surfer
March 11th, 2007, 09:45 AM
Dave Lieber just released a follow up article
to his original write up from May 2006 titled
Web sites help rate online investments. (http://www.matrixwatch.org/forums/showthread.php?t=4346)
Site ends up a bad investment (http://www.star-telegram.com/202/story/33111.html)
By Dave Lieber
Star-Telegram Staff Writer
He invested $190 on an Internet site that promised he would double his money every two or three months. But Michael Hurley says he never saw a penny.
The New Jersey man may be among thousands of people worldwide who will lose money now that one of the Internet's largest investor plans has collapsed. The program, Success Through Advertising, had more than 24,000 investors in 143 countries, one of its top executives told me a year ago.
But the program closed March 1, Kim Inman, its owner and founder, announced in a recent conference call to investors.
In that call, according to a recording I listened to, Inman said his venture ran out of money.
He is considering bankruptcy, he said.
Ironically, the Internet may have contributed to the demise.
When I wrote about the program a year ago, I could find no report in a newspaper or other publication scrutinizing the venture. But investors had come together to share critical information on various consumer Web sites.
The program, which debuted in 2002 as Your Money Machine Success System and is registered offshore, began by offering investors the chance to double their money every two or three months.
The system involved buying "wholesale advertising credits" for retail advertising space on the program's Web sites. Every time a new member joined, the member who did the advertising got paid, an early Web site for the program explained.
Critics called that uncomfortably close to the definition of a pyramid scheme: They said some investors got paid for getting others to invest. And some disgruntled investors shared complaints on Web sites.
Success Through Advertising Chief Operating Officer Mike Hamilton told me last year that Inman's program had "paid out $100 million over the course of three years" to investors. Many investors only got paid periodically, he acknowledged. But he said he intended to create a more regular payment schedule.
He also said the program was getting a new name and focus.
Billed as "the next generation of advertising," the program would reward investors who promised to view Internet advertising for 30 minutes each day, Hamilton said. They would get a percentage of ad sales by supporting the Web site, writing product reviews and providing feedback to advertisers, company officials said.
Critics wondered how such a business could turn a profit.
But Hamilton told me that the critics would be "silenced by actual results."
Now Hamilton finds himself silenced. He told me in a voice message last week that he wanted to talk but that Inman told him not to.
Hurley and others say the program may have had problems finding new investors because of the complaints that disgruntled investors shared on several Web sites. One that Hurley found was MatrixWatch.org, which offers message boards about supposed moneymaking opportunities and advises investors on how to file complaints.
"I read horror stories of people who lost homes, money, family and friends," he said. "I became incensed."
MatrixWatch.org members say that, according to their registry, they have located 186 people who report losing $1.1 million. They want to know where the money went.
In his conference call, Inman, who lives in Indiana, said he was likely to "lose everything I own."
Speaking in a choked-up voice punctuated with sighs, Inman said, "We did the best we could." He insisted that everything he did was legal and ethical.
In the meantime, MatrixWatch.org members have traced Mike Hamilton to leadership positions in two new Web ventures that offer similar advertising-investment programs -- cpago.com and usadubli.com.
MatrixWatch.org will continue to monitor them and other Internet business ventures, members said.
"We try to create a single place where everyone can go to get their information," member Josh Dion of New Hampshire told me.
"It's really empowering the people," said John Kachurick, a volunteer who runs it. "A single person can't do a lot. But our motto is, 'The more people you get together, the more power you have.'"
IN THE KNOW
Before you invest
Be forewarned, the Federal Trade Commission says, if a multilevel marketing plan, also known as "network" or "matrix" marketing, offers to pay commissions for recruiting new distributors.
The FTC suggests:
Beware of plans that ask new distributors to buy expensive inventory.
Distrust plans that promise enormous earnings.
Don't pay anything or sign any contracts in a high-pressure sales meeting. Insist on taking the 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 Internet research.
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.
