The Gifting Scheme: “Whenever someone feels the need to tell you that their system is honest and legal, you need to be worried.”

Give money. Then get other people to give money. Then have those people go out and seek more donations. It could be a recipe for starting a charity. What if the idea is to grow the spirit of giving so that some of those gifts come back to you and make you fabulously  wealthy? Not bad, eh?  These get-rich-quick gains are generated by something called the “Real Results System,” which at worst appears to be a Ponzi scheme. The people behind the Real Results System actually would quarrel with the idea that their program is an investment. Dig into their Web sites (you’ll need a password supplied by one of their generous “gifters”) and you’ll find a section where “investment” is on a list of words that “participants must not ever use” when referring to the “activity.” The Real Results System is an invitation-only “one-up,” which is jargon for a type of pyramid scheme. The Real Results folks avoid any terminology that makes their plan sound like a marketing scheme, but they also avoid using any words that provide a clear understanding of how the system actually generates gains. If you get a Real Results invitation, you’ll be invited to join a conference call and you’ll be given a password to access the Web site. You can’t actually contact the system’s financial backers because they put no contact details on the Web sites; no one involved in establishing the Real Results Web sites answers e-mail requests for more information. The conference call makes it clear that you can’t actually ask questions live and that any questions you’ve got should be addressed to the person who invited you.What all of the conference-call speakers make clear is that this deal involves no sales, no marketing and no products. There’s just a pledge, a minimum of $500 to a maximum of $3,500. And then there’s the $100 annual fee, and there seems to be some software you should be purchasing to help you invite more people to join and give you gifts. For this, you get “unlimited cash flow for a lifetime.” “Whenever someone feels the need to tell you that their system is honest and legal, you need to be worried,” says Bryan Lantagne, director of the Massachusetts Securities Division. “And when they tell you not to call it an investment, that’s a major red flag.”

This entry was posted on Saturday, June 9th, 2007 at 9:33 am and is filed under Business, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.