Friday, June 4, 2010

TVI Express and TVITeamOz plans strawman defense

TVITeamOz (the team being sued by Australian ACCC and halted operation), allegedly posted a rebuttal on an Indonesia TVI Express website. Instead of replicating it here, just go read it, then I'll show you how lousy their argument is.  

(note: the Indonesian site got weasel-itis and erased the copy of the letter. Unfortunately, they kept a copy on facebook under the same name: pengumuman... so you can't hide!

What they are doing is using the logical fallacy "strawman" for their defense. Let us pick it apart.

"They" (TeamTVIOz) wrote:
"A pyramid scheme is defined by following characteristics:
--> No product
--> Returns for investments
--> People only at the top make money and rest don’t. All late comers lose their money.
As per the WFDSA and any Direct Selling body, above mentioned are the points which define a Pyramid scheme."
 This is already false. A search of WFDSA's website brought up this definition:
Numerous legislatures around the globe have proscribed pyramid selling. The wording of relevant statutes, codes, articles, acts, regulations and the like vary, but all contain the following core concept: A pyramid is a scheme in which a recruit pays (an entry fee) for the opportunity to receive future benefits (money or privileges) which are primarily derived from that recruit's (and/or subsequent recruits') introduction of additional participants in the scheme, rather than from the sale of products to consumers.
Thus, the scheme's rewards effectively come from the addition of new participants and their investments, not from the sale and distribution of real products to persons who actually use or consume them. No real trading in viable goods or services takes place, and the scheme essentially involves an internal redistribution of wealth from new entrants to the promoters. The scheme serves no legitimate commercial function. The only "trade" being carried on is actually in scheme participants' rights, and the redistribution of participants' entry fees or investments.
It's clear that TeamTVIOz is citing their imagination of what WFDSA says, instead of reality. They defined a "strawman" of pyramid scheme, defeated that strawman, and claim the argument has been defeated. They picked some characteristics of pyramid scheme that they do NOT have, say "we don't have that", and they conclude they're not a pyramid scheme. If they claim victory based on that, they will lose. It is as easy as that.
What about the arguments that they made? They are bogus as well.
a) No product
We are a valued travel company having corporate tie ups with RCI, Cambay Resorts, Sarovar Hotels, Fave Hotel and a few other hotels and resorts.  The online booking engine has delayed but that does not mean that we do not have a product. We have been giving accommodations to thousands of people which proves we have a product.
WFDSA never said that a pyramid scheme has no product. In fact, quote from the same page:
"A closer inspection of a pyramid scheme's so called "products" typically reveals that they have no real market value. This is because the products are often "gimmicks" such as certificates, spurious training programs or magazine subscriptions, illusory discounts, or over-priced and under-performing "miracle" treatments and the like."
And that's exactly that that "certificate for 7-day 6-night accommodations" is... a gimmick.What else would you call a "product" that less than 1% of people actually used, and redemption problem persisted for nearly a year now?
Where did I get the 1% number? Read their own announcement: "We have been giving accommodations to thousands of people which proves we have a product." Out of a million members (which TVI Express and TeamTVIOz claims, in the SAME webpage), they have redeemed merely thousands to prove they have a product. Even if we take "thousands" to be "ten thousand", that's a mere 1% redemption rate, so the argument is 1% effective. It proves that TVI Express product is only 1% effective. That is not a product. That is a marketing gimmick and downright DECEPTIVE!
b) Returns for investments
We do not promise any returns to our members, nor do we operate as an investment scheme. It is a workable plan wherein members make money by referring other people which is just like any other traditional business where more sales means more commissions.
