How The DS-MAX MLM Scam Operates
The Consumerist has a nice post on DS-MAX
Features: How The DS-MAX MLM Scam Operates
You've heard all the stories about Midtown Promotions and my experiences investigating their IDT campaign. You probably noticed a lot of references to their shady Dark Overlords, DS-Max, now apparently known as Innovage, probably in an effort to hide their crooked past from prospective employees smart enough to look up their prospective bosses on the internet. Now, for a clearer picture of the dreaded DS-Max, the Consumerist takes you through a typical 'career' at one of their winning affiliates:
DS-Max grew out of our redhead stepchild to the north, specifically in Toronto, where a dude named Murray Reinhardt lived out of his car on the hard road to bringing joy and a set of steak knives to poor souls on every continent. This was in the 1970s, where everything was possible; blond teenagers danced naked in the streets and an ounce of weed was two bits. Murray called his organization of clearance item reselling 'DS-Max,' after his own mantra, 'Direct Sales to the Maximum!' Murray's start-up became a sales force in period of a few short years, eventually expanding into thousands of affiliates. What was once a street and door-to-door sales operation, selling goods directly to the (unsuspecting) public, 'later expanded,' according to the holy Wikipedia, 'to include sales of discount coupons, telecommunications contracts like AT&T, credit card processing services and other sales packages on behalf of more service based industries.'Except they no longer do that because they are no longer DS-Max. At least, that's what ol' Richard Shapero wants you to believe. The DS-Max website is no longer. Lawyers snipe at us with each mention of the 'D' word. No matter what they call it, if the affiliates are affiliated or if they are 'independent,' as 'Eric' at Midtown claimed, whether they are either kicking up to the real top of the pyramid or they've stolen Murray's ideas and gone into business for themselves, the ads for prospective suckers are still the same.
One frequently asked question: 'Is DS-Max a pyramid scheme?' Most commissions break down something like this: Five bucks for the salesman, five bucks for the owner, and three bucks for DS-Max. One D.C. Advertising owner defended himself half-assedly on Ripoffreport, saying, 'Am I a part of a pyramid scheme? Well yes, but its no different than corporate America. The people at the top make money off the people below them. Everyone is expendable just like in any company.'
Read the entire article.
Note the claim that corporate America is a pyramid because the people at the top make money off the people beloww them.
This is a common justification among pyramid scammers. Its emotional appeal is that what we are doing is no different than how an ordinary business operates. (The logic of the statement is clearly false: people at bottom of the corporate ladder are paid a wage, the people at the bottom of the pyramid are simply losing money.)
The emotional appeal works because what the speaker said is true and the levels of CEO compensation are out of whack with the talent delivered. Finally, the phrase "everyone is expendable just like in any company" will resonate with a job seeker who has recently lost his or her job. These true and emotionally powerful statements may mask the false analogy between a pyramid scheme and an ordinary sales position.
Remember the essence of a believable fraud is to mimic ordinary economic life as closely as possible. Throw in an unbelievable upside, the economic miracle, and swirl in a nothing to lose guarantee and you have a ready made fraud.
