I recently had an opportunity to read Financial Advice for Blue Collar America by Kathryn B. Hauer. The book is positioned as a practical guide for the average American who needs to get straight to the important topics, and the it definitely delivers on that promise.
The book starts out with the premise that being a blue collar worker actually CAN offer you an opportunity to gather wealth. Blue collar as used in this book means a job which doesn’t require a college degree, but requires a certain level of skill and training. This includes trades like carpenters, truck drivers, auto technicians, police, and skilled manufacturing workers. A sampling of current annual earnings for these jobs ranges from $40,000 to $82,000, which might be surprising to some.
Early on we learn about basic financial concepts such as net worth and cash flow, which are explained well. Also included are information on debt, budgets, saving, investing, the many types of insurance, taxes, and wills. These topics are covered briefly, but there is enough information for it to be valuable. Continue reading
GoFundMe scams seem to be growing by the day. While the GoFundMe fundraising site can be a great resource for people who need to raise funds for legitimate charities and needs, it has also become a hotbed of fraud. And with the site taking a nice 5% cut of every dollar that is donated through GoFundMe, it seems the company’s motivation to shut down fraudulent campaigns may not be too high. After all, the site makes money whether or not a campaign is legitimate.
GoFraudMe was started by Adrienne Gonzalez to keep the company and the site’s users accountable. It all started when Adrienne reported a fraudulent campaign, and GoFundMe did nothing about it. She knew the campaign was fraudulent because all costs for Bart (the zombie cat) were covered by the Tampa Bay human society, yet someone was raising funds to cover for the care (that didn’t need to be paid for). While the company does shut down some apparently scammy campaigns, it doesn’t seem to be all that aggressive in doing so. The Bart campaign is still active as of today! Continue reading
I’ve been telling you for years that multi-level marketing is NOT about selling products. It’s about recruiting people into a fake opportunity. The products are the “front,” meant to make MLM look like a legitimate business. In reality, very little product is retailed to actual consumers. Instead, it’s sold to new recruits into the scheme, who have little chance of ever retailing those products for a profit.
Look no further than the case of Herbalife to prove my point. (This point is usually difficult to prove, as MLMs do their best to hide the numbers so we never see the truth behind the scam.) This month Herbalife entered into a settlement agreement with the FTC that has them paying $200 million and substantially changing how the company does business.
Herbalife falsely claimed: “Settlement Does Not Change Herbalife’s Business Model as a Direct Selling Company.”
The FTC clearly disagrees, and said in its press release about the settlement (emphasis mine): Continue reading
A new bill is making its way through Congress, and it’s titled “Anti-Pyramid Promotional Scheme Act of 2016.” What’s it all about? It is an attempt by the Direct Selling Association and multi-level marketing companies to make sure that their pyramid schemes are never shut down. It is a bunch of fluff that is designed to look like it protects consumers, while the bill is really protection for MLMs. It makes inventory loading (getting recruits to buy inventory to “qualify” for commissions, regardless of the fact that they will likely never be able to sell that inventory) perfectly legal under basically all circumstances.
Attorney Douglas Brooks has analyzed the bill and dubs it the “Pyramid Legalization Act of 2016.” This is his analysis:
In the guise of an “anti-pyramid” bill, the proposed legislation would more accurately be called the “Pyramid Legalization Act of 2016.” The bill would make it extremely difficult if not impossible to prosecute the most pernicious forms of deceptive multi-level marketing programs and product-based pyramid schemes. Continue reading
A few months ago, I was asked to beta test PerfectAudit software by Ocrolus.The software has used other names such as AuditGenius (auditgenius.com now forwards to perfectaudit.com) and Medicaid Genius. Promotional emails are being sent from the domain perfectauditpreview.com, which forwards to perfectaudit.com. The company is currently marketing to service providers in the divorce arena, and they say that firms such as Met Life, RGL, and Duff & Phelps are using the site for divorce cases.
The website bills Perfect Audit as a “game changer” for those who depend on data from bank statements and credit card statements. It’s a great concept! PerfectAudit will use OCR technology to pull the data off the statements, put the data into a searchable database, and you have access to data that is guaranteed to be 100% accurate.
