Consumer Co-Op Fraud
Chris Gunn
Tuesday, April 9th, 1996
Many of us are used to seeing pyramid schemes out there on the Net. Well,
here's a twist that you might find interesting. These groups go by many
names, Co-Op's, Purchasing Alliance, Buyer's Leagues, etc. They make you
think that they're just a bunch of normal people, banding together for
greater purchasing power. They claim that through bulk buying they can get
things much cheaper for their members.
Doesn't sound bad so far? In fact, it sounds like some major stores like
Price Club or Sam's. The difference is the membership. You usually have
to pay a very stiff membership fee of $100 to $1000. There's also usually
a requirement that you recruit new members who also pay that fee. You may
even get a percentage of their membership fee as a commission or you may
qualify for bigger discounts by recruiting. The problem is, it can't be
done. The volume of sales and number of members required for this to work
as described would quickly overwhelm any grassroots organization and
require the resources of a major corporation. That's why the bargain
stores are parts of major retail companies.
There won't be any buying of goods in this Alliance, but there will be
sales of memberships and lots of profit for the organizers. Before you get
involved, check out how you actually order the items. If the sales pitch
avoids talking about how orders will actually be filled and/or how the
volume needed is achieved, then don't get near it. The real aim of this
scheme is not to sell you items, it's to get your membership fee and the
fees of your recruits. You might find that there really isn't anything to
buy at all, except a pack of lies.
Log on the WebSite at http://www.fraud.org, or call 1-800-876-7060.
If you spot obviously illegal operations on the E-Ways, please
forward copies of the messages to NFIC at frau...@psinet.com.
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