ZeekRewards – a Full Range of Biases and Conclusions

by louabbott on August 8, 2012

Here’s a truth about all reporting:

I interpret the news and that introduces bias.

Indeed, any commentary whatsoever about the news, by anyone, anywhere, anytime, introduces bias (intentional or not). The only way to not introduce bias is to present data with no comments, no trendlines, and no anecdotes. —Mish’s Global Economic Trend Analysis – (in my opinion, the best financial blog)

(In all cases on this page, emphasis is mine.)

When it comes to ZeekRewards, Zeekler.com’s paid advertising division, I am finding not only a full range of biases, but also radically differing conclusions, even from people considered real pros – even watchdogs – of our industry.

For example, here’s what Ted Nuyten posted on his blog just yesterday, August 5th, 2012:

Recently Business For Home got many questions if ZeekRewards is legit. Zeek Rewards has become a very large company getting ever-increasing attention, see below graph. Seems the company is attacked by many false rumors.

Short answer: We believe, in general, ZeekRewards is a legit company.

Rod Cook, the original “MLM Watchdog” said this on his “WATCH WATCH LIST OF SHAKY TO FLAKY COMPANIES = DANGER” dated Feb 4th 2012:

 ZEEK REWARDS has hired not one but two MLM law firms to pull them back from what was a sure meeting with the law!  They also hired a complan builder to work on building a system that does not look like gambling.  One of the major activities they are taking for protection is DISTRIBUTOR COMPLIANCE so that Distributors do not describe the Zeek opportunity as a ponzi scheme like they have been?  . . .I am leaving ZEEK on the Watch list so we can see how their compliance battles work.  I think we will see Distributors terminated over this (always bad) to protect the company.

This comment found at itsaboutyoursuccess.com takes a far stronger position and is unusually clear compared to most:

 James Carvin says:
April 24, 2012 at 6:34 pm

I have been approached by several people concerning Zeek Rewards and in every private meeting it was always about “double your money every two months.” In this last meeting not a word was said about the penny auction. This tells me that their time is about to end. It has been my experience that it takes the Attorney Generals some time to take action on any program they are considering. They need time to collect evidence and that takes up their resources so they only choose larger enterprises that are affecting more people. Zeek now has over 360,000 members, which is enough to hit their radar. I don’t think it will matter what they do to protect themselves on the corporate level when the marketers are out there presenting it this way. The conversation took the course of, “We’ll do this for a while longer and then withdraw while we can. It’s a gamble. We know it.”

Personally, I find this mentality appalling. Do they not realize that they are profiting on the ill fortune of the masses? It is the same thing as stealing. That is why pyramid schemes are illegal. Ponzi schemes are worse. They depend on new money coming in to pay to existing members while the system runs out of new members to feed off of. I’m not sure if that is happening here but I think it will fail legally because it only has a product or service as a pretense. The ad spots have no traffic in cyber space. Therefore they have no value. The penny bids are for products no one ever sees. Therefore they are not actually purchases. The recruiting money is therefore a share in investment money, not a portion of sales for building a sales network. I’d say good luck to those who’ve invested in it but I’m more inclined to wish that justice be served.

I just heard almost the exact kind of ‘appalling mentality’ that Carvin describes above from a well-respected businessman and extremely active church member in my area who called me a few days ago inviting me to look at Zeek (thus prompting me to finally make this post).

Randy Schroeder, whom I have known for close to 20 years now, certainly can’t be accused of being impartial. He is the president of North America and Europe for MonaVie. So he has an obvious and clear bias.  That said, I have never known him to attack legitimate network marketing companies like this …  he is usually a staunch defender of the industry.

“It’s gonna blow up; it’s gonna be an ugly blow-up. It’ll probably happen sooner, not later. And it will leave a trail of devastation behind it. And I urge you to not even consider them.” – Comment on Zeek Rewards by Randy Schroeder in a July 16, 2012 Leadership Mentoring Call. He was expressing his personal opinion, not the official MonaVie opinion.

Obviously, with the use of words like pyramid and ponzi, Randy does not consider Zeek a legitimate network marketing company.

On the complete other side of the opinion continuum, Troy Dooly says this in one of his replies to a comment on his post about Zeek Rewards at MLMHelpDesk.com:

From what I have seen the founders of Rex Venture Group, the parent company of Zeekler and Zeek Rewards, are not running any form of a ponzi scheme, nor are they running ant form of illegal pyramid compensation structure.  Like any company launching a new program, there have been plenty of challenges along the way. …

Randy has some great reasons to say what he said. I said almost the same things when I first looked at them. But unlike Randy, I did take time to talk to all the folks involved, outside regulators and some folks far smarter than myself to get a better understanding of not just Zeek, but all the companies and the underlying business niche.

Interestingly, Randy’s only response on the same blog post included this comment:

Neither Troy nor any other person knows what I did or did not do to validate the opinions I expressed. I did in fact do significant research and gain legal opinions prior to expressing an opinion.

