Chang: In order for there to be a link to the Global Payments 1.5 million breach, some of those credit cards had to have had cardholder address in one of those 6 countries.
I am not denying there is no link between fraud observed and those 6 countries. What I am suggesting is that perhaps Paul Burks had another overreaction to a non-issue and used that as an excuse, such as telling internal staff “there were 1.5 million credit cards stolen recently”.
Stolen credit cards happen all the time. Heck, just 1000 stolen credit cards alone are more than enough to perpetuate all the fraud the attackers want, why is the 1.5 million Global Payments, confined to North America, at all related to the 6 countries?
Reading more on the Global Payments 1.5 million credit cards stolen, the address were not stolen, just the ability to create counterfeit copies of the card. So this would limit their usage to physical locations or online purchases where the address is not required.
Also the banks that issued the cards were all in North America.
I fail to see how the Global Payments 1.5 million stolen cards that date back to Jan 2011, limited to North America, can only be used by physical swiping (or online if address confirmation is not required), has anything to do with the Zeek Rewards fraud and the removal of credit card processing in Dec 2011.
If he’s a paid speaker in some of ZR’s Red Carpet Events, then he can’t claim to be neutral or unbiased. People should usually identify when they are indirectly or directly involved in something.
He isn’t acting “dishonest” or something. He provides the readers with lots of factual information, and most people WILL be biased in one direction or another, no matter how hard they try to be “neutral”.
When it comes to personal opinions and what people consider to be “important” or “valuable”, it will be up to the person itself to decide. And he clearly represents MLM as a business model, so people can’t expect him to be something else than that.
One problem is that he seriously believes in something without checking the facts, or where he fails to check the correct areas when he’s looking for facts. This will be closer to be “misguided” than to be “dishonest”, and most of us will be that from time to time.
For me, it isn’t a problem if he believes the penny auctions generates tons of money. The majority of people will probably believe in exactly the same idea. It may become a problem for him, but for me it isn’t any problem.
To be able to see Zeek Rewards as a Ponzi scheme, he’ll need to analyse it in detail and be willing to unfocus from what he previously has believed in. And that is probably more difficult than to see the 2 mexican singers in this picture:
Oops, trying to link to an external picture didn’t work.
But it actually made the statement become more “interesting”, showing exactly HOW difficult it will be for him to see Zeek Rewards as a Ponzi scheme. 🙂
The key issue to emphasize to Troy Dooly is if he was aware of the quid-pro-quo. If NMBJ happened to have had a great article about ZR, and then they decided to buy $100,000 worth of magazines and consulting to use as marketing, that would be one thing. “I love that article, can we buy x thousands?”
However, if as the insider account that Oz posted says, if this was a quid-pro-quo arrangement, and that Dawn had basically written the entire article, Troy’s “endorsement” vis-a-vis the upbeat & positive report on the NMBJ article and contents, should be retracted.
From a professional viewpoint, NMBJ “Network Marketing Business Journal” and Troy Dooly’s blog has to be interpreted in their correct context, and to the audience they are designed to serve. It’s an audience that want something specific, and not a random undefined audience.
Most editors and publishers will have to adjust the content of a magazine or website to meet the specific needs of their main audience.
Browsing through the comment thread shows lots of comments thanking for confirmation, for positive news and information, and for reestablishing ZR’s credibility. It’s a “give the audience what they want” strategy, giving them what they prefer to read.
A couple of examples from the comments:
This is clearly an audience that really WANTS confirmation rather than doubts about something. They want very specific information, and they would probably felt unhappy if Troy had started to analyse something that doesn’t confirm their beliefs. It wouldn’t be wise of him to focus on doubts when he has an audience like that. The audience clearly wants a picture painted in a beautiful pink color, something that makes them feel well.
Interestingly, the comments will also reflect that the problems are real in what they don’t tell anything about. Most of the comments will only be specific when it comes to free bids, the ones that don’t generate any real revenue.
I had to use the same method when I checked the story in NMBJ. I had to start with “From a professional viewpoint” and defending the article, before I finally came to the conclusion of calling it “junk” and “marketing material” from my own critical viewpoint.
@Jimmy — so you’re thinking that the Global Payments thing is just a cover story? Like it’s easier to blame an external foul-up than an internal one?
Got an interesting idea from one of my commenters…
Any one has ever tracked how many items closed for Zeek on say, three random 24-hour periods, their individual closing prices, and thus, we can calculate estimated Zeekler daily revenue?
Previously based on the IDS I calculated them to be generating 320K PROFIT Daily (58.5 million divided by 365) and growing, as it’s now May 2012, probably closer to 400K daily now.
Do their revenue support such growth, at only 144 auctions per day (or so)? Or however many that is?
The issue of if various financial relationships are affecting the coverage of Zeek Rewards by certain industry experts reminds me of the famous quote which emerged from the Ad Surf Daily trail. Gerry Nehra was paid a significant sum to act as an expert witness at a hearing on ASD’s behalf.
Judge Collyer wrote:
I think it’s fairly safe to say that at least some of the industry experts who’ve attached their names to ZR are not acting in a neutral manner. And if we’re right about ZR’s buisness model then it will be many of the people who go to those experts for their opinions who end up losing money.
I have analyzed every auction on ZR and there is no way the revenue from the penny auction is even close to supporting the affiliate. I ran this a month ago, looking at revenue generated (difference between cash out value and closing bid) for 20k auctions.
You can pull all the auction data from ZR site, the only thing you won’t have is the time frame unless you capture the auction id’s on a daily basis so you know the date ranges per auction id.
I can rerun/share the analysis, but the key issue to remember is that there are matching VIP points per dollar spent in retail auctions so even if you gave Zeek Rewards every benefit of the doubt possible and concluded that there was some decent amount of retail penny auction revenue occurring, the entire analysis leads to concluding Zeek Rewards is a (complex) ponzi.
For example, suppose today I generated $1 million revenue today by bringing 10,000 retail customers who bought $1000 in VIP bids each. For that $1,000,000 in revenue, Zeek Rewards pays me $200k (20% commission). I also get 1,000,000 matching VIP points which earn ROI for 90-days.
Let’s say I set this to 100% cashout (0% reinvest) for the next 90-days. How is Zeek Rewards making money? For the $800k in revenue (after my 20% commission), if I set my cash out to 100% at 1.5% avg daily profit share, I would cash out $1.35M over 90-days.
Zeek lost $550k on this $1M in revenue by paying me $200k (20% commission) and $1.35M in daily profit over 90-days.
I have asked Troy Dooly to look at this in comments here and on his blog. I have suggested if ZR eliminated this matching points bonus they would actually have a legitimate retail revenue source (the only question would be the ratio of retail to affiliate revenue – but since Zeek doesn’t disclose this, it’s hard to guess other than empirical analysis of auction volume).
But as it stands now, with matching VIP points, it’s a full ponzi.
(My theory is that ZR needs to increase penny auction revenue so they are keeping the matching VIP points in order to “encourage” affiliates to buy on their own behalf. This results in massive bid inflation and irrational bidding as we have discussed several times here. But in the end, ZR can then show some stats on how great the retail penny auction is doing, as the average person looking at the stats is not aware they have matching VIP points on the back end).
The only way to make the model profitable is if the VIP points get devalued. But once the daily profit share drops, people start running for the exits.
Oz. great info.
Interesting details. Actually I’ve also heard that the true reason for banning those countries is a very high rate of fraud coming from them. No wonder Mr Paul Burks decided to go for the option of simply weeding out them totally instead of “searching the terrorists among the innocent citizens”. Rather a military approach I would say, although not one to be judged easily.
Sometimes companies choose not to work with problematic clients – I guess it is their right.
As for the NMBJ info, well that’s a bit of a worrisome trick, but not unusual practice for the humankind – unfortunately…
Well Jimmy, totally agree on this. Even that the auction software is not a problem.
Amazing software can be purchased for about 1000$ and surely customized for another 1-2 thousands.
These two are just a few testimonials of my claims:
ipennyauctionsoftware.com/products/Quibids-Penny-Auction-Software-Package.html
phppennyauction.com
So, I don’t get myself why Zeek sites are so ugly and outdated…
The only reasonable reasons I’ve heard of are that the looks and the code currently are not the priority, the focus being on compliance and solving the existing problems which can not be simply ignored or solved by software change.
Well, Oz thanks for the effort and wish good luck to Zeek – I appreciate their efforts as well.
I believe that’s called “kill them all and let God sort them out” approach. 😀 (No blasphemy was intended, that’s the actual expression)
IMHO, the only thing that would actually FIX the compliance issue is remove ZR altogether. ALL of the vulnerabilities are on THAT end of the business.
Allowing affilaites to buy bids trade for VIP profit points to get profit share, when bids is what generates the profits to be shared just SCREAMS “ponzi scheme” to any regulator with half a brain.
By reading so many comments on the various articles on Zeek, one can lose the big picture, which is written in the “about” section of this website’s homepage:
I have found this forum very insightful, but filled with too much conjecture or supposition. At times one has to dissect information from an uncited source. (for ex the above article claims Dawn wrote most of the NMBJ article. We are left to trust that the commentary is factual, although there is no included evidence or proof)
The vast majority of comments are from the same handful of critics; the few defenders use little factual evidence, but often instead hope-based refutes. The small band of skeptics spend so much time here hurling adament reviews and opinion, I question their agenda.
The supporters often make naive cult-like talking points. These are sometimes the same type followers who use silly MLM verbage like”skin in the game,” and “stud” and throw T-shirts at each other.
Bottomline, until the company can prove that bids or subscriptions are actually purchased in a viable and sustainable ratio, the naysayers of Zeek express valid points, and anyone that cannot acknowlege this critical red flag is foolish.
However until Zeek’s model is proven to not work, or until a proper authority concludes the model is not compliant, one should be careful of snarky or condemning reviews and comments about Zeekler and Zeek Rewards.
There is evidence of credibility within the Zeek leadership, and therefore deserve some degree of benefit of doubt.
@Daniel Claiborne — two comments
1) Hands of justice move slowly. By the time does come down one way or another, it’d be too late for most of the participants.
2) I am not sure about your alleged “evidence of credibility”. The only “evidence of credibility” I see is in hiring of compliance team, but so far compliance team have produced little concrete changes, certainly no noticeable change in the business model.
Burks himself has little credibility left after the OFACS explanation was debunked.
The compliance team has SOME credibility… but until there are actual CHANGES in the business model that addresses WHY does ZeekRewards look like a Ponzi, ZR itself just have some temporary credibility by association, nothing more.
Not all insider sources can be identified, of course, otherwise those sources wold never agree to share information.
Do you really doubt that Dawn didn’t write most of that article or that ZR didn’t pay $100k for magazines and consulting in a quid pro quo? That is prett common in MLM promotions to begin with, fits the entire ZR narrative to date, and has very specific information that only an insider would know.
ZR could come on here and say “no we did not pay Laggos $100k, it was only X” and then play the “our critics have no credibility card”. I doubt Oz would risk the credibility of years of analysis on here by making stuff up.
The entire quoted text from the insider could not have been made up by anyone except someone on the inside. The question is if the information is precise or not.
As for the rest of the commentators like myself, I have a lot more Zeek knowledge than most know. I have genealogloy repots covering over 6000 affiliates. I have tracked every retail auction since Aug 2011. I have listened to every corp call except the nightly opportunity calls as they get repetitive.
I am on 4 different (large) team lists and the leaders are friends with either Dawn or DD personally, have done business in past MLM’s with Dawn/DD, and they have guest spoken on some team calls (where they share a lot more than the corporate calls, such as info about their own downlines).
So just because someone is anonymously posting here, doesn’t mean they don’t know what they are talking about. The nature of being a critic/analyst and a distributor is you cannot identify every source (or risk being deactivated and losing your entire virtual points balance), but you can provide information that is analyzed on its own and corroborated with others.
For example, the collective experiences of those banned in those 6 countries due to what Burks claimed was OFAC sanctions were credible even though anonymous. They corroborated each other, and matched Oz’s analysis of the 6 countries removed from the sign up form.
The only ones with misleading information were Burks and Dooly, and they still haven’t clarified or corrected the record (hoping the issue just goes away).
Hello fine people 🙂
By the way, the RPP run has slowed to a snails pace. Everyone is complaining. People are not being paid everyday…so how are these people making a profit?
If you don’t get paid that day and get it the next day, I don’t understand how you can make a profit from the day before, if that makes sense. Using their exact words…they said “it’s a snag in the software”. Bull***!
They send out news like this assuming everyone is stupid, but I guess people need to believe that finally something is going to work for them online. It’s a really confusing and unglued biz model to me probably by design.
On their news blog, they claim that cc processing would start up again by Thursday of last week, but that didn’t happen either. Now they are telling everyone to use e-wallets when there is no way set up to do it and they know that.
A lot of folks accounts went inactive for that reason and they want you to go in once inactive and upgrade again using an e-wallet system.
Several people I know lost days of profits trying to get those stupid e-wallet systems set up and they weren’t very happy about it. Since they are paying out fake profits anyway, they should have paid those people for the days lost, because it wasn’t their faults.
So now you have your up-line telling you to set your investment back to 0% to get enough to pay for your subscription….you lose profit that day mind you.
Most all support tickets go unanswered. Support is totally useless.
Another thing I don’t understand, is if the auction site is down on a particular day, how did the company make a profit that day (since that’s how members are paid)?
Another thing about Zeek that I didn’t understand initially..was how people got paid. If you needed a large amount of money in case of an emergency…it could take you days or even weeks for those that don’t have a gazillion points to get your money and then 2 more weeks before it’s processed..then wait on the mail unless you use STP, AP, etc.
Why on God’s earth would they set this thing up like that so people have to wait a VERY long time to get their money. That stinks!
I could be wrong, but it looks like they are already falling apart, or they have grown so much they can’t keep up with themselves.
By credibility I refer to the fact that there are decades of business experience within the ranks. This means something.
However, if the uncited information listed above, (that the banned countries was merely an attempt to prevent credit card fraud), is indeed true, then of course this damages the company’s credibility, not just Burke’s.
Yet as a reader I am asked to simply to accept the information as fact based on faith as it is uncited, and from an anonymous writer at that. The emails to OFACS indeed raise eyebrows but are not conclusive.
At this point, if I accept the allegations are true, that indeed the sanctions were a panic move and mistake by leadership, what in your opinion should have been done, and what is the proper move for reconciliation at this point.
Further, as Internet blogs have discussed, what can the company do to most quickly and efficiently solve what some have described as inadequate, dinosaur servers and code, credit card processing fraud prevention, and a hokey back office and penny auction site? (admittedly I’m laughing as I mention these red flags that have been too slowly addressed no matter how fast you are growing)
@Jimmy
I agree. I could easily deduct there was a good chance she wrote it. I do not consider this a big deal, I was trying to make a simple example that the reader is left to trust in faith that information is valid.
However,the question to whether the information is precise or not could potentially be a major deal.
I appreciate your feedback
I will rarely present information on here without publicly citing a source and acknowledging it.
In this instance to protect my source(s) I have done so. That doesn’t mean I personally have not verified the source(s) used and their relationship(s) with Zeek Rewards.
Anyone questioning the information is free to conduct their own due diligence with the company. I even encouraged this at the conclusion of the article itself.
As per the article, I’ll be nuking any further discussion on the source(s) used. Continued discussion of the information presented is of course welcome.
Yes, it does mean something but I don’t think it means what Paul Burks wants you to think. In the last 15 years almost every program Paul has run has had a pyramid scheme aspect to it where you could earn money not from selling products to end users but rather through recruiting people to pat to join the pay plan.
I say “almost” because I haven’t found the comp plan from when he was having people sell fire extinguishers. I made a rather long post on another site with proof of these claims and if Oz grants permission I’ll give you the link:
http://www.realscam.com/f10/zeek-rewards-how-get-3k-month-starting-free-member-642/index4.html#post21112
Vicky: Thanks for posting. Zeek Rewards facebook is now deleting negative post.
Someone had posted a critque of the auctions. He questioned how the auctions could generate the large payouts. The post was deleted the same day.
Two points to note:
1) Using “source” of the hypothesis to judge whether the hypothesis is valid or not is called “genetic fallacy”. You seem to be objecting to the this “uncited” hypothesis based on exactly that.
2) The “uncited” hypothesis fits much better than the Paul Burk’s version. Of course it’s not “conclusive”. Few if any hypothesis ever was “conclusive”.
Generally speaking, one hypothesis is judge to be “better” than another hypothesis if it can explain MORE of the available facts and/or is simpler.
NOW we veer into pure speculation, based on what you consider to be an “unproven” explanation.
A very interesting article and a very revealing discussion.
I am one from those banned countries (Slovenia) and I had a small group of friends and relatives behind me from Slovenia and Croatia. All banned, no explanation, nothing.
While reading I could not detect any good reason why our countries became drop-outs and I do not believe that frauds originated here. There are only 2 million people here in Slovenia and there rumours would have already appeared on different forums about people having problems with their cards.
With all the problems pointed out in discussions, I think that we were banned, because we were small players, buying small amounts of bids and being mostly silver. It surely did not have great impact on Zeek’s daily profits or funds.
@kchang
I am not objecting to anything. Again this forum is analysis. I am just doing cross examination. I simply noted there is much conjecture, and uncited sources, and cautioned our tone when opining. Also I am new to this forum.
Oz made a valid point that he also has some credibility that also deserves some benefit of doubt. I agree with you that the uncited hypothesis is better than Burkes. I understand genetic fallacy, and furthermore read your well written article that included it’s definition.
Based on this I am not wanting to veer into speculation, I wanted to know your opinion on what you believe are some of the proper moves the company could make moving forward
@Daniel Claiborne — actually I did not write any paper on genetic fallacy (though I did cover a lot of OTHER fallacies on my OTHER blog), but thanks for the compliments any way however undeserved that was, and I accept in the spirit it was intended.
IMHO, the best way for the company to demonstrate its REAL attempt toward compliance is disclosure: show the world how many people bought bids, vs. how many people are affiliates (that also bought bids). That would prove once and for all whether Zeekler has REAL customers who pay for bids instead of relying on ZeekRewards members to prop it up.
Furthermore, what’s so ****ing secret about fraud? EVERY company runs into fraud. The only part that is worth covering up is their own reluctance to tackle fraud, IMHO. And this sort of bullsh__ answer only makes them look bad.
*Unconfirmed*
I’m hearing ZR have announced they are planning to abandon the US and move their financials offshore (Hong Kong?).
Hong Kong is mentioned in relation to credit cards but not directly with moving to a larger bank. Not sure at this stage whether or not the bank they are moving to is offshore or not (they don’t mention the bank name).
…guess no matter how many compliance lawyers your hire, ponzi schemes are still illegal in the US.
@ Oz, if they are illegal, does it really matter where they move?
If they do go off shore, can they still be under scrutiny by the authorities?
They can, but when you start moving your money offshore recovery of funds becomes a whole lot more complicated.
On the other hand, money laundering and other less scrupulous financial activities become a whole lot easier…
(I’m not suggesting anything specific, just stating facts).
Hong Kong doesn’t tolerate Ponzi’s either. A former Ponzi offender that ran off to Hong Kong was extradited back.
http://articles.businessinsider.com/2011-11-04/wall_street/30358667_1_hong-kong-face-charges-cnbc-guest
Yes they can. ANY company that operate in the US is subject to US law. In fact, individual states can sue ventures individually. California sued Zamzuu (i.e. YTBI) out of California and so did Illinois. That essentially drove them out of business.
As I predicted very early on in my comments on the other Zeek post, the move to offshore processing is the same script that other online lotteries and gambling sites have done.
If the issue was just “fraud”, a company would have the same issues with banks outside the US as inside the US. Think about it, why would a VISA payment processor in Hong Kong handle fraud any different than that in the US?
However, where payment processors differ by country are:
1. The type of business they support (gambling, unregistered investments, etc.)
2. Ability for US regulatory agencies to freeze funds or have other oversight
3. Ability for US affiliates to recover money with any type of civil legal action
What I also don’t get is how can a company with 3 million customers (the other Burks MLM’s) not have experience with handling international deposits?
The way other HYIP’s and AdSurfs deal with international deposits is to just not accept checks. They accept credit card (which has built-in currency conversion globally) or eWallets (which handle the local currency). Something smells funny.
I understand that Zeek moving offshore is not a fact YET, but I don’t see how this will help them out of the mess they’re in.
I also don’t understand why would they hire attorneys if they can’t help them out of the mess they’re in. Just doesn’t make sense to me.
I’m not that savvy when it comes to money laundering, offshore biz deals, etc. But thanks to this website, I’ve learned a lot especially about Zeek 🙂
Theoretically speaking… Moving offshore has TWO advantages: more insulated against lawsuits, and more insulated against enforcement actions. (both are BAD for members, good for corporate)
TVI Express is long known to have “registered” in Cyprus, but actually operates out of somewhere in India (though it long claimed a virtual office in UK).
@kchang
You’re right. I was thinking cognitive bias fallacy. Crap! I was trying to give you some cred : )
For anyone interested here is a list of other types of fallacious arguments
http://www.don-lindsay-archive.org/skeptic/arguments.html
“The jawbone of an ass is just as dangerous a weapon today as in Sampson’s time.”
— Richard Nixon
(quote borrowed from link)
@kchang
Specifically appealing to authority
@Oz
Are you saying you are hearing from sources that there is a possible move to bank in Hong Kong, or are you referring only to their announcement on their newsletter, and the reference to only credit card processing in Hong Kong, and that people are mixing the info up.
@Daniel
@oz
Yes, I read your quote. But you said “I’m hearing”, so I was wondering if it was inside sources, or people who read the announcement wrong.
If there are no inside sources, this is what I mean by tone when you remark
What is the point of a this remark if you have no other sources or if a foreign bank move has not been proven to be confirmed?
I’m hearing was just what I’d read here and there.
My comment was in relation to the move. Much has been made of ZR being wholly based in the US, a move overseas in any capacity is highly suspicious.
Especially when you consider their past dealings with VISA and processor problems and what not.
I still maintain in the ongoing face of no evidence to the contrary that ZR is a ponzi scheme. Recent payout problems and a move offshore (even if it’s just to do with credit cards) would only strengthen that assertion.
Alone it’s obviously not enough but combined with everything that has been analysed previously and discussed these latest developments aren’t really doing anything to convince anyone it’s not a ponzi.
When you look at your typical HYIP and specifically ponzi’s within that niche, payment problems, processor problems and running offshore are almost always universally bad news for members.
Not being in the banking industry, but just as general knowledge, I seriously doubt any bank in Hong Kong, even if it’s just to process credit card transactions, would be cheaper or more robust than any provider of the same service in the US.
Hong Kong, being such a tiny place is a VERY expensive place to live. It enjoyed status as financial center mainly due to its history as “Pearl of the Orient”, gateway to China, and all that. A lot of the finance have actually move on to Shanghai.
There are very few banks NATIVE to Hong Kong. Wikipedia only listed 9. Rest are all foreign funded but incorporated in Hong Kong.
Searching through credit card processing in Hong Kong shows it’s probably ctopay.hk that ZR have latched on. No mention of prices, and that they need three MONTHS for a merchant to get “verified”.
Just had another thought on a different ZR thread:
Is ZR compliant with the “70% rule”?
The historic 70% rule is designed to prevent inventory loading, i.e. uplines making downlines buy stuff just to prop up upline’s commission. (Clearly, upline can’t buy inventory to drive up his own commissio). The whole idea is to prevent a Ponzi scheme, were the members end up paying other members.
But isn’t the whole bid business a form of inventory loading, except the upline is Zeekler/ZeekRewards itself?
100 percent K Chang. Once you buy those bids to be vip profit eligible in the 90 day roll over. Or lets just look at it this way, can you participate in the retail profit pool without that initial, what should we call it, investment.
ZR is not compliant with the 70% rule. The sad part is if you talk to MLM execs they all admit that their programs do not satisfy the 70% rule, and they don’t care. Ask Troy Dooly about that.
Its actually a cruel form of inventory loading as in you pay for literally nothing. You purchase bids that you can either use in the crappy penny auctions and waste your time or give them to new potential recruits in hopes of them purchasing some worthless bids.
Management keeps so called half and throws the masses of affiliates the scraps to keep it afloat. Imagine a company that took your money gave you virtually nothing of value in return and then claim to pay you a daily profit from the selling nothing in a so called vip point, oh it does exist, its zeek rewards.
Without the eloborate creation of the vip point having a value mindset in so many affiliates heads with a compound effect this scam would not of lasted this long.
It is internal consumption, not inventory loading.
Buying bids is not inventory loading because you cannot sell the inventory nor return it (no buyback). It is simply internal consumption.
Zeek Rewards probably (estimating based on data from hundreds of affiliates I have talked to and/or are in my up/down/crossline) has about 98-99% internal consumption. So they are no where close to the 70% rule.
You could say there is zero inventory at all, just internal consumption.
Look at what happened here to Herbalife. This is the exact same question we are trying to ascertain here. We’ve been asking this question constantly and if ZR had a positive answer, there is no doubt they would go to the press with it to prove what a great and sustainable business they have.
After all, they’ve published much flimsier metrics (such as counding all of the free/fake customers in the distributor-to-customer ratio).
The article: http://themlmattorney.com/herbalife-usana-and-big-shorts/
I think only when you make up shill accounts to give the free bids to that it becomes “internal consumption”. Otherwise, it’s inventory loading: i.e. affiliates are required to buy bids to profit.
I read it as internal consumption, based on this definition: http://www.dsa.org/ethics/code/#loading
You are giving bids away in order to qualify for investment. If you did not give the bids away and just sat on it, it’s not inventory loading because there is no profit, bonuses or commissions that trigger based on the purchase of the bids.
When you consume or use the bids, by giving them away, you then activate the investment part of the business. So there are two separate businesses within Zeek Rewards: the MLM component where you get commissions on those you recruit, and the investment which you buy into by giving bids away.
Maybe I’m drawing too fine a line between the act of purchasing bids and giving them away.
@Jimmy — ah, but Zeek can make the SAME observation: they don’t know which are the real customers and which are shills. As far as Zeek are concerned, they are all customers who have bids they could spend. The source of the bid is not important to them, as long as SOMEONE paid for them.
In other words, bogus.
Internal consumption is just a way trying to weasel around the anti-inventory-loading 70% rule. Those are CUSTOMERS, not affiliates.
My personal solution: create a special class of customer that can buy “direct” for lower price, but only generates limited commission to their upline (thus discourage people from recruiting this sort of “customer”)
While the information this site generates about Zeek Rewards is certainly interesting, the agenda pursued by the same five or six commenters is way, way too obvious to trust. I mean some of the answers are right in front of your noses but you are too hung up on “proving” ZR is a “ponzi” to notice.
ZR is not a ponzi for very obvious reasons: It doesn’t promise any particular level of return, it doesn’t promise any money it doesn’t have, and it doesn’t have any reason to ever “cut and run” as long as there is a flow of income (whatever it may be).
It doesn’t matter how many people cash out at any given time because the only money they can cash out comes from income. The return for any given day will be identical whether nobody or everyone takes cash out. The company has a fairly solid internal financial mechanism, since it makes a minimum 50% cut which is never drawn on by affiliates.
The model, therefore, is inherently sustainable, though worthwhile returns require decent growth. That is a situation faced by many other businesses. If the company manages to navigate the legal and technical hurdles it currently faces, there is no reason it can’t continue on indefinitely.
That required growth is via ongoing investments by members, that’s the problem.
The recipe of VIP point values approaching $1 for 1 point ROI over 90 days and the ever increasing amount of VIP points generating ROIs that exist are in no way shape or form sustainable.
Long before VIP points approach a $1 for 1 point ROI members will bail and the entire thing will collapse.
