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I'm not particularly literate about finance and market. One of my friend invited me in a 1-hour meeting about this Social Trend marketing of TheTrendSocial.com. Apparently buying one of their "kit" that cost minimum 99 euros you have the assurance that you will be payed for the entire life (just because you are a member) minimum 5 euros / month. The more people you invite, the more you gain also from their purchases. And apparently you will be gaining a lot of money if you invite a lot of people.

I think, just feelings, that there's something more behind the scene. I can't believe that you just have to invest 99 euros and you have the chance (and you possibly have it) to gain 25.000 euros / month for the rest of your life (there's something like ranks that place you in Premium rather than Junior rank and obliviously the more you invite and the more you gain and the more you rank). The problem is that if you are premium, they guarantee you 25.000 euros / month for the rest of your life minimum.

Is there something going on? How do they gain from this in the long term? What are the real risks (a part obliviously that this company fails and so their promise)?

Here's a FAQ...

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Then we have how do I become Advisor:

enter image description here

And finally all the available kit (note that this is in Italian because I couldn't change the language for the from page):

http://oi43.tinypic.com/343n0iu.jpg

Honestly I've never visited the website but I thought there could me something more bullet-proof rather than few things. The meeting explained a lot more that isn't even there.

There's also another website linked to that which show some more information about the markets and other stuff but still don't explain anything that I told you below.

http://www.feelthetrend.com/

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migrated from quant.stackexchange.com Mar 27 '12 at 22:56

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BTW: can you post a link to what you're describing? I looked at www.thetrendsocial.com, and it seems to be a legitimate business which doesn't mention any program like what you're describing (although most of the site is in Spanish, so I might be missing something) –  littleadv Mar 27 '12 at 23:11
    
@littleadv, I know. I visited the website and it seems all legit. Also when I was invited to this meeting here in Italy, everything seemed strange, like everybody in that meeting was well dressed and were using iPads except for us and the other new –  user6060 Mar 28 '12 at 5:44
    
@littleadv ...people. Everything seemed like a cult and you were some kind of elected. Once home I'll take pics of the inside-side of their website and let you see by yourself. You need invitation to join it. –  user6060 Mar 28 '12 at 5:51
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@CharliePigarelli what you describe is a classic pyramid scam. You see all the "successful" members, and it pressures you to join, you feel like you're missing out on something. That's a marketing trick. At least some of these well-dressed people with iPads are being paid for their performance there. –  littleadv Mar 28 '12 at 5:57
    
@littleadv, I'm user00009273, I can't re login with that account. I've posted an edit to the original answer. Could you accept it? –  user6060 Mar 28 '12 at 12:00
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1 Answer 1

It's called a "Pyramid scheme". Its illegal in almost every country of the Western world. You're not going to earn lifetime income, of course, and these things collapse pretty quickly. Most of the "common folks" don't return the investment, its the organizers who take the money. Sometimes they run, most times they end up in jail.

The way these schemes work is that they pay the early "investors" from the fees paid by new "investors". As long as a steady stream of new people keep signing up and paying into it those who got in very early make money. The idea is based on the geometric procession of each new person signing up two or more people, and those people doing the same. Pretty quickly at that rate you need to sign up every human being on the planet to keep the new money flowing in to make it work, which obviously is not realistic. Ultimately a small % of the people (if they can stay out of jail) will make a big amount of money the vast majority of "investors" get stiffed.

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MLM borders on being a Pyramid scheme. It depends on what percentage of your income comes from recruiting and how much comes from selling products. 1% from sales doesn't make it not-a-pyramid. –  mhoran_psprep Mar 28 '12 at 10:24
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It doesn't matter when the system collapses. When it does, you will be the recipient of stolen property, and the authorities will look to recover that money from you. Read about the situation affecting the owner of the New York Mets if you want more detail. –  duffbeer703 Mar 28 '12 at 12:53
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@CharliePigarelli Yes, it surely seems like a scam. Please do yourself a favor and run screaming away from this awful thing immediately. –  Chelonian Mar 28 '12 at 22:30
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@CharliePigarelli Google for "New York Mets Madoff". The owners of the team are being forced to pay back $162M in ill-gotten gains from Madoff's scheme. –  duffbeer703 Mar 29 '12 at 2:36
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@CharliePigarelli If your friend already dropped 100 Euros on the meeting, I wonder if it would make any sense to threaten them with informing authorities about them? Maybe it would be easier for them to just pay him his money back? It's a shame these things take people in. –  Chelonian Mar 29 '12 at 2:48
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