USI Tech, what’s going on?

2017-12-24

Recently USI Tech have caught my attention. First, a relative of an USI Tech member contacted me to share her concerns. She said she was very worried about her relative’s involvement in the scheme as she seemed to have had a personality transplant and was now obsessed with the company. The concerned relative couldn’t find much about it so turned to me for help. As always, once something is on my radar, I start noticing it when it appears and my concern and curiosity are piqued.

I have decided to document anything USI Tech related here so that all the upto date information will be easy to find if you are concerned about this particular MLM. This is particularly important when you realises a Face Book group dedicated to exposing the company disappeared suddenly. The information needs to be preserved. Please send me any information you think should be included.

If you would like to see, join or follow the new face book group, go and have a look here.

Ethan Vanderbuilt has written about USI Tech in this blog post. Unsuprisingly, he considers it to be a scam (in his opinion). He has concluded it is a Ponzi scheme because people earn money when they get others to pay to join it. He looks into the people behind the scheme and where the company is actually located. It seems it may not be straightforward. The founders have a past of financial dodgyness, involving the authorities and people being arrested.

Here is USI Tech’s website.They are in the UK, regularly putting on seminars to try and recruit people. They claim to have a special programme (robot) that can trade in cryptocurrencies and magically make loads of money for investors easily.

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Here are some things that have been going on with the company.

December 15th 2017 British Columbia residents are warned not to invest in USI Tech as they do not have the necessary registrations.

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December 19th 2017 Ash, a crypto expert blogs about USI Tech and details the problems he sees with the company. He attended a recruitment event and analyses what is said there. The comments after this article are worth a read.

December 20th 2017. The Texas State Securities Board warn against investing in the company. They issued a cease and desist order because they are not properly registered in Texas and are breaking lots of rules. They state that USI Tech claim to be regulated by the FTC but this is blatantly untrue. Ethan Vanderbuilt examines this development. Here are the documents detailing the order.

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December 21st 2017  Nova Scotia’s securities commission warns people that it is illegal to run schemes in the way USI Tech are doing.

December 23rd 2017 The Financial and Consumer Services Commission of New Brunswick have warned against any involvement with the company. They call it an illegal investment scam and encourage people to report them. This is on their website

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December 24th 2017 Manitoba Securities Commisssion in Canada warns against USI Tech and states that companies offering high returns at low risk are often signs of fraud. They ask for people who have been involved with USI-Tech to contact them.

Which country will warn against USI Tech next? Will anyone get in trouble over it? Will people start coming forward about money they lost in this scheme? Any information, please contact me.

How to choose a Network Marketing company to work with

This is a serious article and is not a spoof or a trick. It is not an attempt to get you to sign up to anything.

This article gives pointers to people who are in Network Marketing and are looking for a new company. I am not against the individuals who are in these schemes. This site is aimed at facts and exposing the realities of Multi Level Marketing.

I am forever seeing people go from one company to another and making dreadful mistakes along the way. Some of you have been led into illegal schemes or tricked into doing illegal things yourself. Many of you will have had your reputation affected and gone through a lot of trauma.

A bit of research before joining a company could save you a lot of trouble.

 

Products

What are the products? Don’t be swayed by the level of commission or an assurance that the products will ‘sell themselves’. Products do not sell themselves, you have to sell them. If you don’t wear make up, don’t sell make up. If you aren’t into sports, don’t sell sports products. You will have no credibility if you try and pretend you know about these things.

You could run the risk of looking like an idiot if you are selling something you know nothing about. It is not enough that the company provides training in the products. People will see through you. People with a real interest in the market will spot you a mile off.

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Is there a market for the product?

Will people actually buy the product for what it is? Is the price reasonable? Do you know of people that will buy it because they want it? If they saw it in a shop, would they buy it? You need real customers, do not rely on friends and family who you think will support you. They may initially order from you to be supportive, but you do not want pity purchases. Pity purchases dry up, and can cause resentment between you and people you care about. Friendships are more important than selling a lipstick. Ideally, you would want repeat customers who like the product and ask you for it, instead of you chasing them for orders.

Do you want to sell to customers or will you have to beg?

Is the company registered at Companies House?

It doesn’t take long to check a company is registered and their accounts can be looked at. Go to their website and type in the company name in the search box. You can find out when the company was incorporated, who runs it, all sorts of information. Take a bit of time to look into the details that you find out.

It isn’t enough to be told by someone you work with that a company is legitimate. Find out for yourself. It really doesn’t take long. If you are investing your time and money into a scheme, you really should be doing these background checks. Google the names you come up with. Have any of them been in trouble with the law? If there is no information on them anywhere, this might not be good. You would think that someone who has set up a business that is going to be really successful would have experience and leave a footprint all over the internet on their previous activities.

