Friday, September 22, 2017

Commentary: Is LuLaRoe eating its own tail?

Recently, multiple news outlets reported several disturbing reports that LuLaRoe is not only rescinding money back policies, but also threatening to sue a blogger critical of its operations to obtain information that it claimed were "proprietary".  This has raised questions about why would a company with claimed 80000 reps would turn on its reps like this.

First, multiple TV stations reported that local reps are worried when LuLaRoe rescinded its no-fee 100% money back and free return shipping policy, which has only been in effect for a month. Instead, reps are to use the regular return channel, which only return 90% of price, but also have to pay shipping.

According to reps, the inventory you get from LuLaRoe is like hitting a lottery, as you cannot specify designs, merely quantity and size. Similar to collectible card games. Certain rare patterns sell quickly at inflated prices on eBay or such, while the rest languish in rep's stock, until the rep either liquidate them on eBay and give up, or try to go through the buyback process. There are rumors that up to 4000 cases of refunds are pending, and people have been waiting for months

And unlike other MLMs, LuLaRoe's startup costs are extremely high, as much as 5500 dollars to start, and if rep can't sell them, often the advice one gets from rep's upline is "order more!"  Some reps claimed you need about 15000 in inventory and markup of over 40% to earn a profit. And if you get a bunch of duds from the factory order (remember, it's random), you will have to arrange a trade with a different rep... if you can find someone who wanted your duds and trade you something they considered duds.

One blog that exposed such practices, and other complaints about LuLaRoe from disgruntled customers and reps was Christina Hinks, better known as MommyGyver online. And after publishing many such complaints, including documents shared online by such, Hinks has been served with a "discovery petition" from LuLaRoe demanding that she...

...disclose the identity and contact information of potential defendants who have damaged LLR and its goodwill by providing Respondent with LLR's confidential and proprietary business information, information about LLR and its merchandise, and false, derogatory information regarding LLR, much of which respondent has posted on her blog,
The interesting thing is much of the information had already been shared online via various social media platforms.

LuLaRoe so far has yet to comment about this potential SLAPP suit, though they did respond to the change in return policy (which is technically against their own company policy that changes in return policy must be announced for 30 days before it can go into effect). LuLaRoe's statement claimed the policy was always 90% buyback. The "improved" 100% buyback and free shipping was merely a temporary "waiver".

Tuesday, September 19, 2017

Scam Tactic: Moving the Goalpost (aka Special Pleading)

Moving the goalpost is very simple to explain with a single image:

Moving the goalpost, courtesy of zapiro @
If someone moves the goal post, you'll never to be able to score a goal.

So what does that have to do with scams? Two ways:

1) when scammers promised one thing, then moved the goalpost with some excuses, or

2) when scam deniers tried to deny the evidence of the scam by moving the goalpost.

Scammer Moving the Goalpost

Scam companies that promise an IPO (initial public offering) while offering stocks or options to affiliates are known to move the goalpost because the IPO either will never take place, or takes place but were completely useless.  One such example was Wantong Miracle 萬通奇跡 scam in China, where a known scammer who launched multiple scams in China AND in the US seem to have finally been arrested by Chinese authorities.

Some suspect that recent attempts by Visalus to roll back the promised "founders equity incentive plan" may also be "moving the goalpost" after one side had already satisfied the requirements, only to be met with even MORE requirements from the other side or lose the supposed equity incentive they have gained, that a judge had to issue a restraining order.

OneCoin, which has been accused by multiple regulatory bodies on multiple continents of being a scam or a suspect scam, has repeated changed or delayed its IPO or ICO (depending on when you asked).  In January and February 2017, OneCoin announced they will go IPO in "early 2018", then the date was moved to July 2018 according to a Chinese website on OneCoin. However, in September 2017, the news completely changed. Instead of IPO, affiliates of OneCoin claimed that OneCoin will conduct an ICO (initial coin offering) instead, and it will not be until October 2018. That's at least THREE delays in less than a year, and it's ALWAYS a year away.

"Always delay the day of reckoning" is a standard bull****er tactic.

Let's go onto our next topic, scam denier moving the goalpost

Thursday, September 7, 2017

Even "Hedge Fund of the Year" Got Tricked By Ticket Ponzi Scheme

A sports talk show radio host claims he has access to an almost unlimited amount of discounted major sports tickets, and he needed a lot of money to buy them in order to share the profits. Do you believe him?

A "hedge fund of the year" with 18 billion assets did, and it appears they have lost $4.3 million they put into two companies controlled by this talk show radio host.

You may think who'd believe this sort of stuff, or how can they be this stupid, but really, think about it...

Hedge funds, esp. fund of the year are NOT stupid.

However, there's no doubt that this is a ponzi scheme... When the Feds arrested the radio talk show host and uncovered a trove of communications between him and his co-conspirators, as well as evidence of his millions in gambling debt.  Robbing Peter to pay Paul is the very definition of Ponzi scheme. This radio talk show host, who co-hosts with a VERY famous former NFL celebrity, had been accused with running this scheme.

Yet you can see this sort of argument proliferate in the "make money fast" market, and promoters use the language of "this can't possibly be a scam because it associated with _____", and this guy has it in spades. A famous hedge fund gave him millions of dollars. He co-hosts a show with a celebrity. He can't possibly be a scammer, right?


Lesson to take away: when someone tries to sell you something on reputation only, think VERY VERY HARD on it. The risk is probably much higher than you think.