This is a strawman, because they are trying to claim that their pyramid scheme is not a Madoff-style Ponzi scheme. A pyramid scheme does NOT have to be about investment, and arguing they are NOT investment is irrelevant. It's like Bill Clinton claiming "I did not have sex", by claiming a blow job is not "sex". Great, they're not a Madoff-style investment Ponzi. Their denials are irrelevant to the charges: they are operating a pyramid scheme.
They also mixed in ANOTHER denial, but completely unrelated to their denial that TVI Express is not an investment scheme, in the second sentence. They claim they are sales people who recruit (referring other people), which is the same as sales people selling things, and earning more commissions. They completely ignore the fact that commission based on actual sales is legal, but commission based on RECRUITING is NOT legal when the person recruited (the recruitee) is expect to do the same... recruit more people. That's pyramid scheme.
We also terminate positions of members who try to collect money from market projecting us as an investment scheme. Out of 1 Million members, company cannot be held liable for a few wrong doings of members. We are clear of what we do and how.
They do? You ever see a list of "banned members" on ANY TVI Express related website?  I sure haven't. And where on TVI Express website do you see "Thou shall not do..." lists? Nowhere. In fact, there is no "Code of Conduct" for TVI Express distributors. There might have been some fine print in the website, but when you join, were you given a full list of terms and conditions, what to do and not to do, when you join? Did your upline go over it with you? No! You pay, you go recruit, and hopefully you make money!
Furthermore, note this: TVI Express itself has NO announcements. So if Tarun Trikha, the "advisory board member" is the real liar, then nobody below him or ever heard from him can be held responsible, nor can TVI Express. This is like Mission Impossible: anything you do will be disavowed. TVI Express is defining appropriate conduct UNOFFICIALLY, and that is not the way a real company would do business.
c) People only at the top make money and rest don’t. All late comers lose their money.
Our compensation plan is based upon Revolving Matrix and a Matrix plan is not new. Some people even with less information claim Binary as a pyramid. What they don’t tend to understand is that there is much to a business model and compensation plan than just a structure.
A plan growing in a pyramid structure like binary cannot be a pyramid scheme.
Again, strawman. Brought up a bunch of other info that sounds good, but ultimately meaningless. The plan relies on recruiting two or more people, and that is the definition of pyramid scheme. They just threw out a bunch of buzzwords like compensation plan and business model, but not saying anything, except claiming legitimacy, but with NO FACTS to back up the claim.
Coming to our compensation plan, we give equal opportunity to everyone and all members start from level 1 of Traveller Board. There are thousands of examples who came later and made money than those who joined earlier.
With a million members, it's clear that the few "thousands" on top will be the earners, and those who joined later (the rest of that million members) will be the suckers. Their "equal opportunity" actually means "you can also be rich if you recruit enough suckers", and that is the problem of a pyramid scheme: eventually, the world runs out of suckers.
TVI Express's defense can be summarized as: accentuate the advantages, ignore the weaknesses, and pray that no one will notice.
So they want to talk about their compensation plan? According to TVI Express website, there are four ways to earn. What they do NOT tell you is ALL FOUR DEPENDS ON RECRUITING MORE PEOPLE, but it is quite easy to figure out if you read their own website  another thing: this link is HIDDEN. it is NOT linked to from the main menu! You have to use a search engine to get in! Why would they NOT want people to find this easily? Hmmm?
  1) board payout -- fill the board/pyramid/matrix/whatever, clearly based on recruiting 