But the product is terrible and doesn’t even come close to doing what they say it does. Here is what they say it does: Continue reading
Yesterday ESPN published an article about AdvoCare, Drew Brees Has A Dream He’d Like To Sell You. AdvoCare is a typical multi-level marketing (MLM) company. It focuses on selling a “business opportunity” and uses nutritional products to make it appear as thought they’re not promoting a pyramid scheme. Unfortunately, more than 99% of participants in MLM lose money, making it a “business opportunity” that is even worse than gambling at a casino.
Mina Kimes did an outstanding job of digging into AdvoCare’s empty promises to distributors. It’s a long article, so I’m going to pull out some of the most interesting excerpts for you. Here is one of the most important things to remember: ESPN has nothing to gain from misleading you. They don’t care one way or another if AdvoCare or any other MLM is a legitimate opportunity. AdvoCare, on the other hand, lives or dies by the public perception… they are fully invested in consumers believing that they push a good and beneficial opportunity.
On selling hope:
AdvoCare, which has used athlete endorsers and event sponsorships to cultivate deep ties to the sports world, portrays itself as a company that “offers the average American the chance to make an above-average income,” but, in truth, only a tiny percentage of salespeople ever make significant money.
Slight correction: Only a tiny percentage of MLM salespeople ever make any profits. Continue reading
Multi-level marketing is not a business. I’ve written numerous times about the fact that more than 99% of participants in multi-level marketing (MLM) lose money. Companies like Mary Kay Cosmetics promote the “income opportunity,” but when the vast majority of MLM distributors say they lost money, the story changes to “they didn’t really want to make money,” or “they just did it for fun,” or “they didn’t try hard enough.”
The truth is that MLM is not a “business opportunity.” Almost everyone who participates is guaranteed to lose money. You can follow all the instructions, talk to everyone you know, invest money in the scam, and you will still lose money. Why? Because MLM is nothing but a pyramid scheme in which all the people at the bottom of the pyramid will lose money.
Check out this new video featuring victims of the Herbalife “business opportunity.” They put lots of money, time, and effort into their “businesses” and ended up losers. Continue reading
There is no shortage of allegations of investment fraud since the stock market tanked in 2008. Are there more investment scams occurring, or have market conditions just led to the discovery of more of these schemes? I’ll guess the latter, although no one really knows for sure.
The beauty of fraud is that so much of it goes undetected. Those involved in financial fraud actively conceal their schemes and their involvement, so it’s impossible for fraud investigators to know exactly how much fraud is happening. For example, perpetrators go so far as to pay others to participate in the scheme and cover up phony financials and non-existent promissory notes. This kind of concealment leads to more investors putting money in a scheme, and ultimately creates ever larger financial losses.
In the end, however, it doesn’t necessarily matter if we can put our finger on exactly how many of these investment schemes are out there. What really matters is being able to identify the hallmarks of such schemes so that investors can avoid them like the plague. Continue reading
I’ve written many times about how multi-level marketing (MLM) is not a business. Don’t believe me? Others have said the same thing. Today Lazy Man and Money lays out the reasons why MLM is not a business. You’ll have to read the details at his site, but the reasons include:
- Businesses obey the Commandment of Control
- Business 101 Excludes MLM
- Businesses obey the Commandment of Entry
- MLM Doesn’t Obey the Laws of Supply and Demand
- More than 99% of people LOSE money
- MLM is Not like Any Other Small Business
- It Doesn’t Matter How Hard You Work
The bottom line that any job is better than MLM. In MLM, you’re almost guaranteed to lose money. With a job, even one paying only minimum wage, you’re still making money.
Herbalife (HLF) does not want you to see or hear the evidence that the company is nothing more than a recruiting scheme. Audio and video footage was obtained of CEO Michael Johnson talking about how Herbalife is a recruiting company:
It’s the recruiting, meaning bringing new distributors into our company, which is the most vital part of our bloodstream. We bring new distributors in, we grow. It’s that simple. It’s that simple. And the company has built its whole reputation, its whole life, on recruiting.
But every time someone publishes this audio or video footage, Herbalife makes a bogus copyright claim and has it taken down. Continue reading