What’s my opinion?

  1. I don’t like the various types of penny and reverse auction businesses to begin with. I like the idea of promoting them as a businesses even less.  That’s a personal opinion.  To me it feels like running a gambling business.  While these auctions may well be legal, it’s not the kind of contribution I want my work to make to the world. It simply promotes too much greed while creating too little value.
  2. Specifically, in the case of ZeekRewards, it is very hard for me to imagine that a business model that continues to sell $10,000 worth of bids to new “affiliates” will not run into significant legal challenges.  (The amount of this ‘buy in’ makes it an entirely different matter than simply running an auction business.) It is also very difficult for me to imagine that lots of people won’t be hurt in the process leaving a “trail of devastation.”
  3. The business lacks a lot (if not all) of the 12 Critical Success Factors that I believe are necessary for “reliable, long-term, leveraged, residual income.”
  4. In the very least, Zeek gets a huge red flag from me. Participate at serious risk to your financial health and business reputation.

Of course, I have my own biases built over the last 15 years of my involvement in the MLM, network marketing industry.  Significant is the fact that I have always, at least for the last dozen or so years, earned the bulk of my income from building network marketing businesses. I have more than a mere academic interest in the welfare, image, and professionalism of the industry.

In a nutshell, I think the concept of Network Marketing as the distribution of appropriate products through relationship marketing done by distributors and compensated by a multilevel compensation plan, is an absolutely beautiful and brilliant concept.  And when it’s done well, it is win/win and profitable.

However, it is very important for people, particularly distributors, to know the difference between Network Marketing “done well,” Network Marketing NOT done well, and outright Ponzi or illegal pyramid schemes which are really not part of the industry at all.  That’s been my soapbox since I wrote my book in 2005.

By the way, Len Clements, whose opinion I respect perhaps most of all when it comes to these kinds of issues, has scheduled an “interview” with ZeekRewards founder, Paul Burke with Kevin Grimes present.  That should be very interesting, though according to Len, it has been rescheduled again.  I will look forward to it.  Perhaps next week, Len? Paul?

What’s your opinion?

What do you think of penny and reverse auctions?  ZeekRewards?  Speaking out as Randy Schroeder and I have done?

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{ 11 comments… read them below or add one }

K. Chang August 19, 2012 at 2:07 am Thumb up 0 Thumb down 0

I have been on it anti-Zeek side since April, as it is VERY easy for me to conclude it is a Ponzi scheme, being a somewhat refined version of ASD, albeit married to penny auction instead of internet ads. It has the same modus operandi, and even hired the SAME CONSULTANTS (Laggos and Nehra). It would never pass the Howey Test, and SEC nail them with it.

Without naming names, I believe some of the big names in ‘support’ of Zeek have been wearing their blinders, as in Horatio Nelson ‘putting a blind eye’ apocryphal story. I have communicated privately with BOTH of them, showing them why I believe Zeek is a Ponzi scheme. One just flat out told me he can’t look into it right now, and that was 3 MONTHS ago. I never heard back from him. The other grudgingly acknowledges my points but kept coming up with explanations, i.e. moving the goal post.

I hope both of them will admit their failings, and publicly explain how where they deceived, and what they learned from this incident.

K. Chang, a MLM skeptic

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louabbott August 16, 2012 at 10:44 pm Thumb up 0 Thumb down 1

Both ZeekRewards.com and Zeekler.com sites have this message tonight:

“Zeek Rewards is currently unavailable. More information will be available shortly on this website.”

Anyone know what’s up?

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Alan Eames August 13, 2012 at 3:38 am Thumb up 0 Thumb down 0

Hi Lou,

I thought you gave a pretty unbiased accounting of the various viewpoints in regards to Zeek. Then you gave your own personal opinion, which you labeled as such. I agree with you.

In your article you have this sentence: “Obviously, with the use of words like pyramid and ponzi, Randy does not consider Zeek a legitimate network marketing company.” The excerpt you included from Randy does not include those words. Minor omission.

Re the comment from the long-time network marketer about having made his money back, it strikes me as very callous and irresponsible. Does he not care about the people he recruited into the scheme? How did he promote this “opportunity” to his prospects? “Well, this one’s a little iffy, but you might make your money back. I’ve made mine back and the guys ahead of me are making obscene amounts of money, so come on in.” Rude and short-sighted and not looking at the bigger picture.

Thanks again for keeping us informed!!

Best,
Alan

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Gary Affron August 11, 2012 at 12:24 pm Thumb up 0 Thumb down 0

Lou, when the FTC shuts a company down there are some that have already won because they have made money. Unfortunately there are many, many more that lose money, time and effort and will sour on our industry from that experience. Experience has proven the next time those who ‘sour’ are approached, they won’t even look at the offer because of their past experience and sour taste of what they’ve already encountered. Thus we ALL end up losing what could’ve, should’ve, would’ve been irregardless of a positive experience and personal gain for those who made more than they lost.

