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  1. #1
    OPM and Moderator Chuck Hamrick's Avatar
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    SCAMWORLD: Huge Beatdown Of Internet Marketing "Gurus"
    Great article and I haven't had a chance to read the supporting articles. Newbies need to read this as we are inundated with inquiries on how to make money online. This is not the way. I call this segment re-marketers as they are focused on driving the lead by marketing to each others lists. They make money off of naive consumers looking for security against layoffs or after getting fired, farmers who are struggling to keep their farms and retirees wanting to make extra income.



    Chris Trayhorn - Posted on 15 May 2012

    So-called Internet marketing "gurus" plague the performance marketing industry, ripping off newbie affiliates with get-rich-quick schemes and BS advice that costs a fortune. So it was interesting to see tech website The Verge release a massive expose of what they called "SCAMWORLD", featuring such well-known personalities as Frank Kern, Andy Jenkins, Yanik Silver and Mike Filsaime.

    The long and detailed article, together with its 15 minute supporting video (see it after the jump), describes how top gurus allegedly collaborate as a cartel, providing social proof and recommendations for each others products, and passing the huge lead lists that they generate on to unethical boiler room-type call-centers that pressurize newbies into signing up for products they can't afford

    Super-blogger Andrew Sullivan has picked up on the story, as have major blog boingboing.com and The New Yorker, so it may just be that this gets traction with the FTC. Meantime, the people featured in the film naturally deny the accusations, though perhaps not in the most convincing manner. Frank Kern:
    "I NEVER sell, rent, or trade customer lists with ANY company. EVER...I tried working with one in 2003 for a period of roughly six weeks..."

    If video is not displaying click here

    Journalist Joseph L. Flatley spent several months researching his piece, and much of what he writes about won't be shocking to most of us in the performance marketing community. List-building, lead-generation and product launch strategies are all established, known tools and I doubt that any of us would view their use as unethical. What shocked me though was that these guys allegedly sell on their leads to telephone boiler rooms who really go to town on people:

    "Now you've been fortunate enough to have some decent credit here, from when I was talking to Matt and Mitch, you have some decent credit. Let this credit perpetuate yourself towards financial independence and making this change. . . on the success team, we don't call them credit cards, we call them investment cards."

    These "investment cards," claims Bartold, will pay for "all the tools, all the training" necessary to build a business that runs essentially on autopilot. While Debbie sleeps, travels, lives her life, the story goes, this will generate an income.

    "What I've laid out for you, I assume that is something that you do want to do. Is that right?

    "Yes. It is."

    "Why is it something that you want to do?"

    "Well, because it's something that I'm interested in. First of all, I always wanted to learn more about the internet, about doing business on the internet, and so, this will give me the opportunity to do that. I just don't know enough about it.

    Later, we learn that Debbie doesn't "have a computer at home yet, but [is] in the process of getting one." Which is fine, according to Bartold: "We can get you through the first monetary goal of $25,000 right now without you having to have one."

    Interestingly, while Frank Kern denies ever dealing with call-centers, Mike Filsaime is happy to justify their use:

    He sends leads to Prosper, which uses them to push coaching programs starting at $2,500. At some point down the road after ordering a Filsaime product, customers receive a call from Utah offering training through one of his “coaches.” For $2,500. Except the organization doesn’t have anything to do with Filsaime (beyond the fact that he’s the source of the leads). Instead, some guy who makes as little as $10 an hour (according to Jones) coaches customers from material developed by Prosper. Filsaime gets about a quarter of the take, another quarter goes to whoever fulfills the order, and half goes to Prosper

    The whole article is worth a read. It's not an ideal representation of the online marketing industry. It paints with too broad a brush and there are already plenty of articles popping up arguing that it doesn't differentiate enough between ethical and unethical Internet marketers. Danny Sullivan of marketingland. com explained his problems with the piece here.

    Those objection may be true but it is also the case that Internet "gurus" plying nothing but BS have been tolerated for a long time. "Buyer beware" is still good advice - hopefully the good that will emerge from this article is that more publishers become more aware. We can't grow the industry if newbies get fleeced before they have even started.
    Last edited by Chuck Hamrick; May 16th, 2012 at 01:29 PM.


