Avoid Telephone, Direct Mail, Mail Order, and MLM Promotion Company Scams
By John T Jones, Ph.D.
The world is full of people and organizations promoting illegal scams to suck your hard-earned money out of your pocket, bank account, or from your credit card account. Here are a few of them.
Envelope Stuffing Scams
Joe Simple reads an ad in a magazine or receives a letter that invites him to make money by stuffing envelopes. He sends in $40.00 for a kit and gets nothing in return.
Mary Blank reads a similar classified ad opportunity. She sends in $35.00 and gets a single sheet that tells her to place the same ad she responded to using her address as the money recipient. She is to then send out the same single sheet in reply.
April Think-Little sends for a mailing kit. She spends $53.00. She gets supplies and sends out the materials as instructed. No money comes in! She is told that nobody ordered from her mailings so there is no profit.
Billy Lee Dream-World sends out $65.00 for an envelope stuffing opportunity. He makes his mailings and then is told they were not done quite right and that there will be no pay but that he should try again.
Companies and individuals promoting these scams are operating illegally. The Federal Trade Commission has targeted the larger envelope stuffing schemes. It has leveled charges against numerous work-at-home schemes throughout the United States.
Nigerian E-mail Scam
I call this the Nigerian Scam but other countries have joined the party. Montreal Canada is a world center for scam generation. If you get an e-mail, a letter, read a classified ad, or get a telephone call from some strange character in some overseas place offering you a take of millions, RUN LIKE HELL!
When we lived in Arizona a neighbor use to call me and say something like, “John! I’ve just won $100,000.00 from Readers Digest!”
I would say, “Now, Pearl, don’t do anything! I’ll be right over!” (Although she has passed away, I’m not using her real name.)
She would tell me she got a call from Montreal and that all she had to do was send $2500.00 to get her big prize. I would call Readers Digest and the Canadian Government’s scam hunters and then tell her not to send any money because it was a scam.
The Nigerian Scam goes like this. Abdul Mahogany sends you an e-mail and tells you that his great uncle was a government official who died in jail. His uncle held large amounts of cash in a Swiss bank. To get the money from the Swiss account, Abdul would have to travel to Switzerland and have the money transferred to an account in the United States. Abdul will give you half of the zillion dollars if he can transfer the money to your account. All he needs is YOUR BANK ACCOUNT NUMBER AND THE TRANSFER NUMBER TO YOUR BANK (which he can get on his own once he has your bank account number)!
Abdul does not go to Switzerland (except for skiing on his winter vacation). Abdul does not have money transferred INTO your account. Abdul does transfer money out of your account into his. ABDUL EMPTIES YOUR ACCOUNT. You are furious and humiliated. You call your bank, the Chamber of Commerce, the police, and even the FBI. And what are they able to do? NOTHING! You have been had.
The Internet is full of sites covering the Nigerian Scam. There is a good cartoon at http://tinyurl.com/ke3qq
Direct Mail Scams
One thing about mail scams is that the United States Postal Service takes action against such scams. For example, see http://www.usps.com/judicial/1982deci/12-118d.htm where the Service took action against Group One Communications of Jensen Beach, Florida. The Service took almost every line of their mail promotion and declared it false advertising. Here is the final judgment: “Therefore, I conclude that Respondent is engaged in conducting a scheme for obtaining money through the mail by false representations in violation of 39 U.S.C. § 3005 and that a False Representation Order, substantially in the form attached, should be issued against Respondent.”
I got a letter one time with an offer and I asked the local postmaster if the offer was legal. He said that legal or not the offer would not bring income to anyone. They do not pursue every complaint. They go after the big guys.
I questioned an MLM program once on its legality and I was told that because the monthly fee was so small ($7.00) that the program would be too small potatoes for the federal government to investigate in the near future. They are working on the big stuff.
MLMs and MLM Promotion Scams
Some MLMs are scams in themselves. I was in one once where the federal government shut it down as a simple pyramid. The operators were required to pay back the money collected. However, the operators were allowed to pay the money back in merchandise. This was good for them because they could buy a fishing pole from China for $3.95 and get $150.00 credit for providing the merchandise. Thus if they owed you $300.00 they could give you a fishing pole and a cheap pair of binoculars worth a total of $13.95. How in the heck they got away with that I’ll never know.
The particular MLM was one of those Right Leg / Left Leg varieties. My Right Leg was growing like crazy but I could never get enough new members in the Left Leg to make one penny. So who was getting the monthly profits from the Right Leg? Why the big shots at the top. They could keep the program solvent with that money.
I’m in an MLM now that doesn’t have that kind of payout. Still, you can lose your shirt by paying promotion companies to promote for you.