Saturday, September 2, 2017

How to spot truth in sea of lies, rumors and myths

Spotted this in the Lifehacker archives (originally published 2012) but it's still relevant

The internet is full of crap. For every piece of reputable information you'll find countless rumors, misinformation, and downright falsehoods. Separating truth from fiction is equal parts a mental battle and diligent research. Here's how to make sure you never get duped.
As long as words are hitting the page, news and facts are filtered through someone. Sometimes this is a ludicrous rumor that somehow morphs into a fact, or even just a small tip that doesn't work at all. Filtering out the junk from the facts is hard, but it's not impossible.

Friday, August 25, 2017

IPro Network One Month Update: still no proof of any original claims

More than a month ago, I highlighted some spurious claims by (over-)enthusiastic IPro Network members claiming that some famous personalities have "endorsed" IPro Network.

Two anon comments were left claiming I know nothing, blah blah blah, but left NO evidence to rebut any of the observations. I invited them to leave publicly verifiable evidence, not "I know the secret call me" or "my friend told me" evidence.

It has been about a month, and I haven't gotten a single reply.

So I decided to go search for some myself. Is there any news that Kevin Harrington endorses IPN?

Google says... nope. Indeed, there is ZERO mention of Kevin Harrington with ANY sort of cryptocurrency or blockchain opportunity in the entire 2017 when searched via Google News.

Instead, it appears that in 2017, Kevin Harrington is jumping into soap, cannabis, marine phytoplankton (sea scum), and horse racing, not to mention lending his name to entrepreneur bootcamps and invention services. But nothing about cryptocurrency, and definitely not IPN.

Indeed, the ONLY webpages that mention Kevin Harrington and IProNetwork together are IPro Network members webpages (or social media) and event listings that mention his one-time appearance.

Yet this tweet is still there:

And here's a claim that Kevin Harrington has "JOINED" with Pro Currency Team (i.e. IPro Network)

"Kevin Harrington from the Original hit TV show (Shark Tank) Joins
With Pro Currency Team (IProNetwork)..." claims G+ post

I am still waiting for the evidence, guys.

Thursday, August 24, 2017

MLMSkeptic Investigates: Why is Valentus illegal in the UK? (it's the ingredients)

Recently, it was all over the news (cite 1) (cite 2) (cite 3) that former finalist for Miss England and FHM model Charlotte Thompson was "busted" selling 'slimming coffee' and got a visit from the UK Trading Standards Officers and told to stop her business.  She went online to vent. But what you won't find in these news articles is WHY did Trading Standards make a visit to her home?

MLMSkeptic investigates this little conundrum, by exploring what Valentus did in the aftermath passing blame, then check the sources from Valentus itself, and the statements by Ms. Thompson, then checking the relevant UK laws and interpretations, to see if there is ANY hope for Valentus, in UK, and in rest of Europe.

Recently, when forced to address the issue, Valentus corporate "Director of International Registration", Terry Recknor, gave a webinar.  Ms. Recknor initially blamed Ms. Thompson for spamming thousands of people, implying that was the reason for the visit from Trading Standards, but she soon dropped this bomb:
What you need to understand is, the products technically are illegal because we’re not registered yet.
This seems to imply that as soon as Valentus registered their products in the UK, then there would be no more problems. In the meanwhile, there are suggestions that recruitment in UK and rest of Europe are continuing as if nothing was wrong, despite warning from Ms. Thompson that dealing in Valentus is apparently illegal.

So, what is the truth? Let's investigate first, what does UK Trading Standards actually do?  In the case of their visit to Ms. Thompson, it is to offer:

  • Business advice: Trading standards offer a range of business advice and enforcement policies for all traders and businesses. These range from issues regarding licensing to consumer protection laws.

So presumably, when you combine the various statements given by Ms. Thompson, Ms. Recknor, and explanations, one should conclude that

  • Valentus SlimRoast coffee needs to be registered in UK
  • Lack of registration is a violation of consumer protection laws
  • Ms. Thompson's spam alerted Trading Standards to let her know

But is this true?  Searching UK Food Laws (Food Safety Act 1990, Food Standards Act 1999, and Food Hygiene Regulations 2006) brought up nothing about registering coffee or similar drink mixes and such.  There had to be a different reason.

Which brings us back to "consumer protection", and what other areas does that cover. This was made clear at a different Trading Standards page:

We make sure that people are not misled by claims, prices, descriptions and other selling techniques used by traders when they are selling goods and services.

As it wasn't about registration, let us investigate whether Valentus made any misleading claims. But what constitutes misleading claims under UK law? As SlimRoast is about weight loss, I googled "weight loss claim UK", and that brought me to Advertising Standard Authority, or and their guidance on slimming guidelines for the press (PDF).

Tuesday, August 22, 2017

MLM Basics: Why do so many MLM noobs don't understand "referral sales" is illegal?

It seems an MLM noob is very fond of her comp plan, which she described as
... I can find 3 people who also want sustainable <item> my order is then FREE
She doesn't realize that this is ILLEGAL. Yes, I said it. It is ILLEGAL.

This is called "referral sales", and it can be described as

  1. Seller offer to prospective buyer a consideration (discount / rebate / commission, etc.) 
  2. for a sale (or lease) of item from seller to buyer
  3. the buyer must provide sellers list of potential customers
  4. the consideration (see 1) is contingent on seller be able to make additional sales/lease to one or more of the potential customers (see 3)

And all four elements are in the quote found earlier. Let's check it again, with the elements highlighted.
... I can find 3 people (3) who also want sustainable <item>(4) my order (2) is then FREE (1)
And yes, this is ILLEGAL. In all 50 states of the US, and in all European countries, and Australia, and so on and so forth.

And you'd be surprised how many companies engage in this ILLEGAL behavior, and its affiliates are completely unaware they are being defrauded.