Compensation plan

Have a look at the compensation plan. Do not be distracted by people or figures that show you can earn a lot of money at the top. Have a look at what you think you are likely to earn.

If you need to host parties, how many do you realistically think you will do? It may be suggested that you do 2 parties a week to earn a certain amount of money. How realistic is this? How many people do you know that will be happy to host parties for you? How far away will you have to travel? How much time and cost will be involved? Two parties a week does not sound much, but could you keep it up for long?

Don’t get carried away with what could be possible. Work out what you can realistically achieve. Look at the details. Work out a plan properly. If someone says it is easy to set up parties, ask them for the details on how they do it. If someone tells you it is simple and no effort, they are likely not being honest with you. Especially if they are trying to persuade you to join their team.

Are there minimum amounts of money that you need to bring into the company every month? Companies have different amounts that you are expected to bring into the company in order to remain active and to earn bonuses. Find out what this is. Will you be expected to make up the amounts with your own purchases? Wold you be buying these products anyway at these prices or would you end up spending money you would otherwise have spent on bills? People think they will just make up the amounts on their own purchases for a bit, and then their businesses will take off and they won’t need to anymore. This is not a good tactic. You will be wasting your money and you could end up being your own customer.

Advertising and marketing

Check what type of product you will be selling and what the selling points are. You will need to find out what claims are allowed and which ones are illegal. When you put claims on social media, you are as responsible for the advertising as a standard company is when they advertise on the TV or in magazines. Officially in the eyes of the law, you are responsible for your claims.

If a company sells coffee and you market it as weight loss coffee, you could get into a lot of trouble if you break advertising rules. Have a look at the CAP rules for the UK. This page tells you nice and simply some of the main advertising rules you need to adhere to, like what you can and can’t say. It covers weight loss rules, before and after pictures, testimonials, health claims etc. If you are told to sell a product by claiming it can do something like increase metabolism, cure diabetes, lose weight, help with depression, you need to check this is actually allowed.

Link to weight loss rules at the Advertising Standards Association.

Have a look at this index from the ASA that covers all the advertising rules you’ll need. There’s sections on competitions, environment, customer data, health claims.

If you are satisfied that the product claims can be advertised by you legally, you will be in a good position. The last thing you want is the ASA telling you to remove content or Trading Standards turning up at your door. You will not be able to blame the company for your claims, it is you that is responsible for it.

It is not acceptable for you to say that you were told to make the claims or that you just copied an advert. Make sure you carry out your responsibilities seriously.

If a company just sells weight loss coffee but you know you cannot sell it as weight loss coffee without breaking the law, could you sell it just as coffee? If not, you might want to find another company.

The DSA

Some people will tell you their business is legitimate if it is registered with the DSA. However, this does not provide you with any protection at all. Some companies have been with the DSA and been shut down by the authorities for being a pyramid scheme. The DSA is made up of people that run Network Marketing companies. They act to protect the companies, not the individuals signing up as reps. People who have complained to the DSA have found their complaints just passed onto the company.

Beware the hype

I’ve seen the hyped up videos, you probably have too. You know, the ones where someone is screeching  about the amazing opportunity they have just stumbled upon. Join now, it’s amazing, they’ve looked into it and it’s perfect. DO NOT TAKE THEIR WORD FOR IT! You may like them and trust them and want to join their team. You may even have worked under them before.

Signing up to a new company should be a big decision and not taken lightly. Do your own research. You don’t need to tell the person you don’t trust them. Check out what they are saying, follow the points in this article and decide for yourself if it is a good opportunity for you. If you decide it is legitimate and you think it is for you, join up. If it isn’t for you, find something else instead.

If you decide not to join and you are put under pressure, remember you are in charge of what you do and which company you chose. You should not be working with someone who tries to pressure you into their team. That’s not how professional people behave, that’s what bullies do.

How will you get paid?

Being paid isn’t as simple as being paid straight into your bank account. Most MLMs pay into a third party account. You might be charged for withdrawing money or there might be minimum balances needed before you can access it. Some companies pay bonuses in the form of stock or discounts on their products. Is it important to you how you get paid?

Is it an illegal pyramid scheme?

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This can be a tricky subject and I have seen may different interpretations on what a pyramid scheme is. It is usually the people who are recruiting that give the loosest definition. You should be familiar with pyramid scheme laws so that you can avoid one. Here is an article I wrote that brings together the relevant rules for England and Wales. Have a look. There are links to the actual law so you can see with your own eyes what the law is.

