Posted by mazu on September 24, 19102 at 08:09:03:
In Reply to: HOST4INCOME WARNING posted by robert bowen on May 01, 19102 at 05:23:03:
Host4income is identical to the Skybiz set up that was set up in '99
If you haven’t heard of them over the past two years, don’t feel that you are missing out. Skybiz was one of the fastest growing MLM’s all time during late 1999 and early 2000. Why do I use the word “was”? Good question.
Skybiz was permanently shut down by the FTC in 2001 for being an illegal pyramid scheme. People that had already paid for sites are going to be able to keep them but only for one year and no one has been able to sign up since early 2002.
You see, MLM is a very legal way of marketing but there are a lot of companies out there that do it in an illegal way. The government has said that companies that offer real products and services have a right to be in business and pay people with an MLM pay plan. The only caveat to this is that the company has to have a real product or service. If they don’t, then they are toast.
People (including reps) in Skybiz know this but their argument has always been that Skybiz does have a product: Their web site and training. This may sound like a “case closed” situation but it gets a bit more complicated. The government also says that the company must not only have a real product as part of the company but that people would really buy that product without a compensation plan. This is where Skybiz really gets into trouble.
Would people buy the Skybiz product if it weren’t for the compensation plan? Not the sites that they first sold and not the sites that they sold when they were closed. This is where good companies don’t get into trouble. Most nutritional or telecomm companies have 50% or more of their customers as just product users anyway. That way there is no question that people are buying the product for the sake of the product, because they are!
The Host4income reps all say the same thing: it isn't an illegal pyramid scheme becasue there's a 'product' - the 'website'. The 'website' you need to recruit others.
Well, that's their downfall - it's just a website to recruit others. That's all Skybiz were relying on - and guess what? They're in jail.
If you want to talk to a real human being who knows this story inside out, talk to Matt at mazu:
Matt Gagnon
Mazu Publishing
(503)844-4864 x202