Whereas in a regular business you’d just wait till sales picked up again and/or changed your marketing strategy, in a ponzi scheme with guaranteed ROI timeframes there is no recovery.
Sooner or later all you’re left with is a shitstorm of epic proportions.
Funny that, those reasons hold true for every fixed time-based ROI Ponzi scheme that’s ever existed and as long as there’s a flow of income (investment of new money by members), of course the owners don’t have to “cut and run”.
Well… unless the authorities come knocking.
Unfortunately, that’s an excuse straight out of Ponzi defense 101. Ponzi scheme is defined by how the money flow, not what promises its organizers made.
SEC wrote:
The fact that ZR does not make promises of return (in fact, it did at one time, but I’m not counting that) is irrelevant.
Your excuse can be summed up as “they said it’s not an investment”. My reply is “what they say doesn’t match what they *do*”.
I’ll also refer you to the Ad Surf Daily case, where its organizers made the exact same claim: we’re not an investment, and we don’t promise returns.
ROFLMAO.
“As long as there is a flow of income…”
Again, ROFLMAO.
Zhang and co trying to prove that ZR is a PONZI. Could you compare side by side, ZR with other MLMs that you know is not a PONZI by your definitions or criteria. As far as I know most MLMs have been running for years even though they’ve been dubbed “Ponzi”.
I guess you have a lot of convincing to do here. The cleasing of “PONZI” sound much easier on paper than you may think. Most of these MLM operate within the loopholes or confines of what constitutes a legitimate MLM. The smart ones follow the advice given by their MLM lawyers and also past MLM court judgements.
I guess you should leave the decision or whether is a Ponzi or not to the people that participate in these programs. Most of them acknowledge the challenges, risks or risk/benefit and don’t care a lot about what other people think.
Check these links out, look how long the arguments provided have been outstanding and imagine what has been done about it since.
http://www.ftc.gov/os/comments/bizoprevised/rebuttals/535221-00098.pdf
http://www.ftc.gov/os/comments/bizoprevised/rebuttals/535221-00097.pdf
You five agenda hawks have done it again. Drawn a few dots and failed to connect them in order, instead drawing only the picture you want to see. Obviously ANY company is reliant on its flow of income, but there is no “cut and run” point, no reason for collapse. Obviously at some point any business will fail if there is no income flow, but that’s hardly restricted to ZR.
Again the important thing that you are all missing is there is no way for ZR to collapse on its own. Its mechanics prevent that because there is no imaginary money. Every point is directly tied to real money.
Again people getting paid out make no difference to the ZR system, that’s a very important factor that you ignore because it doesn’t fit your agenda.
The profit share percentage is a result of performance, not a driver of it. This is a key difference between ZR and ASD.
Again as long as the legal and technical issues are addressed, the mechanism is fine. That is where you should be concentrating if anything, however in that area all you have is incessant speculation.
Why would this so-called insider talk to you? Can you explain his motivation? It doesn’t make sense.
OK Zap. Lets connect the dots together then. But i need you to tell me where the start is. In detail, tell me where this income is generated in this company. Educate me more in these mechanics and why even have this real money is tied to these created company points.
I look at your profit share and performance as simple recruiment of new investors, please connect me back to the right dot. We almost have the bottom of this pyramid completed. ZR doesnt care about payout as long as this base keeps expanding.
As far as legal and technical issues, have you read the last zeek update. There is alot for you to concentrate on because your business or mechanism is anything but fine and can only lead to speculation. Troubles with processors on rpp and company pool or distraction from too much money going out than in.
Having to switch banks after years of business because of growth and international reasons. Cmon. HonG Kong from left field to handle credit transactions from left field to pay membership that havent been approved but when they do, are you seeing any kind of stall and confuse tatics here.
I atleast hope they dont run out of potato salad at the red carpet dinner gala.
@zap
We are analysing business models, and we will usually ignore methods to bend the laws. Instead we will describe what we can see.
I seriously don’t believe anyone will join Zeek Rewards as an affiliate, just because he is very interested in purchasing bids. Most people will join ZR as an investment scheme, to earn profit points and VIP points on their investments.
I know the agreement says “you are purchasing bids”, but I will usually ignore bullshit. The process of purchasing bids and the ROI they generate are far more similar to investments than to purchasing products.
The description is only a method trying to avoid being counted as an investment scheme.
Your implications are incendiary and infantile with the term “agenda hawks”. We don’t agree on all the issues, and your attempt to lump us together as some sort of “conspiracy” is really lame.
Over-generalization.
Real business have a legitimate activity that generates profit, be it buy-low-sell-high or advertising or some such.
Zeek’s business model seem to rely on a bunch of affiliates propping it up with all these bid purchases. As there is little if any proof that “real” profit is earned, it is a suspect Ponzi scheme.
When more people ask for cash out the profit will drop because less people are “repurchasing bids”, thus lower profits. Lower profitshare percentage means more people will also cash out their VIP point balance, leading to even lower profits, so the whole thing enters a death spiral.
You fail the acknowledge the fact that “profit” and payout is linked. You either cash your daily profit share, or you “repurchase” bids with it (or mix thereof). The repurchase generate “profit”. If you cash out, that means less profit for subsequent days for everybody else. If everybody cash out, profit drops to next to nothing.
As they are in a cycle that drives each other, you’re doing chicken-or-egg argument. It will get you nowhere. It is circular.
There’s your fundamental mistake.
Right now, everybody in ZeekRewards is doing at least 80/20, meaning of their daily profit share, 80% goes back into Zeek as bid repurchase.
Let’s say the person has enough profit share… $1000.
If he does 80/20, he gets $200, $800 goes back into Zeek as bid repurchase.
That $800 is counted as PROFIT toward next day. THEN half of that is shared with the rest of affiliates.
You did NOT take that into account. You ASSUMED that profit share has NOTHING to do with payout.
Your premise that the model is sustainable is NOT supported by your explanation, due to one fundamental mistake.
The only person who has made a mistake here is you in assuming that such a mechanism is inherently problematic. It isn’t. That funding mechanism STILL ties every point purchased to real money.
To a large degree, it is irrelevant where the income comes from and it is fine for it to come from repurchases; those repurchases are indistinguishable from outside cash purchases. None of that money is imaginary.
ZR’s system is reactive, not proactive, so if there were no other activity going on, the profit share would indeed drop off. That is always a possibility and represents the risk of ZR. However that will happen completely visibly to ZR members, at which time they can decide what they want to do.
All businesses can fail regardless of the product or service they are selling and when they do, someone loses out. The most that can be asked is a transparent mechanism, and ZR’s mechanism is indeed transparent.
It is clear that your agenda from the outside is to attempt to hasten the demise of the program, which is pretty sociopathic. It’s one thing to share objective due diligence but another to actively attempt to compromise the program due to subjective disdain.
Charles Ponzi used real dollars, no bids at all. Thus, having bids and points tied to real money is NOT relevant to whether it could be a Ponzi scheme or not.
The fact of the matter is you can’t have members paying other members. That’a Ponzi scheme. You refuse to acknowledge this fundamental point.
Again, you are avoiding the fundamental question: do Zeekler have real customers who buy bids, instead of just affiliates buying bids to, to generate the profits?
You’re saying that it doesn’t matter. I am telling you that’s the fundamental question whether it’s a Ponzi or not.
It’s clear that your agenda from God-knows-where is to attempt to defend a potential Ponzi scheme by trolling the critics and claiming outrage at a “conpsiracy” or “agenda hawks” of your own imagination.
Before we go into all out flame-war, I’d like to ask zap to clarify his position:
Are you taking the position “ZeekRewards is not a Ponzi scheme”?
If so, please cite your evidence, and we’ll go for an Oxford type debate, you present your view and evidence, we’ll present our view and our evidence, then we can pick apart each other’s evidence or logic.
This sort of back and forth only leads to ad hominem attacks when one side is too angry to write coherently.
@silentobserver
Most MLMs don’t recycle member investments and pay out 90 dayROIs so comparison is invalid.
T2MoneyKlub just went bust a week or so ago, same deal with investments and returns. If you want to compare ZR you need to compare it to other ponzis, as that’s all it is.
No thanks. I’ll continue to analyse and discuss irrespective of whether or not they care.
…and when that income primarily comes from members and is then paid out in a 90 day ROI? Ponzi.
Sure there is. Members stop buying VIP bids because they can’t sustain positive growth in their vip balances over 90 days (because ZR aren’t paying out enough per VIP point) = collapse.
Sorry but it makes a huge difference. IF people can’t grow their VIP balances because they aren’t getting enough $$$ per vip point over 90 days to reinvest with, there is no Zeek Rewards and the ponzi collapses.
Over time the $$$ amount per vip point paid out over 90 days increases as more as VIP balances get larger and more and more points are needed to be invested in to sustain VIP point balance growth every rolling 90 days.
At the same time as more and more of virtual VIP point currency is created, the overall dollar value per point paid out daily decreases.
It’s a one way road to Ponzi collapse any way you look at it.
Absolute horseshit. ZR record the payouts for tax purposes but never actually pay out automatically re-invested money so of course it’s virtual in that members never see it.
As for where the money coming from not being relevant? Of course it’s relevant. If it’s all from members (regardless of whether they’re using their primary accounts, family members, fake customer accounts to buy bids etc.) then you have a ponzi!
Ponzi’s current payee obligation was always initially imaginary money. That is why real Ponzi schemes are vulnerable to systemic collapse and are illegal. ZR does not have this problem.
The question is only fundamental to those who have an agenda as you do.
Ponzi does *not* involve imaginary money. Ponzi involves taking one member’s money to pay off another member with a bit of “profit” for him, so it is always running a deficit, so eventually there’s no money left to pay everybody who needs to be paid.
If you call a deficit “imaginary money”, then your rant somewhat makes sense.
However, you failed to explain WHY Zeekler is NOT running the same situation. All you said thus far is “it uses bids, so it can’t happen”. Explain why.
@zap
Zeek Rewards initially launched guaranteeing 125% ROIs. With Zeekler unknown where was that money coming from? Of course it was virtual money.
Except that as above, it most certainly does.
First and last warning, future attempts at derailing by carrying on like a pork chop about agendas will see you nuked. Stay on topic.
FYI, PatrickPretty.com says Zeek insists it’s not a pyramid scheme. 🙂
http://www.patrickpretty.com/2012/05/22/editorial-stepfords-at-the-gate-zeek-trots-out-social-security-argument-in-preemptive-pyramid-scheme-denial-auction-site-makes-its-bizarre-case-with-exclamation-points/
The most that can be asked is a transparent mechanism, and ZR’s mechanism is indeed transparent. If zeek rewards is so transparent,why dont they show how many bids are purchased by customers that only want to participate in zeekler auction and not a member of zeek rewards.
Dont give me the same reason that this is a private company that does not have to reveal anything to protect it propietary component from other competitor penny auction sites. What the competition will be able to formulate a formula to set a set bid purchase amount better on zeek by them only proudly stating their bid sales, please.
Transparency would of meant alot, but instead they create this daily profit pool which is understandbly close daily because they rarely have sufficient large enough sums of new affiliate money to increase its thresold. A transparent way would pay a member a simple commision on bids that would be used in the penny auction and would be simple and rewarding based on performance.
But zeek took this transperant way of passive income and shill accounts and stacking and the list just goes on and on. Tell me again how this is transparent.
@Zap The more i read your post, if you changed your favourite term mechanism to ponzi you would be very transparent.
@Observer — like Herbalife (Look up Einhorn, who asked Herbalife CEO do they know who are real customers and who are just affiliates doing self-consumption, the CEO replied that he doesn’t know), they don’t KNOW the difference between affiliate buying bids and customers buying bids, and (pure speculation), they may not really want to know. To them, the bid purchases are profit, so they are in no hurry to find out.
Even though this is the fundamental question that will be answered by that revelation: is the business model legit, or about to tip over into Ponzi scheme?
MONEY COMING IN?
When you are paying the initial money (buying bids), the bids and the profit they generates will be directly linked to money coming IN to the company.
When you are repurchasing bids for the daily profit points, no new money is coming IN to the company. To make these purchases tied to money then the money will have to come from somewhere else. You will need someone paying the money IN to the company, doing a monetary transaction from his account to the company’s account.
We can of course assume that each time you are paying for bids with RPP, a customer will pop up from nowhere and buy 3 times the amount directly from Zeekler (with no affiliates or matching VIP Points involved in the transaction)? Or we can assume that Paul Burks is paying the money from his personal account to the company’s account?
You have failed to identify the part in the “funding mechanism” that ties the repurchase to money, and where the money comes from.
The VIP Points and the daily reward points are not backed up by any huge “pool of money”. Zeek Reward will need fresh money paid IN from affiliates to be able to handle payouts when people starts to withdraw money.
Here are some of the dots:
A.
The main motive for starting Zeek Rewards was to run a successful network marketing company, and to make some money in the process. This definition of a main motive will cover most of the other motives involved.
B.
Another important motive was to avoid trouble with authorities in the process. This will explain the “purchase of bids” method, and identify it as important.
C.
In network marketing, a “successful business” will usually mean a business with huge downlines, where people near the top will earn tons of money. It means recruitment is an important factor in their definition of success.
D.
People will usually act within areas where they are experienced, where they believe they will be able to make it. The experience involved will also be an important factor for how they have solved something.
The dots I have identified here is related to WHY people do something, rather than to WHAT they do or have done. Other dots will have to be connectable to these dots, but I can modify them if needed or add some additional dots.
“SUCCESSFUL NETWORK MARKETING COMPANY”
E.
It will need some incentives in order to be able to recruit people, and it must also be relatively easy for people to recognize it as a success. This is the motive for the daily profit share and payouts, they are needed to attract more people to the network.
WHERE IT FAILS – in general
F.
It fails because of the definition “successful network company”. A better descripition would have been “a successful, profitable and sustainable company, where network marketing is a part of the plan” (reducing the network marketing part to be less important than “profitable and sustainable”).
G.
It will also fail because of “the true nature of something” and “willingness to mislead”. It will be very difficult to handle something correctly if you are using very misleading descriptions. “Purchasing bids” and “buying products” are very misleading descriptions for something that actually is very similar to an investment.
The combination of penny auctions and network marketing with huge downlines isn’t exactly a good idea. Ordinary investors would have worked better for the penny auctions. network marketers will usually try to recruit a downline rather than focusing on retail customers. It fails because they were too focused on being a successful network marketing company, rather than running a profitable business.
WHERE IT FAILS – specific details
I have identified the expression “purchase bids” to be important in point B. We will usually not mess with something that is important. This leads to a new dot.
H.
When “purchase bids” is used for the investments, they will also have to use it on the reinvestments – even if people don’t pay any money IN here. This will eventually lead to huge balances of VIP Points, with huge payouts when people start to cash out some of the profit.
Huge payouts will directly or indirectly be the main reason for why they will fail. It was needed initially as an incentive for joining, but after some time it will become a major problem.
ALL DOTS CONNECTED?
All of thse dots should be connectable to each other (in theory). What made them successful will also make them fail.
“Decades of experience” was the reason why the network marketing model was selected in the first place. The main motive wasn’t about money, but about being successful and having people recognizing them as successful.
Do you guys think the reason for the tremendous slow down in The RPP run is by design because they are having problems paying people?
I was under the impression that all of that was automated. According to one of their articles on the news site, there was a snag in the software that slowed it down. I understand that software can have issues…but a snag?
I was reluctant initially to join Zeek because that Troy Dooley guy was putting them down pretty badly and calling them a scam, investment scheme, you name it. Now his videos are much different and he seem to be rooting for Zeek now. What changed his mind I wonder?
Having been a web developer and IT guy (in classic ASP, the same kind Zeek uses, among others), the “snag” is pretty much… bullsh__. Any one who knows how to program would have kept backups and/or undo changes, and you NEVER EVER touch the live production system, but use a copy of the database to test.
Once you are reasonably sure the beta version works, you schedule a downtime (a few minutes), swap the new code over, and voila, it’s up and running. If not, schedule another downtime and swap it back.
The whole thing screams of “amateur operation”, where they instead of debug their code, they just throw faster hardware at it and hope it’ll stave off the eventual overload. IMHO, of course.
Troy was apparently swayed by involvement of various MLM veterans (whom he knew quite well) like MLM attorney Gerald Nehra and that NMMJ guy Keith Laggos, as well as being invited to do some interviews with Dawn and others.
He has a belief system where he is focusing on the PERSON rather than the CASE. He believe a problem will be fixed if a company hires the right MLM-lawyer, or are using the right advisors.
He started to change his opinions about Zeek Rewards when they hired Keith Laggos (NMBJ, Network Marketing Business Journal) in August 2011. Troy is also regularily hired as a speaker on Zeek Rewards events, through the ANMP Association of Network Marketing Professionals.
People will often change their mind if they put their heart into it. Most of us will do exactly the same thing, and there isn’t anything wrong in it. We will all have some areas we want to protect, where specific types of action will be in conflict with our other interests.
He has become more positive in what he’s writing, but ZR is still listed as “high risk”.
It just doesn’t make sense to me for these attorneys with great reputations to work with something they know is risky.
I would think these attorneys, compliance people and whoever, would be doing all they could to get the company going in the right direction if what they’re doing is questionable. Isn’t that what these people do for a living?
If you read Zeeks news, they tell you what’s going on, but never give a date as to when the problem will be fixed. All they ever say is it will be soon, if anything.
Someone voiced their concerns on the Zeek news site about the IT problems and how early on these problems started. And of course a couple of members came by and slapped him on the hand. It’s almost like you can’t voice your opinion unless someone takes it as a negative comment.
I’m really surprised they approved that comment, because they never approved mine about the same thing.
At the moment it appears that Zeek is falling apart. The RPP is so slow…if you wanted to get money out, it would take forever. That guy made a valid point and the members should be concerned.
Troy is a believer in person-to-person communications, and that is important because network marketing is heavily reliant on person-to-person communications.
However, sometimes, I wonder if the overemphasis on p2p lead him to de-emphasize the actual business model and viability of the products.
It’s easier to let someone else shout the guy down than to censor the post. It also supports the idea that Zeekers are “united” against the “naysayers”. It’s a part of cult behavior.
Once you got the member’s thoughts adjusted, you don’t even need to give the signal before they jump for you.
(Yes, I’m being VERY cynical here)
In this case, I don’t view the slow retail profit pool runs as a symptom that they have money problems. Based on what Oz posted, their programming is performed by amateurs mostly including Dawn’s son.
They had only 11 employees as of January Dawn admitted in an interview (so much for the claim of “14 years in business” and “3 million customers” … you juxtapose those claims with 11 full-time employees and it doesn’t make sense).
I think what is happening is they run on a thin staff and watch costs very closely, because the reality is this is a ponzi with negative margins. That explains why so many parts of the company (back office, auction, payment processing) just suck and have had many problems.
If Zeek Rewards was really taking in millions of dollars in revenue per day and they were REAL PROFIT (and not Ponzi liabilities) then they would have ramped up by now with a whole team of developers.
To illustrate how thin the cash flow is, remember Paul Burks had to take two mortgages out on his house when PayPal banned Zeek Rewards (PayPal bans MLM’s in general). I would think with all the revenue they keep talking about based on the “50% daily profit share” number, Burks wouldn’t have a need to take out 2 mortgages on his house just because PayPal froze their account… how much money do you keep in PayPal anyways?
What about Zeek’s bank accounts, credit card processing, other eWallets? And why was a 3rd mortgage needed… wasn’t the 2nd enough?
What I am suggesting here is that the view Zeek wants you to have based on the corporate marketing and daily opportunity calls of an immensely profitable penny auction driving tons of revenue daily that is shared 50% with affiliates… is completely different than the actual indicators we’ve seen (few employees, slow or no payouts, no customer service, 2 mortgages needed when PayPal account is frozen, etc.).
WOW…that’s really pitiful. I did read somewhere about 1 mortgage being taken out on his home, but not 2. Well that shoots down their bragging rights about being in business for 14-15 years. I was under the impression that Zeek was making millions of dollars.
They are certainly not acting like a million dollar company with all the problems they have. They had better get their heads out of sand before it’s too late for them, if it’s not already.
And anyone that’s been online anytime should KNOW you don’t leave money in a PayPal account. And I thought everyone knew that PayPal does not do business with MLM’s, especially the brilliant Mr. Burks since he’s been online for such a long time.
Couple of thoughts and I question…..
1) Shouldn’t someone be accountable for all the snags with Zeek….the downtime, slow customer service etc….I would think in a real company or perhaps I should say more professional company the CEO or COO would be removed to get someone more suited to lead and deal with these problems….We know Paul isn’t going anywhere……
2) Since they can’t seem to catch up…..why don’t they just halt folks from joining for a couple of days ..easily done by blocking the JOIN button on their homepages …to allow them to catch up……and fix stuff…
3)…Lastly…How long ( provided they don’t fix these things) and in typical scenerios…..In your opinion, till this thing falls totally apart?….can they keep up the facade “that everything is okay…we just need more time”
*that you know of*. Big difference. You are not ZR, you can’t make a denial for them.
In fact, didn’t we just get someone (unverified of course) that said her profit reinvestment not credited into VIP profitpoints?
The RPP pull and the recording of the rebuy are two separate events apparently handled by two separate scripts. It can and has happened before that there was a delay in the point recording, but it always gets recorded eventually.
This is the problem with reporting and basing your reporting on second or thirdhand knowledge and bias. If that person never came back, it would become part of your lore that “someone didn’t get paid” and would be blown up all over this site and subsequent articles.
Yet it’s not even an issue. That report is coming from a very obviously brand new affiliate and they had the misfortune to stumble upon this site for serious assistance.
There are several large community groups serving ZR affiliates and we would all know about it when a systemic problem with people getting paid happens. We aren’t fools, we have our money on the line, and we’re paying as much attention, if not more, to what is happening with the company.
Very good job backpedalling, zap. First you deny that it ever happened, then you become an apologist saying “it happens all the time, it’s no big deal.”
They should hire you as the PR person, but then, maybe you actually are. 😀 (Hey, you call us “with agenda”, I’m just returning the favor… so we’re even, right?)
Yes, I know exactly what a 2nd and 3rd mortgage is. My point, obviously, was to focus on the magnitude of the loan, and the fact that a loan was even needed for a business that is supposed to be brimming over with daily profit share.
Yes, there has. I’ve reported here myself I have not been paid for auction winnings, even after sending Zeekler the winning amount and opening a ticket (and never hearing back). It’s been over 32 days now.
I anticipate I will get paid, but the slowness and lack of response is troubling because IF you thought the retail auction business was at all generating revenue, don’t you think that any legitimate retail customer would RUN AWAY if they experienced the same thing?
In fact, the account that I won with was a retail account, not even an affiliate account. From Zeekler’s perspective, I am the prototypical, desirable retail customer. I’ve purchased $1000 in retail bids with this account (to get VIP points). I am a huge money maker for Zeekler (if you discount the liabilities incurred with matching VIP points), yet I am still waiting 32 days later…
The RPP run is over 2 days behind now. This is “late payment” which isn’t the same as “no payment”. But it begs the question, who is running the place? Will they ever catch up?
I thought they said they are rolling in tons of daily profit share… hire a couple accounting admins or developers.
@zap, the mere fact that the RRP Pool is behind means that you ARE NOT getting paid? Remember you’re suppose to be paid EVERYDAY. That ain’t happening right now.
Suppose you wanted to cash out for the days missed…you can’t do it, because guess what, you’re NOT getting paid for those days right now.
Trust me, people are concerned and you should be too. Some people have lot on the line and have a reason to be concerned.
In my opinion, there is no reason for this to happen if Zeek is the company they say they are.
Since you know everything Zeek, get the message to them to pay up and get that RPP run up to date, get some customer service which is non existent. Make sure they know LOTS of people can’t access the Compliance Course to take the test and give affiliates some time lines on their news site about when all these problems will be handled.
Now I’m not an IT person, but I’m not stupid either.
And I’m not even calling Zeek a scam. That remains to be seen, but they sure are acting like one.
Oh yea zap, I forgot to mention that someone in my down-line purchased 1500 bids 3 days ago, but it still doesn’t show up in her account and she can’t get a response from Zeek.
On my side it shows that she purchased them and I got the commission. When you purchase bids, they’re suppose to automatically show in your VIP points section. Isn’t she suppose to be earning on those bids for 3 days now?
Is that right? Didn’t she lose money so far? I thought so!
Translation: I know it is a ponzi. I’ve know it all along. My arguments here about the retail penny auction was just a smoke screen, just like the corporate videos and daily opportunity calls. I don’t believe the penny auctions generate enough revenue either.
My upline, downline, and the overall Zeek community are all watching the payouts very closely. We’re getting paid, so of course it is legitimate. Now, if everyone is watching the payouts so closely, as soon as there is a hiccup in the daily profit share or reports of people not getting paid, I wonder what will happen….. ?
That would depend on what was in the account. A single account could hold, even temporarily, aggregate site income, which would include both profit and profit share. Depending on how large the operation was at the time and how much was in the account at the time, it is very possible for a home’s worth of money to be lost.
The real issue is what happens to that money — if it’s just frozen and taken by the processor, that’s essentially legal theft. Never been much of a fan of the policies that do that.
Yes this is problematic, and as you say, more problematic than what is happening on the ZR side, which has no record of non-payment. Yet all the reporting here targets the ZR side; this is how you know there are other motives.
They already caught up at least once, about a week ago. Did you miss that? You are right that they need to hire more people, supposedly they have; those new hires aren’t going to get up to speed overnight. But that is more the kind of reporting we need, not simple bomb throwing.
There’s a WORLD of difference between a pay lag and no pay. So far, nothing is yet missing and we haven’t even reached the normal check lag yet. Reports I’ve seen say the electronic payments are still going out.
You may not be an IT person, but I am, and I find the growing pains plausible. I have no inside knowledge to say for sure what it is, and I do think they need to get their IT house in order, but going from “not in order” to “in order” is often not a smooth process.
@zap — so you accept that ZR is a bunch of incompetent idiots running their IT department, but to you it doesn’t constitute scam yet. Right?
So where was the alleged 58.5 million they earned last year? Did they all go into the pocket of Paul Burks?
Before you ask, the figure was based on the numbers given in their 2011 IDS, by multiplying the “average payout” vs. number of affiliates of that level, and that ZR pays out “50%” of profit. So they must have pocketed the same amount. In fact, they probably pocketed MORE because that’s only US affiliates.
I know you don’t have an answer, neither do I. However, there’s one thing to note: “Cry wolf.” If you cry wolf enough times, nobody would believe you any more. ZR is at the point where it has cried wolf too many times to be believable about their sincerity to solve problems.
Hey Naysayers vikey, zap,k.chang and the rest who claim Zeek is not paying out and they scam, check this out
….imagine that?
They did not close down shop and run away. Rather than knock it, come join it!
Yawn, that’s just the ‘I’m getting paid so it can’t be a Ponzi’ argument.
Waste of time really seeing as paying out doesn’t define a Ponzi, where the money comes from and how it’s paid out does.
Who said Zeek is not paying out? I sure didn’t.
It’s the SOURCE of the money that’s the problem.
I am going to ask all zeek supporters one last time and would appreciate a response. Other than existing membership fees and new silver gold or diamond members, how does burkes and dd keep half the profits and pay you all over 1 percent daily and expand your vip points?
There are apprx 300 k affiliates and i know its going to be the same its only the daily profit or the penny auction-HARDLY ENOUGH- or the points retire after …….. .
There are so many of you regardless when you entered that you must realize its just a pool of money waiting to be reclaimed by whoever can access it the quickest, please tell me why you wouldnt take it out over the next 90 days before someone else.
