Speak Asia falsely referred by media as pyramid scheme

Dear BizBasket viewers,

In many articles of various new papers and media clippings you would have heard our company SAOL being compared to pyramid schemes. Many Speak Asians are confused as to what is "Pyramid" first of all and is our company a pyramid? In our previous articles also we have tried to clarify this that the model followed by SAOL is not at all a pyramid scheme. Here is one more effort to educate the Speak Asia family so that our confidence and devotion in the company remains intact.

Pyramid scheme

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

Pyramid schemes are illegal in many countries including Albania, Australia, Brazil, Bulgaria, Canada,China, Colombia, Denmark, the Dominican Republic, Estonia, France, Germany, Hungary, Iceland, Iran,Italy, Japan, Malaysia, Mexico, Nepal, The Netherlands, New Zealand, Norway, the Philippines, Poland,Portugal, Romania, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan,Thailand, Turkey, theUnited Kingdom, and the United States.

These types of schemes have existed for at least a century, some with variations to hide their true nature, and many people believe that multilevel marketing is also a pyramid scheme.

Concept and basic models

A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that one Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the "business" expands.

Such "businesses" seldom involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the "payment" itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information.

The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit.

Connection to multi-level marketing

The network marketing or multi-level marketing (abbreviated MLM) business has become associated with pyramid schemes as "Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure."And the fact while some people call MLMs in general "pyramid selling" others use the term to denote an illegal pyramid scheme masqueradingas an MLM.

The Unites States of America's Federal Trade Commission (FTC) warns "Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products" and states that research is your best tool and gives eight steps to follow:

1. Find — and study — the company’s track record.

2. Learn about the product

3. Ask questions

4. Understand any restrictions

5. Talk to other distributors (beware Shills)

6. Consider using a friend or adviser as a neutral sounding board or for a gut check.

7. Take your time.

8. Think about whether this plan suits your talents and goals

Some believe MLMs in general are nothing more than legalized pyramid schemes.

History of trouble because of Pyramid schemes

The 1997 rebellion in Albania was partially motivated by the collapse of pyramid schemes.

In early 2006, Ireland was hit by a wave of schemes with major activity in Cork and Galway. Participants were asked to contribute €20,000 each to a "Liberty" scheme which followed the classic eight-ball model. Payments were made in Munich, Germany to skirt Irish tax laws concerning gifts. Spin-off schemes called "Speedball" and "People in Profit" prompted a number of violent incidents and calls were made by politicians to tighten existing legislation.Ireland has launched a website to better educate consumers to pyramid schemes and other scams.

On 12 November 2008, riots broke out in the municipalities of Colombia after the collapse of several pyramid schemes. Thousands of victims had invested their money in pyramids that promised them extraordinary interest rates. The lack of regulation laws allowed those pyramids to grow excessively during several years. Finally, after the riots, the Colombian government was forced to declare the country in a state of economic emergency to seize and stop those schemes. Several of the pyramid's managers were arrested, and are being prosecuted for the crime of "illegal massive money reception.

Throughout 2010 and 2011 a number of authorities around the world including the Australian Competition and Consumer Commission, the Bank of Namibia and the Central Bank of Lesotho have declared TVI Express to be a pyramid scheme. TVI Express, operated by Tarun Trikha from India has apparently recruited hundreds of thousands of "investors", very few of whom, it is reported, have recouped any of their investment.

To conclude we want you to understand this article and subject the tests laid out in this article on the business model of Speak Asia. You will find out that the model followed by SAOL is not at all a pyramid scheme and it it just the TRP hungry media and malicious competitors who are trying to degrade the company's name. Whole world knows that entire media and all competitors of SAOL fumbled badly in there effort to stop a revolution called SPEAK ASIA.

Proud to be Speak Asian ! ! !

Regards