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Update: 11/8/2011 – People behind My Shopping Genie

I’ll be going into details about the people behind My Shopping Genie as well as top earners in the company this month.

Original Post Follows:

There has been a debate raging for several years between people who call My Shopping Genie a scam and others who defend it as a legitimate business opportunity. I’ve pulled together some of the information from both sides of the debate and will be posting it here on a regular basis. My attention was initially drawn to My Shopping Genie when I received the following question:

“I was wondering if you might share your thoughts on “My Shopping Genie” from “My Net Universe”.”

High profile internet marketer Stephen Pierce states in his My Shopping Genie review that “From an internet marketing standpoint, I thought it was a goldmine.” He later goes on to say,

“I wasn’t really interested in like what they call the distributor dollars like with network marketing and all that, because personally I think that with network marketing it is hard to make money, because you have to have such a huge volume with a low percentage payoff. What appealed to me was the superior affiliate model inside – how you can make the money just by giving away the free software. So, you give away the software for free for people to use – and if you know how to give it away and you have thousands of people using it, that’s like walking around with your hands in the pocket of thousands of people.”

You can watch Stephen Pierce‘s video of his My Shopping Genie review below:

In fact, as far as I can tell there doesn’t seem to be much debate about whether or not the My Shopping Genie application works as claimed. From the reports I’ve seen about it, it does. The controversy surrounds the structure of the compensation plan and the nature of the payments the company behind My Shopping Genie makes to its distributors.

Since this type of business opportunity is outside the scope of my expertise I decided to look into what the experts in this area thought. I first talked to Lynndel Edgington of Eagle Research & Associates who pointed me to a June 13, 2011 post at Rod Cook’s MLM Watch Dog site which says:

“Complaints are coming in about selective commissions paid to Distributors. To the WatchDog, this is usually an indicator of a Ponzi-Pyramid meltdown. There are not enough new funds coming in to pay first or large distributors. There has always been debate that the licensed icons My Shopping Genie sold did not return money on shoppers as the company promoted. Editor’s Note: If the signup fee is all that is carrying My Shopping Genie…..the commission payment complaints certainly make sense.”

The potential problem with the compensation plan structure has been cleanly described in the My Shopping Genie review by UK writer Marian Owen at Business Opportunity Watch which states the following:

“My Shopping Genie does pay its distributors for recruiting new distributors. The fact that this payment is structured as the fee for a licence to distribute free copies of the software does not alter this fact. Obviously, if it were this easy to get around the law then everyone would be doing it. So the law is widely drawn to catch any arrangements which have the effect of rewarding participants in the scheme simply for the act of recruiting other people.”

The companies response to these types of allegations was covered by freelance Sunday Independent’s Rory Egan in his My Shopping Genie expose that he did in conjunction with the Irish Television show Prime Time:

“Prime Time offered a right of reply to all three of the distributors featured in the report; Hugh Paul Ward, Tony Lynam and Harry Rayburn, but each of them declined. We put it to the company that they were in contravention of the consumer protection acts of 2007 and in a written reply, MyNet Universe said, “The distribution method is common in the software industry in both individual and enterprise software rights. There is no commission paid for the act of “recruiting”, commissions are paid on the sale of a product: the Genie software license.”

A follow up story about My Shopping Genie by Sunday Indpendent write Don Lavery stated the following:

“An expert in commercial law said it had all the hallmarks of a pyramid scheme and this was confirmed by a representative of the National Consumer Agency.”

You can watch the Prime Time expose of My Shopping Genie in the videos below:

A similar point has been made by Troy Dooly in the following videos. The second video includes a letter written to Troy Dooley with a potential counter-argument to the “My Shopping Genie is a “Ponzi-Pyramid” viewpoint:

The following video is the one that includes a letter containing a potential counterargument to Troy Dooly’s video. In the video Troy states that the letter is from Anders Berglund, who according to Direct Selling News Europe has held the following positions:

“Between 2000 and 2006 (when he retired), he was General Counsel of Lux International AG. Back in 1987 Anders became a board member and legal advisor to the Swedish Direct Selling Association. Since 1989, he has represented Sweden on the board of delegates of the Federation of European Direct Selling Associations (FEDSA). He was Chairman of the Association from 1999 to 2002 and has been Vice Chairman since 2007. He has represented Sweden on the Board of Delegates of the World Federation of Direct Selling Associations (WFDSA) since 1993 and was Vice Chairman, Governance, of WFDSA from 1997 to 1999.”

There is further discussion about this My Shopping Genie video here.

And again, in the comments section in Business Opportunity Watch’s review of My Shopping Genie, Marian Owen counters Anders Berglund’s position. (Note, I have NOT verified that any of the information that Troy Dooly or Marian Owen discuss – including the scribd document – is in fact from Anders Berglund).

Allegations of unpaid My Shopping Genie distributors:

According to a June 13th, 2011 post at BusinessForHome.org which apparently is a letter from Kalpesh Patel, Kalpesh Patel has claimed about MyNet Universe:

“They have not paid most of my distributors since January unless they were globals or they asked several times to be paid, even then it was a hard struggle…. I can provide dozens of emails if required, to this day hundreds of reps have not been paid in my team alone, thousands worldwide. They owe me over $50,000, emails to prove this too if it ever gets there. Nobody replies to my emails, calls or texts since they stopped paying me 5 weeks ago, have proof of this too.”