Ive had involvement and followed zeek since feb 2011. Just in that short time how much more reasons to shake your head at, i wonder what the next few months will be. Regardless what your making at zeek you have to admit alot of negative events keep happening and re occurring.
I look at this zeek in this way. Its true you are not putting a gun to anyones head and robbing them of their money and emotions.
But if you offered this gun for a high price knowing that would backfire and accepted the sale…..
Got two ZR “defenders” on my analysis hub who can’t name any facts. Haven’t seen such impassioned but clueless people since my TVI Express expose days.
Thought this was a little strange, apparently sometime in the last 24 hours the daily profit share run messed up:
ZR have put out an explanation on their news site… but it raises some further questions:
Now unless I’m missing something shouldn’t all this be happening automatically via an integrated system? There’s no way known ZR are manually calculating the supposed 50% profit share, so why is some guy sitting there punching in a percentage number to pay out each day?
Someone manually entering in a percentage number each day for the profit share to run off only strengthens the argument that they just variate the % number from day to day so the scheme doesn’t crash (as opposed to it being a genuine 50% profit share).
I can’t see any reason for manual input in what should be a completely automated system given it has to run daily and supposedly calculates overall revenue from a variety of sources.
OZ….it does NOT say in any of the information on Zeekler site 50% it says UP TO 50%! First learn to read, then stop complaining!
Up to 50%, 50% it’s a moot point.
Why is someone manually entering in percentage points for the daily profit share? Shouldn’t calculations of this magnitude be completely automated?
As it stands now it very much sounds like some guy is just sitting there and plugging in numbers as opposed to the daily perentage payout being pegged to the profit generated each day.
So what’s wrong with assuming exactly 50% payout to affiliates?
What does it change exactly?
Wait a minute… 8.9%… The only way you can shift a decimal is make that 0.89%, right?
I’ve done the math before and I found the “breakeven” to be 1.1%. At 0.89% you can’t even maintain the points even at 100% repurchase.
Has the death spiral started already? 🙂 Did Jimmy’s prediction of dropping daily RPP already came true? 😀
Also got a “Joe” on my hubpages nitpicking these little mistakes… He found me using “reverse auction” instead of “penny auction”. Had nothing to say about my example though.
Wonder if it’s the same “Joe” that’s nitpicking “up to 50%” here?
I haven’t been keeping track of the numbers but I know there’s a three day long weekend in the US at the moment.
Dunno how much the % usually dips on holidays like this (I know I know you’d think with more free time there’d be more people using the auctions but that’s a seperate dodgy issue again), but maybe Jimmy can weigh in on the 0.89% number.
Could be. I’ve rejected a number of comments from JOEC’s IP address using multiple aliases and email addresses. The comment let through today was the first that was actually on-topic.
The corporate videos did say 50% exactly.
The question is we don’t know what the inputs are to calculate that 50%. Naive affiliates think it is all penny auction revenue, when simple math shows that the penny auction revenues can’t even pay the $12M+ per month to the top 12 affiliates who earn over $1M/month.
No, not yet.
0.8% is the weekend rate. Mon-Thu the daily rate vary from 1.8 to 2%. Then Fri-Sun the daily rate vary from 0.8 to 1.1%. The average is 1.5%.
My criticism on the daily profit share is that this ratio is inverted if the penny auction was the key revenue generator. Other penny auctions make more revenue Fri-Sun than they do during business days, just like online poker rooms, casinos, sportsbooks, and lotteries make more during Fri-Sun.
Also, the rates do not fluctuate much per day of week. ZeekAnswers (before it was shut down by Zeek corporate) had frequency charts that showed the rate and now it DID NOT vary much by day of week.
For example, graph the profit share for the last 30 Mondays and compare them to each other. This lack of variability makes the entire daily profit share trustworthiness suspect because there were days that fell on major holidays (Christmas, New Years, 3-day weekends).
Even other online or brick & mortar businesses have fluctuations based on seasonality factors (winter break, spring break, xmas shopping season, etc.), yet Zeek’s daily profit share was immune to the variability you see in either online gaming or retail businesses.
@Oz, it wasn’t 42412CA4 out of NY, was it? (that’s IP address in hex, BTW)
@Kasey
Out of the interest of commenter privacy I’ll decline to confirm or deny.
@Jimmy
One explanation is that more members actually invest over the weekend meaning there’s more for Zeek Rewards to take. Share the investments made during the week and then artificially reduce the amount paid out over the weekend.
In this sense the company reduces the days it’s earning a sifnificant cut to two days rather than the other way around (less chance of an immediate crash that way).
I have a history and dates going back to Last Sept, Oct, Nov and so on…nearly every week had .82-.89% days so its normal to have that on a weekly basis.
@Jimmy on the yougetpaidtoadvertize video at around 5m they say “the company is committed to pay out up to 50% of the daily net” That would be after expenses then up to 50% of that amount. I think you all are thinking local not global.
I also do not understand why you all continue to keep talking about the same thing over and over and over i have read all your threads. Zeek this Zeek that it will fail its a ponzi its a scam a scheme, this is all i read over and over.
Even today because they paid out .89% you Jump on it as a failure when in fact you have no clue about the historical numbers, right?
Believe it or not, the 5 of you cannot create a failure in a company thats on the rise in rapid pace, is having growing pains since its obvious to go from 0 to 700k in over a year… I spoke to NX Pay, when i asked about why one of my downline account was not micro debited, she said, “we signed up Zeekler and got 50,000 new accounts, it is overwhelming”…..
give the company a break, they paying people, keeping them up to date and issues happen, big deal. Goodluck
By the way, even Times Square fills up 1.2 million people on New Years Eve, so Zeeklers 700k people is a 5 block area in NYC, not counting the rest of the city, the state, the rest of the country and 170 international countries….
there are billions of people out there, they just starting to grow…
It’s most definitely not normal for numbers to be accurately consistent over a long period of time. Especially something that’s supposed to be tied into the sale of products.
It looks even more dodgy when you consider that before ZR were actually guaranteeing the % of the return paid out @ 125%.
Nobody’s out to create failure in anything. Thorough analysis and transparency is something largely missing from the MLM industry these days.
All we do here is follow the money and look at business models. What gets analysed and how is entirely up to the MLM companies coming up with these things.
Oz, I appreciate that, but how can you possibly break down a model when you do not know the math behind it?
Okay Zeek has 700,000 Affiliates, of them how many are FREE? How many are at $10 level? $50? $100? How many post ads? How many have actually purchased bids. How many who purchased bids have $10 worth $100 $1000 $10,000? Initially?
I have on my team, people who have $10 bids WHY? I gave them to them, have they purchased any more? NO…they want to see if it works first. Okay..I have 6 people on my team at 30-60k in their accounts. I have ton of people with $100/500 and they keep adding ….The point is, how can you breakdown what Zeekler is doing when myself who is earning $2g a day average and I consider myself a smart person, may not be smart as you, BUT I am in the game i have a huge team and i cannot figure out the math or the secret recipe.
I do not also feel that a team of auditors and attornies would rip the inner workings apart and find a systemic problem in the future would sign on only to have exposure to their law firm for fraud and deceit and knowingly be part of a massive scam…OBVIOUSLY they know more then you and i and your 5 friends, right?
I mean really think about your posts and comments and attacks and you would find it completely wrong .
I’ll guess we can interpret the “repeating stuff” to be a complaint rather than a real question? 🙂
I tried to treat it as a question, “I also do not understand … the same thing over and over again”, and it was impossible to answer without repeating basic information that already has been repeated several times.
As a general advise, you should probably avoid reading ALL the comments in ALL threads at once. It will probably prevent you from seeing some details or from seeing the context. The articles and comments spans a period of over 6 months, and they have had lots of new readers making comments, making it more normal to repeat something when you’re replying individually to specific comments.
You have probably failed to identify the context in which the comments are made, and the methods we use for it.
When I’m quoting part of your comment or use the @-sign, it means the reply is directly related to you, and it will be something in your own post that makes me repeat something.
The trouble is that new readers often have very similar comments. We would either have to ignore them or to repeat something that already has been repeated.
It means that repeating stuff is relatively normal when a topic is spread in different threads over several months. We will usually know when we are repeating stuff, but for a new reader the information can be absolutely new.
Try to compare this to a computer related support-forum. Most often people will ask similar questions over and over again within a few popular topics.
@Mack
Some of the problems is clearly reflected in your own comment. A company will need real retail customers to be sustainable, not affiliates or “investors”.
700K affiliates seems exaggerated, but it might be true if we’re counting all the free affiliates in some countries (but most others will use a much lower number). Payouts to all these affiliates needs to be supported by something, other than payments from the affiliates themselves.
Your comment was about your own downline. To make Zeek Rewards sustainable it should have been about all the retail customers you have generated yourself or in your downline, not counting the free customers or the family/friends customers. Retail customers means people buying bids to spend them in auctions, with no other motives than to win an auction.
To be fully able to support payouts to the affiliates, Zeekler will need customers who buys bids directly from them (not via affiliates). The amount spent by these customers will have to grow exponentially (doubled within some weeks, repeated over and over again).
The commissions from your downline should probably tell you something about how many retail customers they have.
@Mack
Here’s all you need to understand:
The secret receipe is that not once did you mention actual customers. Just a bunch of members or dummy accounts you’ve dumped bids on (fake or not, they didn’t go on to buy any bids).
You’re of course not alone and this is pretty much what every earner in Zeek’s backoffice and downline looks like. No actual customers who are purchasing bids of their own accord and using them in Zeekler.
Yet in the same breath you want to tow the company line and *wink wink nudge nudge* suggest that these missing customers are generating millions of dollars in revenue a day?
If you can’t see the problem with members paying themselves and no external retail revenue from actual customers well… I think we’re done here (until the next bright spark comes along and tries to tell us that Zeekler has boatloads of legitimate customers).
This current RPP% glitch fell on the payment request day of the week, when payment requests have to be submitted or otherwise processed a week after. Is that a coincidence?
A friendly comment I posted on ZR News referring to this matter is left in “awaiting moderation” mode for hours now… Is it just me, or are most comments being hidden from view ?!
You don’t need to know the exact math. You will need to know the basic principles rather than the math.
One of the principles in business is the “cash principle”, where you can try to identify WHERE and WHEN a monetary transaction actually happens.
Spending bids in an auction like Zeekler doesn’t involve monetary transactions, so you can ignore the ideas of Zeekler being very profitable. The monetary transaction happens when people are BUYING bids, not when they are spending them.
As an example, if people are spending 6,000 bids in a “$150 cash” auction, they will raise the price to $60. And this will be the only monetary transaction, when the winner pays $60 to get the $150 cash. The BIDS they spend on bidding are not a “monetary unit”, “legal tender” or anything similar to that.
To make this profitable, people would have to spend cash rather than bids in the auctions. Or the auction can make the profit indirectly by selling bids directly to the users before and during the auctions, making money on the SALE of bids rather than the bids spent.
Or the auction can make the profit even more indirectly, by selling bids through affiliates. This would have worked if they only had paid commissions, not any matching VIP Points.
So the one single “cash principle” can give you lots of answers for how sustainable a business model is, without knowing the exact math.
The “cash principle” can be used on the affiliates, too. When an affiliate pay for the bids using credit card or other “cash equivalences”, it involves a monetary transaction. When they pay for the bids with profit points, no monetary transaction will actually happen. So most of the bids are worthless for the company, except for that they will raise the price of an item in an auction.
The “cash principle” can also be used to understand why an accountant won’t react. VIP Points are not a monetary value, so they won’t show up in the accounts either. However, there seems to have been lots of reactions from Howard Kaplan, the IRS and others when it comes to the daily profit points.
So your VIP Point balance is actually worthless. But you can still make a profit on it if you are able to withdraw some of the profit points as cash, before the company runs out of fresh money.
Qmark: Posting on zeekrewards facebook are definitly being deleted. There was a posting about the hacking of accounts because of zeek’s weak security. It was removed the same day.
@Mac After reading your post its the same beaten horse as every other passionate zeek member. My huge downline, I am getting payment, there is endless opportunity of more people joining.
You are never make an attempt to explain where all this revenue is generated other than this extra growth through membership recruitment. That time square description is a good one, remember though after the party the masses exit time sqaure and leave a huge mess.
@Mac Why do you have to deal with RxPAY instead of Paypal. As far as your lawyer reps. They were hired to make your stellar business compliant from being a passive income opportunity.
Even at a trial the defence is not held in content just because they represent their client. As far as ruining their reputation not many people really care other than zeek admin, members and us 5.
Oh, thanks very much bruce ! Didn’t notice your short reply ! Appreciate it …
Hey QMark. That is a good observation on the payment request day. There will be plenty more. AS far as having your nonpositive postings show up or answered, goodluck with that.
Additionally it’s been noted for quite some time now that on Zeek Rewards News they might show hundreds of comments submitted, yet they only publish 2-3.
What happens to the rest or why Zeek Rewards choose not to publish the rest is up for speculation.
Good, thanks for confirming Jimmy’s info. He beat you to it.
Again, does that *really* make a difference in the analysis?
Because new points keep coming up, and ZR keep behaving suspiciously without resolving their existing problems.
So do you agree or disagree, and why? Looks like you disagree, but you can’t say why.
Wrong.
The historical numbers you revealed makes no sense. Auctions happen MORE on weekends, as more people have free time, not less. So logically profits should be HIGHER on weekends and lower on weekdays.
Is it a coincidence that convicted scam Ad Surf Daily also pay less on weekends? (1% on weekedays, 0.5% on weekends) You decide.
I don’t want to see failure. I want to see legal. If the company cannot operate legally, that’s hardly my problem.
WHO said Zeek has 700K affiliates? Last official number was Dawn saying there are… 15000 active affiliates in the US. That came straight out of their income disclosure statement.
“Anecdotal fallacy”, assuming your own experience (or that of your close group) is actually representative of overall situation.
Wrong. Gerald Nehra, one of those hired by Zeek for compliance, previously certified Ad Surf Daily as legal too (ASD hired him for compliance). ASD got shut down ANY WAY. Go look it up. Compliance teams are NOT infallible.
Only if you don’t know ALL the facts. THEN you start to have doubts.
The interesting thing though is more people are joining on weekdays vs the weekend, memberships are renewed during the week, etc.
This means that the cash flow is more closely related to membership fees, renewals and bid purchases which are happening most often on weekdays than on auctions which attract most traffic on weekends.
The spin is that they hold a reserve in order to keep the percentage where they want it. Maybe pay 40% today…kick in the 10% reserve tomorrow in case the auction didn’t make the normal gazillion profit needed. Kind of like a governor on an engine…
That was the explanation I got when I asked how we made money when the site was offline for a good part of the day.
@BWatson
That’s a “reasonable explanation” (the one about having a reserve “buffer” to smooth out the RPP), but hardly the ONLY explanation.
Having an abnormally consistent return is one of the warning signs of a Ponzi scheme. The other is secrecy. (Third is a bogus business or product) ZeekRewards scores 2 out of 3, with a “unknown” on the third.
It can’t be 50% (or whatever percentage) of net, it has to be gross. If it was of net, Zeek would have enormous profits. From Zeek’s own Red Carpet Event, 12 affiliates are earning over $1M per month.
– So that’s a minimum of $24M per month in gross revenue just to cover those 12 affiliates at 50% (the highest rate according to what you say).
– If this was “50% of net profit” then gross was significantly more than $24M in monthly revenue.
– If this was “50% of gross revenue” then gross is $24M just for these 12 affiliates only, not including the other tens/hundreds of thousands of affiliates
Where is all this money coming from? It’s not the penny auctions.
@Mack: Also, listen to the 4 daily opportunity calls with Daryl Douglas. He says 50%, not “up to 50%”. Straight from a Zeek officer.
I think the reality is the % payout is just a made up device, it doesn’t matter what the % is, because it’s just a ponzi.
An important clarification to remember as we examine Rex Venture Group and Zeek Rewards: The company doesn’t share profits – period, which is where part of the issue comes in when people discuss company profits.
The company does share a portion of Daily Net Revenues.
Let’s say they did away with ZR period. ZR affiliates were actually customers and they purchased bids on the auction site, instead of bids for ZR.
The customers make a commission from the purchase of customers they introduce to Zeekler…would that be legal, not a poniz, compliant, etc.?
Yes, that would go a long ways towards making it a more standard commission-based affiliate model. However, the business would have to be revamped considerably for it to be viable.
The Zeekler auctions would have to start being more competitive with the leaders such as Quibids, in order to attract customers who would pay with real cash to purchase bids.
The bid inflation (ie “free bids”) would need to be done away with, or at least recategorized so they could not be used in most of the auctions with people purchasing bids at $0.65/bid.
Zeekler would have to instantly cure the IT issues, get rid of the AlertPay/STP crap, allow credit cards again, and start developing a rep for reliably delivering products in a timely manner after auctions were won.
Even so, I doubt that Zeekler is going to take off even with all of these changes as the penny auction business is a dying fad, not a new wave to ride at this point. But it is fun to speculate….
@cashing out…thanks! I understand what you’re saying. But what I’m saying is that all affiliates of ZR become customers NOW. In other words, starting with the affiliates they have now, and turn them into customers.
And in order for them to make money, they would have to buy retail bids only to use in the penny auctions. If they introduced another customer that purchased retail bids, they would make a commission. But do away with ZR totally. Could they continue with the 50% company profit share and still be legal with this business model?
But the big problem I see…is what benefit would a person that has a lot of VIP points get, if any.
Sorry, for repeating myself and maybe you did answer, but I didn’t really see the answer in your response.
@Vicky
Maybe I didn’t exactly answer your question. If Zeekler did away with ZR, then that would also mean paying commissions in cash ONCE on new bid purchases, but not providing VIP points.
The revenue and “profit sharing” would be exactly proportional to “real sales” of bids which is sustainable indefinitely, assuming a decently run penny auction.
However, the existence of VIP points with daily compounding is the real problem with ZeekRewards that turns this thing into a Ponzi scheme. The reason is that there is no retail bids revenue to pay anyone if it is also generating VIP point liability at the same time.
In other words, there is no exponentially increasing source of revenue to pay the “compounding”, especially at the rate of 1.5% per DAY. Considering that there are tens of millions of VIP points in liability out there already, the end/collapse is a mathematical inevitability.
Real Customers are not buying bids with real money to bid on items at Zeekler – instead ZR affiliates are buying bids through a faked customer/family member so that the affiliate gets VIP points and a 20% commission off the “bid purchase”.
The fake customer/family member is then free to blow the bids on an attempt at winning something since the bids are effectively “free” to them. This results in nonsensical auctions closing at high prices since it is basically just a raffle.
Thus, affiliates buying bids in this manner actually serves to DRIVE AWAY potential retail customers from the auctions since they see auctions closing at high prices with excessive bidding occurring.
Very funny, because the company itself says something differently:
quoted from zeekrewards.com/howitworks.asp
Should you report yourself for misrepresenting the company? 🙂
And before anyone starts crapping on about how the system will just adjust itself and lower the daily profit share paid out per bid, yes this will happen but once it drops low enough that members can’t sustain their bid balances over a 90 day rolling period they’re not going to stick around.
When you throw into the equation that the number of members hitting this bid ceiling is only going to increase over time, that only further will drive down the daily percentage payout. Something there’s no recovery on as each day simultaenously the percentage payout drops and more and more members hit the ceiling driving the profit share even further down into a one-way spiral.
Ultimately sooner or later the daily profit % will dip below what’s sustainable and it’ll crash (nobody is going to bother with VIP points if they can’t grow their balances over 90 days).
They probably mean net revenue, but profit sounds much more attractive. 🙂
From memory, for a company that buys and sells goods, net revenue will be:
A. Goods sold (gross revenue)
B. minus price IN for the goods sold
C. minus expenses directly related to point B (freight, insurance, etc.)
And profit will be minus all the other expenses, except financial posts. For most companies this will mean some heavy expenses, like office expenses, salaries etc.
When we give away sample bids, lets say Bill Registers to my site and gets 500 free bids, he can ONLY PLAY on the FREE BIDS section( BEGINNER & FREE BID) only, NOT On the paid bids section which is 90plus percent of action is, I notice from your posts that you ALL do not understand that.
ALL the other auctions are actually real bids with real money being spent. There is a TON of action on these auctions and it increases all the time, understand is several thousand auctions per week at this point & always growing…..24/7 …
I tend to agree how you all think we are making money on the same money, BUT the fact is the auctions are creating a monster amount of income ….relax and see positive side. Zeek will be largest penny auction in the planet , face it, it is obvious!
You’re missing the point. YOU paid for the sample bids. It generates profit for Zeekler, which goes through ZeekRewards and back in your pocket as profit share. YOU PAID YOURSELF.
More chances for you to pay yourself…
The auctions are generating a lot of profit… From YOUR OWN PURCHASES OF SAMPLE BIDS!
@Mack
…sigh.
You are aware of the VIP matching bonus paid out on the purchase of retail bids right?
Rather than just buy the bids themselves members by them through dummy customer accounts, get the VIP points and then have the chance to stuff around on the auctions and make some money back. That’s why all the action is there, you’ve got a bunch of Zeek Rewards members (not genuine customers) playing with bids that hold no value to them (they already consider the ROI they’ll make on the points they got as profit).
Rather than just make stuff up, Jimmy actually follows the auction numbers and it and from memory it’s only a few hundred on a good day at best. Quibids apparently do a few thousand auctions a day.
Let’s face it, without Zeek Rewards members blowing through retail bids they’ve bought just for the VIP point bonus through dummy accounts, Zeekler wouldn’t even have any traffic.
Well, actually maybe that’s not fair. Take out the bid inflation the above causes and it might have a hope in hell of attracting genuine retail customers.
Oz –
“Rather than just buy the bids themselves members by them through dummy customer accounts, get the VIP points and then have the chance to stuff around on the auctions and make some money back. That’s why all the action is there, you’ve got a bunch of Zeek Rewards members (not genuine customers) playing with bids that hold no value to them (they already consider the ROI they’ll make on the points they got as profit).”
I give up, if you think everybody or even most people think of that, then your wrong, and you know its a statement that somebody without a brain would make and you seem smart, but obviously maybe I am wrong on that assumption also….I am done, goodluck!
Is it me or nobody wants to rebut my rebuttals? 🙂
I just go on what THEY posted. I don’t go for creative reinterpretation, unlike Danny boy there.
@Mack
To date not one ZR member has come on here and announced they have a majority of genuine retail customers over recruited affiliates. Do you really think this is a co-incidence?
All the top guys do is flash their massive VIP point balances and try to recruit new affiliates and that in turn trickles down to “the pack”. In the meantime you’ve got a company running around shouting about it’s 25:1 customer ratio whilst conveniently ignoring the fact that that vast majority of those customers at best exist in name only and have never bought a retail bid for the life of the account.
I mean Jesus Christ, here’s your own personal example:
No mention of genuine retail customers. Even when your own situation differs from towing the company line with crap about an abundance of retail customers you still refuse to
believeconsider that this is just a bunch of Zeek Rewards members redistributing money amongst themselves.I guess we can add you to the list of ‘I don’t want to hear or think about it because I’m getting paid’ list of delusional Zeek Rewards affiliates then. Cheers.
Why do you have to make up this imaginary customer “Bill” if you have real customers acting in the same way?
“Bill” is clearly an imaginary customer. People would normally have said “I have this customer Bill” or “I have 5 customers”, and then described how they went from being free customers to retail customers after the first 500 free bids.
If you have real customers acting in that way, you would have sounded far more convincing if you had used them as an example. “Bill” sounded more like someone telling us about a theory, how something could have worked in theory.
You could even have used “one in my downline has this customer Bill, and he has spent more than 3,000 dollars buying retail bids in the last 6 months”.
This analysis is very simple anecdotally, and I know I’m repeating myself here but this question has come up often. Just ask any of your upline, downline, crossline affiliates who have 5-figure or 6-figure VIP point balances.
They would’ve had to have given away many bids to many customers to get to their current point balance. How many of them had retail customers who purchased bids?
Since every customers that purchases bids results in you getting a 20% commission and matching VIP points, and because it is such a rare occurrence, an affiliate will know how many customers actually purchased retail bids.
Many affiliates have hundreds of customers, yet I’ve yet to hear from a single affiliate that has had a retail customer they didn’t create themselves buy any bids.
This one anecdotal experiment is powerful and avoids small sample size problems because all you have to do is contact a few affiliates with medium sized point balances and be guaranteed they have many customers. If you talk to 10 affiliates with at least 50,000 VIP points each, you will have covered over 500 customers.
Look at it another way… on average, each affiliate who is bringing in retail customers should have generated enough retail revenue from his retail customers so pay for his ever increasing daily profit share. Find me ONE AFFILIATE who can say that he helped Zeekler generate more revenue (from retail customers who purchased bids) than the amount of daily profit share he’s been paid.
See how this atomic experiment proves that it is impossible for Zeekler to be even close to covering the revenue needed to pay daily profit share.
@K Chang
It’s true that the website used the term “profit share,” and as you have pointed out even company’s website technically used the term too liberally. I am just clarifying that what they actually do is a revenue share.
The term “profit share” only relates to the RPP pool in and of itself (the daily earnings minus bid repurchases). Earnings minus expense equals a profit or a loss.
to all the zeek critics, Chang, Jimmy, Cash Out et al….you raise some good points that at the very least should be kept in mind when considering the zeek business opportunity.
I myself as a zeek affiliate considered some of these points before forming my belief in the intentions of the team behind zeek rewards. for me, it is a cutting edge business model that has the potential to rival ebay in years to come, and evolve both from a business model perspective and from the point of view of compliance.
no business model is perfect whether it be a fortune 500 company, a government department or any type of organization. but what I do believe is that zeek rewards is committed to developing it’s model to ensure that it complies to the best of it’s ability.
If that means that some aspects of the model change with time so be it. but to suggest that it is a scam I think is unfounded and illogical. do you really believe that Troy Dooly would compromise his standing in the mlm community for the sake of a temporary consulting fee (I mean temporary is all it would be if it’s a scam).
Why would zeek cut off 6 countries where the model was popular when it is trying to grow the business globally? Why haven’t the authorities seized upon the company if what you declare is so obvious?? I suppose time will tell…but in the meantime I am sure you guys can find something more rewarding to entertain yourselves with…
I’m not trying to “creatively reinterpret.” The clarification is important as I try to look through a regulators eyes when they ultimately determine if there is enough revenue outside the matrix accounting for all revenue arms of Rex Venture.
The daily net revenue matters in determining if the percentage of customer sales vs internal consumption is adequate for compliance, and as we examine the definition of what a customer is at the regulatory level, and to what constitutes a retail bid customer when it comes to Zeek.
Some have mentioned the 1979 FTC opinion which States that 70% of the last product order must be consumed before a rep can make a repurchase. (although current benchmarks are closer to 50%) In the 2007 BurnLounge decision, the FTC claimed BurnLounge was a pyramid because the company pays more for recruiting store members than selling music.
The judge ruled that 3% of revenues generated from people outside the compensation plan is not viable to sustain the company. Therefore I zoned in on net revenue share as Rex Ventures has been in business for 15 years, and one must consider that possible revenues come from other sources besides the penny auction when making an accurate and fair examination.
Come now, Rex Ventures isn’t some mystery organisation with thumbs in a range of pies. Before Zeekler they were doing Free Store Club and now that’s been mangled into Zeek Rewards (although nobody uses it).
And besides, Rex Ventures might the parent company but alone it’s not a MLM opportunity. That squarely falls on Zeek Rewards. Even if Rex Ventures had some legitimate source of revenue (that nobody knows about) that doesn’t change how Zeek Rewards works.
Unless they’re going after Rex Venutures specifically, the authorities will only give a crap about the business model of Zeek Rewards.
Unfortunately it’s a reactionary system. As far as Ponzis go you need to get big enough before they step in these days. Like you said, give it time.