‘Average’ ordinary people in this industry, the ones whose loyalties join their friends (such as this emailer and his buddy the ‘sponsor’) have a right to TRUST and be HONESTLY given the facts. They in fact, strive to do every bit as well as those who so pompously make such comments as “even if the FTC does close it down, I’ve made my money back ” not caring about those who didn’t.

Those who didn’t do as well were in fact some of the people this person joined to his business and seemingly could really care less about and that is very sad commentary in and of itself not to mention a ‘black’ mark on the industry and those who would want to immulate and model themselves after such people.

Unfortunately those ‘average’ people lost out on all of it are now more than cautious with red flags while those of us who have succeeded in the past find ourselves at a loss of those who may have succeeded down the road and done well for themselves in an integrity, honest and ethics based business, but for the attitudes of people such as your emailer.

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louabbott August 11, 2012 at 11:55 am Thumb up 0 Thumb down 0

Tell if you like this kind of attitude . . .

“Lou..Time will tell….even if the FTC does close it down, I’ve made my money back many, many,many times over….my sponsor and his sponsor are earning almost unbelievable amounts of money….”

This was the final comment from an email conversation with a long-time network marketer I know.

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Gary Affron August 11, 2012 at 11:41 am Thumb up 2 Thumb down 0

Thanks Lou for this insightful report. Experience has taught us all, once the Attorney Generals from different states begin investigating Zeek, and North Carolina is already the 1st to do so … Zeek members will begin to bail. Wether Zeek is legit or not legit will become irrevelent due to the fact that damages and costs required in Zeek defending its business model, will be at such a high cost including the likelihood of damaging reputations within its own organization so badly, not to mention the potential of siezed assets … it will be come like the Titanic. History has proven once AG’s get on a companies case, they rarely survive and Amway was the exception not the rule. It is typically the battles won most talked about …not the battles lost!

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Roberto Santana August 9, 2012 at 8:26 pm Thumb up 0 Thumb down 1

I’m not too familiar with Zeek, as I could not understand their comp plan, so I did not finish viewing the presentation. On that note, any comp plan that requires one to be a math genius to understand is to be avoided. I totally agree that Penny Auctions are in effect Lotteries, not Auctions. Not just Zeek, but ALL penny auctions. Sooner or later the FTC will catch up.

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Alfredo Rodrigues August 9, 2012 at 7:13 pm Thumb up 1 Thumb down 0

I totally trust this company, and I am sure when Len Clemens get the interview with the owner, we will to agree with me. (has it been already?)
Amway also was accused of being a pyramid scheme, and because of the same lawyer who is protecting ZeekRewards, Amway prevailed, and we know for a fact that this accusation was because FTC had troubles understanding MLM.
I regret what some leaders are saying about Zeek.
I understand that FTC is still trying to figure out our industry paradigm, but the leaders know it very well, and this attitude of anger desperation will not give them any credit in the future, and will not help the industry in any way.
Shame on them.
Love you all, the true NMPros.
Alfredo Rodrigues

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Duane August 9, 2012 at 6:38 pm Thumb up 0 Thumb down 0

What I find interesting enough are 2 things…..1# the audio file that was chosen to play automatically when this page loads..and 2# the verbiage in said audio file that basically portrays the company in question as “passive”. When some one uses the words “Invest” “Returns” “No Work” ..makes me wonder how much research was really done.

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Maggie Pimm August 9, 2012 at 3:18 pm Thumb up 1 Thumb down 0

I agree in that it is troublesome not to know what you are dealing with. I think it is good to go for the truth and find it out. Having said that, Opinions will continue to be opinions. So valuable they may be, but they have no validity until the truth is found. Is there nobody who can go in under cover and find out? for example, whether the products are real and available or not? Basically, this is the most crucial about the matter. If I knew how to handle auctions, I would do that, just to find out. 🙂

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Richard Bliss Brooke August 9, 2012 at 2:24 pm Thumb up 1 Thumb down 0

My opinion…and it is just an opinion not a fact or a fortune telling machine…is that we are not asking the right questions about Zeek or the other deals like it. Zeek may just be the most ingenious legit mlm model every conceived. Here are some other questions to ask:

1. How will the media treat it when they get ahold of the story… ingenious wealth building business or online investing and gambling?
2. How will the regulators treat it at first blush?…before they really understand how technically it might be legit? Will they drop a dime to the media letting them know it is under investigation for sec and gaming violations before they even have the facts? Or will they protect zeek while they do the due diligence?
3. Does zeek have an exclusive product or model that give the reps a long term edge?
4. Will this model be relevant and viable 20 years from now? 50 years from now?
5. Do you even care?

They truth is most people in our profession do not care how long something will last or how honorable it will be treated by the forces that can render it out of business in a nano second. They don’t think past their desperate addiction to get rich quick without sacrifice and hard work. We are the curse of our own profession.

Pardon the spell check…new mac air I don’t know how to work:)

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