SOURCE: Federal Trade Commission
News researcher Marcia Melton contributed to this report. The Watchdog column appears Fridays and Sundays. Dave Lieber, 817-685-3830
to his original write up from May 2006 titled
Web sites help rate online investments. (http://www.matrixwatch.org/forums/showthread.php?t=4346)
Site ends up a bad investment (http://www.star-telegram.com/202/story/33111.html)
By Dave Lieber
Star-Telegram Staff Writer
He invested $190 on an Internet site that promised he would double his money every two or three months. But Michael Hurley says he never saw a penny.
The New Jersey man may be among thousands of people worldwide who will lose money now that one of the Internet's largest investor plans has collapsed. The program, Success Through Advertising, had more than 24,000 investors in 143 countries, one of its top executives told me a year ago.
But the program closed March 1, Kim Inman, its owner and founder, announced in a recent conference call to investors.
In that call, according to a recording I listened to, Inman said his venture ran out of money.
He is considering bankruptcy, he said.
Ironically, the Internet may have contributed to the demise.
When I wrote about the program a year ago, I could find no report in a newspaper or other publication scrutinizing the venture. But investors had come together to share critical information on various consumer Web sites.
The program, which debuted in 2002 as Your Money Machine Success System and is registered offshore, began by offering investors the chance to double their money every two or three months.
The system involved buying "wholesale advertising credits" for retail advertising space on the program's Web sites. Every time a new member joined, the member who did the advertising got paid, an early Web site for the program explained.
Critics called that uncomfortably close to the definition of a pyramid scheme: They said some investors got paid for getting others to invest. And some disgruntled investors shared complaints on Web sites.
Success Through Advertising Chief Operating Officer Mike Hamilton told me last year that Inman's program had "paid out $100 million over the course of three years" to investors. Many investors only got paid periodically, he acknowledged. But he said he intended to create a more regular payment schedule.
He also said the program was getting a new name and focus.
Billed as "the next generation of advertising," the program would reward investors who promised to view Internet advertising for 30 minutes each day, Hamilton said. They would get a percentage of ad sales by supporting the Web site, writing product reviews and providing feedback to advertisers, company officials said.
Critics wondered how such a business could turn a profit.
But Hamilton told me that the critics would be "silenced by actual results."
Now Hamilton finds himself silenced. He told me in a voice message last week that he wanted to talk but that Inman told him not to.
Hurley and others say the program may have had problems finding new investors because of the complaints that disgruntled investors shared on several Web sites. One that Hurley found was MatrixWatch.org, which offers message boards about supposed moneymaking opportunities and advises investors on how to file complaints.
"I read horror stories of people who lost homes, money, family and friends," he said. "I became incensed."
MatrixWatch.org members say that, according to their registry, they have located 186 people who report losing $1.1 million. They want to know where the money went.
In his conference call, Inman, who lives in Indiana, said he was likely to "lose everything I own."
Speaking in a choked-up voice punctuated with sighs, Inman said, "We did the best we could." He insisted that everything he did was legal and ethical.
In the meantime, MatrixWatch.org members have traced Mike Hamilton to leadership positions in two new Web ventures that offer similar advertising-investment programs -- cpago.com and usadubli.com.
MatrixWatch.org will continue to monitor them and other Internet business ventures, members said.
"We try to create a single place where everyone can go to get their information," member Josh Dion of New Hampshire told me.
"It's really empowering the people," said John Kachurick, a volunteer who runs it. "A single person can't do a lot. But our motto is, 'The more people you get together, the more power you have.'"
IN THE KNOW
Before you invest
Be forewarned, the Federal Trade Commission says, if a multilevel marketing plan, also known as "network" or "matrix" marketing, offers to pay commissions for recruiting new distributors.
The FTC suggests:
Beware of plans that ask new distributors to buy expensive inventory.
Distrust plans that promise enormous earnings.
Don't pay anything or sign any contracts in a high-pressure sales meeting. Insist on taking the 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 Internet research.
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.
SOURCE: Federal Trade Commission
News researcher Marcia Melton contributed to this report. The Watchdog column appears Fridays and Sundays. Dave Lieber, 817-685-3830