  2) residual payout -- never clearly defined, no formula provided, at least partially based on recruiting (the more downline you have, the more residual income, "split to infinity" as quoted from TVI Express). Real MLM's limit your downline split to no more than 6 levels, and have clearly defined percentage share at each level. Furthermore, if there is no sales ("you do not have to sell any products"), how can there be any commission? 

Also, their description is impossible. There are only 10 different 10% commission available for sharing. According to TVI Express description, you can share "infinite levels", 20, 30, even 100 levels down. Let's be conservative, say 5%. That's 20 different shares. So if you have 20 uplines above you, then you get ZERO because your upline had taken it all. And with 1 million different members, how many uplines do you think you have, if you joined? A lot more than 20, that's for sure. And if you

The description of residual income is impossible. And that is definite a part of the scam.

  3) power pool -- supposedly based on "sales revenue", but TVI Express never released their sales revenue, and again, to qualify for it, you have to cycle through the express board multiple times, and THAT, AGAIN, is BASED ON RECRUITING. You don't magically advance up the board. You need more new recruits to push you up the board, and cycle out again and again. You don't do that by sales... but by recruiting. And again, no sales, no sales revenue.

  4) incentives -- those villas, luxury cars, laptops and whatnot... you have to cycle out a few times. Again, by recruiting. 50 times. 100 times... Says so on their website.

Sales was barely mentioned in the compensation plan. It was mentioned once, in residual income, but how it affects your pay is never explained in detail. It was mentioned again in power pool, but to qualify for it you need to recruit like heck. And remember "you do not have to sell any products". No sales, no residual income, and no power pool.
Compare TVI Express compensation model with some REAL definitions of pyramid scheme, and the whole thing becomes crystal clear:
"In a typical pyramid scheme, a member pays to join. The only way for the member to ever recover any money is to convince other people to join up and to part with their money as well."
--  (part of ACCC)
"Pyramid schemes, also referred to as franchise fraud, or chain referral schemes, are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses. At the heart of each pyramid scheme there is typically a representation that new participants can recoup their original investments by inducing two or more prospects to make the same investment. Promoters fail to tell prospective participants that this is mathematically impossible for everyone to do, since some participants drop out, while others recoup their original investments and then drop out."
Both are government agency websites, so these definitions are the truth, not some "partial" definitions TeamTVIOz plans to use.  You should check your local laws to find your local law definition of "pyramid scheme".

Finally, remember, ANYTHING Tarun Trikha says CANNOT be taken as TVI Express official information, because officially he is NOT a TVI Express employee. Remember, "advisory board" members are senior distributors, NOT a part of TVI Express corporate team.

Furthermore, don't you find it suspicious that TVI Express corporate thus far is IGNORING the problem in Australia? No official announcement anywhere. The only response is Tarun Trikha sending some anonymous e-mail to TeamTVIOz, which we cannot independently confirm. And as explaiend before, TT is NOT a TVI Express employee, at least officially. So why is HIS name and face showing up all the time? Where are the TVI Express corporate heads? 

And finally, TVI Express is claiming they will defeat ACCC's lawsuit like ACN did before. What you have to realize is ACN 1) fully cooperated with ACCC, by opening its accounting books and such for the investigation, 2) the lawsuit took several years, and ACN actually lost the first round, but only won on appeal  3) have real products and services for sale 4) pays nothing until CUSTOMER (not additional distributors) are acquired 5) executives are readily identifiable and reachable 6) have real "code of conduct"... You get the idea. ACN is a legitimate business, TVI Express is NOT. Thus, any comparison is pointless. 

So there you go. I predict a speedy victory for ACCC, unless their lawyers completely **** up their case, and that is unlikely.
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Huahahahahaha said...

You could see on Indonesian version,
the truth behind TVI:

also we get interesting news from TVI top leader in Indonesia ( Mrs. Goen ):
i give link first:

She said in indonesian:
Dear All Members, Leaders, Associates

Menanggapi kabar negatif yang beredar di BBM dll, saya leader dari Golden Eagle support systems, menjawab :

1. Berterimakasihlah kepada yang terus memforward berita jelek tentang TVI karena sebetulnya kita sedang mendapatkan iklan gratis dari mereka.

2. Kabar yang beredar di Australia tersebut adalah benar adanya, tapi itu adalah karena kesalahan "OKNUM", bukan karena kesalahan TVI.
Oknum tersebut menjanjikan PASTI dapat uang 100 juta dalam 3 bulan dan menjanjikan dapat hotel gratis 6 malam di HOTEL BINTANG 5 (Pertanyaan saya, bagaimana mungkin bayar 2,6 juta bisa dapat hotel bintang 5? dan siapa yang salah?)

