I've Found a Ponzi Scheme-What do you think I should do?

Last Update: August 31, 2019

A product developer politely reached out to me this week and gave me a review copy of their product. It's a $5000 product that is very popular in the make money online space.

I told them I'd go thru the product and give an honest review, but I would not consider the free copy of the product as a reason to slant my review one way or the other. They said they'd appreciate my honesty, so I was given a username and password to go thru the course. I've been going thru the product since yesterday, and I think I'm quite confident I've found a ponzi scheme!

It's probably 10 hours of content in total with access to a community.

From the beginning, I was very put off by the product because of the way it's marketed in typical "guru" fashion. He is constantly throwing money around, talking about how he makes $20,000+ per day, and showing his cars and houses. I tried being open-minded about it though because I understand some people market that way because they know it catches attention, and I get that.

I don't agree that's what's necessary to capture attention, but some people feel that's what THEY need to do, so I decided to be open-minded. Going into the product, I was surprised that the same behavior in the sales funnel isn't inside. There isn't the constant showing of money, cars, and houses although you do hear over and over that "I make more than $20,000 per day".

Despite the "bragging", I decided to continue to be open-minded and look for technical skills and whether or not the end user would have their goals achieved.

How I Evaluated the End User's goals

In the marketing material, the funnel is targeted at:

  • People who want lifestyle freedom
  • People who want to learn affiliate marketing
  • Look-alike audiences of Toni Robbins, Dean Graziosi, Grant Cardone, and others
  • People who want to learn to market their businesses online (regardless of niche)
  • Paid advertising (no organic methods are taught or marketed)
  • With special attention to people who want to learn a quick method for business growth

As a result, I was able to see that the target audience would likely be people who:

  • Are looking for a first career or career change
  • People who have heard of affiliate marketing, but who want to learn how to master it
  • People who might be looking for investments or passive income
  • Those who have existing businesses and want to learn how to use the internet to get more customers

With this in mind, I decided to evaluate the program based on the criteria of whether it would help the end user to get passive income, to successfully establish themselves as affiliate marketers, and whether they'd learn how to run the business as an investment or passive income.

My Findings

The course marketed that it would teach you:

  • How to set up a website
  • How to set up a sales funnel
  • How to get traffic using solo ads, Google ads, Facebook ads, and Youtube ads
  • and, How to sell to the traffic and make money

At first glance, I think newbies would not know how much money would be required to implement this strategy, but by looking at the curriculum, I can see this method would cost more than most peolpe have in liquid cash.

Ads cost. The funnel software he's recommending costs. Hosting costs (because he introduced a hosting alternative). I think the product developer should be more transparent about the prerequisite startup capital that would be needed because you'd probably need more than $400/mo for several months to master the methods.

Going further into the course, I watched the material on setting up a website and this is where things started getting phishy. You're taught to take a clone of his website and upload it to your website C-Panel. The alternative is you'd take a clone of his funnel and upload it into Clickfunnels. You don't learn how to make a website of your own, the psychology behind whhy he's placed elements where he does, copywriting or anything of the sort.

Everyone graduating the course will have the same identical website. That's ponzi scheme red flag #1.

Going further, I watched the content about setting up the ads, and he gives you the exact keywords, the exact ad copy, and you simply copy and paste the ads and drive the traffic to your website (which is a clone of his). You apply this same copy-paste technique to Google, Facebook, and Youtube. Ponzi scheme red flag #2.

Then, when I looked into the community to see how students are coming along, I see students saying "I set up solo ads using the email copy we're given but got no sales" and other students are replying the same way. Ponzi scheme red flag #3.

What I Suspect

At points, he would be very transparent. He said it took him 4 years to make his first affiliate commissions. He tries to inspire perseverence, and he shares personal stories of his failure, but that's after many lessons where you're given the impression that this can be quick and easy, and lots of anomaly testimonials where people make 7 figures/year and it's unclear how long they got there.

If you're not familiar with the growth phases in business online, you'd probably be very confused asking, "Should I expect to be the anomaly who makes 7 figures in my first year or the one who doesn't make a dollar in 4 years?". Being honest, who goes into a venture expecting to fail for years?

As a result, I think most people hearing his stories would walk away with the "get rich quick" expectation because he emphasizes that possiblity much more often.

People will Likely be Disappointed

I'm confident that a person who is looking to market their own business, sell their own product, or do anything other than sell this product would be sorely disappointed. As a WA alumni, I could pick up nuggets here and there because I have skills that could fill in the blanks like:

  • Website development and design
  • Copywriting
  • SEO
  • Traffic generation with paid ads
  • Etc.

I'm confident that people without those skills would likely be lost, and I'm also quite sure a large percentage of those who buy the course would probably expect to walk away knowing how to build their own brands, sell their own products, and drive traffic in ways that's transferable to multiple business ventures.

What Would You Do?

I know the product developer is going to personally reach out to me at the beginning of the week. What do you think I should do?

  • Tell him I think his product is a Ponzi scheme?
  • Report him to the Federal Trade Commission without giving him the benefit of the doubt?
  • Give him the benefit of the doubt, explain my findings, and hold him accountable to make changes, or else report him?
  • Say it's not my job to correct his ethics and ignore the whole situation?
  • Sound the alarm with a review and ignore the product developer?

What would you do? It's a privilege that he reached out to me, but people are definitely spending $5000+ and losing money and I can see this happening much more if I don't say or do anything.

I look forward to hearing back from you all. Your advice here is always golden.

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MarkStuart Premium
I think you've made a start by this post, Tiffany. Your question is not a simple one; where is the line drawn? Too much of online business promotion is questionable, but there are some very effective programs in both systems and teaching, and even the good ones often stray a little off the straight and narrow in how they present their offers.

I have my own thoughts and have blogged in the past to alert to the possibility of frustration, cost and disappointment. That said, I will not presume to advise on how you handle the issue. Each option comes with pros and cons.
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TDomena Premium
I agree. It's a tough call. Thanks for sharing your views.
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merlynmac Premium
Be honest. That's all you can do. You might want to let him know that he should market his templates as templates and not, do this exactly, as that's what creates the same site and same ads for everyone. They need to be customized so they differ from others.

I agree that costs should be disclosed to people before they shell out that kind of money for a program.

Have you reached out to them with your concerns? Maybe they have answers or a different point of view you haven't considered? Just a thought but worth a quick "hey" message.
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TDomena Premium
It's like you're payng to learn how to be a salesperson of his. It's sad. I'll definitely take what you've said into consideration.
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EHozubin Premium
My gut feeling is that it is a money making scheme for HIM and not for the people that he signs up!
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TDomena Premium
You could be right.
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Joes946 Premium
#3 or run! I've been around those before.
Good luck

Joe
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TDomena Premium
You're so funny! Let's see what I do.
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NnurseBecca Premium
Follow your heart T! I have full confidence you will find a way to make a great impact and the world a better place
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TDomena Premium
Thanks so much! I appreciate the support.
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