  2. #2
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    Thanks, Chuck, I enjoyed the video. Although the dude is a n00b himself: it's pretty much obvious that all the d-bags are connected and it's not the reason why ppl pay for their BS. BS is a niche, there's noone to be saved there...

  3. #3
    OPM and Moderator Chuck Hamrick's Avatar
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    BS is a niche, there's noone to be saved there...
    Authority sites like ABestWeb can go a long way to let n00b's know that the get rich quick schemes are just that schemes to make someone else money. I never have seen an MLM member on the Forbes Top 400 List other than the founder. Its the same concept with Internet gurus, they make money off the backs of the n00bs.

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    If we're talking about Frank Kern and his friends, it's not MLM, at least lately. They do have "products", and there are people who are willing to pay for those products. I understand that their stuff is worth nothing. Those people don't. The question here is not why people like Frank Kern are allowed to do what they do. The question here is why they have followers. And the answer is in the question: because some people are followers.
    The funny thing is that Frank Kern actually explains in his materials that it's all just BS he made up and how he's selling it. And his next product is all about how he sold the previous one! OMG!!!

    Well, in any case, Frank Kern is just a guppy compared to sharks like Deepak Chopra, Drs Phil and Oz, and whatever else fell out of Oprah's ass. Yeah, it's a scam world, but only for those who falls for it, and no site will help them to understand. Look, some of them are typing "google.com" into google's search form as we speak.

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    OPM and Moderator Chuck Hamrick's Avatar
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    If we're talking about Frank Kern and his friends, it's not MLM, at least lately.
    Perhaps MLM was not the right term but rather re-marketers. They make their money by selling information about making money. Some of their followers are as you say to make money getting others to buy into the make money online scheme which is to also market to those who are looking for a way to market. Its like MLM in that you make money getting the n00b to buy the information package and some of the products then they sell the same to the downline. To me its online marketing information MLM.

    Well, in any case, Frank Kern is just a guppy compared to sharks like Deepak Chopra, Drs Phil and Oz, and whatever else fell out of Oprah's ass.
    That is way off base and sounds like you have a real bone of contention for anyone who tries to help people solve their own problems. I don't see the connection unless you are saying that Oprah and anyone who came after was only in it to sell good feelings to people. Apples to Oranges!


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    Quote Originally Posted by Chuck Hamrick View Post
    Its like MLM in that you make money getting the n00b to buy the information package and some of the products then they sell the same to the downline. To me its online marketing information MLM.
    Maybe if we weren't talking about the facts mentioned in the video. But the video is about Frank Kern and his apostles. You don't have to buy his products in order to sell them, it's not MLM in its core, it's an affiliate-merchant relationship, there's no evil scheme behind that. You're not being screwed as an affiliate, unless Frank goes berserk and denies your payments.

    The point of the video is that products of no value are pushed at you through different yet interconnected channels. Well, it's not the only point in the video, and clearly the author has his own sneaky agenda.


    Quote Originally Posted by Chuck Hamrick View Post
    That is way off base and sounds like you have a real bone of contention for anyone who tries to help people solve their own problems. I don't see the connection unless you are saying that Oprah and anyone who came after was only in it to sell good feelings to people. Apples to Oranges!
    If you watch the video and replace the names in it with "Oprah" etc, it will make the same sense. Her apostles are the same tape worms, they create wealth out of nothing, out of ignorance and poor education of their comfortably dumb viewers. Many times their advice is borderline fraud. Just today I saw that Oz talking about anti-cancer remedies.

    There are too many aspects of what they do, I just don't want to go any deeper, I'm not against the system, god bless Oprah for keeping the stupid from reading some Karl Marx.

  8. #7
    OPM and Moderator Chuck Hamrick's Avatar
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    Oprah to Karl Marx, now that's a stretch!

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    Now let's wait and see whose keyword wins.

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    You seem to forget that Dr Oz and Dr Phil both got their start on Oprah's show, so the connection between them was clear. I've never been a follower of hers, but these comparisons are ridiculous - Oprah never sold "money making" schemes to naive consumers, or shared those details with other scammers.