At last count it was 12, aint no way in hell ZR will be paying out hundreds of people millions of dollars each month…
You’re are changing the scope of the premise. We’re talking about whether ZeekRewards is legal or not. You’re trying to change the scope to entire Rex Venture Group which comprises of other companies plus ZeekRewards.
FAIL.
Yes you are indeed trying to reinterpret. In every bit of literature officially published or approved by ZeekRewards, they are a invite-only promotional arm of Zeekler, and all the profits to be shared are obviously from Zeekler.
ZR members are not promoting any other parts of Rex Venture Group. Why should they share in profits from other parts?
This is the second time you tried to INTERPRET what they wrote instead of actually READ what they wrote.
They said “profit”, you claim they actually mean “revenue”. Revenue is BEFORE expenses. Profit is AFTER expenses. HUGE difference.
Now they said “Zeekler and ZeekRewards”, YOU claim they actually mean “all Rex Venture Group’s businesses” when such an interpretation was NEVER offered by ZR.
I wonder what new interpretation you will come up with next.
I have no problem with the auction model. I *do* have problem in who are actually buying the bids (thus generating the profit). All signs point to the affiliates buying the bids, thus paying themselves.
You will need to ask him. All I can say is nobody is infallible. Just check Gerald Nehra, their compliance review lawyer, and his relation with Ad Surf Daily.
As Zeek themselves offered no explanation, we are left guessing. You’ll need to ask Burks.
Because hands of justice move slowly. Authorities often take years to act, if they act at all. Business in Motion, a pyramid/Ponzi scheme in Canada, was exposed by CBC to be a fraud in 2009 in a TV special investigation, but no charges were filed until 2011. Most Ponzis are only noticed when they collapsed. Took Aussies 3 years to convict TVI Express in their court system.
The infamous “get a life” argument… lame.
Incidentally, Troy Dooly had been wrong before. Even he will tell you that. He put a company on fraud alert status, took it off, then put it back. You can find it on his website.
Clearly he was working from incomplete info and changed his mind when he received new info, but he was indeed wrong and corrected himself.
As I said, nobody’s infallible.
ZR affiliates, don’t disregard the value of this site. Use the information from the analysis/arguments/debates here to determine what actions to take and ultimately, when to fold.
Currently taking out as much as I can, not everything. There were just too many signs lately with the business I did not like…
Paul Burks *did* offer an explanation citing OFAC sanctions. It’s just that the explanation doesn’t make any sense. The sanctions issues never existed, we collectively discovered that here and Oz wrote up very specific information include the OFAC’s response to multiple inquiries.
I and others have mentioned how is it that ZR cites these sanctions but all the other major online business who handle affiliate and other monetary transactions are active in those countries. Troy Dooly popped up here for a bit and debated as well, but he stopped replying when it was obvious his position was wrong and Paul Burks just made up the whole sanctions thing.
Paul Burks would have been better off not citing OFAC sanctions at all and just remaining silent. Or coming out and saying “we decided not to do business in these 6 countries based on our risk evaluation”. The fact that ZR made up an answer adds to the narrative that Zeek is not 100% transparent and tells a lot of little lies.
The entire Zeek Rewards growth model relies on the need to attract more affiliates investing in the business (a ponzi). The only way to do that is to convince the affiliate that:
– Zeek makes amazing profits from Zeekler
– Affiliates are getting 50% of profit shared daily
– These are real profits
– Penny auctions will rival ebay
– Penny auctions are a new business model
– Customers will continue to use penny auctions and it is a sticky B2C business like ebay, and not a one-time “try it and never get burned again” curiosity business model like what we’ve seen in the UK
– The money tree will grow forever
Speaking of money tree, AMEX just offered Farmville bonus card… where you do need to plant a money tree on your “farm”. 😀
@K Chang
Why are you compelled to make unnecessary snarky remarks. (Danny boy, FAIL, I wonder what new interpretation you will come up with next) It comes off as a smartass kid sitting in a dorm room. I’m not thin-skinned so you do whatever you feel is most effective.
I’ll state again you appear to be well read and have offered me valuable insight. I think your writings are very well researched and well written. I don’t claim to have the definitive answers, but I’m trying to engage in the discourse, and digest with great consideration what you and others have to say. I’m trying to become better educated.
I’m beginning to think you want to be right more than examining for the good of all engaged. I am not an enemy as far as I knew. If your desire is in any way to help educate or open people’s eyes you would be more effective with a more mature tone. Maybe I’m wrong and you are just being comical. Hard to tell in blogs.
Back to compliance, Im not TRYING to change the scope of the premise. I was trying to include entire Rex Venture group because based on research, my belief was that this would be the angle of a regulator in determining if Zeek Rewards was legal.
Oz made the several good counter points:
1 nobody uses Free Store Club
2 Rex Ventures alone is not a MLM
3 the regulators will only give a crap about ZR unless they had a reason to go after Rex Ventures
I did not say Zeek Rewards affiliates were getting revenue share from anywhere other than Zeekler.
Also I read the words “daily net profits” on their website as you did. It also says “retail profit share in the RRP.
I’m saying it was my understanding that regulators would have to look at revenue when determining compliance. Maybe I’m wrong.
Yes, I am snarky at times. But I NEVER resort to name-calling or attribute nefarious motives to my “opponents” in the debate without cause.
You did resort to “moving the goalpost” twice, thus I remarked on it in a snarky way.
“Danny” is a common nickname for Daniel and is in no way snarky, unless you choose to see it that way.
Just stick to the topic.
Today on the Zeek news site, they announced they are in the process of moving to another bank. They are telling everyone if they get a check, to be sure to deposit or cash it before June 1st so that it will clear the bank. If they don’t the check will be returned with “account closed” and another will have to be reissued.
Each bank is different..some might take days to clear and I have seen checks take up to a couple of weeks to clear.
If they are issuing checks, legally don’t they have to leave enough money in that account so the checks can clear?
Since they are in the PROCESS of moving to another bank, how can they issue anymore checks after June 1st…since they don’t have a bank yet?
If I were a conspiracy theorist, I will say this is when they disappear with all the money, but I’m not.
@K Chang, you’re too funny. Ponzi or not, if they are issuing checks, don’t they have a legal responsibility to leave enough in the bank to make sure those checks clear?
I know checks are void if you don’t cash them in a certain amount of time. But I don’t understand the urgency to cash/deposit the checks so they clear before June 1st.
My understanding is that passing checks on a closed account is felony check fraud in many jurisdictions.
Hopefully the true believers will have an explanation or even a plausible theory for the sudden notice.
The company has been advising us they are moving to a new bank and its not a surprise.
They also cannot just leave an account open until the last person cashes check, bottom line is it is okay for them to move to another bank and they advised everybody as such, i do not see an issue.
@ Chang
I did stick to the topic. I disagree that I changed the scope of the premise whether Zeek Rewards was illegal or not. The discussion I was intending to initiate was whether or not regulators would have to look at the entire company as a whole to determine whether Zeek Rewards was illegal or not.
I.e. Will regulators possibly view that the profit share from Zeek Rewards is part of the net revenue share of the company as a whole?
Oz gave some good feedback. You said I need to read and not interpret, when I’m speculating how a regulator might interpret. Do you really assume that I acknowledge that the Zeek Rewards website uses the term “profit,” yet that I think I know better than them what they mean?
Shallow reasoning unless I’m Stevie Wonder. Good grief, Chang, can I get a little benefit of doubt. Can I get permission to “move the goal posts” just a smidge : )
Then you’re contending that ZeekRewards is hemoragging money that requires additional infusion of cash from all the other businesses to be legal, right?
Closer to what I was contending would be that ZR was paired with the remaing arms of the parent company so that regulators would have to consider the company as a whole. By technicality the numbers would be padded in theory.
I am not trying to Bill Clinton up the word ” infuse,” but if infuse means to pour money from one arm into another arm, this is not what I meant. If this were the case the company would be giving money to an affiliate which they did not earn which makes no sense.
Whenever I say company I refer to Rex Ventures, and ZR or Zeekler when I refer to the arms. Again if I’m a regulator how do I view the situation. Maybe infusing, pairing, however you slice it, it does not matter. Or does it?
I contend the “scope” is ZeekRewards/Zeekler, you contend that the scope is entire Rex Venture Group.
So you’re saying that it’s POSSIBLE for ZR/Zeekler to be a Ponzi, but maybe not for Rex Venture Group, right?
Seems you’re arguing that ZR cannot be considered separate from all the other parts of RVG, despite its distinct business model, client base, affiliate base, and so on and so forth.
Zeekler and Zeek Rewards can either be sub-divisions (“marketing names”) of Rex Venture, or be independent subsidaries (“daughter companies”).
On most people, “arms” and “legs” will usually be connected to the body. It’s very uncommon to have arms and legs acting on their own (other than in cartoons). 🙂
From their “About us” page:
Main parent company = Lighthouse America
Main subsidiary = Rex Ventures LLC
The standard way of moving bank accounts is to leave enough funds in the account for all outstanding checks.
If Zeek cannot do this, or was not aware that this was a standard practice, that raises even more questions…
The real story here is simply that Zeek corporate continues to be short-sighted and makes many amateur mistakes despite “being in business for 14 years” and “having 3,000,000 customers” in previous ventures.
Some have posted on the ZR FB account (the ones that weren’t deleted) that it takes up to 2 weeks for the Zeek checks which are mailed to make it to them outside the US. So in the time that Zeek cuts the check and closes the bank account, the affiliate has never even received the check yet.
I am sure Zeek at this point isn’t “running away with the money” but the way in which they handle business doesn’t inspire confidence that they’ll be able to deal with complex issues properly when they keep fumbling over basic issues such as credit card processing, “sanctioned countries”, IT system uptime/production release cycle, compliance courses not working, spotty compliance enforcement, no customer service, and then this.
P.S. I’m still waiting to be paid on my Zeekler auction that I’ve paid for. I’ve opened two tickets with no response. When it hits 60 days, maybe it’s time to file a complaint somewhere…
@Jimmy
Spoke to a few people, they basically said they have the new checks with NEW accounts, the post that was made on Zeek site was regarding the old checks that people have still not cashed, but was told directly from 2 friends of mine they got new checks from zeeks new bank..FYI
What does the NV stand for? Nevis? (the Caribbean island)
The fact that Lighthouse America, US (NV) has no suffix of Inc., LLC, Ltd., etc., means what, that it’s a sole proprietorship? Doesn’t make sense for the owner of a multi-million dollar company to expose himself to unlimited liability.
Google -> Lighthouse America, US (NV) -> 0 Results.
Not that any of these are all that significant, but would like to try to piece the puzzle together.
NV>Nevada
Thanks Vermillion, saw that too…
So do we know where Rex Venture Group, LLC is registered?
If anybody finds out what the new bank they’ll be using is, please post.
There is an entity named “Lighthouse America LLC” in Nevada records. Its standing is listed as revoked. The entry reads: “No active officers found for this company.”
The Zeek entities appear to use no business designation when referencing Lighthouse America — i.e, no “LLC” or “Corp.” or “Co.” follows the name. So, it’s hard to say if there is any Zeek/Rex tie to the revoked Nevada LLC. I’m curious about it, though, because Rex clearly has at least one tie to Nevada.
There is a Nevada entity known as Rex Venture Group LLC. Its standing is listed as active. Managers are listed as Paul R. Burks and Susan W. Burks.
There is a North Carolina entity known as Rex Venture Group LLC that is listed as a “foreign” company doing business out of the state of Nevada. Paul Ray Burks of Lexington, N.C., is listed as its registered agent. The entity is listed as “Current-Active.”
There does not appear to be a listing in North Carolina for Lighthouse America.
In any event, the information — as presented on the Zeek Rewards and Zeekler sites — has a problem that some grammarians would call the “unclear antecedent.” The info is presented clumsily and appears to be at least mildly at odds with itself.
For example, the ZeekRewards site says this (in the first paragraph of the About Us link):
The curious punctuation — the comma after “America” followed by “US” and then (NV) – is hardly friendly reading. The next sentence begins with “The company . . .” — but it’s hard to tell what company the passage refers to.
The Zeekler site is pure butchery (in the first paragraph of the About Us link):
Personally, I find the presentation in the About Us areas of the Zeek arms to be strange and ambiguous. I wonder if it is deliberately ambiguous. It would be easy enough to fix, so I wonder why it hasn’t been fixed. As is stands, it is unclear — as are many things about Zeek.
PPBlog
Its registered in Nevada according to the website, also that Nevada entity search engine.
Nevada. Registered in January 2003, so there goes the “14 year in business”.
Corporate search –> Rex Venture Group, LLC
NV Business ID – NV20031006028
Manager – PAUL R BURKS
Managing Member – SUSAN W BURKS
The other “Rex Ventures, LLC” is registered in February 2003, using an agent as managers (Hagendorf law firm, PLLC).
NV Business ID – NV20031020409
@Chang
I’m not knowledgable enough to make this argument. I was ASKING if Zeekler/ZR might not be able to be considered separate from RVG from a compliance standpoint. And if this was a possibility, is the retail profit share of Zeekler/ ZR considered part of the entire net revenue of RVG?
One reason I am delving into this arena is I’m trying to figure out the purpose of the corporate structure.The word “company” is being used often, and I’m not sure if people are meaning ZR or RVG.
I thought Zeekler was a division, and that ZR was an exclusive advertising arm. What is an arm? Is it a department?If ZR were deemed not compliant, do you cut off an arm, or close a department?
Zeekler can exist without ZR, if that was your question.
These two companies seems to be the same. North Carolina was registered November 29. 2011, with principal office in Nevada. “Certificate of existence with status good standing” from Nevada was attached to the registration in North Carolina.
Same company. An “out-of-state” corporation can “domesticate” in a different state. In this case, home state of NV, domesticated in NC.
No, it is not. LOL The question was that thing before the question mark. Chang this reminds me of the quote Lt Col Slade said to Chris O Donnel’s character in Scent of a Woman: “Charlie, are you f****** with me?” : ) I’ll try once more.
There was a company before Zeekler and ZR. Supposedly, it made revenue, and supposedly it still does (not counting Zeekler and ZR.) Zeekler and ZR are arms/divisions/departments (whatever) that were added to the company.
I’m wondering, NOT persuading or arguing, how separate Zeekler/ZR is from everything else that comprises Rex Venture Group from a regulator’s point of view when determining if ZR is compliant.
Is there legal precedent for regulators to be able to say “We are axing the ZR department due to non compliant retail revenue numbers/customers” without considering the % of revenue/ customers of the rest of the company, and assuming the company is not injecting monies outside of Zeekler/ZR into the RPP.
Do regulators HAVE to count the revenue and customers outside of the Zeekler/ZR if they are “departments” and RVG is the company? I don’t know how to ask the question any better.
All this chatter about Rex Ventures vs. Lighthouse America vs. Zeek Rewards/Zeekler is pointless.
Zeek Rewards stands or falls on its own as far as legality and profit/loss. Just like any other subsidiary. This is Business 101, folks.
As to whether Rex Ventures, Lighthouse America and the claim of being “14 years in business” has any credibility or relevance vs. a company that started just 2 years ago, keep in mind that Rex + Lighthouse + Zeek had a total of 11 employees as of Jan 2012.
“14 years in business” (or is it 15 now) is meaningless based on the amateurish business decisions we’ve seen to date. A company in business for 14 years with the worst website on the internet. A company allegedly raking in millions in profits per day but using out of date ASP code and cheap stock photos.
I’m not the one trying to shift the goalpost.
@Jimmy
If ZR is a subsidiary and stands or falls on its own based on law, then this is the first reply to my last question. I am not a lawyer, and I did not take Business 101, but I own several successful businesses.
I have learned in life that in this cruel and cynical world, technicalities often matter-fortunately and unfortunately depending on which side you are on.
A comical analogy: My uncle was visiting from out of state. My brother took him to Hooters for beer and wings. My uncle’s phone was ringing when he suddenly darted to the Red Lobster parking lot next door.
You see my aunt, who was calling, did not want him going to Hooters, and my uncle did not want to lie. “Hi Honey, I’m at the red lobster.” Well, I called Bull**** on my uncle. For me he was not being truthful, and displayed bad character. However, in court, with a good lawyer he might win that case.
I have examined many of the red flags and points made by insightful people like you. Until the company can prove that bids or subscriptions are actually purchased in a viable and sustainable ratio to affiliate growth, it is easy to see why people are calling bull****.
But the fact remains that the proper authority has not yet deemed the company illegal. So I want to know why.
@Chang
Lol I tried buddy : )
Goalpost fallacy. Scope of premise was not dismissed. What was deemed logically fallacious was not logically fallacious.
wide right…NO GOOD
You can’t even agree on the premise.
I agree on the scope of the premise- An evaluation or that something is given. You then want the premise to be that ZR is illegal.
I agree that an evaluation of this premise is necessary. So I dug deeper to attack this premis from a different angle, which you called moving the goalposts. Maybe a kicked the ball from the other side, which maybe is against your rules, but I did not move the posts
You moved the goalpost by insist on “looking at the larger picture”.
It’s much like instead of looking at one’s own financial means to see if he’s solvent, you also looked at his parent’s financial means and insist he’s still solvent if you count his parent’s money too.
Just had another thought.
The way a Ponzi scheme works is as follows:
A puts in money X
some time passes
B puts in money X
A takes out X+1 (for example)
As long as B puts in money BEFORE A takes out X+1 A can do so. There’s a built-in “delay”. In investment, it’s called “maturity”, like fixed-term CD has specific maturity date. A Ponzi need people to come in BEFORE A’s maturity date to pay off person A and his/her “return on investment”.
That 90-day expiration of VIP profitpoints is just a clever way to introduce this delay without making it a true “maturity period” (which would make them look like an investment).
Because points “expire” in 90 days, affiliates are encouraged to leave the profitshare uncashed (used for repurchase of bids / profitshare points) for as long as possible, 60 days or more, even though there is no formal “maturity date”.
Furthermore, this repurchase of bids also minimizes money leaving the system. People only start cashing out when they accumulate a LARGE balance of VIP Profit points.
Instead of spelling out the exact rate of return, maturity date, and so on, this whole thing is disguised by adopting non-investment terminology, and by adopting “fuzzy rules” that encourages reinvestment and maturity > 60 days but not specifying it formally.
It’s pretty ingenious disguise for Ponzi scheme when you think about it.
@K. Chang
You nailed it K. Chang.
An ingeniously disguised illegal Ponzi scheme is just as illegal as an obvious one. Setting my bid repurchase to 0% and getting the cash out as quickly as possible. Hopefully soon enough.
After all the fallacies and online thesis, the revenue for the 60 to 90 delay between out and in just caused an eureka moment? I guess I assumed that was obvious. I thought I was the only one overthinking.
American Express math is similar in the sense of delay by holding funds longer than competitors and collecting interest. Ingenious amateurs at work.
@Chang
Getting away from our goalposts crap, my scope however you view it is valid regardless how you choose to try the referee the discussion. I made some reasonable points and hopefully I will find some feedback. Moving on…
ZeekRewards is the marketing arm for the other projects, too.
* Free Store Club
* Shopping Daisy
* Zeekler
* and itself
Free Store Club is included in the membership fee for ZeekRewards. Shopping Daisy is probably a free toolbar. All have been collected under the same ZeekRewards umbrella, instead of running 3 independent programs (where 2 of them already had started to fail).
I don’t know anything about the company structure, whether ZeekRewards and Zeekler are independent daughter companies of Rex Venture Group or marketing names.
The big picture here isn’t very important. ZeekRewards is the main project whether it is independent or not.
@M Norway
Thanks for the feedback. Sincerely.
Chang likes to referee the forum like its some college course on human inference and logic. If I wanted to take cognitive psychology again I would go back to college. Apparently I was using inductive reasoning and I broke his rules.
Look, I get the premise. ZeekRewards is legal or not is the main project. I thought my question is necessary at some point to address this. The big picture, Rex Venture Group, might ultimately be important to a regulators eyes to determine if Zeek Rewards is legal or not.
Jimmy said Zeek Rewards was a subsidiary and falls or stands on its own based on law, and it’s right out of Business 101. To me this relates back to the original premise or main project. So I ask what laws?
What Business 101 teachings? I’m ignorant on these subjects. If I’m not allowed to look at the larger picture to then I humbly apologize to all the fine people here at the table. (I sure hope I did not commit some logically fallacious sin somewhere in there)
How is discussing the scope of the premise “referee the discussion? it’s be like tackling a problem before it was defined. As the Cheschire Cat said, “If you don’t know where you’re going, then it doesn’t matter how you get there.”
I don’t doubt your points are reasonable. The question is are they RELEVANT.
When has ANY ZeekRewards member posted ads NOT about Zeekler?
Evaluate actual actions, not corporate gobbledygook.
So your general reaction was “I knew that…”?
Yet you are STILL trying to debate whether it’s a Ponzi scheme or not?
Chang
I included an explanation for relevancy. Yes, I knew that, and yes I’m still premising the premise.
@M Norway
You evaluated wrong- “Gobbledygook” Fallacy. Shame shame, Out in the hallway! Three licks for you!
Your “explanation” for relevancy is ZeekRewards must be lumped in with all the OTHER arms/legs/appendages of Rex Venture Group, with a allegation that “authorities will look at it this way”. The WHY of that allegation has yet to be offered.
And there is no “gobbledygook fallacy”. You can go to fallacyfiles to find a real list.
Free Store Club is a joke. No one resells anything from there, and only naive affiliates buy from their “at wholesale” prices. These are all made-in-China goods that you find on the “buy wholesale direct” sites.
You can find Amazon Marketplace sellers of the same items for about the same price as the “FSC cost” so after retail markup, there’s no way you would sell anything from your Free Store Club even if you did do any advertising, and even if the ugly store and checkout process didn’t scare away the customer.
Shopping Daisy is an app you install and it scans a bunch of shopping sites. Essentially an affiliate commission overlay. The problem is it hasn’t been available for download in at least 3 months that I’ve been checking.
Even when it was available for download, you had to register to receive a user id to enable it, and the emails were not being sent out. So you had an app that was unusable and most people just uninstalled it (assuming they made it far enough to have installed it in the first place).
@Daniel Claiborne
Most others here are discussing the topic from their own viewpoint, not from a shared common viewpoint. So the topic has a rather wide range.
When it comes to supporting the payouts in ZeekRewards, “the big picture” isn’t very important, since ZeekRewards currently is the main part of all Rex Venture Group’s operations.
When it comes to legality, Free Stores Club and Shopping Daisy doesn’t seem to have much activity, so I don’t think they are contributing much to anything (legality, financially, etc.).
Rex Venture Group will probably fail too if ZeekRewards fails, regardless of which definition we use for “marketing arm” – daughter company or only a marketing name.
Rex Venture Group LLC is registered in Nevada, January 2003, and in North Carolina in November 2011.
http://nvsos.gov/sosentitysearch/
The other names used are probably marketing names or d/b/a “doing business as” names. In that case, ZeekRewards will be an arm firmly connected to the body of Rex Venture Group.
Exactly
So are you going to explain WHY? Or should we chalk that up as solely your OPINION?
Guys it’s a waste of time discussion. Zeek Rewards and Rex Ventures are run by the same people.
If ZR goes down, management will be taken out leaving Rex Ventures non-functional.
RV has no other revenue, as mentioned already their previous programs (FSC and Shopping Daisy) have been amalgamated into the ZR opportunity (because they were failing as opportunities on their own, so now they’re just compliance fodder for ZR).
When RV moved on from FSC they pumped all they had into ZR/Zeekler and that’s where we’re at today. There is no mystery revenue so it’s a moot point whether or not the authorities will look at ZR or RV.
Zeek Reward days are numbered.
I’ve been trying to read up on US laws regarding issuing of checks. I’m no lawyer but here’s where I’m at (I’ve decided not to publish this as a seperate article as I’m not entirely sure on the matter):
In the US the issuance of checks falls under the ‘Uniform Commercial Code’ (UCC). Specifically Article 3.
As per section 3-412 of the Uniform Commercial Code:
Section 3-115 refers to “incomplete instruments” which I’m taking as meaning incompete checks (a non-issue with ZR’s issued checks).
Section 3-407 refers to the alteration of checks (fraudulent or otherwise), again a non-issue for ZR issued checks.
To the best of my knowledge (and I’ve had emails from ZR affiliates about this), the deadline is June 1st to cash the checks and as it stands there are a whole lot of people who haven’t even received their checks. Some of these checks were requested mid to early May, well before the announcement of the cashing deadline was made by Zeek Rewards on their news blog dated May 28th.
Thus to the best of my knowledge when affiliates eventually receive these checks and subsequently try to cash them past the June 1st deadline (which ZR provided just 4 days notice of), this would put Zeek Rewards in breach of the Uniform Commercial Code would it not? As I understand it is wholly Zeek Rewards responsibility to ensure the account they are drawing on is open and contains sufficient funds to pay out all existing written checks.
I’m not going to go into the penalties for breaching the Uniform Commercial Code as it varies from state to state (with the state the check was drawn on seeming to be where the applicable criminal penalties apply). There is also the possibility of civil action on behalf of the person trying to cash the check (again this differs from state to state).
Note that for a criminal case ‘intent to defraud’ has to be proven which in this case is a bit of a grey area. The recent introduction of an e-wallet alernative for the checks (see below) is an obvious case against intent however at the time the checks were issued this was not the case. Knowingly or otherwise Zeek Rewards had to see this coming and went ahead and issued the checks anyway or something happened with their existing bank accounts that was unexpected (the banks booted them out).
I read this morning what appears to be Zeek Rewards trying to play down this potential breach of the UCC:
As I understand it, if an affiliate chooses this option Zeek Rewards can then put a stop on the issued check which then negates any breach of the UCC (for that particular issued check).
As far as affiliates who don’t opt for this option go however, I’m failing to see how Zeek Rewards aren’t in breach of the Uniform Commercial Code by having their affiliates receive checks on a bank account that has been closed.
I’m not an accountant so any further clarification on these points is obviously welcomed. My own uncertainty is why I’ve added this as a comment rather than seperate article.
One final worring note, in the May 30th news update linked to above, Zeek Rewards mention:
Confident? What does confidence have to do with anything? Either you move your bank accounts or you don’t.
Stating your confident you’ll be able to start issuing checks again soon only infuses uncertainty into the equation. Not withstanding the admission that for the time being Zeek Rewards has obviously suspended the issuing of all payment checks to members (probably why nobody has received a check for a while).
Note that if Zeek Reward’s current bank accounts are shut down come June 1st and they for whatever reason don’t restart their check runs soon, even more problems arise as each state has a set period of days in which the issuer of a check must pay the amount written after a bad check has attempted to be drawn on. From what I can see this varies from state to state ranging from 2 (Massachusetts) to 35 days (New Jersey).
I don’t believe offering an alternative e-wallet payment gets around these laws, especially if the affiliate doesn’t use an e-wallet (why should they be forced to sign up for one?).
Looking at the bigger picture I’m starting to think the banks Zeek Rewards were using politely told them they could no longer do business with them. This of course then raises the question of why? Let’s face it, it’s a hard pill to swalllow that Zeek Rewards planned the bouncing of checks or suspension of their check runs. This is after all a company that loves to boast about how they’ve never not paid anyone ever.
Wouldn’t be the first time Zeek Rewards have given a public explanation that wildly differed from what was actually going on behind the scenes (the officially unexplained banning of 6 countries anyone?).
That last few paragraphs are of course opinion on my part but the rest is solid, at least as far as I can see. Anyone?
The problem here is what is the responsibility of the company vs. the bank and so on.
In the US, a check is valid “forever” unless there’s an expiration printed on the check, like “void after 90 days”. Some banks put extra scrutiny on checks that are “stale”, which is 90 days or 180 days old.
