jokach
May 26th, 2006, 12:42 PM
Reposted from:
http://www.dfw.com/mld/dfw/news/consumer_news/14673243.htm
Web sites help rate online investments
By Dave Lieber
Star-Telegram Staff Writer
Before you invest in an Internet get-rich-quick business, you should do your homework. Is the program any good? Are investors satisfied?
Your Money Machine Success System is one of the largest Internet investor plans, according to the Web site MatrixWatch.org. The plan now goes under the name of STA or Success Through Advertising.
The program allows investors, for an initial payment of $79.95, to buy "wholesale advertising credits" that equal what STA Chief Operating Officer Mike Hamilton says is $500 worth of retail advertising space on the program's Web sites.
Investors make their money by getting a percentage of advertising sales and by supporting the Web site with page views, product reviews and feedback to advertisers, he says.
Hamilton told The Watchdog in a telephone interview this week that STA and its predecessor companies have "paid out $100 million over the course of three years" to investors. He acknowledges past problems but says the company is re-creating itself to become "a major force in the Internet advertising community."
But MatrixWatch.org President John Kachurick calls the program "one of the biggest Internet schemes of all time." His Web site provides an online community for investors to share their stories about their successes or failures.
Some investors in YMMSS and STA have claimed losses between $10,000 and $50,000, he says.
STA founder Kim E. Inman of Indiana did not respond to my request, made through Hamilton, for an interview about the company, which is registered in Belize.
The dispute highlights the importance of using the Internet as a research tool before you buy into investment opportunities.
As best I can tell, no newspaper report scrutinizing YMMSS or its STA incarnation has been published. So if a potential investor tried to research this program through the mainstream media, nothing would turn up.
But type the program's name into an Internet search engine, and various Web sites detail numerous complaints by unhappy investors.
MatrixWatch.org leader Kachurick says that Web sites like his offer what he calls a new type of consumer movement for disgruntled people to connect.
"It's a movement against these schemes," he says. "We've created a victims register and allow people to contact us about their losses. We also help law enforcement find victims and add up the losses."
However, he says, he is unaware of any law enforcement investigation into STA.
Hamilton says that one reason for the high number of complaints found on the Internet is the type of people who invest in these programs.
"When you understand the mind-set of somebody trying to make a lot of money quickly on the Internet, and they believe they can make a lot of money without doing work, and they don't see that come to fruition, that's how they spend their time, complaining," he says.
He adds: "I knew there was going to be, in the short term, a lot of negative reaction, and I can live with that."
The company has 24,200 investors in 143 countries, he says. If you visit the Success Through Advertising Web site, you will find few ads in the various retail categories. But in mid-June, the company expects a rollout of its new business model, Hamilton says. Until then, he says, investors are holding onto their advertising credits.
Twenty-two percent of the money raised will cover overhead costs, including program development and administrative expenses, he says. The remaining 78 percent will go to investors in the form of payback on their initial investment and profits.
The company's Web site describes the payment method this way: Investors must spend "at least 30 minutes during the week prior to pay day visiting advertisers on our retail site or perform other functions, such as the writing of product reviews, that demonstrate a minimum level of support and participation."
That's the new business model for the program.
"It's painful going through a transition process that we're going through," Hamilton says. "But we're gearing ourselves for sustainability."
The original program created by Inman described a different payment method. "The 'immediate commissions' goal is achieved every time a new member joins because the member who did the advertising gets paid," an earlier YMMSS site explained. Investors get paid, it promised, "when new people hear about it and join."
Critics say that's the classic definition of a pyramid scheme. Investors got paid for recruiting others to invest.
"They keep rebranding it and keep making promises," says Kachurick. "I question everything about them."
But Hamilton says he is not worried about any negative attention:
"In the long run, that negativity will be silenced by actual results," he says.
Research assistance provided by news researcher Marcia Melton.
IN THE KNOW
Before you invest
Multilevel marketing plans, also known as "network" or "matrix" marketing, are a way of selling goods or services through distributors.
These plans promise that if you sign up as a distributor, you will receive commissions both from sales and from recruiting others to join.
"If a plan offers to pay commissions for recruiting new distributors, watch out!" the Federal Trade Commission warns on its Web site.
Under Texas law, it is illegal to offer a "pyramid promotional scheme," defined by the state as any plan that promises compensation "from a person's introduction of other persons to participate in the plan or operation rather than from the sale of a product by a person introduced into the plan or operation."
The FTC Web site suggests:
Beware of plans that ask new distributors to purchase expensive inventory.
Distrust plans that promise enormous earnings.
Insist on taking time to think over your decision. Talk it over with family members, knowledgeable friends, an accountant or a lawyer.
Do your homework. Check with the Better Business Bureau and the state attorney general, and do research on Internet sites.
The FTC says there are legitimate investment opportunities on the Web, as well as unscrupulous players.
"Sometimes, it's tough to tell the difference," the agency warns.