    And while you might not agree with this type of reality television (I'm not really a fan myself), we have the freedom to turn it off. No one asks for our credit card if we want to keep watching.

    The issue here is the scammers that sell the promise of making money - when the only person getting rich is the author of the program. It exists in EVERY industry (real estate, investing, etc), and we also see late infomercials that promise us riches, weight loss, improved health, etc etc.

    Preying on low-income folks online who just want to learn to make money, then giving their information to a wider network is despicable.


  11. #10
    ...and a Pirate's heart. Convergence's Avatar
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    Very well said, Teezone...
    Salty kisses, Sandy toes, and a Pirate's heart...

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    Quote Originally Posted by teezone View Post
    You seem to forget that Dr Oz and Dr Phil both got their start on Oprah's show, so the connection between them was clear. I've never been a follower of hers, but these comparisons are ridiculous - Oprah never sold "money making" schemes to naive consumers, or shared those details with other scammers.
    It's not about the product, it's about the method. That's why it's not apples to oranges, but apples to apple seeds. It's the same schemes, just on a different scale. It's not about your or my taste of TV, it's about actuall value of their programs, and then how is it all better than "money making schemes to naive consumers"? It's still "to naive consumers", isn't it? There are only so many ways to sell something that's not really needed, and Kern is not an inventor of those ways, he's not even as successful as he claims to be.

    Quote Originally Posted by teezone View Post
    And while you might not agree with this type of reality television (I'm not really a fan myself), we have the freedom to turn it off. No one asks for our credit card if we want to keep watching.
    Excuse me ))) but noone is twisting your arms to make you buy an e-book either. Ever bought a "how-to" ebook? I have, it was an ebook on how to always win in online poker and it was $2. I was very curious and the price was right. See, I didn't buy it to learn a secret about online poker, I bought it to learn a secret about the ebook itself, and I did.

    Quote Originally Posted by teezone View Post
    The issue here is the scammers that sell the promise of making money - when the only person getting rich is the author of the program. It exists in EVERY industry (real estate, investing, etc), and we also see late infomercials that promise us riches, weight loss, improved health, etc etc.

    Preying on low-income folks online who just want to learn to make money, then giving their information to a wider network is despicable.
    See, right off the bat, the last statement has nothing to do with our "heroes". Frank Kern (or Carleton Sheets, or Michael Trudeau, or whoever else) don't prey on "low-income folks", they prey on those who's foolish enough. Ok, maybe Michael Trudeau does, I'm eating my words. But still, their market is made of fools, it has nothing to do with income.
    You know who actually preys on "low-income folks"? Dollar Tree, Family Dollar, Deals.
    Then, again, who can watch drs Phil and Oz at 2-4pm? The same "low-income folks".
    But Franks Kern's courses are not for "low-income folks", they cost too much.

    You might say you don't want to know Frank Kern and his stuff. But then how can you say what he is and what his products are about? How do you know he doesn't deliver what is paid for? Or is his sin that he upsells? Well, don't we all do that when we put similar sandals on the same page?

    I know some of FK's products because I've had them. Paid nothing, I'm a commie, and those who pay for his stuff and then come and cry should uninstall the Internet.

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    You missed the point I was making here
    No one asks for our credit card if we want to keep watching.
    Last time I checked, those TV programs are FREE (with your cable subscription, of course). Very different from a 'guru' who only offers you a sneak peek, until you pay. You disagree with Dr Oz, but you didn't pay for his ebook that promised a cure for whatever the show was about that day. And by the way, when you bought the poker ebook, no one sold your details to another online poker company who contacted you directly. And then a casino got in touch.. and so on... and so on.

    Look, scams have existed since the beginning of time, and you can split hairs all you want, but this is about unethical online scams that share leads, and I stand by my quote here:
    Preying on low-income folks online who just want to learn to make money, then giving their information to a wider network is despicable.
    That was meant as a sweeping commentary on the article, I don't care how much a program costs, or who it was designed for. And you just can't logically compare Oprah/Oz/Phil to any of this.
    those who pay for his stuff and then come and cry should uninstall the Internet
    We can attribute some of this to "buyer beware", but blaming the victim is uncalled for.
    Last edited by teezone; June 2nd, 2012 at 12:37 PM.

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