And again, according to a June 13th post at BusinessForHome.org, Andrew Burling sent them the following letter (again I haven’t verified the letter was actually from him):

“They owe us TENS OF THOUSANDS OF DOLLARS, and after asking, then begging, then threatening to get paid, they turfed us! We were turfed on June 6, 2011. We were accussed of CROSS SPONSORING, but we were not even in another Company.”

One of the commenters there asks a question that appears to be directed at Andrew Burling: “how come a video was uploaded to you tube on june 3rd ( 3 days before your termination, coincidence ?)”. The upload date can be seen in the following image:

Limu video

The video referenced can be watched below:

MyNet Universe’s Response

MyNet Universe has written a letter countering both Kalpesh Patel’s & Andrew Burling’s allegations. Click here to read the full text.

PTVPartner Warning

There is a fairly new organization that I’ve been advised you need to be aware of and avoid.

The organization is called PTVPartner and PTVPartner itself encourages you to do your due diligence when they state:

“This Is The Perfect “Free Money” Strategy
That Will Not Keep You Up At Night
From Worry!

Perhaps this sounds too good to be true. You wouldn’t be the first to think that. Nor will you be the last. But from the start, we are telling you honestly, with conviction that, after reading this release and doing your own due diligence, you will never be “ordinary” again!”

So think of this information as a way of helping you with the due diligence that PTVPartner.com themselves recommends.

I’ve invited my friend Lynndel Edgington of Eagle Research Associates who alerted me to problems with PTVPartner to offer his insights here for all of you.

His comments, insights, and cautions about PTVPartner follow…

Note: His original comment got buried, so I’m reprinting it here:

Lynndel ‘Lynn’ Edgington says:

September 28, 2009 at 4:02 am • Edit

Thanks Paul for inviting me here, and to be able to point out some major red flags we see with this program. Most of what I am going to share comes from an interview that was done with the admin of this program, Garrett Rainier.

The first red flag is this statement of his, and I quote: “The reason we selected these two processors (Liberty Reserve and Perfect Money) to begin with was to allow members the most anonymous venue of participation. Like it or not, most of the world is of an oppressive nature. Governments like control. The majority of HYIP participants don’t pay taxes on the money they earn in this arena. Governments don’t approve of this and attempt to cause problems for Members and perhaps at some point ourselves. So an anonymous entity was expected to be preferred. We personally do not want to participate with any vehicle that will cause undue scrutiny on our endeavors or those of our members.”

Any time you have an admin telling you that governments are oppressive and could cause their members and them problems, and undue scrutiny on themselves is a major red flag. If you are legal, you don’t worry about regulatory scrutiny.

They have announced that their main thrust of advertising will be on work-from-home sites, click-to-pay sites, and MLM sites. Now ask yourself, they claim to be this investment program, so why would they want to advertise on these specific sites instead of the normal investment sites? This is to keep from drawing the attention of the authorities to their program, but would if they were advertising on the financial sites.

Here is another major red flag, and I quote: “We have made some decisions regarding AP and STP. Since they are not offshore and potentially can cause challenges for us with respect to their government’s decision to allow or disallow participation in programs like ours. According to our terms of service, you are responsible to determine if your government will allow you to participate here or not. We are not required to uphold a KYC policy. However, if your government does not allow you to participate, then don’t. We would prefer you to remain out of our program than participate here and cause problems. We are not going to police this. What we are going to do is protect ourselves, this program and those that are in compliance.”

I’m sure you recognized some of the issues I said were red flags, but the major one is this: As an investment company you cannot absolve your responsibility of complying with the KYC rule and force that on the customer by fiat. Well not if you are real and legitimate. Of course any investor should look into this being legal in their country, but that also means this investment must be registered in that country as approved by the agency that oversees investments. Here in the U.S. that means the SEC (Securities and Exchange Commission).

To sell any securities allowing U.S. citizens to invest, the offerings must be registered with the SEC, and also with each State’s security agency charged with this responsibility. So all you have to do is check with EDGAR, which is the SEC’s database of all registered securities approved for sale by the SEC. Another red flag is the myth of being offshore elmiinates the need to be registered in the country from which they solicit customers. It makes no difference where the organization is registered. If they sell to one U.S. citizen, they must be registered and they are not exempt from U.S. laws or law enforcement.

When the reporter who did this interview gave his intro, he said this, and I quote: “I am a bit more enthusiastic about this program than many of the recently opened short term programs I could compare it too and would not be at all surprised if we see bigger things from this one and see it run for that bit longer than such programs usually go for.” Now what is striking about this statement is the admin in the interview says they will be around for the long haul. I guess the intervewer is not as optimistic about them as the admin is on this point.

Like everything, you must do your due diligence before investing in any program. There are enough red flags flying here to tell me this program has major issues, no matter what they say in their hyping this program. They also say this program is drawing a lot of people, but their website is barely registering with Alexa. It does not mean this cannot get traction quickly because it could. We just see a lot of hype with very little to back it up, and they have all the trappings of a classic HYIP Ponzi scheme.

They also claim this is a private placement offering, but this is limited to just 100 people if this is true. You also have to be a ‘qualified’ investor before you can participate in a true private placement. So what does “qualified’ mean? It usually means that you have a gross income of at least $250,000 and assets excluding cars of $1 million dollars. I’m sure that everyone reading this is a ‘qualified’ investor. LOL. Another major red flag.

It is your money and you can invest in anything you feel is right for you. All we can do is warn you of things we see with this program that warrant a thorough due diligence review before reaching your decision. I hope this information has been of help to all of you, and you know how to spot some red flags you didn’t know about before.

Related:

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Is My Shopping Genie A Scam?

PTVPartner Warning

How To file Complaints

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