Contoh : seorang salesman kursi pijat mengatakan kepada customernya, "Pak.. garansi 3 bulan materai kalau tulang bapak tidak sembuh, saya tanggung jawab! lalu dengan pembelian kursi 2,6 juta ini 3 bulan kemudian akan saya kirimkan bonusnya 100 juta rupiah ke rumah bapak!"

Perhatikan! ini adalah "Over Promotion" dan SANGAT GILA!
Tindakan ini ilegal di perusahaan manapun, perusahaan Anda pun kalau ada salesman seperti itu pasti kena sangsi sosial dan sangsi hukum. dengan pesan ini saya mengajak Anda dan mengedukasikan Anda untuk TIDAK MELAKUKAN "OVER PROMOTION MARKETING"!!
Bekerjalah secara jujur, apa adanya, jangan memaksa. Hotel di Indonesia sudah ready booking secara offline dan sudah BANYAK yang menikmati, jadi kita di Indonesia baik-baik saja dan tidak ada masalah apapun..
Dear All Members, Leaders, Associates

3. Soal kabar yang beredar di kaskus, itu adalah kembali kepada "handling objection" atau bagaimana menghadapi keberatan.
Mereka tidak tahu perhitungan TVI dapat hotel kenapa bisa murah, darimana untung perusahaan, jelas saja macam melihat pesulap tersohor David Copperfield menembus tembok Cina, seperti "ilmu hitam" katanya.

Karena MEREKA TIDAK TAHU DARIMANA UNTUNGNYA DAN CARANYA KERJASAMA DAPAT "HOTEL MURAH" sehingga mereka mengaggap ini pun penipuan, macam pesulap dibilang punya ilmu hitam.

Leaders! Bangkitlah dan kuatlah! Kita berlayar dengan BAHTERA yang akan menyelamatkan hidup jutaan orang!
Ombak pasti sangat besar karena kita berlayar dengan kapal besar, yang akan bertahanlah yang akan berjaya ketika ombak mulai surut, janganlah ketakutan dan malah meloncat ke laut karena itu adalah bunuh diri dan tidak menyelesaikan apapun!

Perusahaan besar, angin dan badainya pun besar. Saya leader bangga dengan TVI karena saya makin yakin bahwa TVI adalah bahtera besar yang bisa membawa kita kepada FREEDOM / KEMERDEKAAN yang sesungguhnya!

Tertanda, Leader Golden Eagles.

i give simple translation, and the core meaning.
1. She thank for all bad information about TVI, because give free advertizing for TVI
2. She agree about case in Australia, but it's not TVI, just leader in TVI
She also told: "It's imposible to give hotel 5 star 7day6night with just 2,6million IDR (USD$275)"
Also told leader don't over promotion. ^_^

It's very interersting that top leader in Indonesia talk like that.
"It's impossible to book 5 star hotel 6night with USD275."
She, herself denial what TVI wrote in their web. ^_^

Kasey Chang said...

The problem is Mrs. Goen talks a good talk, but reality indicates otherwise.

1) If all publicity is "good" publicity, then why is BP spending millions buying air time for commercials saying "We will fix it" about the Gulf of Mexico oil spill? According to Mrs. Goen, BP should be enjoying all this "free publicity".

2) Is it really TeamTVIOz's fault that TVI Express never explained what "code of conduct" is for their distributors? Is it TeamTVIOz's fault that the whole TVI Express thing IS a pyramid that relies on recruiting with no real product? Or is Mrs. Goen suggesting that all recruiting should be done in secret, under the radar of law enforcement, and essentially become fugitives?

3) Mrs. Goen clearly do not understand David Copperfield is an ILLUSIONIST. In fact, the "Masked Magician" had already explained how the whole trick is done in his series "Magic's Greatest Secrets Revealed", by "passing through" a wall of steel containers.

And finally, Mrs. Goen chose an interesting metaphor. Something about "no need to abandon ship in a storm"... You only stay on the ship in a storm if you are sure the ship is not leaking and sinking.