In all states, a check, once written, is considered valid, and closing the account without making sure all checks have cleared is considered “passing a bad check” and may subject the writer to penalties. Specifically, in North Carolina, this is the law:
http://www.ncleg.net/EnactedLegislation/Statutes/HTML/BySection/Chapter_14/GS_14-107.html
Penalties vary from state to state. Giving a warning doesn’t mean anything. Once the check is written, it must be honored.
I think they should have thought this out better in advance, because I think bouncing checks or otherwise not paying members is the death knell for a ponzi scheme.
If members can’t get their money, they’re not going to want to recruit new members and they will probably start to panic and want to cash out completely.
@Kasey
If the bank shut down Zeek’s current account, Zeek need to come clean about that.
If Zeek Rewards pulled the plug then as far as I can see they’ve left themselves wide open with hundreds if not thousands of uncashed checks in circulation that are going to bounce. All written with the prior knowledge (as per their delayed news blog) that their accounts were closing (you don’t plan to close a business bank account 4 days before it happens).
The current suspension of the check run indicates that the bank(s) Zeek Rewards were using shut the door on them, and if this is the case then they need to state so (and more importantly why).
They might not have a legal obligation to explain why but as a member I’d think it was in my best interests to know if Zeek Rewards shut down their account or if a bank stopped doing business with them of their own accord.
Meanwhile I’m half expecting a press release to be issued by Burks blaming OFAC sanctions again for the closure of their bank account(s)…
This is why it’s stupid to tell stupid lies when you don’t really have to. It makes it harder to tell stupid lies when you really need to.
So ZR banned a bunch of counties because they knew that as long as the remaining members were getting paid they’d forget all about their former fellow members kicked to the curb for a cover story. It had nothing to do with the checks they were receiving so why should they worry about it?
If they ever bothered to think about it (at all) the whole OFAC thing couldn’t have made a lick of sense but it put the issues to rest as far as the ZR community was concerned.
And now we have ZR either closing or being closed out of their current banking relationships. If they were closing the accounts it would be an trivially simple matter to just leave enough money in the old accounts to cover any checks drawn on them and issue all future checks from what ever bank they migrate to. That’s the common sense way of dealing with a change of banks, so why isn’t ZR doing this?
Paul and Zeek are so far not above telling lies to their members that I predict Rex Ventures next enterprise will involve Hydro-Fracking. The sad thing is almost all of their affiliates and some industry experts are happy enough not digging beneath the surface as long as that surface is paying them cash money.
Interesting fact, Andy Bowdoin’s Ad Surf Daily was raided within about a month of having a bank refuse his buisness. We don’t know that Paul “lost” rather than “closed” his previous bank arrangements but if he just closed them he did it in a very awkward way (to say the least).
Which brings me back to my initial point, it’s a shame that Paul et al. lied so brazenly about the April bannings because now anyone with more curiosity than Troy Dooly will wonder if they’re also lying about their banking issues.
FWIW, Rex Ventures/Zeekler/ZR has an F rating by the BBB.
As much as I wish I could suspend my grip on reality there is no way that the penny auctions as they currently exist, the shopping site and shopping daisy (which does not even work) could even begin to generate enough revenue to support the payouts.
I signed up as an affiliate and within days started asking questions about how is it possible that the auctions that I saw on Zeekler could actually attract enough people to spend their money to bid? No way, the auctions are junk. I could see it if there were a lot of good auctions with interesting and valuable products but 90% of the auctions are garbage. There are not enough dummies out there to spend enough fresh cash to bid in them.
The person who recruited me keeps saying “don’t worry, really, plenty of people DO buy bids”. They also sincerely believe that all these people placing daily ads on these spam filled classfied sites generates enough traffic from real retail customers to generate millions of dollars in revenue? REALLY?
Have you looked at Classifed Giant or the other sites they suggest placing your ads? The entire site is nothing but Zeekler ads. Go to any section and 90% of the ads are from Zeekler affiliates. If you have any clue about internet traffic, you know that there is no way these sites are generating sufficient traffic from real customers. There is no possible way that these spam sites generate enough viable visitors.
My friend keeps insisting that there ARE people who go to these sites, get hooked with the free bids and buy retail bids, but everyone he knows is making their money just from placing a daily ad. Well SOMEONE needs to be selling these bids to new buyers.
It does not take a rocket scientist to understand that and to see this is not a sustainable model as it stands. I think the marketing concept is a good one and if the auctions were good and people were actually placing ads in places that could generate real traffic from potential buyers; the business could be viable, but right now all I hear is wishful thinking from people who drank the koolaid and desperately want to believe the smoke and mirrors is for real.
Just glad I only invested $99. It will be interesting to see how long it takes for the pyramid to collapse. Shame too, it could work if done properly. People are smart, these auctions are for the most part stupid and most people are not going to spend a lot of money to bid in them.
Wow so funny you all citing laws and theory that Zeekler gonna bounce checks and they starting to Fail, OZ, come on…how long did you spend on that 20 page essay earlier??
Did you guys know that Zeek had a conference call tonight and all moneys will be available for Everybody s E-wallets ASAP?? why do you keep thinking this company will fall, the same few of you keep coming up with theories that do not exist.
How about this, why don’t find out who killed Tupac & Biggie as Obama told Trump….really have to give it a break, you waste all your efforts and energy on nothing…I had to laugh that OZ or whoever looked up the law about bouncing checks and going into the UCC codes, FUNNY!!!!!
Now I have to really wonder if the moderator will allow this one through. They have TOLD US for months to setup the E-wallets, if people do not or did not do that, then who is at fault? But the company said the money is there for those who are owed checks and simple transfer to the E-wallets….find another topic to pick on lol
Not to mention if I close my local Bank of Texas account, I’ll probably go open a Citi, Chase, Wells Fargo, BofA, U.S. Bank, etc. These banks have worldwide support and based on Zeek’s claims and daily profit share and the 12 affiliate who already earn over $1 million a month, any bank would love to have me as a customer.
I don’t go seek out some random bank in Hong Kong and claim it can better support international transactions. Really? You mean my Citi and Chase business bank accounts with those massive buildings in NY can’t handle “international transactions” as well as some bank no one’s heard of in Hong Kong?
I think you have to really read between the lines here, because changing from small => large bank is fine and everyone would accept that. But changing from US => foreign bank should raise a lot of red flags.
At this point, all we can do is speculate due to lack of transparency from Zeek (and the explanations Zeek does give do not pass basic rational analysis, just like the OFAC sanctions explanation).
I would speculate that the reason they move the money off shore is to keep the funds out of reach of US legal enforcement. Whether criminal or civil action, a US court can’t order a Hong Kong bank to freeze accounts. This allows Zeek corporate and officers all the time and money in the world to defend their case (using victim’s money).
Perhaps this isn’t the only reason Zeek is moving funds offshore, but absent a more reasonable explanation, this explanation has to have been at least part of the calculus.
Jimmy….did you listen to the call??? Dawn said they are leaving their local bank in NC and will be working with SEVERAL larger institutions who can handle the business, not just one. What part of the Conference call did you not understand?
They also said that the PROCESSOR for the credit cards was a Hong Kong Bank, that is fine, do you know ANYTHING about merchant accounts??? I am sure you do not, when you do learn about HOW they work and WHY it makes sense on what Zeek is doing, THEN make a reasonable Theory, but your showing your lack of knowledge in that arena.
@Tom: I do agree that discussion on Zeek bouncing checks is off the mark because it’s obvious Zeek intends to keep paying the ponzi off. The issue is not that, it is Zeek’s great executive leadership and “15 years experience” keep making amateur mistakes and bad business decisions.
You don’t close an account without leaving funds in, giving people no notice. Did you realize some people do not receive their checks for up to 2 weeks for US mail to be delivered to their country? Zeek’s no-notice was weak and a symptom of a differnet problem then running out of money to pay the ponzi.
As for setting up eWallets, your explanation is a stretch. Zeek has never, ever said “setup eWallets because that is the only way you will get paid”, nor did they say “we will never send out checks, so setup your eWallets”, nor did they say “we won’t process credit cards any more, so setup your eWallets”.
Zeek will continue to send out checks (written against the Hong Kong bank account, that will take longer time to clear in the US). Zeek has said since Dec 2011 they continue to find ways to reinstate direct credit card purchase for affiliate compound bids, but to date have recommended eWallets.
Zeek never signaled their intention to ban checks or direct credit card purchases, and they never sent out any notice of any urgency on setting up the eWallet. It was just there as a convenience for those wanting to use it.
This is the “you must be an idiot” argument?
So if all they are doing is changing their processor for credit cards, why are checks being sent out drawn against a Hong Kong bank account? Surely that means the issue is more than just merchant accounts which only affects credit card income.
I’d use the “you must be an idiot and don’t understand” argument but don’t want to stoop to your level.
JIMMY DAWN SAID THEY DEALING WITH SEVERAL BANKS…. obviously you only heard what you wanted to hear ….you are the Tin Man…Oil your Ears
@Tom
If availability of money is all you’ve taken from this discussion then I’m afraid you’ve missed the point entirely.
My condolences.
The fact of the matter is at this stage Zeek Rewards are merely ‘confident’ they are going to restart the check run and have offered no concrete assurances.
Additionally I can think of no justifiable reason to move their banking offshore when some of the largest banks in the world are based in the US (keep in mind Zeek Rewards’ cited reasons about their bank being too small).
I can think of lots of dodgy reasons though.
Well if it’s several banks then that explains everything.
…
…wait no it doesn’t.
So instead of PAYING you, your funds now go into an eWallet? Are they a bank? Paypal can have an eWallet because they are a bank. But ZR? Come on.
Sure, prove our theory wrong, name some evidence to defeat out logic and evidence. We’re waiting.
And why not, as it illustrate typical mind of a Zeekler? (disjointed, prone to conspiracy theories, etc.)
Maybe you should go look up banking laws on legality of “eWallets”. Digital wallets are for you PAYING money to merchants (out of your checking account), not to hold your funds. Only a BANK can legally hold your funds in the US. (Before you ask, Paypal is a bank, really, licensed in 37 out of 50 states)
That *would* explain why ZR is moving banking offshore… They want to do something NOT allowed in US law. Clearly that’s not the only explanation, but then, do you have a better one? We’re waiting for ZR’s official word.
So, who’s really paying you? ZR? Or some newfangled entity that’s actually based in Hong Kong using a Hong Kong bank? I’m waiting for that check to tell us for sure.
And refused to name even one of them.
Same goes for you, except you fill in the parts you didn’t here from your imagination.
— Dawn said big banks, several
— They must be real, I don’t need names
— I really believe in Dawn
Well, I just got an EMail from my old upline claiming that in the near future Zeekler will not use checks at all, and your *only option* of getting paid will be through an E-Wallet, and nickel-and-diming on fees. I mean, come on people! This is sounding more dodgy than an online poker site after the UIGEA went into effect.
When businesses start to obsess over things like getting a bank to handle their business, and start talking about processors for checks, you know the writing is on the wall.
In the Email from the upline, they were claiming the bank was “too small” to handle the Zeekler transactions. Well, how about Chase? I am sure they are big enough… WTF. This whole thing is starting to smell like the end is near….
Also, in the EMail, my upline was claiming that the paychecks for May 14 and May 21 were *not even issued* at all unless you had an E-Wallet setup, due to the bank June 1 thing. I call bullshit… This was not planned, and is a panicked reaction on ZR’s part to the bank deciding something was amiss and shutting their ass down.
So Zeeklers, you really think people will keep signing up in droves to join a company that is so dodgy it cannot process credit cards, cannot issue checks, requires overseas infrastructure to move finances and needs an E-Wallet to be paid??? There must be some govt agencies breathing down their necks here….
That’s what I have a hard time believing about this “business.” Plus, I find it extremely hard to believe that this cheap penny auction site is generating millions of dollars of revenue with which to pay ZR members. Not to mention that I find it incredibly unlikely that any business would pay 50% of its daily profits to people to spam the internet for them when they could simply hire one or two IT guys and buy some software to do that themselves.
Plus it doesn’t make sense to pay out millions of dollars to thousands of people to advertise in this manner when some national TV ads would bring in far more traffic to the zeekler.com site. Nor can I see that even if this were a legitimate business how it could keep on growing forever.
Any business is only going to reach a certain number of people through advertising, and some of them won’t become customers no matter what. But the ZR model is based in infinite growth which is just impossible. The “it goes on forever” hook is something often used in ponzi and pyramid schemes.
You know what they say about things that sound too good to be true, and this one sounds waaaaaay too good to be true.
Keep in mind that Full Tilt Poker was later charged as a Ponzi scheme, where the “owners” basically lived off everybody’s “deposits” and they *know* there’s not enough money to pay back everybody’s deposit.
U.S. Alleges Poker Site Stacked Deck
http://online.wsj.com/article/SB10001424053111904106704576582741398633386.html
The article goes into how many payment processors, even those based in foreign countries, can be raided with cooperation of local law enforcement, when Full Tilt, who’s actually licensed in the Channel Islands, UK, went to various payment processors around the world, like Australia (where one of them stiffed them of like 40 million).
Not that online gambling can be compared ti penny auctions, but the idea that they had to go to a foreign payment processor seems to show that ZR may be in far bigger legal trouble than they are letting on.
ZR members only lame excuse is “oh, we’re just growing to fast” is the reason for all these problems is a bunch of BS.
I can understand a legitimate fast moving company with an actual product experiencing growth issues due to manufacturing, shipping, warehousing, staffing, etc. Zeek’s product is nothing more than air. They can’t handle the growth because no legitimate financial institution wants to do business with them and they have a bunch morons running the show.
I’m with a company that’s paid out nearly 1 billion in weekly commissions in the last 7 years. They seem to have a bank that can handle the business and their hasn’t been one hiccup. No need for e-wallets or offshore accounts.
Furthermore, zeekrewardsnews.com is nothing but bad news! I love all the happy Zeek idiots that comment on that site praising management for their good decisions and upstanding reputations!
You just don’t understand how MLM works! Stop being so negative! I’m building my business and changing peoples lives!!!
Ha ha ha.
Question…when Zeek Rewards is ruled a ponzi scheme, can the individual distributors be held liable and have legal action taken against them by the government or will only the corporate officers get in trouble?
K. Chang and Oz have done a lot more research in this area on what has happened to other ponzis.
The short answer is yes, the top distributors can be held liable. This also occurs in countries where the corporate entity is not reachable by that country’s legal system, so the top distributors in that country are indicted.
The more significant impact to most members is that the bank accounts are frozen immediately and it could take a long time for the system to distribute the money, and there’s no guarantee you’ll get back what you put in, or what the value of virtual points.
This is why I speculated that the bank account movement is more likely what the poker sites and sportsbooks have done to keep the money out of reach of US regulators. This way if there is any legal action, the company still controls the money.
Thanks Jimmy, good explanation.
So can individual distributors have legal action taken against them by their downline in addition to that taken against them by the government?
Thanks for the mention.
In general, the “top” distributors, and I mean tip of the iceberg, the top 0.1% or so, can be co-indicted with the execs in the company. BurnLounge, for example, has the three top members indicted along with the execs. A fourth actually pleaded out of it by settling with like 150000 fine. Others now are on the hook for MILLIONS.
Australia recently fined TVI Express top leaders 200000 and rejected one’s claim that “I was a victim, not a perp!”
So the tip-top (i.e. those with bazillion points) can be in BIG trouble. The average rank and file should have nothing to worry about
Theoretically, yes. I haven’t seen it much in Western countries though. I know in Indonesia and South Africa some “leaders” of TVI Express scam were arrested by local police for fraud when enough people complained.
However, the culpability in this case may be a bit iffy. It’d be hard to argue who’s the victim and who’s culpable in a pyramid / Ponzi scheme, as in “how much blame does the guy who introduced you to the scheme have?”
I’m afraid that’s a question best left to lawyers and law enforcement.
I would guess a civil suit might be in order, but I don’t know if criminal charges could be brought, unless the individual distributors knew it was a ponzi or portrayed the system as an investment scheme.
My guess is, though, that probably only the higher-ups will be subject to any legal action except for possible civil suits. But I’m no lawyer or expert in legal issues.
Thanks guys. It does seem that some of the sponsors I’m aware of just don’t realize it’s a ponzi scheme, but I have no doubt some of the others, usually bigger ones are working for YouGetPaidToLie.con
Speaking of ASD, it is amusing to note that some of Zeek’s top affiliates are former ASD members. I believe PatrickPretty.com actually named two of them as really rabid ASD members who sued the government to try to revive ASD.
Some will risk legal actions (like fines), but most will not. The risk is relatively low.
ZeekRewards is a hybrid between Ponzi and pyramid scheme. The recruitment system is more similar to a pyramid scheme, and the investments are more similar to a Ponzi scheme.
In a normal Ponzi scheme, most of the participants are considered to be victims when the scheme collapses. Participating in a Ponzi scheme isn’t automatically considered to be illegal. In a pyramid scheme, all activities are considered to be illegal (participating, recruiting, marketing, organizing).
Most “schemes” will often involve the participants in other types of illegal activity, like tax fraud or illegal investments like offshore investments.
The Disner brothers were part of the ASD lawsuits and also had 5 figure account balances stolen, but apparently were laughing all the way to the bank because they had cashed out much more.
Todd Disner is the top Zeek affiliate AFAIK. He was showing off a back office with 700k points in Oct/Nov (and previous versions in 2011 showed 500k and 300k points) that people were using to recruit. My sponsor recruited me in 2011 by showing me Todd’s back office YouTube video, even though my sponsor had nothing to do with Todd’s downline.
That’s what led to the compliance requirements to stop showing back office and YouTube purge of all Zeek videos, even though everyone still does it, they just make sure it’s not posted on a public web server but requires a password or shown only during a Webex session.
Just search on +disner +adsurfdaily. If you believe in the theory of “the company you keep”… this is the company Zeek is keeping at the top of their ponzi (in addition to at least 2 corporate officers who are affiliates and likely in the top 12 earning over $1M per month, but they haven’t disclosed any more info since we started asking questions here and on Troy Dooly’s blog in the comments section).
K.Chang, Oz, and Jimmy. The three of you offer a lot of good opinions and theories. Some very valid points and other points that sound more like an opinion then fact.
I’ve noticed that the three of you reply to the majority of the comments left on your blogs. So this is directed for anyone of you. The three of you have offered so many theories on why this company can’t succeed and is a ponzi. I’m somewhat confused on why none of you have attended one of the red carpet events and presented your theories to the people that could actually answer your questions.
Everything I’ve read about the event states that the leaders of this organization are like an open book and they answer all affliate questions in front of everyone at the events. Why not do some actual investigating instead of presenting your readers with nothing but speculative info?
Countless times I’ve read others postings on your blog with info about Zeek that is incorrect but yet nobody on here corrects them. Makes you wonder. Out of curiosity do you know how many active paying members are in Zeek???
On the topic of “the company you keep,” note this strange little oddity in Rex Ventures, LLC showing up in agreement for known ponzi Text Cash Network:
http://www.patrickpretty.com/2011/12/27/update-text-cash-network-creates-even-more-name-confusion-with-assignment-clause-that-appeared-on-purchase-agreement-page/
Just another “dot” to connect along with everything else…
I, and others, have asked these questions on:
– ZeekRewardsNews, but comments not approved
– Zeek’s Facebook page, but comments quickly deleted, plus many Zeek supporters replying with “trust in Zeek” language
– ZeekAnswers.com, with some good discussion, but Zeek corporate took down the site
– Troy Dooly’s MLM Help Desk, but he doesn’t answer the questions directly and the updates he promised after meeting with Zeek never materialized, but instead he is consulting to Zeek
– Other forums with some good discussion but much less substance than you see here.
Some answers Zeek has already provided but without any details. For example, Paul Burks and Dawn have replied saying the daily profit share formula is a trade secret. So that’s the end of that discussion. How is the daily profit share formula a secret unless you want to hide the true source of revenue that feeds into the ponzi?
Like the investigation that Oz led here contacting the OFAC and posting 2 separate replies, plus replies from other affiliates who also contacted OFAC?
How does the OFAC’s official US government response contrast with the flimsy excuse Paul Burks made up on the “sanctions” for those 6 countries?
Why don’t you start there before you get on your high horse about how all we do here is speculate without substance. There is more substance on BehindMLM on Zeek than any other site, including all of the Zeek corporate sites.
So if your questions are going unanswered once again why don’t one of you go to the red carpet event and ask your questions in a room full of ppl so they get answered? What’s stopping any of you from attending???
It really wouldn’t matter if the questions were asked at a red carpet event. Paul Burkes is a master spin doctor. They’d spin the answers the same way they do on the website as to why countries are getting shut down, reasons for changing banks, etc.
Isn’t that kind of a cop out answer? From the sounds of it some of the smartest ppl involved in this type of business have attended the red carpet events. Even if that isn’t correct I do know at least 700ppl attended the last one.
Don’t you think your questions would make everyone there want to press for more answers since you seem to be able to prove this is a ponzi or pyramid? Why don’t all of you on here go to the next event together and challenge the company and prove that your theories are correct?
All of you seem so sure of yourselves. I think Zeek is a great opportunity and seems to be taking the steps to build for the future. I could be wrong but no one at this point can seem to prove otherwise…
Schmidty, calling them out in front of 700 of their distributors at their gathering is not the appropriate venue. Most of the people there are innocent and excited, regardless of what the rest of us believe to be true about Zeek.
I don’t know the other members on this site very well, but I’ve got 17 full-time years in Network Marketing. If you think we’re just picking on Zeek because we have nothing better to do, that couldn’t be further from the truth.
When a company like this comes and goes, it puts another blight on my industry making it harder for us to do our jobs in legitimate opportunities.
Every Zeek Rewards distributor I’ve talked to tell me that this company has a good 2-3 year run. If it was a solid opportunity, why would they be saying that? Do you believe Zeek has a future past 2-3 years?
My own opinion (and I’ve never been wrong once in 17 years as to which companies will be shut down), they have 6-9 months left.
If the people who run Zeek are such an open book and eager to answer questions, why do they delete negative questions and skeptical comments from their facebook page?
I’m sure if anyone brought up all these issues at one of these red carpet events, they’d probably be shouted down by all the zeekheads out there who will defend to the death the idea that ZR is a valid money making opportunity.
Why is it OUR responsibility to ASK questions when it should be THEIR responsibility to operate transparently after they had repeatedly offered bogus excuses?
Troy Dooly promised to show up and ask some tough questions. We shall see.
Schmitdy/Mack/or what ever your name your next name will be
Dude, wisen up. Burks and that Dawn chick aren’t going to be at the next so-called red carpet event even if there is one. They’re going to be in Burkino Faso or some other non-extraditable jurisdiction.
The official spin will be that they’re trying to find office space large enough to accommodate their hyperbolic growth which doesn’t exist in the developed world, right?
And please tell us, WHY is it that no reputable bank in the WORLD will do business with them, let alone banks in the US, China or Hong Kong? And why do companies like Amazon who have many more transactions not have this problem?
Are you suggesting that they’re going to pay their electric bill and phone bill with an “eWallet” ?
Please answer, only if you have explicit answers. “Quit being so negative. Build your business and change peoples lives!!!!!!” is not an answer.
As far as I know the Red Carpet events are invitation only. Furthermore Zeek Rewards members’ support tickets are going unanswered for months, so doesn’t look like they’re responding to anything.
At the end of the day these questions are being raised and discussed and Zeek Rewards are welcome to clarify and answer these points. Instead they choose not to and continue to use vauge terminology and offer up dubious explanations via their official channels.
Furthermore we know Zeek’s business model, what clarification is needed? I can sign up, invest money, blahblahblah and earn a 90 day ROI. That’s fact, not opinion or speculation. End of the day? Not sustainable and strongly resembling a Ponzi scheme.
Those receiving checks (not anymore!) open their mouths and swallow the good sauce, the rest of us scrutinise (although to be fair, a fair few members have started to realize this isn’t adding up too).
On Troy Dooly, I fired off an email a half week ago asking what happened to the interviews. I remember Dooly mentioning on his Aces Radio interview back in April that he had some material he was going to upload but that never happened.
I didn’t receive a reply to my email but he did mention in one of his recent videos that the reason he didn’t have any interviews was a time issue. Apparently when the next red carpet event rolls around he’s going in a day early to record some stuff. What will be discussed and whether it will amount to anything more than a marketing video I have no idea.
He’s certainly been provided with pertinent questions from enough people to make the inverviews interesting so let’s hope this time around they have more substance then a half hour of Dawn Olivares gushing about how great everything is.
I note you failed to provide even one example. With BehindMLM being open to corrections (see the Lyoness thread where I modified the review after reader feedback), I’m guessing you’re just having a cry about compliance issues.
Breaking down an opportunity for people to understand with accuracy is far more important to me than wordsmithing the description of an opportunity so that they appear legal.
You’re welcome to provide a specific example of incorrect information on here, just as anyone else is.
Troy Dooly…everyone points to this guy and says see, he says its okay so it must be. Well I believe somewhere on this site an exchange between him and I think Chang is quoted. In this exchange Troy exhibits zero knowledge of how the auctions work, stating that the bids cost a penny, etc..
I’m sorry but how can someone be around this business (reviewing, interviewing, keynote speaking…)and not know the fundamentals? It is either fodder for plausible deniability when ZR gets shut down or he isn’t the sharpest tool in the shed. Either way it renders his views moot to me. Anyone else feel this way?
Yes BWatson, my personal opinion…Troy Dooly is a tool (sorry Dooly Fans). He’s a self appointed mlm expert, and I have no idea why he has a following.
He’s weak in his interviews…he has no balls to get to the heart of the matter and when confronted he tucks tail and runs.
To be fair, Troy Dooly *tries* to be as impartial as possible. He is against scams as soon as he sees it. However, he is not infallible, and he can be fooled as well as anybody. Here he admits so for an incident in 2009
http://mlmhelpdesk.com/troy-dooly-reverses-decision-placing-global-verge-back-on-mlm-scam-alert-list/
He *did* say the industry is “high risk”, but with Bidify and DubLi 2.0 joining the market he thinks it’s a growth area, so when Burks and Oliveiras invited him in to show their “truthiness”, he reported it as he saw it, which isn’t neutral, nor an endorsement, but it’s taken as endorsement by the fanbase.
And he *did* name TVI Express as a scam. I’ll give him points for that.
He will call it a scam when he sees enough evidence. The question is what is the threshold.
I think that’s good K Chang. I just think his interview with Dawn was a joke. It also seems that he’s the type of guy that if TVI befriended him the way Zeek did, he’d be singing a different tune about TVI also.
My opinion…he lives for approval and he doesn’t take a tough journalistic approach when confronted…not the way you would, I would or Oz would.
These are just my initial impressions based on my limited exposure to him. I don’t really follow anything he’s said or done…just the stuff I’ve seen about Zeek so far. I could be very wrong.
Troy Dooly doesn’t take the extra step to ask questions like:
1. Where is the revenue is coming from? He’s been MLM long enough he has to know the revenue has to come from *somewhere*.
2. On the 25:1 customer ratio, did he bother to ask:
– How many of those customers ever spent a penny? (pun intended)
– How many of those customers ever logged in to any Zeek site?
– How many of those customers even know they have a Zeek account?
– How many of those customers are real people?
Yes…those are the tough questions he’s never bold enough to ask. I feel as though the guy hates confrontation at all costs.
@jimmy — I’ll have to point out that the separation between “paying customers” vs. “self-consumption” is a fundamental question that has been plaguing the MLM industry since its inception, and DSA and all the advocates are fighting this tooth and nail to avoid being pinned down.
