I’ve been monitoring recent activities in the Nigerian Tech Scene, and I’ve discovered a site (www.nigeria-mmm.net)that claims to give people 30% more of their initial registration fee at the end of 2 weeks. They also claim to give a certain percentage of commission when you refer someone to their network. After conducting some research, I came to the conclusion that the probability of this scheme being a scam is 65%. Considering the way the Nigerian economy is, it might be best for you to avoid this.
A BRIEF HISTORY OF THE FOUNDER SEIGEI MOVRADI (EXTRACT FROM WIKIPEDIA)
Sergey Panteleevich Mavrodi ( Russian: Серге́й Пантелеевич Мавроди; born August 11, 1955) is a Russian criminal and a former deputy of the State Duma. He is the founder of the МММ series of pyramid schemes. In 2007, Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).
In 1989, he founded MMM. He was then elected to the State Duma, thereby obtaining parliamentary immunity. Mavrodi declared MMM bankrupt on December 22, 1997, then disappeared and was on the run until his arrest in 2003. In 1998, Mavrodi created Stock Generation, allegedly a classic pyramid scheme presented as a “virtual stock market game”. The website ran from 1998 to early 2000. The Massachusetts district court initially found that the U.S. Securities and Exchange Commission was unable to cite Stock Generation’s founders and owners for securities violations. However, the United States Court of Appeals reversed this decision in 2001, concluding that the SEC alleged sufficient facts to state a triable claim. In 2003, the SEC obtained permanent injunctions against SG Ltd. and relief defendants SG Perfect and SG Trading, which profited from the disbursement of funds fraudulently gained by SG Ltd.
On April 28, 2007, a Moscow court sentenced him to four and a half years in a penal colony. The court also fined him 10,000 rubles ($390).
In January 2011, Mavrodi launched another pyramid scheme called MMM-2011, asking investors to buy so-called Mavro currency units. He frankly described it as a pyramid, adding, “It is a naked scheme, nothing more … People interact with each other and give each other money. For no reason!” Mavrodi said that his goal with MMM-2011 is to destroy the current financial system, which he
considers unfair, and allow something new to take its place. MMM-2011 was able to function openly, as Ponzi schemes and financial pyramids are not illegal under Russian law. In May 2012, he froze the operation and announced that there would be no more
payouts.
In 2011, he launched a similar scheme in India, called MMM India, again stating clearly that the vehicle is a pyramid. [16] He has also launched MMM in China. He was reported to be trying to expand his operations into Western Europe, Canada, and Latin America.
As of September 2015, it had spread rapidly in South Africa with a claimed 1% per day or 30% per month interest rate scheme [18] and
warnings from both the South African and Russian Communist Parties for people not to participate in it.
https://en.m.wikipedia.org/wiki/Sergei_Mavrodi
NIGERIAN AUTHORITIES TAKE NOTE
Here are some other reasons why I think it’s a scam.
1. They Are Focused More on Recruiting than Selling
One of the first things to watch out for is a focus on recruiting rather than selling. If you are being recruited to recruit more people of your own, rather than actually focus on selling a particular product, that might be a red flag. Consider whether or not there is a lot of focus on getting you to recruit more “team members,” instead of focusing on acquiring customers. If the recruits are the customers, that could be a red flag. This is obviously what the MLM in Nigeria is doing now.
2. Poor Training
What sort of training and support are they giving clients?
How are your questions answered? If you are asking tough questions, and they are deflected with talks on positive thinking, you could be looking at an MLM scam. Also, consider the training situation. Are you provided with actual business techniques and support? If the training consists of how to convince recruits or tips on selling to friends and family, your “home business opportunity” might actually be a work-at-home scam.
3. Pressure to Pay for More
Are you being pressured to pay for more product? You might be asked to join a “fast track” or become “elite” by purchasing a great deal of inventory all at once. Or, you might be pressured into buying an expensive business package in order to get the business support you need. If you are asked to pay for extra training (beyond attending an annual conference or convention) regularly, or if you are asked to pay for basic office supplies, you might be in trouble. Be especially wary of those who ask you to put your costs on a credit card, or encourage you to take a home equity loan or line of credit to pay for this “business investment.”
4. Sales Tactics Brought to Bear on You
Do you feel as though you are the subject of a high- pressure sale when you talk to the MLM representative? You might be told that you have to make a decision right now to get a good deal on the initial kit, or to buy in at a “special” price; it could be a scam. Most legitimate companies allow you to talk it over with your family or sleep on your decision.
5. Seems Too Good To Be True
As with everything in life and in purchases, you need it to pass the too good to be true “smell test. Are the
claims about the product outrageous and hard to really prove? Are there a lot of enthusiasm about the “amazing” program, without much to back it up? Watch out for anything that seems too good to be true. Chances are that it’s actually a scam
6. The Testimonies Don’t Link To Accounts Of Real Individuals that Can be easily contacted.
Some of my points were taken from Business Insider. Now One Question is how they plan to get 30% profit for someone who pays to join the program when there’s no product to sell?. They’ll probably hire a group of marketers to convince people and post fake earnings to convince people to join.
Another thing we need to take into consideration is the fact that history has a way of repeating itself. This is why I will also include the history of MLM schemes so you can decide for yourself.
Wikipedia
MMM is similar to la Multi Level Marketing System, with some differences
Multi-level marketing ( MLM ) is a controversial marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline” and can provide multiple levels of compensation.
Companies that use MLM models for compensation have been a frequent subject of criticism and lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price fixing of products, high initial entry costs (for marketing kit and first products), emphasis on recruitment of others over actual sales, encouraging if not requiring members to purchase and use the company’s products, exploitation of personal relationships as both sales and recruiting targets, complex and exaggerated compensation schemes, the company and/or leading distributors making major money off training events and materials, and cult-like techniques which some groups use to enhance their members’ enthusiasm and devotion.
MMM binary tree structure. The blue individual will receive compensation from the sales of the downline red members.
Independent non-salaried participants, referred to as distributors (or associates, independent business owners, independent agents,
etc.), are authorized to distribute the company’s products or services. They are awarded their own immediate retail profit from customers plus commission from the company, not downlines, through a multi-level marketing compensation plan, which is based
upon the volume of products sold through their own sales efforts as well as that of their downline organization. Independent distributors develop their organizations by either building an active consumer network, who buy direct from the company, or by recruiting a downline of independent distributors who also build a consumer network base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price.
The U.S. Federal Trade Commission (FTC) states: “Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people—except perhaps those at the very top of the pyramid—end up empty-handed
The Federal Trade Commission 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
The vast majority of MLMs are recruiting MLMs, in which participants must recruit aggressively to profit. Based on available data from the companies themselves, the loss rate for recruiting MLMs is approximately 99.9%; i.e., 99.9% of participants lose money after subtracting all expenses, including purchases from the company.”
Updated – 19 AUGUST 2016
Many Individuals have claimed that this scheme is not a scam. However, all I have to say is just be very careful not to invest too much in MMM. Certainly, one day the scheme would end.
I guess you can decide for yourself after reading this. However, everything I wrote here is strictly my opinion. If you feel differently about this scheme, use the comment box
