A few minutes’ research into Instant Payday Network begins to immediately raise red flags that this project is a scam.
Firstly, there are many slightly different Google results, because it’s a Multi-Level Marketing (MLM) scheme, which means that individual users are incentivized to recruit other people into the program. So, various people set up websites with Instant Payday Network in the domain name, making it difficult to access the direct source site.
Secondly, these other Instant Payday sites redirect people to sign up on other sites, including My Cash Freebies and others. In fact, many sites that claim to be reviews and appraisals of Instant Payday Network are simply a different way to recruit affiliates. There are so many domains and website variations with either no attribution, or attributed to different people, that it is readily apparent that there is some level of scam or deception at work.
Some sites claim that Instant Payday Network shut down in 2015, although some of the sites are still in operation. MLM networks eventually do collapse; once the pyramid reaches a certain size, it can no longer generate revenue or expand and recruit faster than complaints are lodged. Statistically, MLM schemes can’t survive beyond the fourth or fifth recruitment level, due to the exponential nature of their growth. However, these collapsed systems are often simply re-launched under a new name.
Whatever the domains and names of these secondary sites, Instant Payday Network participants are ultimately part of the Empower Network.
Empower Network just filed for bankruptcy in August of this year, with much publicity in some circles. The end was heralded in June 2017 by a disturbing video posted to Facebook by founder David Wood, where he ordered viewers to buy the company’s products or risk his curse on themselves and their families.
Empower Network was launched in October of 2011 and recruited newcomers with a combination of lucrative returns and charismatic leadership from David Wood and David Sharpe. Empower Networks in particular is interesting because their “product” was a blogging platform and training on SEO and web visibility techniques, a fact which is still apparent when you search for the company, the founders, the sites, and the reviews.
Empower Network was an MLM scheme, and these function by recruiting more people to join the scheme, trickling money upward to the top of the pyramid. Those people who joined early made money, so their testimonials incentivize others to join the network, thinking that they might make money as well. This inherent bias in the system, coupled with the extensive use of online SEO tools, makes it difficult to discover how much the average person made or lost during the lifetime of Empower Network.
It costs a newcomer about $5000 to purchase all the products and fully commit to the system, but then affiliates made about $4650 for everyone they recruited to join and purchase the products.
In August 2017, David Wood released another video via Facebook, announcing the closure of the company. Upon watching it, it seems that perhaps Empower Network wasn’t simply an MLM scheme, but perhaps a Ponzi scheme as well.
A Ponzi scheme operates by using revenue generated from new affiliates to pay the extravagant returns promised to older affiliates. The structure is similar to an MLM scheme, but is even more fragile. When new people stop joining, the cash flow stops and the entire structure collapses. In David Woods’ final video, he alludes to accounting issues and debts that had been plaguing the company for years, which implies that the business model may have more closely mirrored a Ponzi scheme than an MLM.
While MLM schemes are legal, they are very similar in structure and practice to illegal pyramid schemes, and many claim that the two are virtually identical, with just enough differentiation to keep MLM schemes from being shut down by the government. Whether or not they are illegal, many people find them unethical and perhaps personally uncomfortable.
For example, when joining an MLM scheme (also called “network marketing” or “affiliate marketing”), a person ultimately has to invest some of their own money in the products, even when the claim is that they can start making money with no investment. Having purchased the products, the only way for that person to recoup their investment is to sell the product to a friend, coworker, or family member, or recruit those people to also join the scheme and purchase the products themselves. Some people find it personally difficult to look to their friends and family as a revenue source, which is why it is emotionally easier to set up a website and attempt to distribute to or recruit strangers.
MLM schemes often employ very persuasive psychological tools to recruit, engage, and motivate people. Some people even compare MLM emotional sales techniques to cults, in the sense that participants are expected to not simply take up MLM as a part-time job, but to engage on a deep emotional level with the brand, the products, and the leadership.
Finally, people who participate in an MLM scheme often fall into the Sunk Cost Fallacy: having gone so far and invested so much, they don’t want to abandon the project without gaining a return (perhaps a gambler would call it “breaking even”), so they continue to invest time and money. There is a natural reluctance to admit to the self, as well as family and friends, that the enterprise was a failure, and MLMs blame affiliates themselves for losses, rather than the impossible system. These impulses can keep people participating in an MLM scheme far longer than is financially viable.
In David Woods’ final Empower Network video, he promised that he was working on something new and better that would launch once Empower had completed bankruptcy proceedings. He still has an avid group of friends and followers who will be willing to join him on the next venture. But it would be wise to treat any new venture from Woods and his team with extreme caution, no matter what review websites might say. Empower Network demonstrates that these networks can be harmful in practice, but difficult to identify ahead of time.
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