Yet this is the fundamental issue in ZeekReward’s legality: what is the ratio of paying customers vs. affiliates? Or are they going to use the Herbalife answer: We just don’t have that sort of visibility? Because Herbalife is one of the larger MLM companies out there, public-ly traded and all that.
One wonders if FTC nails ZR on this issue (instead of the SEC nail ZR on illegal unregistered investment) it’s going to cause a paradigm shift in the entire MLM industry, and maybe that’s why the topic is avoided like a taboo.
@K. Chang – I’m more interested in ratio of “real customers” to “total customers”, where Troy touted the article Dawn wrote about Zeek having 25:1 customer-to-affiliate ratio.
I haven’t even gotten to the point of identifying when is a customer not linked to virtual points ponzi. I’m just trying to get an accurate description of what a customer means. I have over 100 fake customers and I’m probably just middle of the pack with my mid-5-figures balance.
I don’t think we can reliably quote the 25:1 customer ratio anymore. In one of his recent videos Dooly mentioned the customer had doubled it’s membership size in the past month alone.
I don’t even want to think about how many new fake customers have been created to dump bids on over the last few months, let alone the last month. I imagine the ratio is all over the place now… 50:1, 100:1? Who knows.
Without a precise definition of “customer”, the ratio is meaningless any way.
Herbalife’s CEO, when questioned by Einhorn, hem-and-hawed until his CFO came to his rescue and cited some ratio of customer to self-consumption, but when questioned, admitted that those are ESTIMATES and not accurate numbers.
They basically assumed that low-volume is self-consumption and high-volume is reselling. What are the criteria? unknown, will be forwarded to Einhorn AFTER the call.
http://dealbook.nytimes.com/2012/05/01/einhorn-questions-prompt-selloff-at-herbalife/
http://dealbook.nytimes.com/2012/05/01/einhorn-questions-prompt-selloff-at-herbalife/
In my opinion, the customer argument doesn’t really matter. There’s 4 or 5 more pressing issues ahead of Zeek regarding their legality…they’ll probably be shut down before the customer issue is ever brought to center stage.
What is a customer of Zeek anyway? Someone who played the auction 1 time…multiple times…did they win anything? Is a customer someone who just gambles at the site?
The only way you’ll get a true representation of the average customer : distributor ratio is if Zeek would release the sales reports from their penny auctions. That would be very revealing.
@chang
I think you nailed it, Chang. When short seller David Einhon popped the question and Herbalife shared the fact they STOPPED breaking out retail sales from internal consumption, their stock had a short down turn of about 33% before rebounding.
Most companies do not split out sales because it is not an easy thing to do, and they are not going to unless they are made to. From an accounting standpoint it should not be hard. But from a regulatory side is a different story.
Question: in cases where the FTC has questioned sales numbers, how much time do they allow for the numbers to catch up? Do newer companies get any Leeway?
Jimmy…so, based on your quote below, you are a zeek affiliate?
The debate rages on even today, almost 30 years after the Amway rules were established. The exact ratio of “customer vs. recruiting” was never established.
Some MLM opponents, such as Taylor & Fitzpatrick, insist that “70% rule” means at least 70% sales to ultimate consumers. On the other side you have Len Clements and other MLM proponents insist they are wrong. Instead of arguing over, I’ll refer you to Grimes & Reese LLP’s opinion on this:
http://www.mlmlaw.com/saleswatch/omnitrition.html
The main point I wish to point out: The Omnitrition case specified very clearly that “personal consumption by affiliate/distributor is NOT retail sales”, and thus does NOT satisfy the “FTC vs. Koscot” pyramid scheme test.
So what exactly is the bid purchases by the affiliates for? And please spare us the “given away” official line. Could it be construed as “personal consumption”, where it’s “traded” for VIP Profitshare points?
FTC, in case of Burnlounge, had records gathered by the North Carolina Attorney General’s office, who had apparently investigated BurnLounge for a year before involving the FTC. By the time FTC hits you, you’re doomed. No catching up is possible.
@Chang
Thank you for the Omnitrition link
Latest Zeek News Post:
Zona Libre means tax free zone. Zona Libre De Colon is in Panama…second largest tax free zone in the world after Hong Kong. Not sure if this is of any relevance. Funny how they’re asking zeek members not to dispute the charge.
So Zeek Rewards billing has moved offshore to Panama then? I thought the credit card stuff was moving to Hong Kong. Or is it now just routed through Hong Kong to some dodgy tax haven?
If confirmed, this just keeps getting dodgier and dodgier…
This is interesting stuff. I started reading up on Zeek after a couple of guys at my local watering hole started pushing it on everybody and their grandmother.
This really gets my goat… some of these people they’re trying to “recruit” don’t have a pot to piss in or a window to throw it out of. It’s disgusting.
Hell, one of the guys actually gave one of his employees a pay envelope with a note saying that he’d invested the employee’s pay in Zeek in that employee’s name “because {employee} will thank him for it later when {employee} is a millionaire like those early Facebook investors!”
As to the banking thing, I know that a local Ponzi schemer, Scott Rothstein, started bribing bank officials in order to hinder internal scrutiny of his accounts. Those banks were then on the hook for millions when the scheme collapsed since they didn’t follow their own internal fraud controls.
I don’t know how relevant that is, but I found it interesting.
I think I would be demanding my pay check then. I think under most state or even federal employment laws your employer has to pay you unless you agree to have your wages invested.
I’d be pretty PO’ed if I had bills to pay and my employer “invested” my money into a shady ponzi scheme.
It appears that credit card processing is working with a Panama tag, and that the new banks are all located in the United States.
And tag now removed.
How does it appear like this? I haven’t seen any mention of who is handling Zeek’s CC stuff other than Hong Kong and no word yet on what banks they are using.
So ZeekRewards LIED AGAIN? Like Paul Burks lied about OFACS?
One common thread: first they said Hong Kong, then this reference to comes up. Searching through Panama’s bank list
http://www.theswiftcodes.com/panama/
Shows HSBC, which founded in Hong Kong and Shanghai, but has presence in both US and Panama (and all around the world). HSBC Panama has a branch in Colon, which is where the free zone (Zone Libre) is.
I previously suspected HSBC, this is another confirmation.
Sorry Oz . Meant that credit cards are working, and was referring to your Zona Libre reference which you already said don’t know relevance. Troy Dooley stated the new banks are in the U.S. yesterday
The really interesting thing is HSBC does NOT operate its own merchant services, but had sold it to Global Payments back in 2009.
http://www.hsbc.com/1/2/newsroom/news/2009/merchant-services-jun09
But Global Payments is the company that was hacked
http://krebsonsecurity.com/2012/03/mastercard-visa-warn-of-processor-breach/
And we had suspected was the “real” cause of banning the six countries (see above in the real article).
So it comes full circle? Out of the frying pan and into the fire?
ZR really needs to let people know what’s going on.
No e, it’s Troy Dooly.
Any way, as Troy didn’t even know about the Hong Kong reference, I would say he’d been fed partial info. Only he can determine if that is so, of course.
Here’s the official ZR reference to Hong Kong
http://zeekrewardsnews.com/2012/05/updates-and-announcements/
Wow Zeek is going to change the economics of the world with this new innovative way to make money! It is like the discovery of perpetual motion!
Quit your jobs tell your kids to quit college and take all the money and buy some bids…..Tell the United States Government to buy bids to cure the national debt, Say good bye to Wall Street….too risky and not enough return!
Please use your heads people save your reputation! This is just stupid! I for the life of me can’t get over people that are buying into this thing!
It is going to grow and grow to a very painful, bloody death and the longer it takes the more people that will be hurt. CRAZY!
What’s up with Zeek using random inappropriate capitalization? If they’re a bajillion-dollars-a-minute company, then you’d think they could hire some decent copywriters.
Sheesh, I’m actually embarrassed for them.
@Chang
I wonder why write “Hong Kong” in the first place. Why not just say “processor” or the name of the company, or nothing at all. Why invoke conversation either way if it is best avoided?
Zeek Rewards has stopped recording the leadership calls, with the last one being May 7, 2012.
Just another dot to connect…
(Someone needs to record the calls and publish them).
When Zeek banned all members from the 6 countries didn’t they technically steal all their purchased points? I know the only ones they paid real money for was the initial purchase.
But once those points generate a return and they “buy more” instead of cashing out. Isn’t that the same thing as using real money?
I mean they sold you a product and they stole it from you.
According to Zeek logic, some people from those country stole from Zeek, so they are somehow justified to steal them ALL back. (Yes, I’m being extremely sarcastic here)
ZR only refunded investments made from the affiliate using their own money. Let’s say you invested $1000 and recruited others and over time grew a balance of 50,000 VIP points, all along reinvesting 100%, you only received $1000 back.
This is really BS because the commissions that you earned by recruiting got excluded from reimbursement. Also there are reports that some are still waiting for their reimbursement despite sending Zeek verification information.
Some affiliates who were affected also lost out on VIP points they generated by purchasing retail bids “as a customer”. For example, I give each of of five of my family member $1000 to buy retail bids. They buy $5000 in bids and I receive $1000 commission (20%) and 5000 matching VIP bids. I reinvest the $1000 and now have 6000 VIP points.
I don’t care what my family members do with their retail bids – I hope they win something in the auctions – but all I wanted was the VIP points. Since ZR did not pay out the value of the VIP points, in this scenario, the affiliate lots a lot of money because the actual value of the retail bids was almost nothing.
In the US, if Zeek did this they could be sued. There is a lot of precedence around the rewards industry where virtual points are given as incentive. A company can do things to dilute or devalue the points over time, but they can’t just cancel them outright without paying fair value.
There were a few things I did not mention because they did not seem relevant but based on the comments, I think they may be.
Dawn is so concerned that the Zeek Rewards program will be seen by regulators as a security because affiliates continue to explain it in securities terms regardless of corporate language) that she has begun hocking e-cigarettes in another affiliate program.
She was also actively looking for other places to invest all the money she has made from Zeekler. Clearly, if management isn’t confident in the future of the company based on the fact that Zeek is being sold with language that sounds suspiciously like that of a security, then how can new recruits feel confident in it?
The fact that they have these knee-jerk reactions and push mis-information to the field to cover their mistakes is a sign of a company that is not capable of long term growth.
@Source — while the info’s appreciated, it’s mostly hearsay, so pardon me if I say confidence on your “new” stuff is relatively low.
MLMers often join multiple programs so if Dawn started another affiliateship while she’s part of Zeek it’s her issue, and maybe Paul Burks’ unless there’s some sort of employement contract that prohibits double-dipping (hmmm…)
So you’re basically saying this “stop referring to ZR as investment” is mostly Dawn’s idea, NOT Gerald Nehra’s? (now that’s really relevant) Any memos or announcements or interviews where this concern was hinted at or shown?
Well looks like the checks are done and dusted. After closing their last bank accounts (or getting booted from the banks) ZR have yet to issue any new checks and are instead claiming
As far as I know this was only touted within the last week (once the bank account problems started up in late May).
With ZR only using offshore payment processors, the money trail for the authorities is harder to follow. “Move as much of your business offshore ASAP” – I guess that’s the end result of hiring compliance lawyers… rather than actual compliance in the US.
Yet thousands of other companies manage it daily.
Oh and after months and months of ‘we are upgrading our support systems and training new staff’, that’s now changed to ‘please stop calling our support staff or they’re going to boot us too’:
“Stop asking questions guys and contacting Zeek. Just shutup, invest your money and let us get on with running our Ponzi”.
The downloadable “leadership” call is pretty much Dawn and friends berating affiliates as “unsuccesful and broke” morons for a half hour too (with some guy giggling in the background).
http://zeekrewardsnews.com/2012/06/hit-6-and-other-zeek-101-suggested-behaviors/
First of all I have to say this is a very interesting thread on what is a very hot topic or should I say company in the MLM industry at the moment.
After reading a good portion of this (and I apologize if this was covered earlier as this was a lot to read) I think there is a question or two that need answering and I don’t know if anyone has or even can at this point.
If Zeek is giving away 50% of their daily revenue/profit whatever you want to call it to affiliates, where EXACTLY is that money coming from.
Some in here state it’s from the only the VIP points being bought, while others say it’s from the Penny auctions, while others say it’s a combination of things. Well which is it?
I would tend to agree with the thought that the penny auctions can’t be producing enough to cover the daily revenue and have what’s being shared being shared. I mean they would have to pay out $400,000 a day just to the top 12 people. That’s just the top 12 not to mention affiliates like Jimmy who have middle 5 digit vip point balances making a decent daily income as well.
Lets just do a little math equation and say the rest of the 10’s of thousands of affiliates get paid out approximately $600,000 a day to bring it to a cool $1,000,000 a day in PROFIT/REVENUE Sharing. That would mean each day on average they have to net $2,000,000 at the 50/50 ratio.
That means the net revenue for the company would have to be $730,000,000 for the year from Penny Auctions to pay what is required to it’s 10’s of thousands of affiliates. (Now I know I made up the rest of the affiliates revenue but it isn’t too far fetched if there are 100,000 affiliates averaging $6 profit a day, but this is just an example so the true number is undetermined, but it has to be well over 400k that we can determine).
After reading about zeek rewards from multiple sources, again I am wondering exactly where zeek gets it’s revenue from?
IS it from a combination of penny auctions, affiliates purchasing bids, subscription renewals, sales on the free store club sites held by affiliates, and customers purchasing bids to use on the auctions? If this is the case then maybe they can meet the daily revenue required.
Another question is can anybody say they know how many actual customers are buying bids to spend on Zeekler auctions? Not affiliates but actual paying customers.
If these two questions could be answered I think it would go a long way in determining what kind of opportunity Zeek actually is and what it’s future holds.
Whether it is a ponzi, pyramid, legit opportunity is fun to banter about but does anyone have all the facts needed to come to an actual conclusion either way. When it comes down to it a business is about numbers and if the numbers don’t work out it will eventually be exposed legit or not. Just ask Kenneth Lay how long mark to market accounting can go on.
I’m an interested party that was recently solicited by a friend to join. I haven’t yet and have been researching as much as possible and would be interested to know more about where the actual daily revenue comes from since this is what a good portion of their business model is based on.
Also I was told Amazon handles their shipping…is this correct?
@Aaron
All the revenue is via affiliates.
Membership fees, VIP bid purchases and retail bid purchases through dummy customer accounts.
FSC is dead and actual Zeek Rewards members like Jimmy will readily tell you that despite being part of huge downlines, they’ve yet to hear of legitimate retail customers buying bids.
Here on BehindMLM we’ve had more than a few ZR affiliates go on about genuine retail customers, yet at the end of the day it’s always the same. They don’t have any or know anybody that does have genuine retail customers who have gone on to buy retail bids with their own money.
If you want to test this, ask your friend how many retail Zeekler customers they have who have purchased retail bids with their own money. Make sure you get proof and make sure you aren’t shown customer accounts who signed up, bought bids and then never logged in again (your friend most likely created these accounts to get the matching VIP bid bonus and referral commission on the retail bid purchase).
Have a look at Zeekler yourself, would you waste your money buying bids to participate given the other penny auction offerings around? Zeekler isn’t remotely competitive (some members haven’t been paid out their winnings for months) because the business relies on affiliates pumping money into Zeek Rewards (and Zeekler through fake customer accounts).
And please by all means do your own research on this and let us know how it goes with your friend. You’ve got a real life example to look at so make the most of it.
No genuine retail customers = you’ve got your answer.
Thanks Oz I agree no genuine customers and the business model is faulty. My friend is relatively new to Zeek as well and he is voicing some of the same questions I am. He has yet to put any money in as he wants, like me, to learn a bit more about it.
I apologize for my previous quote sounding like he was already a paid affiliate of zeek, as he is not. My friend nor I for that matter, would make dummy accounts in order to earn money through any opportunity. That’s just fraud and having owned a business and currently working for a large financial institution I am not one keen on being fraudulent.
What I was reading on their site and elsewhere is that an affiliate can sign up for a customer coop. The Coop assigns retail customers to the affiliate which in turn they can issue their bought VIP bids to these assigned customers through the coop.
Are these the dummy accounts you speak of? I’m assuming if the affiliates aren’t signing up their own customers or creating their own dummy accounts, they are using the customer coop to get customers.
After reading it I don’t know why anyone wouldn’t use the coop since it sounds like a much easier way to get customers (real or fake) than finding your own or creating dummy accounts.
You can guarantee I will continue to do research being that I don’t join anything without doing an ample amount of research. That being said unfortunately the internet is full of people for and against just about any company or opportunity and you really have to weed through a lot of opinions in order to find facts.
While I appreciate your feedback OZ do you have definitive proof there are little or no customers buying bids to place on items in the zeekler auctions. While it is alarming Jimmy and other affiliates haven’t heard or can’t provide proof of actual retail customers buying bids this is a relatively small sample size.
Not saying it isn’t true just saying it’s a small sample size.
I only ask because you seem to be quite knowledgeable about the zeek subject and was wondering if you’d found some quality information to support in your research.
Someone has to be buying these bids since they are required to use for the auctions that are going on continuously. Am I right here I mean I guess you could create a fake account but then you could only get VIP bids according to zeek.
If I’m understanding how zeekler works there are different auctions some requiring actual paid bids to be purchased so somebody is purchasing these bids right?
Now I have to admit I don’t know much about penny auction sites so I couldn’t tell you which one is better or more competitive than others. (Research I will be doing shortly) To answer your question though I wouldn’t buy bids to use on the penny auctions on likely any auction site regardless of how well done the site was. It’s just not of interest to me.
If I were an affiliate I definitely wouldn’t (And I assume most affiliates wouldn’t) since I’m already putting up money for a subscription and to buy bids to give away unless it is worth it to create the fake accounts. Meaning the retail commission and the gained VIP bid bonus are enough to offset the price of the bid purchase (I don’t know the actual numbers for these yet so I’m curious).
Also if affiliates are doing this why wouldn’t they use the bids to try and win prizes rather than never log in again, it’s their dummy account with the bids so why not try and earn some extra money on it? If I’m correct if an affiliate actually wins an auction they can cash out.
I guess after all that I am wondering who is actually doing the bidding in the auctions with the paid bids, customers, affiliates??
I apologize for the rambling here as it’s getting late I’m watching the Hear Celtics playoff game and I’m a bit tired. The main thing I was interested in was the customer coop but your response also created a few other thoughts I had.
Also again I heard this but wanted to know for sure…does Amazon ship for zeek? If so why would amazon partner with a company garnering this much heat. Then again I don’t pretend to work for Amazon or know Bezos’s policies on who Amazon works with but I heard this was the case so I was interested.
@Aaron
Get in contact with whoever is trying to recruit him then and see if they have any genuine retail customers (non-affiliate customers who buy retail bids for themselves on an ongoing basis).
The coop used to be inhouse through Zeek Rewards (yes, create an opportunity that requires customers to dump bids onto then sell customers to members). They’ve sinced stopped charging for the company co-op (they’ve been putting off introducing a customer acquisition requirement on it for months now), so as new members you only have the option of creating fake customers to dump bids onto yourself, or pay a third party to create fake accounts to dump bids onto.
Customers only require the entry of a non-validated email account so those with VPN and/or use proxies (3 per IP address from memory) just create the accounts themselves while everyone else pays the third party customer providers.
I’m not in Zeek Rewards. Those with access to large downlines have commented here and you yourself are free to ask the person trying to recruit you (as well as their upline) for evidence of genuine recurring retail auction customers.
To date every Zeek Rewards member who has come here shouting about genuine retail customers has stated they don’t have any when asked. All they do is then crap on about the affiliates they’ve recruited and their growing VIP balances.
Yes, the problem being that if an affiliate creates a dummy customer account and buys retail bids through the account – they themselves get a 20% referral commission (cash) and matching VIP point balance on the retail bids themselves.
You can see here how the concept of creating fake customers for affiliates to invest more money in lends into itself.
They do, this has been documented here on BehindMLM with bidders paying well over the dollar value of the items they are bidding on. This bid inflation is why genuine retail customers don’t bother with Zeekler.
The retail bids are inflated due to purchases through fake accounts for the referral/vip bid commission, the VIP bid balances are inflated due to everyone giving purchased vip bids away and the free bids are self expanatory.
VIP bids = people who get given bids (not customers until they themselves purchase retail bids which never happens)
Retail bids = affiliates who only purchased the bids to get the referral commission and VIP point bonus and are trying to win an auction to cash out and recoup some of the bid cost.
Amazon ship for Amazon. From memory Rex Ventures have a seperate dept who handle auction shipping and FSC purchases. Last I read this dept don’t answer emails sent to them, although that was a few months ago now.
@Aaron — where does the money / profit come from? How to get that is simple… trace the money.
Hint: Bids are NOT money. Bids were BOUGHT using money, but bids are NOT money.
Get that so far?
Penny auctions themselves do NOT generate profit. PURCHASE OF BIDS DO GENERATE PROFIT. Consider the cost of the item vs. the prices sold… the auctions themselves only LOSE money. All the profit is in the purchase of bids (to be used in the penny auctions).
Which answers your question about where do the profits come from.
All the rest of Zeek proponents are too tied up about the mechanics of money. They failed to trace the money trail itself…
In a real business (MLM or otherwise), money goes from customers to company (as sales), then company to affiliates (as commission).
In Zeekrewards, money originates from affiliates (buying bids) and ends back at them (sharing the profit). It’s a Ponzi scheme.
Word is that SolidTrustPay has frozen accounts for users in Virginia and South Dakota due to state licensing issues. This may affect users in other states, and might impact other eWallets like AlertPay.
Zeek’s move to 100% eWallets and no checks is a big mistake because neither Zeek corporate nor the mass of affiliates are accustomed to the high-risk, high-fraud world of eWallet providers that HYIP and AsSurf investors know all to well.
Further, there is much risk that the US govt could shut down one of the eWallet providers from operating in the US. This happened to Neteller, for example. This would result in funds being frozen AND inability to get money to/from Zeek (unless the affiliate opened another eWallet account from a different provider).
Man this is sounding like dejavu with what happened to online poker sites.
First, they went to Neteller and everyone was depositing and cashing out like crazy using Neteller until 2006, when the UIGEA (law against Internet gambling) passed. The poker sites kept on and one day Neteller was shut down, funds were seized and that game was over.
Next, the sites would start using lesser known E-wallets, but many of them stopped allowing US citizens to sign up, until people were reduced to using Western Union to wire money to people in foreign countries under false pretenses in order to deposit, and then cashing out occurred by checks drawn on international banks.
After that went on for a while, the “check processors” were frozen on April 15 2011, the poker site domains were shut down, and the whole thing went belly up with basically zero warning to poker players.
BTW, most banks will get nervous about people using E-wallets as they have a shady history, and many banks will close customer accounts if they detect large money transfers going on with E-wallets.
This whole thing is starting to smell like a week old dead fish… I give this ZR thing no more than 6 months before it is shut down or goes defunct.
I was about to ask what the average lifespan of a ponzi scheme is in order to try to gauge how long ZR has before it collapses, but the more I read here the more red flags keep popping up.
I can only hope that my in-laws are able to cash out before the thing collapses so they can get their money back, but they’ve not quite been in 90 days yet, and they’re still signing up people left and right.
I hope people don’t get pissed off at them for getting them signed up only to lose everything they put in.
This is where I start to wonder if Paul Burks is some sort of idiot svant of scamming. He has demonstrated a continued and ongoing lack of competence for so long that it could very well be masking the signs of the ponzi apocalypse.
Customer service stops responding? They haven’t been responding for months.
Website down making it temporarily impossible to cash out? At ZR that happens several times a month.
The “Program Admin” gets caught telling very clumsy lies? That’s been going on for months as well but Paul hasn’t stopped paying out so all’s forgiven.
Strange issues with banks and payment processors delaying payouts? This one’s usually when the smart money starts cashing out but Rex Ventures might in fact be stupid enough to close their existing bank accounts before all the checks issued on those accounts get cashed. So it’s honestly very hard to say how close to midnight it is for ZR., how amazingly convenient.
It’s important to remember that for the better part of ten years Paul et al. have been holding weekly update calls for a string of programs that never went anywhere. They have literally more than a thousand hours experience mixing excuses for why nothing was working out the way they said it would with enough Rah Rah pump you up hype to try to encourage you to bring fresh money into the deal.
The only difference here is Paul is experiencing success for the first time with ZR so he’s lying to a much greater number of people and a lot more people are paying him critical attention than ever had before.
When did Dawn get involved in the business? Maybe THAT is the catalyst.
Dawn and Daryl Douglas are two known affiliates by their own admission on corporate and leadership calls. They have been affiliates from the beginning.
This is why I have commented here several times about the inherent conflict-of-interests. They not only have visibility into the financials (so they can make optimal reinvesting decisions), but they control corporate strategy!
Maybe they were willing to bend the rules in 2011 so they can enjoy massive growth, now they tighten the screws on compliance because their selfish-best-interest is to preserve Zeek for the long-term.
But the reality is it’s almost impossible to sell Zeek if one were to be 100% compliant (no income projections, no spreadsheets, no sharing of back office, no check flashing, no use of the word ‘investment’ or ‘compound’ or ‘interest’ or any “banking term”, no public meetings, no online marketing material allowed, etc).
Dawn has said on calls “I’ve made more in the past 5 months that I have made my whole life… many of you are experiencing the same thing”.
Affiliates in ZR? Or in previous Burks ventures like TheFreeStore, Lighthouse, and such?
June 13th!That is the next red carpet event. Why don’t all you naysayers send one person out there with a list of your questions and ask away? Since the ponzi can be proven by all of you don’t you feel morally obligated at all to save ppl thousands of dollars by proving it is?
I’m sure you would get tons of recognition and praise for doing such a detailed job and exposing zeek for what it is? So many theories, opinions, and questions from you guys but none of you go straight to the spot where your questions may get answered.
Confusing I guess maybe you don’t to know the truth since it would kill your blogs if you’re wrong about your theory.
Their system has been hacked before and it’s often talked about on here on how no company making that much money should experience that problem.
My facebook account was hacked the other day and it wasn’t the 1st time. Correct me if I’m wrong but aren’t they a multiple billion dollar company? How come they’re getting hacked considering they should have the best IT ppl working for them.
@aaron Zeek shares up to 50% of their daily revenue it’s not set at 50% nor are you guaranteed of making anything for the day
Some on here have speculated that this is by design, so when the inevitable collapse does happen the members won’t think anything’s suspicious while their phone calls/emails/trouble tickets go unanswered and the website goes down for a few days.
You need to read between the lines to really understand why Zeek has so many support calls. Although supporters think Zeek is being 100% transparent, the truth is Zeek is disguising the entire investment ponzi and trying to market it as a legitimate business.
As a result, you generate a ton of confusion because Zeek has to use tells affiliates how to act, how to behave, what to say, etc. that is different from how you would normally promote an investment opportunity.
Just imagine how easy it would be if Zeek used investment instead of bids. Compound interest instead of expiring points. No one gets confused about ASD, JBP, JSS Tripler, etc, right? They are illegal, but they are transparent.
@zeek lover
From memory, red carpet events are invite only.
Troy Dooly has been supplied with a ton of questions but despite attending two red carpet events, has failed to ask anyone anything (he cited time issues and has stated he’s going to try again this month by going in earlier).
Regardless, Zeek Rewards management have categorically stated that they will not divulge the percentages of revenue the profitshare is made up of (member/non-member revenue). The reason for this is it blatantly gives the illusion away that Zeekler/Zeek Rewards is being propped up by genuine non-member customers.
You don’t need to attend a red carpet event to work that out…
What happens on Facebook is irrelevant.
If you all want to get Zeek shut down like I do, take action beyond this website. I’ve written to the FTC and SEC. I’ve also written to the 3 e-wallet companies they’re using letting them know that they’re jeopardizing their businesses by being partners in a ponzi scheme.
