HONOLULU – A new money making opportunity from a company that calls itself “the center of the online universe” could be nothing more than a pyramid scheme. A Better Business Bureau (BBB) investigation shows that iJango—a new self-described multi-level marketing company—is aggressively seeking representatives for a product with no track record and a business model with red flags. Consumers are paying hundreds of dollars in upfront fees based on the claim that they can earn money by recruiting others to do the same—a red flag for pyramid schemes.
Multi-level marketing (MLM) is one form of compensation often used by direct selling companies; sales agents recruit other sales agents and receive a cut the new agent’s product sales. Pyramid schemes, which are illegal, promise that participants can make money by recruiting people who then pay for their own opportunity to recruit people. The money is then filtered up through the pyramid.
“Millions of people earn honest money by selling products through multi-level marketing. However, some money making opportunities blur the lines between MLM and pyramid schemes,” said Dwight Kealoha, chief executive officer of Hawaii’s BBB. “iJango is making big promises about its money making potential, but based on BBB’s investigation, we believe the potential to generate revenue primarily depends on the ability of participants to recruit additional representatives.”
More than 3,400 people nationwide have contacted BBB to check out Austin, Texas-based iJango since it launched on August 1, 2009. iJango is being marketed heavily online, including YouTube and Twitter, through spam e-mail campaigns, and at in-person sales presentations across the country.
In the company's promotional materials, iJango is described as an interactive Web site portal for customers to access social media and interact with online merchants. iJango claims that their representatives can make money by inviting "friends, family and associates to use iJango...for FREE!" The business claims that this portal tracks individuals' Web surfing and e-commerce activities, thereby generating commissions payable to iJango based on users’ Web page views and purchases.
iJango says participants can pay an upfront fee of $50 to join the program, but recommends purchasing a package for $149.95 with a monthly maintenance fee of $19.95. The company further claims that consumers participating in the program will earn income in two ways:
- The recruitment of other individuals to purchase the opportunity and the recruitment of registered customers.
- Commissions that are generated by Web site traffic and purchases through iJango Web site portals.
Along with concerns about iJango’s business model, BBB has recently received complaints about the ease of use of its portal, delayed materials and alleged difficulty in canceling membership. The company has responded to some consumers by stating that they have issued, or will issue a refund. iJango has earned a BBB rating of F and its full BBB Reliability Report™ is available online.
iJango co-founder Cameron Sharpe also co-created Ultimate Introductions—aka Ultimate Singles—a purported Christian dating service that generated complaints from customers after charging thousands of dollars and failing to deliver on promises. In 2004, a company sued Ultimate Introductions for theft, fraud and unfair competition, and forced it to go out of business as part of the settlement.
BBB recommends caution when considering any business opportunity and offers following advice in order to make an informed decision:
- Avoid any plan that places primary emphasis on commissions for recruiting additional distributors. It may be an illegal pyramid scheme.
- Beware of plans that require purchase of expensive products and marketing materials upfront. These plans may be pyramid schemes in disguise.
- Beware of plans that claim to sell miracle products or promise enormous earnings.
- Don't pay or sign any contracts in an "opportunity meeting" or any other pressure-filled situation without first taking time to think over the decision. Talk it over with a family member, friend, accountant or lawyer.
- Remember that no matter how good a product may be or how solid a multi-level marketing plan appears, an investment of time, as well as dollars, may be needed for your investment to pay off. If it sounds too good to be true, it probably is.
For more information on pyramid schemes and to check the reliability of any business, start at bbb.org.