Zeek Rewards Shut Down and the SEC
It was not a surprise at all the Zeek Rewards and Zeekler were shut down last week.
I've had several calls and emails over the last several months about Zeek Rewards, especially as they climbed up the ranks to the top 10 on MLMRankings.com ( rankings are based on interest, not on quality of the company ) and in every response I said the same thing:
Zeek Rewards will be shut down, and most likely people may go to jail.
When they asked why, did I think Zeek Rewards was a ponzi or a pyramid, I would say, not in the sense that you think of other MLM companies being a 'pyramid scheme' but because they are taking money from people as an "investment", not calling it an investment, in fact going to great lengths to make sure everyone was trained to specifically not use the term "investment", but when I looked at back office details on the returns on these Investments by any other name, it was crystal clear that Zeek Rewards was operating as part of its back end a non-registered investment scheme.
I would like to give them the benefit of the doubt, and say, well, maybe they just didn't know it was really an investment - but all the shenanigans to try to misdirect and label the investment aspect as something else makes that doubtful at best.
Here's how it worked. Forget about the cash for bids, and the ridiculous requirement that you had to essentially spam a classified ad every single day ( the only reason they ramped up and ranked so high on MLMRankings.com ) the core problem was the leaders were pitching a deal where you put funds on deposit with Zeek Rewards, an in turn earned a very hefty percentage return. That returns turned out not to be from profits, but from other people in turn investing their own money in Zeek Rewards. That is the definitely of an Ponzi investment scheme.
Here is a snapshot of an actual back office account for the "Profit Pool Award":
To help ensure that the retail profit pool finishes quicker, we're limiting the start time of this report while the retail profit pool is running to a 10 days in the past from the end time of the report.
The full history will be available again when the retail profit pool completes. |
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7/30/2012 6:05:27 AM |
Retail Profit Pool Award for : 7/28/2012 |
0.00 |
3,598.00 |
3.38 |
378.80 |
$0.00 |
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7/28/2012 5:33:59 PM |
Retail Profit Pool Award for : 7/27/2012 |
0.00 |
3,598.00 |
3.35 |
375.43 |
$0.00 |
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7/28/2012 1:34:17 AM |
Company Pool Resulted in 195 VIP Points. You earned 195 VIP points from Paying Back Bid Advance On Customer, Giving Bids To Your Personally Sponsored Customers |
195.00 |
3,598.00 |
0.00 |
0.00 |
$0.00 |
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7/27/2012 2:20:42 PM |
Retail Profit Pool Award for : 7/26/2012 |
0.00 |
3,403.00 |
6.97 |
372.08 |
$0.00 |
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7/26/2012 3:38:05 PM |
Retail Profit Pool Award for : 7/25/2012 |
0.00 |
3,403.00 |
6.77 |
365.10 |
$0.00 |
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7/25/2012 12:03:30 PM |
Retail Profit Pool Award for : 7/24/2012 |
0.00 |
3,403.00 |
6.78 |
358.33 |
$0.00 |
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7/24/2012 9:06:39 PM |
Company Pool Resulted in 92 VIP Points. You earned 92 VIP points from Paying Back Bid Advance On Customer, Giving Bids To Your Personally Sponsored Customers |
92.00 |
3,403.00 |
0.00 |
0.00 |
$0.00 |
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7/24/2012 2:53:57 PM |
Retail Profit Pool Award for : 7/23/2012 |
0.00 |
3,311.00 |
6.49 |
351.55 |
$0.00 |
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7/23/2012 1:11:15 PM |
Retail Profit Pool Award for : 7/22/2012 |
0.00 |
3,311.00 |
3.04 |
345.06 |
$0.00 |
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7/22/2012 4:48:01 PM |
Company Pool Resulted in 58 VIP Points. You earned 58 VIP points from Paying Back Bid Advance On Customer, Giving Bids To Your Personally Sponsored Customers |
58.00 |
3,311.00 |
0.00 |
0.00 |
$0.00 |
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7/22/2012 1:21:04 PM |
Retail Profit Pool Award for : 7/21/2012 |
0.00 |
3,253.00 |
3.15 |
342.02 |
$0.00 |
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7/21/2012 10:51:19 AM |
Retail Profit Pool Award for : 7/20/2012 |
0.00 |
3,253.00 |
3.02 |
338.86 |
$0.00 |
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7/20/2012 10:37:56 PM |
Company Pool Resulted in 119 VIP Points. You earned 119 VIP points from Paying Back Bid Advance On Customer, Giving Bids To Your Personally Sponsored Customers |
119.00 |
3,253.00 |
0.00 |
0.00 |
$0.00 |
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7/20/2012 12:46:39 PM |
Retail Profit Pool Award for : 7/19/2012 |
0.00 |
3,134.00 |
6.29 |
335.84 |
$0.00 |
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This was from an initial "investment" of $2500.00
When asked about this, and shown these numbers, my straightforward advice was "Get out while you can."
I've seen posts elsewhere about the Zeek Rewards Shut Down, and most people keep parroting the company meme "But it's NOT and INVESTMENT because the company SAYS its NOT an INVESTMENT".
Guess what people, the company can call it whatever they like, the SEC took a look at it and decided it was an investment, and since they have the black suburbans, the cool sunglasses, badges and guns, they win. Zeek Rewards loses.
All the complaining in the world won't change a thing. If Zeek Rewards had just operated a simple penny auction site, they may have been okay, but even the FTC issued a warning last year about penny auction sites which puts all of these companies ( Bidify, etc ) in potential peril from additional federal scrutiny.
Sorry to those who lost money, this isn't an attempt to ridicule anyone who invested in or believed in this business model, but it's a perfect example of when something seems to good to be true, it usually is. Plus, there were all kinds of red flags out there about Zeek Rewards and Zeekler. Everything from past business failures for the executive team, lack of contact info, and lets face it, a really really cheesy site.