In summary, the big rules (In England and Wales) are-

You cannot be your only customer

There has to be a product or service that is sold

You cannot spend more than £200 in the first month in a scheme

You have to display the statutory wealth warning on recruiting adverts

There are some irrelevant ‘facts’ that you might hear to explain pyramid schemes like- “corporations are pyramid schemes, if people can overtake you in the pyramid it is not a pyramid scheme, it is registered with the government so it must be ok, I have earned money so it must be ok…” No doubt you will hear all sorts of rubbish. Listen to what people say by all means, but check out what the actual law says. After all, it could be you that is breaking the law if you are not careful.

In the US, you need to look at the FTC’s rules. Have a look at what they said about Herbalife.

 

Extra costs

What sort of training is available? Some companies provide training manuals or online modules as part of the joining fee. Some will charge you for it. Some will charge you for training courses. Some will expect you to travel long distances at your own cost and pay for your own hotel.

Are there events that you are expected to go to? Herbalife have recently been in trouble and are being sued for their events. They told people they would make money if they attended all the events. These events turned out to be a money making exercise and did not help anyone make any money.

Have a look at postage and packaging fees. Will you have to pay for it if you order for a customer? Younique presenters and LuLaRoe end up paying a lot for postage. Is there a minimum amount per order?

Will you have to pay a fee for having a back office or for being paid? Will you have to pay a fee to your upline to be in groups ( I have heard of this happening).

If the person trying to recruit you tries to fob you off and not answer your questions properly, or tries to tell you not to be so negative, take this as a warning sign. It is perfectly acceptable to work out what your running costs are going to be before you invest your time, money and reputation in a company.

 

Look for criticisms

Other people may have been in this company and had problems. What problems did they have? It will be useful for you to know how others have done. You may be told not to look for ‘negativity’ and to stay as positive as you can. This is not helpful when you are assessing a business opportunity.

Imagine you looked up a company and found a criticism about the product availability. Maybe there is never anything in stock or there is a three week wait for stock. This would be useful to know. What if people are never paid the correct money or ex members complain about hidden costs? You need to know this.

Make your own mind up over what you are going to do with this information. You may want to dismiss it as the ramblings of a bitter ex-rep. You may decide that the problems are going to be a problem to you to.

Deciding to ignore any criticism and any problems could backfire on you. If you have a friend who has concerns about the opportunity, do not dismiss them. They may have a valid concern. Listen to what they say and then make up your own mind about it. There is no need to fall out with them or cut them out of your life. It is a very special thing to have someone looking out for you and telling you what they think.

Of course, there is a difference between someone who dislikes you and makes mean comments, and someone who is worried you will make a mistake. Please dismiss the nasty people, but listen carefully to worried people that love you. You don’t have to do what your loved one says, but it is hurtful and unnecessary to cut caring people out your life who have not done anything wrong.

 

Understand what FDA accreditation means

Quite often, you hear the claim that a product has some sort of FDA backing. Is it certified, registered, certificated? Do you know what these terms mean? Do you know which applies to the products being sold? Have a look at this website that clearly sets out what they mean and how you shouldn’t be misled by the phrases. Don’t be impressed by the claims until you know what it means.

Your attitude

I get that you need to be positive, I really do. You deserve to do well, I want people to be successful. Boosting your self esteem and believing in yourself are good things. These can give you confidence and push you to try new things. These are healthy attitudes and help in everyday life.

I do not want to knock anyone’s confidence, or belief that everything will work out OK. What I do object to though, is the attitude that you can have anything you want, just because you want it hard enough. Your desires may give you the push to be more adventurous and give you a purpose in life. This is good.

What is not so helpful are the people who persuade you to ignore your rational thinking and natural curiosity and just do what they tell you to do, based on the belief that just wanting it is good enough. You need more than that. You deserve more than that, you really do.

If you want to be taken seriously as a business person, do your research. Don’t just hope it will all work out alright because your friend said it would. Think for yourself.

 

I hope you find the above advice useful. Remember the following points

You are responsible for your actions

Don’t take people’s word, find evidence

Don’t break the law

Listen to criticism, is there any truth in it?

Why do people join MLMs?

This is a question that is asked again and again. Once you can see it is a fraud, it can be difficult to understand how people can fall for it. Here, I will attempt to explain why people fall for it.

Is it a lack of intelligence or education?

No qualifications are needed and, quite often, posts are badly spelt and have poor language skills. The large number of emojis add to the effect. For example

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Many people assume that bots must be stupid because of this, but it is not necessarily true. Sometimes they copy and paste posts because they are lazy or are told to by their uplines. Sometimes they might just be trying to appear fun or they are appealing to the type of people who communicate like this. Of course, they might be stupid, but it is not a prerequisite.

Some bots are nurses, teachers, lawyers, doctors and vets. We cannot assume a lack of education is the reason for joining an MLM.