A friend of mine told me he used a promotion company to get him new members in an MLM. He paid over $800.00 for the promotion company to make a mailing of 1000 for him which they did. He got 10 new members. That is a 1% return and any direct mail operator can get rich on such a return if he charges enough for his service or product. See [http://tinyurl.com/s6xf8]
Then my friend paid the promotion company to mail 4000 more. He expected 40 new members. Nothing happened!
He told me that he contacted the promotion company and they first told him that he had “missed the mailing” (a group mailing). Next they told him that the mailings were “actually made” but the return was zero. Instead of getting 40 new members as expected, he lost over $3500.00. I’ve advised him to contact his state’s Attorney General for restitution and to see what the Small Claims Court requirements are in his state.
A good rule for MLM and Direct Mail operators is this: Never pay a promotion company or a print and mail company to make mailings or place classified ads for you. You have no control over what happens after you pay them.
Many people who could have made it in an MLM or Direct Mail programs have lost their capital before they could really get started.
Making a First Class direct mailing yourself cost about $600.00 per thousand. Promotion companies and print and mail firms make money by charging you above the mailing cost. They typically charge as much as twice the actual mailing cost.
The mailings are often sent by Third Class and some seldom send out mailings when they say they will. You can wait for months for your mailing results instead of two weeks from you own First Class mailings.
Some promotion companies may be making more money on their promotion activities than in the MLM they are supposedly working. However, they are gaining members at your expense so they are successful on two fronts, the MLM income and their promotion income.
Promotion companies are in the same program as you are. They are your competition. Never give your competition a break by paying for their leads. Promotion companies are actually curtailing your promotion activities by draining your capital.
Shared leads from group mailings or group classified ads are controlled by the print and mail or promotion company, not you.
Placing your own classified ads means that the leads generated are yours and not shared with somebody else.
I’ve seen folks in MLM spend thousands of dollars for promotion when they could have used a simpler approach and made money. MLM is tough enough without having your money skimmed off by a promotion company that promises you the moon and gives you the shaft.
Direct Mail Gifting Programs
An informal but pretty comprehensive description of Gifting Programs is given at http://tinyurl.com/haou8 I get these programs in my mailbox every week. Typically you join a club for a fee. Then you send out the same offer but you get nothing for your first member. His contribution goes to your sponsor, not you. After that you collect money as gifts. These programs are illegal even if some product is given to the member on joining. I’ve talked to people who have been in these programs. They are not rich as described but instead very disappointed.
Katrina brought out the scammers by the thousands. Scammers often use good causes to bilk you of your money. If some one calls me on the telephone and says that he is from the Benevolent Variety of Police Charities, I hang up.
There are many web sites that use scams to bring you to their site so that they can sell you their “safe” programs. Therefore, you have to be alert even when you are looking for scam information. By fighting scam Internet operators gain a lot of customers. I have a personal friend that does this. At any rate, even these sites can give you good anti-scam information. One site is http://www.scambusters.org/ You can read about the Katrina scams there.
The old saying is If something seems to be too good to be true, it is too good to be true!
We have to be alert to everything that is going on.
We have to watch what we read on the Internet, the letters we get in the mail, and the telephone calls we get while we are trying to watch reruns of Bonanza.
If you suspect something is fishy, then make a search on the Internet for complaints against the company or program. Ask your postmaster about it if it comes in the mail. Check with your banker or the Chamber of Commerce in your town.
Before you join any new program, make a search on the Internet using key words such as scam, complaint, the name of the program, etc.
Most scammers are in a hurry to get you when they use the telephone. Never give these crooks one inch. Hang up!
Never ever take money out of your bank account for a scammer (stranger) nor ever give your bank account number to anyone whatsoever no matter who they say they are. Never ever give anyone your social security number on the Internet or on the telephone.
Make sure your computer is secure. Use your privacy system to warn you if you want to email your telephone number or any other personal information. Talk to your banker about how to protect your accounts.
The Attorney General of your state has information on all kinds of scams. Go to your state’s web site and give the Attorney General’s office a call when you have a complaint or when you have a question on a possible scam.
I was overcharged for months by a telephone company. They refused to give me back my money. It took me a while to get my money back but the Attorney General of Arizona, who is now the Governor of Arizona, got every cent of my dough back. Dealing with the telephone company was a pain but when I told the Attorney General’s office they were not cooperating, the hammer came down. I got my money!
copyright©2006 John T. Jones, Ph.D.
John T. Jones, Ph.D. (email@example.com), a retired college professor and business executive, Former editor of an international engineering magazine. To learn more about Wealthy Affiliate University go to his info site. If you desire a flagpole to Fly Old Glory, go to the business site.
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