Dave Lieber's Watchdog column appears Sundays and Fridays. (817) 685-3830
http://www.dfw.com/mld/dfw/news/consumer_news/14673243.htm
Web sites help rate online investments
By Dave Lieber
Star-Telegram Staff Writer
Before you invest in an Internet get-rich-quick business, you should do your homework. Is the program any good? Are investors satisfied?
Your Money Machine Success System is one of the largest Internet investor plans, according to the Web site MatrixWatch.org. The plan now goes under the name of STA or Success Through Advertising.
The program allows investors, for an initial payment of $79.95, to buy "wholesale advertising credits" that equal what STA Chief Operating Officer Mike Hamilton says is $500 worth of retail advertising space on the program's Web sites.
Investors make their money by getting a percentage of advertising sales and by supporting the Web site with page views, product reviews and feedback to advertisers, he says.
Hamilton told The Watchdog in a telephone interview this week that STA and its predecessor companies have "paid out $100 million over the course of three years" to investors. He acknowledges past problems but says the company is re-creating itself to become "a major force in the Internet advertising community."
But MatrixWatch.org President John Kachurick calls the program "one of the biggest Internet schemes of all time." His Web site provides an online community for investors to share their stories about their successes or failures.
Some investors in YMMSS and STA have claimed losses between $10,000 and $50,000, he says.
STA founder Kim E. Inman of Indiana did not respond to my request, made through Hamilton, for an interview about the company, which is registered in Belize.
The dispute highlights the importance of using the Internet as a research tool before you buy into investment opportunities.
As best I can tell, no newspaper report scrutinizing YMMSS or its STA incarnation has been published. So if a potential investor tried to research this program through the mainstream media, nothing would turn up.
But type the program's name into an Internet search engine, and various Web sites detail numerous complaints by unhappy investors.
MatrixWatch.org leader Kachurick says that Web sites like his offer what he calls a new type of consumer movement for disgruntled people to connect.
"It's a movement against these schemes," he says. "We've created a victims register and allow people to contact us about their losses. We also help law enforcement find victims and add up the losses."
However, he says, he is unaware of any law enforcement investigation into STA.
Hamilton says that one reason for the high number of complaints found on the Internet is the type of people who invest in these programs.
"When you understand the mind-set of somebody trying to make a lot of money quickly on the Internet, and they believe they can make a lot of money without doing work, and they don't see that come to fruition, that's how they spend their time, complaining," he says.
He adds: "I knew there was going to be, in the short term, a lot of negative reaction, and I can live with that."
The company has 24,200 investors in 143 countries, he says. If you visit the Success Through Advertising Web site, you will find few ads in the various retail categories. But in mid-June, the company expects a rollout of its new business model, Hamilton says. Until then, he says, investors are holding onto their advertising credits.
Twenty-two percent of the money raised will cover overhead costs, including program development and administrative expenses, he says. The remaining 78 percent will go to investors in the form of payback on their initial investment and profits.
The company's Web site describes the payment method this way: Investors must spend "at least 30 minutes during the week prior to pay day visiting advertisers on our retail site or perform other functions, such as the writing of product reviews, that demonstrate a minimum level of support and participation."
That's the new business model for the program.
"It's painful going through a transition process that we're going through," Hamilton says. "But we're gearing ourselves for sustainability."
The original program created by Inman described a different payment method. "The 'immediate commissions' goal is achieved every time a new member joins because the member who did the advertising gets paid," an earlier YMMSS site explained. Investors get paid, it promised, "when new people hear about it and join."
Critics say that's the classic definition of a pyramid scheme. Investors got paid for recruiting others to invest.
"They keep rebranding it and keep making promises," says Kachurick. "I question everything about them."
But Hamilton says he is not worried about any negative attention:
"In the long run, that negativity will be silenced by actual results," he says.
Research assistance provided by news researcher Marcia Melton.
IN THE KNOW
Before you invest
Multilevel marketing plans, also known as "network" or "matrix" marketing, are a way of selling goods or services through distributors.
These plans promise that if you sign up as a distributor, you will receive commissions both from sales and from recruiting others to join.
"If a plan offers to pay commissions for recruiting new distributors, watch out!" the Federal Trade Commission warns on its Web site.
Under Texas law, it is illegal to offer a "pyramid promotional scheme," defined by the state as any plan that promises compensation "from a person's introduction of other persons to participate in the plan or operation rather than from the sale of a product by a person introduced into the plan or operation."
The FTC Web site suggests:
Beware of plans that ask new distributors to purchase expensive inventory.
Distrust plans that promise enormous earnings.
Insist on taking time to think over your decision. Talk it over with family members, knowledgeable friends, an accountant or a lawyer.
Do your homework. Check with the Better Business Bureau and the state attorney general, and do research on Internet sites.
The FTC says there are legitimate investment opportunities on the Web, as well as unscrupulous players.
"Sometimes, it's tough to tell the difference," the agency warns.
Dave Lieber's Watchdog column appears Sundays and Fridays. (817) 685-3830