There has been some research into why intelligent people fall for scams.  It is thought that they might have a misplaced sense of confidence and, once tricked, might not question their judgement. This riskology blog post looks into some of the reasons why intelligent people get caught in scams and gives links to some interesting research.

Some are tricked

Some people could be tricked by deceiving adverts like these-

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It is made to look like a job advert. Primerica are a prime example of this tactic. They target jobseekers and offer ‘interviews’ to people so that it looks like a proper job opportunity. If you think you are applying for a job, you might not notice that you are actually being offered something else. A forensic accountant has written about how Primerica hides their recruiting as a job interview.

Fake it ’til you make it

This is one of the main reasons why people join MLMs I think. People post on their social media about their fantastic lifestyle and how it is achieved through their MLM. It looks to the casual observer that the bot is being successful and is earning money from their scheme.

People brag about how they have managed to buy the latest car, live in a big home, or just treat themselves to little things. They post pictures of nice things and imply that their MLM is the reason they can have these things.

In actuality, most of these claims are lies, designed to interest friends, family and colleagues into joining up so they can have nice things too.

 

The recruiter is often a trusted person

This is one of the main reasons for people falling into MLM I think. We automatically trust our friends and loved ones. If they tell us they are being successful we will believe them more than if a stranger told us. After all, why would someone who cares for us con us into a money losing scheme?

This begs the important question, why would our loved ones con us into a scam? It could be that they do not realise they are in a scam. It could be that they hope they will make money soon and they need you to join to help them be successful. Once you, and others, join them, they will be successful and then they will help you too so it will all be alright. I don’t think people join these schemes knowing they are scam and get their family involved in them maliciously.

I think that the fact your friend recruited you and you recruited friends will lead you to staying in the scam longer. You will feel an obligation to make it work for everyone.

 

Guilt

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Women are targeted this way. They may be feeling like they can’t afford childcare or don’t want to go back to work after maternity leave. They could be feeling desperate and willing to try anything during their maternity leave to try and earn enough money to resign. It might be worth the risk to them and might be enough for them to suspend their scepticism. They might not have fallen for it before their babies were born.

Timeless Vie wrote a good article on the phenomenon of guilting mums into MLMs.

 

False claims

False statistics are commonly bandied around that make MLMs look good, like this one-

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No one has been able to provide any proof for these statistics. John Milton Fogg, an advocate of MLM has examined the evidence for the 20% claim and says it is untrue.

It is easy to find out the truth about these facts when examined in isolation, but maybe it is more difficult if people are bombarded with ‘facts’ like these alongside other factors in this post. Maybe they would have no reason to disbelieve them due to who is telling them these ‘facts’.

Some people do earn money in MLMs, albeit a vary small number. Pictures of these people getting cheques are plastered all over the internet and prospects are told they could achieve this.

 

Prospects  might be shown earnings disclosures where it proves that some people earn good money. However, if you analyse these disclosures, you would see that statistically, you are likely to earn a tiny, tiny amount.

 

Love bombing

This is a tactic employed by cults as well as MLMs. The recruiters act as though they really care about you. They might call you and other people in their teams ‘hun’ and litter their social media with heart emojis and positive, uplifting messages aimed at raising your confidence and feeling part of a new ‘family’.

 

It is hard to dislike or mistrust someone if they seem like they like you and are helping you. This tactic especially works on lonely or vulnerable people who feel isolated. The effect is exacerbated when people ae isolated from their own friends and family. MLM people advocate unfriending and cutting out people from their lives if they question the new MLM family. A Them vs Us feeling is created. For each real life person cut off, the MLM bond is strengthened.

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The above FB post is from a ‘life coach’ that coaches MLM members.

Confusing terms

Have you ever seen an MLM compensation plan? They are really complicated and with lots of small detail and levels and hoops to jump through. I don’t think anyone really understands the complexities of the structure. As people climb the ladder, they find more obstacles and changes to the way their pay works. It is not obvious at all how it works. People are assured by their uplines when they join that it is simple really. They are persuaded to learn as they go along.

Here is a link to It Works’s compensation plan, all 20 pages of it.  Have a look and see if you think people understand what they are signing up to. It is more likely that people come away with the main message from MLMs like ‘8 ways to be paid’ or ‘paid every 3 hours’, than the actual details.

One of the things I have noticed that all MLMs have in common is their substitution of money for other terms, such as Case Credits or PV. I believe this is the same tactic used by casinos. Casinos use tokens instead of money so they forget they are gambling real money. People in MLMs might get fixated on just needing 4 more CCs, and not realise they are spending their own money. Targets given in CCs don’t look as threatening as real money would. The person becomes distanced from what they are doing.

Conclusion

There are many reasons people fall for the MLM scam, and it is not simple by any means. We should all be very careful because any of us could fall victim to one under the wrong circumstances.