This thing should be ended by August.
(Ozedit: If you want to criticise Dooly then provide specific examples backing your criticism, ad-hominem insults aren’t constructive).
Can Zeekers post and advertise on FB?
Good question, I don’t know. I was told that wazzub-ies have been banned from FB, but I don’t know about Zeekheads.
I post my ads on FB. I don’t believe it’s against FB policy for personal pages. I have an account with zero friends, set to completely private, so nobody sees them but me. In other words, my ads are about as useless to zeek as all the other affiliate’s posts on those crappy classified sites.
If your question was referring to paid advertising, they don’t allow MLMs on that.
Spotted this gem on the Zeek Rewards support forums:
What crack are these people smoking?
Either a business is or isn’t a Ponzi scheme, solely determined by the employed business model.
Are they trying to say that if ZR turns into a ponzi scheme, it’s not their fault but the fault of all the affiliates?
Or rather, what I meant was “If ZR is found out to be a ponzi scheme.”
Maybe Paul Burks has discovered some previously unknown financial plan or formula to make money appear out of thin air.
If that’s the case, then maybe we should have him show that plan to the government and pay off the national debt. Then he could go collect his Nobel prize for economics.
Just think of what this could mean, everyone in the world will become rich! Poverty completely wiped out! Everyone living in peace and harmony!
Or… it could just be another ponzi scheme.
Al: I also post zeek ads for myself and others, on my private FB account. I did get a message from ZEEK. They wanted to know how many ads I was posting.
I never responded and they never contacted me again.
You should filter the search by “problems” category, you’ll find a treasure.
Yeah I’ve been keeping an eye on it. Apparently no SolidTrustPay payments for a while now. Affiliates wondering wtf is going on with their checks (they don’t want to use e-wallets), affiliates complaining about not getting auction winnings, affiliates trying to chase payments of $5000 deposited with Zeek, affiliates claiming to have paid Zeek as far back as April and having not received any communication or paid bids to date… and on and on it goes.
http://zeeksupport.zeekrewards.com/zeeksupport?view=recent
The “growing pains” excuse has been trotted out for over six months now. Not good enough.
To add to the list in my previous comment, Zeek also appear to be not accepting paper payment from affiliates either (according to their latest update). I’m guessing if they’ve moved their bank accounts offshore holding a paper check in the US is kinda useless for them so they don’t want affiliates to give them checks anymore (?)
I’m really wondering if this is the beginning of the end for Zeek. I don’t care what business you run, when you start holding payments back people tend to get a little cranky.
I wouldn’t be surprised if people started trying to cash out 100%, though if payments aren’t being sent it should start making people really nervous and wondering if they’re ever going to get paid.
With a scheme that requires constant recruitment, how many people are going to want to recruit others if they know they’re still waiting on payments?
@Oz — there is SOME truth in that a legitimate MLM can “become” a Ponzi/Pyramid scheme (FTC prefers the term “entrepreneurial chain”) if the key provisions that differentiates it from a Ponzi/Pyramid scheme, such as the 70% rule, the retail sales requirement, etc. are NOT enforced.
However, there’s no proof that such provisions ever existed for ZeekRewards other than “explanations” (it’s for promotion! It’s given away! Don’t look while I give you this VIP Profit points in return!) that it’s NOT relevant to Zeek’s business model.
Patrick Pretty opined that ZR is setting the stage to blame the affiliates for “abusing their business model”.
http://www.patrickpretty.com/2012/06/05/bizarre-zeek-leaders-scold-affiliates-coo-plants-seed-that-if-company-tells-members-to-change-their-preference-in-dispensing-toilet-paper-they-should-do-it/comment-page-1/#comment-
That Zeek Rewards conference call is quite comical and quite strange. They really want you to press *6! http://www.zeekrewards.com/CC/Leadership_Call_120604.mp3
Yes Oz, I was a bit harsh on Dooly, you’re right. For someone who’s supposed to deliver unbiassed news and seeing picture of him at the red carpet events partying it up like he’s a distributor is a bit irritating.
His videos seem very biassed to me and he’s defending the companies bad decisions. Sorry.
STP, as I posted way back when, is anti-fraud. They cut TVI Express when they realized they’re dealing with fraud. I would NOT be surprised if they added a few companies to that list.
Actually, South Sea Company did that just… in 1700’s, by claiming to assume the entire British Empire’s deficit.
http://kschang.hubpages.com/hub/Why-Following-the-Crowd-is-Stupid-how-speculation-bubbles-busted-fortunes-then-and-now
You can’t call it a Ponzi as Ponzi scheme didn’t exist until 1920, but it’s their equivalent of one, albeit with official government support.
And where’s that guy that claimed his upline told him that Zeek have 22 trucks dropping off checks every day?
Highly unlikely since they keep claiming that they’re going totally paperless.
I’m confused about Troy Dooley’s involvement with Zeek? In his latest post, lots of people are complaining about not being paid. He seems to give as many excuses as Zeek does. Does he work for Zeek?
I just can’t make the connection. I do understand that he speaks at their events. Here’s the post: http://mlmhelpdesk.com/zeek-rewards-update-zeek-101-suggested-behaviors-and-may-red-carpet-day-video/
They are also not paying out any commission on the subs because they are/were having problems with CC’s. Someone in my upline pointed out to me that he has missed over $7,000 because of this. So they are only paying out on part of the system.
Troy Dooly is a board member in Association of Network Marketing Professionals ANMP, and are invited as a speaker in that role.
People can have several different professional roles. Usually it will be up to the person himself to decide if some of the roles are in conflict with each other. And Troy has never claimed to be anything other than pro MLM in his blog, so acting as a speaker (for ANMP) in some events isn’t in conflict with his blog.
Where we do rather critical reviews and tries to detect problems, he will deliver a more positive viewpoint most of the time (if the company involved hires the right advisors, like Kevin Thompson, Gerald Nehra, Keith Laggos, etc.).
MlmHelpDesk has also a different audience than this blog. This has been reflected in a few comments in both blogs. 🙂
I haven’t visited his blog in some weeks, but ZeekReward was still listed as “High risk” a few weeks ago.
That’s like having it both ways. He endorses Zeek in the video but lists it as “High Risk” so he can deflect blame when it fails. “I told you it was high risk…”
I think the Kings are going to win the Stanley Cup, but there’s a high risk that if they don’t close it out in game 5 that momentum will shift to the Devils.
I re-read the Omnitrition case, and found it to be even MORE relevant to ZeekRewards than ever, except in this case, FTC will slap it down as a PYRAMID SCHEME.
This is from MLMlaw.com, website of Grimes and Reese (Grimes did the compliance course, as Zeekheads love to point out)
Note the interesting similarities: buy the products, give them away, get compensated for it.
Jimmy, I remember you said Zeek’s bids are not inventory loading. I’d like to differ. I think this scenario is VERY applicable to ZeekRewards.
I think they are not inventory loading because bids are not inventory. They are not consumed and have no real value (or very minimum value). The bids are a virtual investments with a marketing requirement to give them away.
If the ad units in AdSurfs are not inventory, these bids are likely not inventory either. If the AdSurf units can be considered inventory, then bids can be considered inventory.
I suppose in either interpretation Zeek is big trouble. If they claim the bids are not inventory, then they are running an investment ponzi. If they claim the bids are inventory and actual products with unique commission plan, then they are a pyramid.
The bids are consumed, but allegedly by someone else (thus, the “giveaway”). Except in this case, the giveaway itself is organized by company and described as “promotional activity” (whereas in Omnitrition, it’s we don’t care what you do, give them away if you can’t think of anything else)
The only difference now is who gets to Zeek first: FTC, SEC, or state attorney general?
Patrickpretty.com found a list of “Zeek employees”, among them are a lot of ex-ASD, ex-OneX, and ex-Cash-gifting scammers.
http://www.patrickpretty.com/2012/06/07/more-absurdities-zeek-promo-appears-on-website-that-also-pushes-jss-triplerjustbeenpaid-indefinitely-sustainable-second-income-seniors-secure-your-pension-site-claims-zeek-post-includes/comment-page-1/#comment-27612
Yeah, he probably know there are some problems there, like the lack of real customers in the penny auctions.
Actually, I spent alot of time and efforts in that comment, trying to avoid answering the real problem and trying to find some “safe” arguments that could be used, and trying to make the answer look “meaningful” for most people. 🙂
I tried to use a similar technique as Troy does from time to time. I ignored the real question in the comment, and focused on some details where I could give a relatively neutral answer without answering anything important.
I’ll guess the real question in Vicky’s post can be translated to something like this:
I have exactly the same experience there. Some questions will not receive meaningful answers, they will only look meaningful. So I lost interest rather quickly a few weeks ago.
Dawn Olivares is apparently going to do an interview on Aces Radio live sometime in the next 24 hours.
Dooly will be interviewing her, ‘asking her some of the questions we have received about how Zeek Rewards works, What are penny auctions, and a little more about the history of Rex Venture Group‘.
This might be a preface to the supposed interviews he’s supposed to be doing before the next Red Carpet event. Not holding my breath that anything of relevance will be discussed though. It’ll probably just come off like a promo for Zeek Rewards (much the same as Dooly’s last Youtube interview with Dawn did).
Zeek’s support forum is backfiring on them. They opened it hoping for free support from community volunteers and affiliate leaders. But being the first mostly uncensored Zeek site, affiliates are slamming corporate and the apologists for all the canned answers.
It’s especially sad to watch the canned responses:
“Go ask your upline, don’t just post on the forum”
“I did ask my upline, they have the SAME problems”
“Open a ticket or use the live chat, don’t complain on here”
“I did open a ticket, it’s been 3 months with no response. I did use live chat, I waited in the queue as user 169 and the support rep said they can’t help me and I should open a ticket.”
There are lots of different threads. Here’s one that is interesting because Ruth shows on Facebook and ZRN all the time with her ra-ra MLM attitude and simply ignores that no amount of positive thinking can change the fact that Zeek isn’t paying people, lost money, can’t integrate the eWallets, and have a myriad of other problems.
If they were taking in millions per day, you’d think Zeek would have, umm, more staff? Oh wait, it’s the ponzi thin margins, thing, forgot, thanks.
http://zeeksupport.zeekrewards.com/zeeksupport/topics/well_i_dont_know_what_to_say_but_i_really_think_this_forum_is_not_doing_any_good_at_all
Zeek Rewards and lack of management is just getting to bizarre to stand anymore. The radio interview with Dawn will cover everything from hambugers to toilet paper but nothing with lack of retail customers and banking issues and concerns.
Will star 6 mute out Dooly, because he wont ask any decent questions anyway.
Jimmy, thanks for the zeeksupport site link. Oz, I’m pasting one of the zeek distributors frustrations…this is long, but very revealing…you can choose to leave it here or not:
I briefly read through some of the forums yesterday and what I saw was problem after problem after problem being discussed, with few resolutions. I really do wonder if the ZR staff actually care about the business or if they’re all just ready to take their cut and jump ship as it does down.
If the ponzi scheme isn’t already imploding, if they don’t fix the problems affiliates are having then they’re just going to hurry the process along. I can imagine thousands of affiliates, tired of the problems they’re having, cashing everything out.
Wow I just read through that zeeksupport forum, the “employees’ are sure whiners, Oh poor me, I’m doing the best I can, you affiliates are so mean to me. Oh Please.
It’s also your upline who is responsible…quit complaining and go to them. That is NOT how you treat people who are feeding you money…hello.
I can’t imagine I’d ever talk or have that tone with any of my customers in my real business, because I certainly wouldn’t have a business if I did.
It’s imploding for sure, this is how it always goes. It’s the same thing over and over again. It’s sure not the first time I’ve seen this happen, being married to the true believer, who truly believes that someday one of these things is going to be “real”.
Run for the exits affiliates. It’s over. Although at this point there isn’t much you can do for yourself, just please stop recruiting new members, have a heart.
That’s why I’m concerned for my in-laws who have invested in it, and are constantly signing up more and more people under them even though I expressed my concern that it is a ponzi. If this thing is getting ready to implode, then they’re setting up a lot of people to lose money.
You’d think they’d learn by now since they’ve been involved in several other MLM schemes in the past which went bust, and they never made anything. But they keep assuring me that “This one is the real thing. It’s good.”
More issues from zeek support forums. Looks like A LOT of won auctions are going unpaid:
http://zeeksupport.zeekrewards.com/zeeksupport/topics/getting_paid_on_zeekler_auctions
This guy’s frustrated because Zeek employee Andy posted a brief message saying that the problem can be resolved swiftly, yet Andy appeared to have forgotten all about it and didn’t bother following up for a couple weeks.
Like I said, this kind of attitude is what’s going to hurry the demise of Zeek if it’s not already imploding. Affiliates are not going to recruit anyone if they know that it’s extremely hard to get paid for auction winnings.
Either things are extremely hectic at Zeek HQ (which could be if the ponzi is collapsing) or else all their employees are totally incompetent.
Sorry if I stray off topic a bit, but I bet there are so many in my situation. Joe I’ve been through the same thing for years and years with someone close to me, hundreds and hundreds of businesses, thousands and thousands of dollars lost.
It’s frustrating, but once you have the sickness it doesn’t seem to go away. I think MLM and other schemes are as addictive as gambling. The person just loves it still…go figure. Nothing I can say or do can change the opinion. It’s completely unbelievable and impossible to understand.
The person is completely addicted to the initial excitement created in the mind. When it becomes less exciting in a few weeks, has to move on to the next.
Ah, but you know what they’ll say, “we are busy moving our accounts to our new bank and credit card processor”, and “we are coping with our explosive growth thanks to all of your promotional efforts”.
@Erin — I call that “fishbowl hopping”, jumping from one “opportunity” to another, always looking for “the big one”.
I don’t think MLM is addictive, but it has many cult characteristics. MLM model is a very “insular” system that is essentially a “commercial cult”. When you force one person out of a cult (even a relatively benign one), they feel something empty, and they seek to fulfill it, usually by joining another one.
Yes, K Chang, that is always what they say, it starts with the excuses every time one starts to go down.
The true believers will still believe until the last dying breath, and even then they will blame it on something else.
@Erin — I call that “fishbowl hopping”, jumping from one “opportunity” to another, always looking for “the big one”
Exactly what happens around here. It sure seems like an addiction around here, can’t speak for others.
I believe you should warn them against possible tax problems (if they are U.S. citizens). We have had a few discussions here about ZeekRewards and taxes, but we haven’t made any conclusions.
The problem is that they will get a very high taxable income from the daily profit points. ALL profit points are taxable as income, and the deductions are very vague.
I have posted a few comments about this today.
To show them the problem, you’ll need to use a spreadsheet. They will need to SEE the problem themselves.
I just don’t know why family & friends who get involved in MLM schemes think they have to try to recruit me. I have never been interested in getting into MLM or get-rich-quick schemes, mainly because I can think for myself and know that most of them are ripoffs.
But aside from that, I have no desire to go around and try to recruit every person I know into one. Yet when the latest “great opportunity” comes around, someone always has to ask me to attend a meeting.
Every MLMer always go after friends and family first because they can use “social capital” (i.e. their relationship) instead of actual effort / money to recruit.
This makes the initial few recruits/sales easier, but also disguises the real cost of MLM, and why most MLMers never make money and stall after a few sales.
Well Joe, I guess if we were just smarter we would “get it” LOL
I read somewhere, unfortunately I don’t remember the site, that the average earnings for someone in an MLM business is about $78 a month, before expenses.
Just doesn’t seem worth it to me to try to recruit, recruit, recruit everyone I know and those I don’t.
Zeek is popular because it’s being sold to the MLM community, but is really an investment ponzi. If you took a typical HYIP and tried to sell it to an MLM’er they would think “scam” or “ponzi”.
What Paul Burks did is went after traditional MLM leaders and showed them how easy it was for the average MLM’er to make money with very little work. This is because Zeek is an investment ponzi first with an MLM add-on.
So the recruitment goes something like “this is the first MLM that you can earn without recruiting”… (wait, corporate banned the use of the words “no recruiting” and “no sponsoring” but everyone uses that because that’s how you sell a ponzi/get-rich-quick bizopp).
$78 probably includes averaging in the the guys at the top and the guys at the bottom, the middle and bottom usually loses money.
@Joe Mama
I have posted a comment about possible tax problems, but the comment is awaiting moderation.
The taxes can be a huge problem (for U.S. affiliates) if they are not prepared. But you can’t TELL people it will be a problem, you’ll either have to SHOW it to them or they will have to find it out themselves (using a spreadsheet).
The tax problem scares me to death, can’t wait for this ponzi to die. Last years taxes will probably be audited at some point, and who can explain it?
Now that Zeek has gone paperless and are using eWallets, shouldn’t they get rid of the 2-3 week drag from when you request money to when you receive it?
I can understand this “excuse” for paper checks. It has to get printed, someone has to sign them or stamp it or even if robo-signed has to be checked. Someone or some service has to put them in envelopes and put Zeek’s lovely choices of postage stamp. There is some complexity for mailing outside the US.
Okay, I get all that even as inefficient as Zeek is in this area, I can live with a 2-3 week drag. But we’re talking electronic transfer using an API to send money. Why the 2-3 week drag?
Jimmy, the 2-3 week drag…to use your money to pay the generation ahead of you in the Ponzi, possibly?
Here’s Dawns Bio from the Dooly interview that will take place today.
I’d especially like to point out the 10 years of software development! Maybe she should pass her infinite wisdom onto her IT staff at Zeek.
Have you ever seen so many amateur mistakes before? Surely this can’t be a company that makes millions of dollar in PROFIT per day.
Remember, if they are saying that Zeek pays UP TO 50% net revenue per day, that means any projections using 50% are CONSERVATIVE. If Zeek’s actual revenue share on a given day is LESS than 50%, that means corporate revenue is even greater!
So you have a company making million but unable to perform basic administration, not acknowledging support tickets for MONTHS (not just one complaint, but hundreds), etc, etc.
I don’t know if the tax issue would really be that big of a problem or not. The way I see it is that you only have to pay taxes on income, and point balances wouldn’t be considered income until they paid you a check or money transfer, or whatever they’re doing now.
In other words, until it hits your bank account, you shouldn’t have to pay taxes on it. Since you are technically “purchasing bids” and not “investing,” then the point balances shouldn’t be considered earned income until you cash it all out.
Of course I’m probably oversimplifying it and I am no accountant, and if the government wants to make it more complicated than that I’m sure they will.
Just got word that ZeekReward has been banned in Montana until further notice. See the June 4th Dawn’s “briefing”.
They are apparently blaming it on “e-Wallet issue”.
I have a new name for Zeek Rewards…How about Zero Rewards.
Listen to the call and skip to about 18 minute mark:
https://www.youtube.com/watch?v=LI-9qufScu4
Dawn says about having to jump through Montana’s hoops. So it’s probably NOT a payment processor issue, but a Zeek Issue.
She also said they jumped through North Carolina’s hoops, which may or may not hint that they had issues there too.
Yes, there was a post on Facebook asking when Montana residents issues will be resolved. The answer was very terse. May be worth asking our insider what the real issues are.
Apparently Zeek is not accepting new members from Montana either:
http://mlmhelpdesk.com/mlm-penny-auction-alert-zeek-rewards-affiliates-must-deposit-commission-checks-now-rcd-update/#comment-59132
Troy immediately blames it on payment processor issue. I’m not sure he’s neutral any more.
Above, there were some comments on average earnings in MLM…. The average American business is loosing money and house holds are going south….I strive not to be average.
For me MLM is the answer to the 40-40-40 plan that clearly did not work for me and my wife. I totally agree if everyone can just go out and get a 6 figure job like the people above…… then they can pay the mortgage for sure!
Last time I looked the average income for a FAMILY is around $46000 a year before taxes and to me that sounds worse than $87 a month before expenses. People averaging $87 a month are not putting 50-60 hrs in. Just don’t be so average and work your a** off like you do for some one else.
Oh yeah don’t work stupid things like Zeek, pick a long term solid direct sales company where you see many people making a living. This one is one I will take joy in watching the blood bath that is coming and so well deserved. Zeek is IMHO going down!
Charge it up to US trade sanctions against Montana.
General statement may be true for MLM’s but Zeek is an investment ponzi. I can put in $10k, and do nothing and make money.
I can tell all my friends to do the same thing. They tell their friends. We can solve the economic woes of the entire world just buy depositing $10k and then paying $10/month for a firm to place our daily ads for us, and pay another firm to sign up fake free customers for us.
Hooray! Someone tell Obama about Zeek.
It was moved from “high risk” to “start up mlms” shortyly after the first red carpet event.
But now i cant find it anywhere in the “mlm companies” pulldown menu.
I agree Jimmy
When I read that Zeek was banned in Montana, at first I thought that maybe the Montana AG shut down their operations there or something. I’m still wondering.
I did a google search for “zeek rewards montana” but so far am not finding anything but tons of zeek spam.
At any rate this can’t be good for Zeek. How long before they shut down operations in other states? What about all the ZR members in Montana? Do they now lose their investment?
@ Joe Mama…they issues 1099’s for 2011 on total point balance, not what people had actually received, so yeah, it’s a tax problem.
People are putting their hard earned money in zeek that they have saved for an eternity. They will have nothing left…. especially if they look like they are making money. People will go all in …and then bust.
I say fry all of the management and all people that speak out on zeeks behalf to get more people to join this sinking ship for their own personal gain. They should be treated the same as blue sky or pump and dump people in the stock market and do some time.
These people have always been wrong look into their track record of predictions….LOL really people look up to them. Then they cover a great company with great stats and turn into captain obvious….. so it looks like they know something. Just sayin….
You’ll need to SEE the problem in a spreadsheet.
The RPP paid each day (to the backoffice) is taxable as income, even the points that are being reinvested. The VIP point balance on the other hand is not taxable (since they can’t be withdrawn as cash).
You can save your in-laws from a big tax problem, and I’ll guess that will be more easy than to save them from ZeekRewards. They in turn can save their downline from tax-problems.
Normally, we can’t save “true believers” from an income opportunity. They will only close their ears if you’re starting to talk about Ponzi schemes. So you’ll need a better strategy than that.
When it comes to the tax issues, some of us can probably find the tax advises from Howard Kaplan on ZeekRewards’ own websites, so you can use that as a reliable source. “True believers” should normally believe in the company’s own information.
The taxes can potentially become a HUGE problem, a more serious problem than losing their investment.
Ah yes I do see the problem. I didn’t think of the daily “profit share” being considered income. Of course when they roll it back over by “purchasing bids,” it’s using some of that “money.” I see how it will get complicated.
I don’t think I can tell my in-laws anything. When I brought up the possibility of it being a ponzi, my father-in-law smugly said, “Just remember what you said when we all get rich.” It’s hopeless because they all have dollar signs in their eyes.
I just hope they’re able to recoup what they put into it before it collapses. My wife is in it with $1000 of her dad’s money, and her two sisters as well. So they’ve got at least $4000 into it so far.
at this point, i’m only interested in the credit cards. as someone said above, and i’ve said this a thousand times to others; “how can a company that is making millions a day, not be able to solve a simple credit card problem?”
with millions a day, couldn’t you take one million a day, and re write the whole thing? it would be nice to see 2011 tax statement of the company, and the monthly audits of the company for 2012.
The conference call was actually disturbing, from a “professional” viewpoint. But I’m not very familiar with conference calls in MLM either. I listened to all 33:45 minutes.
When listening to a leadership call, I will usually expect information to be organized in specific ways – placing the most important points before the less important ones (or other similar methods). This conference call was completely disorganized in most parts, with the important information near the end (where the sound quality was poorer, and where they had lost most of the focus).
They have a problem with communication in the organization, resulting in affiliates calling their bank, lawyer, tax advisor, and so on and so forth. Rather than fixing the problem inside the organization (by using better methods), they identified the problem to be related to the affiliates. And this is disturbing when the main focus in the call seemed to be motivational stuff.
I joined ZR in January and after growing increasingly concerned about my “financial contribution” I decided to do some research of my own and found this site.
I’ve been lurking and reading for a few weeks now and have decided to cash out right away. I just hope it lasts another 90 days so I can get my money.
Thanks for the enlightening and informative posts. It sure makes a refreshing change from the almost evangelical rants that the true believers come out with on the FB forums and skype chats. I am starting to feel sorry for these people.
@Elsie – many people I have talked to both here and IRL who are in Zeek have suspected it was a cleverly disguised HYIP (which makes it a ponzi).
One could argue that Zeek didn’t set out to build a HYIP business model, though it had some elements of that with the guaranteed 125% return.
One could say that Zeek was hoping that the retail penny auction business would really take off and could form the backbone of their revenue stream, and that Paul Burks took a giant gamble and now that almost all revenue is affiliate and not retail, he has a huge mess on his hands.
Regardless of how you got into Zeek, most affiliates that have visited BehindMLM have been honest and willing to discuss and learn. Several have realized how risky this entire business is and have altered their cashout strategy accordingly.
At a minimum, at least you are now driving with eyes wide open.
As Charles Ponzi didn’t “intend” to start a Ponzi scheme, but did, the “intentions” doesn’t count for much.
The only question is how blind they choose to be toward reality.
2000 calls to NxPay in one day. 🙂
I found an explanation over at MlmHelpDesk. I’ll guess the problem is solved now, but I’m posting the solution in case it isn’t solved.
I had to listen to the conference call one more time, in the middle of the day instead of late at night. I still find it very disturbing as a leadership call, even at daytime. They have very different ideas for leadership than I have (like reading quotes from self development books).
Here’s something I didn’t know… Zeek Rewards charge affiliates to go to the Red Carpet events (sourced from the support forum):
$1000 + more money if you want to talk to management? Uh…
Oh and Zeek Rewards are also actively deleting information pertaining to who their new banks are and whether they are offshore or not. Check out this support thread with lots of censored replies to the question “who is zeek banking with now?” from an affiliate – http://zeeksupport.zeekrewards.com/zeeksupport/topics/who_is_zeek_banking_with_now
Yeah… total transparency. Why does a legitimate business need to be secretive about how and where it’s funding it’s e-wallet payouts from?
Are the Red Carpet Events still at the Holiday Inn Express? Classy and glamorous for your $1000.
Paul Burks and company have always been about constant milking of the distributors with add-on packages and useless requirements like the compliance course.
They are treating this “red carpet” event like an election fund raiser event. They have to get *more* money from all you affiliates one way or another.
We have had discussions about ZeekRewards being an independent company or only a business name. The answer is alternative business name for Rex Venture Group.
From BBB:
Interesting cost about the Red Carpet thing, since according to ZeekRewards news, the official cost is $25.
They may be moving to village inn this year. There are only two meeting rooms in Clemmons, NC any way. 😀
@Elsie – many people I have talked to both here and IRL who are in Zeek have suspected it was a cleverly disguised HYIP (which makes it a ponzi).
One could argue that Zeek didn’t set out to build a HYIP business model, though it had some elements of that with the guaranteed 125% return.
One could say that Zeek was hoping that the retail penny auction business would really take off and could form the backbone of their revenue stream, and that Paul Burks took a giant gamble and now that almost all revenue is affiliate and not retail, he has a huge mess on his hands.
@Jimmy, I think you are absolutely right with your hypothesis – it seems to me like ZR started as one thing but has become an out-of-control monster that they do not know how to handle anymore.
For a while now it has struck me as really strange that the penny auction side of the equation is barely ever mentioned by the thousands of affiliates who are busily recruiting.
I never recruited anyone so at least I don’t have that aspect on my conscience.
It’s because recruiting ZR affiliates under you pays off more than recruiting customers to the penny auction website. It’s not only zeek that doesn’t really care about the penny auctions, it’s the affiliates as well.
