Cash Gifting Programs

[Yuliya Mironova]

Once again I see a fresh wave of new-ish members of forums, even this one, making many short posts in order to have their signature files displayed as much as possible to promote their illegal cash-gifting programs. (This is one of the few forums they come to specifically for this purpose, because many other forums are now blocking them and deleting their posts in order to protect themselves against the allegation that they're aiding the promulgation of this illegality. I have myself seen conversations elsewhere in which such people recommend this forum to each other expressly for the purpose because, very distressingly, it's perceived as a "soft touch" for promoting such criminal activities in this way.)

I think the current economic downturn and uncertainty is going to attract large numbers of people into this sort of illegal "opportunity". Those of us making a living in Network Marketing should particularly be on our guard and speak out about them. Saying nothing is not, on any level, the right thing to do. Ours is also the business model that gets seriously damaged in the long term by the way these criminal programs market themselves.

I thought it might be useful to WAHM members to point out a few things and provide some helpful links on this subject.

1. Some of these criminal enterprises dress themselves up as "multi-level marketing", but if there's no genuine product (and in many cases there isn't even a pretence of one) they are rightly illegal. In the US, Canada and all of Europe anyway - and I'm pretty confidently guessing in other countries, too.

2. Their promoters invariably say things like "There's nothing illegal about cash gifting" and challenge critics to point to the specific item of statutory law, which varies from country to country of course, saying that gifting is illegal. It isn't always statutory law - it's sometimes case law. The reality is that they are trying to con us, and sometimes to fool us by quoting tax regulations which are entirely irrelevant. Gifting itself is not illegal, but soliciting a cash gift from a recipient whose intention at the time of the "gift" is to become apparently entitled to make profits by soliciting cash gifts in turn from third parties IS illegal. Don't get sucked in by the lure of "easy money". People go to prison for this. Don't be one of them. Don't assume "eew, well, that's just other people, not me".

3. Members living in the US may be interested to see this page on the FTC's own website warning about the illegality of these "opportunities".

4. In a recent discussion here, Robin kindly shared this link from the North Carolina Department of Justice. (This particular one was shared simply because one of the people who apparently didn't understand why cash gifting programs are such a big deal happened to be from North Carolina, but information like this is widely available online from just about every state in the U.S. and most countries around the world. This just happens to be a nice concise one, explaining the illegality unambiguously.)

5. I have no idea how "official" this site is (I suspect not very), or to whom it belongs, but if anyone's interested, I've recently come across the "Cash Gifting Watchdog".

Lastly, please excuse me for making very similar posts in the Network Marketing folder as well as here in Business Advice, but these are inevitably the two WAHM forum folders in which people habitually try to promote these crimes.

[Jerry1952]

I feel I need to reiterate and reinforce what Yulia is saying, here.
The IRS views Cash Gifting to be a pyramid scheme, which is considered to be illegal, and participating in it will get you arrested
.
Furthermore, those people who try to recruit you into the program will tell you that since it's a gift, you don't need to report it as income, This is TOTALLY FALSE. The IRS considers this to be VERY taxable.

The best rule of thumb, in case you still have any doubts, is to contact the IRS and ask them what their position is, in regards to this or any other suspicious pyramid-type business model. Believe it or not, they really are a VERY good source for information, and will give you the straight poop on it.

(Uh oh...this is scary...Yulia and I are actually BOTH on the same side of the fence...is it snowing in Hell? [img]smileys/smiley2.gif[/img] )

[Yuliya Mironova]

Originally Posted by Jerry1952

(Uh oh...this is scary...Yulia and I are actually BOTH on the same side of the fence...is it snowing in Hell? [img]smileys/smiley2.gif[/img] )

Nah, we have been before, actually. And I liked what you had to say earlier today about "warm market" too. Thank you for your post, Jerry, a pleasure to be in agreement with you. [img]smileys/smiley2.gif[/img]

[Job4Beth]

And it's not just the Internet. I received a chain letter today...send a dollar to the five people on this list, take the top name off, put your name at the bottom of the list and you'll get a boat load of cash. Yeah....Right. This chain letter suggested that I send the letter to 300 people. That would be 300 chances to get arrested!!!! I don't think so!

Unchained Beth

[kellymccausey]

I blogged about this recently too. Someone hit my sister up with one. Grr!

http://www.sparkplugging.com/wahm/wa...fting-schemes/

[loren]

I blogged about an experience with a cash-gifting promoter
http://zerodollarmarketer.blogspot.c...h-rope_18.html

Honestly it's warped and defies logic. People get involved with it
though and then they are willing to spread the misinformation in
order to recoup their losses. It's a slippery slope.

[Yuliya Mironova]

Originally Posted by loren

People get involved with it though and then they are willing to spread the misinformation in order to recoup their losses.

Yes, I think this is exactly what happens.

I think there's a very small number of people who are really brazen about it, deliberately set out to do it knowing that it's illegal and wrong because they want to make as much money as possible that way, and then a much bigger number of people who get talked into it without really realising that it's illegal, or choosing through their own financial need to accept the "explanations" that "it isn't illegal" even though they know really that there's something not quite right about it (because you'd have to be very gullible not to, wouldn't you?). And then, as Loren says, they have to try to recoup their losses.

I had a conversation some months ago with a member of this forum about a different sort of "illegal network marketing 'opportunity' ", but also one without genuine products where the entry-fees of later-joining participants are used to pay the profits of earlier ones, and was really taken aback when I finally managed to explain to her why it really wasn't going to be around for as long as a year (because none of its predecessors ever has been) and she actually said to me openly "Well, even if you're right that doesn't matter to me because I'll have made my profit by then anyway". It saddens me.

And it concerns me that given the state of the economy at the moment, these criminals are going to attract a lot more people who "feel in need".

And one or two of these disgusting things even dress themselves up as "Christian opportunities", which makes me really angry. [img]smileys/smiley7.gif[/img]

[T.J.]

Wow that's so weird I just heard about this on another forum.. They said the exact same thing. Any you can't find a clear definition on google..Thanks for the info..

[vacationofwealt]

I really don't know why people join cash gifting programs. Why not just find a company that promotes a product you see value in so you can at least give yourself a chance to have major success without just participating in a cash game.

[Jerry1952]

Originally Posted by vacationofwealt

I really don't know why people join cash gifting programs. Why not just find a company that promotes a product you see value in so you can at least give yourself a chance to have major success without just participating in a cash game.

GREED

That's the driving force.

However, as in the movie "Wall Street," greed is not necessarily a bad thing. We are all in business to further our own financial situation. Technically, that is greed, but when it's focused and channeled down the right avenues, it's a very positive force.

Unfortunately, Cash Gifting goes after the desire to make a lot o money, and offer nothing (no tangible product) in exchange. It attracts those get-rich-quick schemers, who want the rewards, but not the work. To put it simply, Cashing Gifting is really Cash GRIFTING. It's a con game ,and nothing more than that, which is why the IRS considers it to be illegal.