Everybody I know involved in Zeek is busy recruiting people to put in their downlines but nobody seems interested in recruiting customers who want to buy bids.
Here’s what an official Zeek Rewards Customer Support Rep has to say about enquiries into whether or not Zeek Rewards’ banking has moved offshore:
Asking which bank Zeek is now using puts the company in danger???
Sucks to be a curious Zeek Rewards affiliate. ‘Shutup and cash your damn cheques! Oh wait… sorry we don’t do those anymore. Just use our offshore e-wallet providers and STFU. Which one?! Hell just sign up for all three because availability is up and down like a freaking yo-yo!’
And apparently there was a training call with Zeek Rewards telling affiliates to accept charges from Korea, this appears to be CC related so they might not have moved to Hong Kong (China) as they originally stated.
Even the affiliates dunno what’s going on…
Reading Dawn’s “official support rules” is fun too. Most of the rules are reasonable, but these raises eyebrows:
@Oz — that quote is so good, I took a screenshot and put it on my ZR explanation hub.
It’s a “shut up or ship out” threat.
Funny that Marie (an employee) and others are asking for account information so they can resolve outstanding financial issues – many Zeekler customer issues are STILL unresolve despite Zeek employees asking on the forum for members who posted to proviee more account information.
Just imagine the phishing attacks that could occur!
I read some affiliate was complaining that someone else (his upline?) had used the email he signed up with Zeek Rewards with to create a fake customer account:
Lol?
I don’t want to beat a dead horse but all these issues makes me wonder how much life Zeek has left. If you read about people who run ponzi schemes, when things start collapsing they get all stressed out and start running things very sloppily, and the “business” side of things suffers.
Payments get missed, calls go unanswered, investors ignored, etc. I was thinking it might collapse by the end of the year but I wonder if it has THAT long.
Of course, I don’t know how Zeek ran before I started reading these threads, so this could just be how they’ve operated all along. But even for a ponzi you’d think they’d try to iron out the bugs to keep their members happy.
I wouldn’t think they could just keep running on people’s greed, but I could be wrong.
Apparently the support forums are going private:
http://zeeksupport.zeekrewards.com/zeeksupport/topics/from_public_to_private-1lzqsa
I guess they were a little embarrassed that the threads about people not being paid for won auctions showed up in a google search.
The example cited here of:
Affiliate tells friend/family to buy $1,000 in bids because then they get matching points which result in the money coming back-
That’s not even ‘against’ zeek’s policy, is it? As far as the company is concerned this is still ‘win’ for them, yes? Or am I missing something?
@EM
No it’s not against their policy and yes, they claim it’s a win due to creating customers and generating auction revenue.
Nevermind the fact that they have to pay out >100% of the bid revenue on VIP point ROIs and referral commissions…
…hey look over there, have some free bids!
Oh, it’s a “win” for them because as long as someone keeps pumping in money (either buy more bids, or more people buy bids), they are happy.
But it’s a net LOSS for the affiliates, because they are essentially paying themselves, which makes it a Ponzi scheme!
On the topic of “compliance,” wouldn’t Zeek Rewards/Zeekler be a PCI Level 2 Merchant (1M to 6M credit card transactions per year)?
Remember they charge monthly subscription fees, plus any actual retail penny auction purchases. The vast majority of these have to be credit cards.
Considering their IT nightmares to date and lack of professional staff (husbands, brothers, sons, etc.), I am certain they would fail a PCI audit miserably.
Maybe *that* was why they switched banks! 😀
@K. Chang, Check out the link. Is this allowed?? Thx!
“Zeek Rewards Cashback for my Friends” http://networkmoneymakers.com/zeek-rewards-cashback-for-my-friends/
It’s not illegal, if that’s what you’re asking. The additional affiliates are not required to recruit anybody to earn that “bonus”.
I know it gets a little confusing, but there are FOUR aspects to a pyramid scheme (and Zeek is a suspicious Ponzi scheme, though it has some elements of pyramid scheme as well)
1. You pay to join (legalese: “consideration”)
2. This enterprise / scheme / organization / whatever
3. and get the right to recruit other people (who also pay to join just like you)
4. and you get paid (legalese: “compensated”) when you recruited more than one people (either directly or indirectly)
As this Dave Newman guy has 1, 2, 4, but not 3 (no new guy is required to recruit more people to get paid by him, they just need to join) what he did is legal.
(or at least, not a pyramid scheme)
I have a quick explanation here on pyramid scheme that may be of some use:
http://amlmskeptic.blogspot.com/2012/06/mlm-basic-why-is-mlm-not-pyramid-scheme.html
Do you all have a suggestion on the best steps to take to delete/remove and/or cancel a Zeeks Rewards account. This account would be new. No more than a week old. With no out of pocket money deposited?
Any advice you may have will be greatly appreciated.
He’s offering a one time payment for people to join his downline, and is offering a relatively low amount. It’s only a small incentive for joining his downline instead of others’.
So the method itself isn’t illegal.
The method is probably better than paying for “cheap” leads. He’s almost guaranteed to get his money back from commissions.
@M_Norway, thanks.
My husband joined, but we’re getting out!
@tkitty – Isn’t it interesting that it’s so difficult to find information on how to quit Zeek? Just found this post the other day:
It seems to me that failing to renew would just keep the person in the company. Maybe that’s why they brag about how few people quit?
This was an interesting read…
http://www.patrickpretty.com/2012/06/18/bulletin-adsurfdaily-figures-and-zeek-rewards-pitchmen-todd-disner-and-dwight-owen-schweitzer-raise-possibility-of-prosecution-for-tax-evasion-because-of-government-seizure-of-asd-database/
Please tell me it is true that Zeek will no longer accept Montana affiliates, investors, members suckers or whatever you call them.
I live in Montana and am being hounded by a true believer to sign on. The easy way out is just to say “can’t since Montana is off limits”. Please help
That’s the latest word. Apparently Zeek didn’t want to “jump through the legal hoops” set up in Montana even though they had been before (do a google search of zeek rewards Montana and you’ll see plenty of affiliates there) and Montana’s MLM laws aren’t any stricter than other states’).
The only apparent difference is that Montana isn’t afraid to prosecute “incredible business opportunities” that aren’t in compliance with the law.
In your Zeek back office, when you click on the “contact affiliate services” link it takes you to the Zeek support forum rather than to the page it did previously which allowed you to open a ticket, had list of customer support phone numbers, or attempt a Live Chat.
Is Zeek encouraging affiliates to not open a ticket and just post semi-publicly on the support forum? Public posts deter criticism. Probably not a good move if it will cause more issues to be in semi-public view.
* semi-public = you have to be an affiliate to access the support pages, but you can always sign up as a free affiliate (and then technically be bound by the Zeek ToS).
Dawn was going on about how they’re not to keen on phone support in the Aces Live Radio show interview from memory.
Maybe this is a step in that direction.
That was because you clicked on Affiliate Services when they were closed. When they are open, it allows you to open a ticket. They could do a better job of explaining that to affiliates.
@Vicky…
Why would you wonder or state it doesn’t make sense?, There are many Attorneys that defend the sleaziest criminals in the world, many that are blatantly guilty of the crimes in which they are accused!
As far as zeek is concerned I have my concerns also, the biggest questions that come to my mind are…
1) Affiliates vs. Auction Customers… I do believe that if the majority are being purchased by affiliates vs consumer the business is doomed.
2) Why are they so big on the 80/20 suggestion, if I recall this is very much what was suggested in ASD, pull 20% put 80% back into Ad purchases!?
Troy says those affected by the non-existent OFAC sanctions were not ripped off, even though they did not get paid for their VIP point balances.
Troy,
thank you for the reply. Ripped off has a few layers – money, of course but also dignity – the way everything was done is humiliating.
My user name is viktorija, but there were a few more people who signed after me through my link (relatives and friends).
I also am not aware of any of the affiliates in the 6 “OFAC sanctioned countries” to have received the current or future value of their point balances.
In some cases, affiliates had subsidized their friends/family accounts to buy Zeekler retail bids in exchange for the VIP points. The affiliate was hoping, of course, that they would earn ROI on the matching VIP points and didn’t really want to buy Zeekler retail bids which have very little value in the penny auction.
With Zeek Rewards kicking them out without any consideration for their VIP point balance, they were “ripped off” in that they spent more money than just the initial bid purchase.
Also, some affiliates spent both time and advertising dollars to promote their Zeek business. Some paid for hosting, mailing list auto-responders, and other internet business related costs. The “revenue” generated from these activities are reflected in the growing VIP point balance.
So by not paying out the VIP point balances and only refunding the initial purchase, these affiliates who invested in their business also got gripped off.
The problem is to Mr. Dooly, work means nothing. You can only be ripped off if you lose MONEY, not dignity and time and labor.
Did he had the SAME thoughts before regarding any OTHER scams? That you can only be “ripped off” if you lose MONEY?
I am not acquainted with the oprevious work of Mr. Dooly, but he HAS MADE a promise to come to the bottom of the problem. I do hope he’ll strive to do it.
Troy hasn’t considered the value of VIP points and only looked at “initial bid purchase” and perhaps monthly membership fees.
Imagine if you had over 100k in points and were refunded only your original purchase. I haven’t seen Zeek corporate, Troy, or the support staff address this major issue for those that are affected.
Was looking into “FHTM” when I came across this little gem:
http://www.usatoday.com/money/companies/2010-10-15-multilevelmarketing14_CV_N.htm
Apparently, NMMJ works cheap, if Dawn only paid 100K for feature cover.
But guess whose names turn up?
Yep, our good friend Gerry Nehra, now employed by Zeek!
Clearly the affiliates are NOT customers, because they have to sign contractor, gives up SSN, and gets a 1099!
Yet it’s clear affiliates are buying bids, and in fact, buying MORE BIDS EVERY DAY! Clearly far more bids than customers would!
Hmmm…
FHTM got hit in Montana because apparently the commissioner’s brother tried to recruit her, prompting her to investigate it and subsequently declare it a pyramid scheme.
The way Zeek’s spreading, it won’t be long before its tentacles touch something it shouldn’t go near.
okay, I’ve been outa MLM for 10 years. The last company I was with I went to the #3 income earner spot before they imploded.
A good friend is pushing hard for us to join Zeek. I insisted we go down for a Red Carpet event. However, I don’t want to take/waste the time if this is going to turn into a huge dissappointment down the road. I’m building life over again with 2 kids, 2 cats, a mortgage and all the other “essentials” of family living.
I appreciate everyones information here and in the zillion other sites and blogs – it’s just too much to digest. Is Zeek worth the effort/gamble or not…?
I am a ZeekRewards affiliate. I became one prior to reading all these negative investigative reports.
Relevant to me is the below Two (2) Questions that I cannot find anywhere in ZeekRewards. Not in their Terms and Condition, nor Purchase Agreement or anywhere else for that matter.
Is there a LIMIT on the amount of VIP Points that you can have?
Is there a LIMIT on the amount of US$ you can Cash Out?
According to a Chart based on Purchasing 5,000 VIP Points to start with and calculating 1.5% daily earnings on current VIP Points and doing an 80% Reinvest with a 20% Cash Out, ONLY after the start of the 4th Trimester and subsequently to the 12th Trimester, then I would have collected a gross income of US$ 13 Million and would still be left over with 52 Million VIP Points that would be earning a whopping 780,000 VIP Points DAILY.
WOW, that would be amazing; however this will only be little me; what about the other several million affiliates? It seems to me that Mr. Bill Gates may be in the wrong business.
Please, please, please, tell me where to find the LIMITATIONS, if any exist, of earning VIP Points and/or Cash Out?
Even if they were to freeze new affiliates at some point, which I do not see anywhere in ZeekRewards policies, Zeekler Penny Auction would be the 1st Source of income to payout all affiliates.
Where can you find the Gross Monthly (or Quarterly or Yearly) Income Report for Zeekler Penny Auction
If no limitations exist and the Zeekler Penny Auction is not a rapid earning Money Making Site, way above e-Bay that makes 9.2 Billion a year, then the simple math speaks for itself. It will collapse!
To bad so many affiliates can’t understand this and realize just how too good to be true Zeek Rewards really is.
Does anyone really think that a piddly-ass penny auction site is making $780,000 daily just to pay that one affiliate, not to mention the millions (or possibly billions) of daily profit it would need to pay EVERYONE. But all you ever hear from Zeekheads is pie in the sky.
@buck
We’re not completely neutral here, in the fact that most of the “regulars” already have made up their opinions about Zeek being a Ponzi scheme. But the topic has been “balanced” most of the way, with quite opposite viewpoints in the comments. And the initial review will usually be factual (the first review in a serie of 22 articles).
My tips to you is to click on the company name, in the top of the article or in the menus on the right side (near the top), to get an overview over the different articles.
A compressed overview goes something like this:
ZeekRewards was released in March 2011, after they had tested the compensation plans under a different name for some time, “FSC Auctions” or something. I can recommend reading the article about the origin as a part of your research.
They changed the business model from 125% ROI to the current 90 day RPP in August 2011, and have made several changes later, too (all making it a little harder for affiliates to qualify).
The first review on this website was in September 2011, but the topic didn’t become very active before December 2011 / January 2012. It has gradually become more active in the seven months since then, and there’s probably over 3,500 comments to the 22 articles.
I’m NOT updated on any recent changes in the business model, but there has been introduced new qualifiers just recently.
Other than that, I mostly have information for people who wants to avoid it than for people who wants to join it.
It’s mostly the affiliates OWN money being distributed among the affiliates, most of it going upwards in the system to the affiliates with huge downlines and huge VIP balances. It means the odds will be heavily stacked against you and many others who have joined after May/June.
I have asked questions about real paying customers for 7 months, and have been able to identify ONE real customer (she spent $260 on 400 retail bids 5 months ago, and has later become an affiliate). I have also had a few dialogues with free customers and affiliates having PLANS for how to attract customers.
And that was the basic information I had. You will probably get more detailed info if you ask about something specific (within a range where people can be expected to be able to answer it). 🙂
TAX ISSUE:
I have been focusing on one specific issue part of the time. Affiliates (in the U.S.) received 1099 tax forms where all the reward points was stated as taxable income (even if they hadn’t withdrawn any money). This issue is currently unsolved, but may potentially cause an audit for Zeek’s mother company in the near future.
All in all, there’s several “issues” here.
The financial factors are “business secrets”. Rex Venture Group LLC is a privately owned LLC, and don’t release information to the public (other than what’s required to the State Secretary of Nevada, where the main company is registered).
The true core of the business is money coming in from newly recruited affiliates, making their first purchase of sample bids (aka “doing their initial investment”), where they get VIP points in return and can compound the daily RPP and grow the VIP balance.
That is the true core, both in WHY people join ZR and WHERE most of the money comes in. It was nicknamed “the Compounder” for a short period of time, before one of the compliance changes in 2011.
They haven’t had any upper limits for VIP points or daily withdrawals until now that I am aware of. If they had something like that, some of the affiliates would probably have mentioned it during 7 months of comments.
I must be missing something here, if Zeek Rewards is saying all of the money to pay affiliates is coming from 50% of the Zeekler auctions then there appears to be a major problem that any 3rd grader could figure out.
I went to Zeekler and counted the penny auctions, I saw about 30 currently running with only about 20 getting bids every few seconds, the rest had to much time and not many bids.
I kept track of how many bids those 20 auctions gained in 1 hours time. The 20 auctions gained about 18000 bids in that hour. Now times that by 24 hours a day and Zeekler is pulling in about 432,000 dollars a day plus the little it gets from the actual item price.
Now they give half of that to the affiliates so lets say 225,000 per day gets distributed out.
Now we have heard that there may be a million affiliates but lets say just 500,000 affiliates making a very conservative 10.00 per day. We know there are many making 1000’s per day but at an average of only 10.00 per day that would mean Zeek Rewards is paying out $5,000,000 per day to its affiliates from earnings of 225,000 dollars per day??
Where is the money coming from if not from the new affiliate money and subs paying other affiliates daily payouts. Am I missing something here because if this is the case it can not last much longer at all!
People who got in early are into the millions already and at 225,000 per day coming in from the penny auctions, that doesn’t cut it. Are people really this stupid?
The official claim is “up to 50%” not exactly 50%, so that means that if Zeek is paying LESS than 50% to affiliates they are making EVEN MORE than any estimates based on 50% profit share.
Your numbers will be skewed because there will be more auctions during the day. You need to account for the slowness of auctions at night.
You also need to subtract all free auctions and bidpacks which generate no revenue.
Then, you need to account for BOGO offer and affiliate VIP bids they get with membership fee (i.e. 250 VIP bids per month are given to Diamonds who pay $99 membership fee). So in total, the VIP bids are probably worth around 48 centes per bid. The retail bids are worth $0.65 without a BOGO offer. The BOGO offers have changed from VIP to retail back to VIP bids.
Finally, if you had all the data available, you would also look at the the number of unique bidders in a premier auction (since the first bid costs 5 or 10), and also subtract any bids that expire due to non-use, though paid bids may be immune to expiration now (need to verify this).
The vast number of affiliates are FREE and make much less than $10/day.
But no one knows the average. Zeek’s IDS only published the “median” with the vast majority being FREE affiliates, it’s hard to estimate the average.
But in general, your analysis is correct, the auction revenue doesn’t even come close to paying the affiliate payouts.
Not to mention the matching VIP points which creates negative liability because the presumption among all affiliates is that they will earn positive ROI. Zeek says profit is not guaranteed, but if profit is zero or negative, the affiliates all drop out and the whole scheme collapses.
@Darrell — Jimmy already vetted your numbers, which I have only one thing to add:
If they are *paying* out that sort of money then where is it coming from?
Clearly, as you found, it’s NOT coming from the auctions themselves. Though if you really “massage” the numbers it *may* fit. And diehard Zeekheads will insist that we goofed up the numbers somehow by nitpicking.
However, analyzing the auctions doesn’t actually track the money, because the profit is most made when bids are PURCHASED, not when the bids are spent.
And with a million affiliates (they claim), we’re talking about millions of dollars plowed right back into the company as “repurchases”.
I agree, I think the answer lies in the fact that they are not paying out that much money as most affiliates are “reinvesting” at 100% or 80/20. This is the only thing saving this company from collapsing right now, if everyone wanted to start drawing out at 100% it would be over.
We all realize that the penny auctions are incapable of sustaining this kind of growth, at an average at an average interest rate of 500% per year plus compounding. I know they don’t use terms like money, compounded interest and investment but that is what it is, word games aside.
As long as ZR only has to deal with accruing points then it can go on forever as long as everyone just keeps plowing their earnings back into ZR.
So as long as the Zeekers/ZeekHeads keep the faith and just keep reinvesting and compounding imaginary pie in the sky earnings, it may last awhile longer.
@Darrell,
I good framework to use is simply this:
Revenue:
A. Incoming revenue from customers
B. Incoming revenue from affiliates
Expenses:
C. Money paid to affiliates
D. Money paid for operations, auction, etc.
Liability:
E. VIP point growth over time
F. Incoming revenue growth over time (affiliate & customer)
The most important thing to look at is the ratio of A:B. That will tell you if this is a Ponzi or not.
The ratio of (A+B) : (C+D) gives you a current snapshot of cash flow combined with a chart of E over time will tell you what the sustainability.
The ratio of E:F will tell you how sustainable the model is and give you ability to predict when it will crash, but this financial data is not available.
I recently learned that Monavie’s former head corparate attorney Kevin Grimes is in charge of Zeek Rewards Compliance Course. To my knowledge he is one of the top MLM attorneys in the world. Why would he assioate him self with a company which you say is illegal and a dressed up investment scheme?
Also Zeek Rewards proved the so called memo being given out in NC credit Unions was false and the person who published it had no idea what made a legal MLM.
You’d have to ask him that.
When did that happen?
COO Greg Caldwell wrote a blog post about it full of allegations but failed to provide any proof. Furthermore NCSECU never publicly retracted any of their statements.
I recently learned that Keith Laggos, Zeek’s highly touted MLM consultant with an MLM text book used in 200 universities, hired to review and modify Zeek Rewards compensation plan, and often cited by Troy Dooly as a top expert in the MLM industry and personal friend, said that the FTC will move in on Zeek within 3 to 6 months.
Laggos then told Zeek affiliates to join the Lyoness pyramid, which has had legal issues in the US and has been sued by former employees in Austria calling Lyoness an illegal pyramid scheme.
Why would you associate with a company that the top MLM industry expert, hired consultant, highly recommended expert by Troy Dooly and Zeek execs, active Zeek affiliate with a 45k member downline and earnings of $40k a month, himself has said will be shut down by the FTC in 3-6 months?
Zeek rewads has been going strong for several months now and i know several affiliates personaly. I believe that it is a totally legitament mlm.
I do not believe the theory that only the money from affiliates purchasing bids supports the company’s retail profit pool simply because the maximum amount of bids any affiliate can purchase is 10000. I personally know an affiliate who has a VIP point balance of over 500000 points and is paid over 8000$ a day.
How could they afford to do that from the maximum amount of money one can put in is 10000$?
First of all 8000 of 500,000 is 1.6%, so your friend is earning 8000 points a day – not cash. If he was earning $8,000 he’d be at 100% withdrawal and would be out in 90 days (not to mention the $8000 would steadily diminish over the 90 days).
In any case, as long as new investors keep throwing $10,000 investments at Zeek they’ll continue to keep paying out. This is how all Ponzis work.
As an aside, how many $8000 a day payments do you think a “legitament mlm” would be able to pay out?
A far better indicator of the “legiamency” of Zeek Rewards would be having a look at your friend’s account and seeing how many retail customers he has buying retail bids with non-affiliate money on a regular basis, vs. how many affiliates he’s recruited.
We both know what those statistics are going to look like though…
1. Purchase bids as a customer for 20% commissions + matching VIP points, or if you act quickly you can get 2x matching VIP points until 2am.
2. Compound interest, which in the history of man has been unsustainable for any business opportunity, investment, or any program claiming to offer 0.8% per day or more in daily profit share.
3. Recruiting others into the Ponzi scheme, thereby earning commissions on their investment and daily commissions, plus matrix commissions.
Zeek is a hybrid Ponzi/pyramid. All you have to ask yourself is where is the money coming from. How many external customers do you have that are real legit customers? How many retail customers continue to buy month after month enabling the ever increasing VIP point balances? How come the number of auctions per day is the near constant over the past 8 months?
Shouldn’t Zeekler auctions have increased by multiples in volume if Zeek Rewards affiliate numbers and payouts have shown similar similar growth?
Why would he be involved with Zeek Rewards? And why would a top MLM industry expert publicly tell Zeek Rewards affiliates to join a pyramid? To my knowledge pyramids are illegal. And also i have never heard this except on this site. These are just some thoughts.
Your Google skills are lagging. Searching for Zeek Laggos and there are articles and links to the recordings and personal reviews from those who attending the calls live.
Please, do some research before thinking we’re all just idiots here. We’ve been analyzing Zeek for 9 months. There are over 4500 comments across 25 articles.
He is in 100% repurchase of bids and yes i have seen his account. I recently talked to a Hawain Blue Diamond in Monavie which we know is a good MLM company.
According to him he himself is in Zeek along with several Monavie Black Diamonds. I don’t understand why so many top level distributors would be involved with a so called ponzie/pyramid scheme. — It is not new affiliates who buy the majority of bids daily… they are bought by established affiliates.
Yes of course he is. So in effect he makes $0.
You’d have to ask them.
When these “established affiliates” joined the company invested $10,000 of their own money into it – which at some point in time was used to pay another affiliate’s ROI. Now they earn money from investments made by affiliates who joined after them.
How much they make is dependent on how much they choose to re-invest.
P-P-P-Ponzi scheme.
There is no way to tell that they soley use initial investments to pay retail profit for affiliates. To me i feel that this penny auction industry is growing rapidly.
I know you’ve seen Quibids commercials. I do not think any of yall are idiots. In fact i know that you are well studied in this and i would just like another view point.
Ask your 500,000 point friend how many genuine retail customers who are not accounts he set up and purchase retail bids on a regular basis with external non-affiliate money he has and get back to us.
Solely isn’t the issue, the issue is whether or not the external money is negligible. Thus far all signs point to yes, in that time and time again we get affiliates on here going on about retail customers and then stating they have none, Zeek Rewards refusing to divulge whether or not more affiliate money goes into daily commissions or retail external money and the number of auctions.
Comparing Zeekler to Quibids is silly. Zeekler’s auctions are buggered due to bid inflation by affiliates purchasing retail bids through dummy accounts. They then use these bids to try and win auctions so that they can cash out and mitigate some of the cost of the bids they purchased (they make the rest back through the matching VIP points + referral commission).
I know that the maximum amount of bids one can give a customer is 975. I also know he is repurchasing 8000 bids per day. So your are saying he would have to create roughly 9 acounts per day to give away all his bids.
I know over time you would run out of valid email adresses.
That’s when you buy them from people who have automated the creation of “email account customers”.
Ask your friend about it, he’ll know what you’re talking about as he most likely already purchases them.
Sidenote: I was asking about genuine retail customers, not fake ones he’s either created or purchased off someone. Genuine retail customers purchase bids on a regular basis with external money, fake customers don’t as they’re just email addresses.
I also know he started out with 0 customers. Over a period of time i watched as that slowly grew to around 50 and then so on just from placing online ads. And also why would Zrewards affiliates create fake acounts and jepordize there membership with the company?
I know this company is generating alot of money and i think this would be investigated and shut down quickly.
I know there is a company called Zcustomers where you can buy customer leads from Zeek. I know another affiliate who is on autoship program to buy 10 a month. However now he has around 40 customers. I do not understand where the other 20 customers came from.
He has been on the autoship for 2 months. also he joined in may.
Useless information unless you can state how many of those customers bought retail bids with external money on a regular basis.
Zeek Rewards does not verify customers. They don’t even verify email accounts to check if they’re real.
Zeek Rewards themselves offer a customer co-op to members who joined before April 2012 I think it was, maybe your friend is a part of this (which explains where his 50 initial customers came from you mentioned).
I know that the customer coop takes bids that have been built up over a period of days for new affiliates who had just bought bids and had no customers or affiliates who have run out of customers.
However i did not see any where in his bidmanager any new customers untill several days of online advertising which leads me to think that he has had real retail customers sign up to Zeekler penny auctions under him.
The customers the co-op delivers are not instantaenous. ZR drip feeds them via the 5cc co-op, that explains the delay.
Simple way to get an answer is to ask him.
And I hope you’re not claiming someone with 500,000 points in ZR joined May 2012, I’d have to call major bullshit on that claim.
How do you know that they do not verify email adresses and ip adresses. They have had issues with fraud yes i know but not from the company, but from people using stolen credit cards who were frauding the company rather.
I have just recently learned that they have found 1 of the lead fraudmen in Vietnam responsible for alot of this and have shut him down. Why would they go out of there way to shut down fraud that would benefit them just like making 100’so or rather 1000’s of fake fraudulent Zeekler accounts would.
I don’t understand that. I know that this industry is slathered with laws and regs and i think that a business of this size thats auctioning off ford mustangs would be heavily looked at by government.
this is another affiliate sir that i know. Right now he is at 21000 vip points.
Because one customer provider explained how they sign up these customers, giving away the fact that they create the accounts without any knowledge of the email account owner.
The email address owner has no idea they’ve been signed up until after a customer account has been created using their email.
Without a credible source I’m not wasting my time.
Zeekler, Zeek Rewards and the forum all give me a 404 error. Looks like the whole place is down.
yes, darrell, i am runninq into the same problem also…
You guys might want to follow along in this thread
https://behindmlm.com/companies/zeek-rewards/nc-ags-office-concerned-about-zeek-rewards/
chris, your link is 10 to 14 days old. if you Google zeek 8-16-12, you get much more updated info…