UH OH! Bad news for TelexFree! I've been warning people for the past 6 months, especially in Africa, that TelexFree was likely to get hit by regulators in the U.S. (SEC, FTC, Secret Service, Postal Authorities, State AG's, etc.) for being an ILLEGAL PYRAMID SCHEME. Anyone with any extensive knowledge of and experience in regulatory compliance, what constitutes a legitimate opportunity vs. an illegal pyramid scheme, and MLM/business opportunity law could see it coming from a mile away! First, their own home country, Brazil, shut them down in June of 2013 for being an ILLEGAL pyramid scheme, seized their assets, and have prohibited them from recruiting any new people in Brazil and paying commissions there. (They've now lost 14 appeals in court to have the original injunction against them lifted! 14! ) Now it appears that U.S. regulators have likely begun an investigation based on this statement from the regulator who shut them down in Brazil!
Here's some background: Once the principals of TelexFree couldn't bring in any more money in Brazil, as well being fined for not having a VOIP license at the time, which means they weren't legally operating as a VOIP company, they fled to the U.S. and set up operations there (after all, if you have been shut down and can't bring in any new money in your home country, in order to keep the company afloat, you have to go somewhere, and what better place than the U.S, so they set up operations there, but that's not all. People in the U.S. started promoting the program to people in numerous countries around the world, even though TelexFree was not regulatorily compliant in any of those countries, which means they are ILLEGALLY operating in them, especially in Africa! (People seem to think that you can sell your product or service and/or recruit people, pay commissions, etc., in any country you want to, which is not the case!) In fact, it appears that either the company knowingly and/or its reps knowingly are attempting to bring people who were in the Brazilian operation as participants into the U.S. operation, including Brazilians, which I am sure the Brazilian authorities will see as nothing more than a way to circumvent the legal action in Brazil!
TelexFree has so many red flags it should be at the front of a Russian parade! Based on the way their program is structured (for example, trying to pop people for around $1500 to up to $15,000, which is an obvious "front end load" and illegal) and how it being promoted by reps in the U.S. (using "no no" words like investment, guaranteed income, etc. when promoting the opportunity, which automatically puts you on the radar screen of the SEC as an ILLEGAL pyramid scheme!), regulators in the U.S. and numerous other countries are likely to consider it an ILLEGAL pyramid scheme as well! (They will likely hit them on similar charges and for similar reasons as they used to shut down Zeek Rewards recently.)
In addition, just because you are selling a product or a service does NOT make the program legitimate and/or regulatorily compliant! In fact, the regulators may hit them on the fact that they have an overpriced product that is being used simply to give the program the appearance of legitimacy. After all, you can get VOIP that TelexFree is pushing for $50 a month through Skype and use it in more countries and it's only like $15 a month, and in some cases, you can find VOIP for FREE thru other sources!
As far as the "get paid to advertise" concept, it's a good thing for TelexFree that its reps have little to no knowledge of the history of our industry. These types of programs have been done before on numerous occasions, and NONE of them have ever worked or lasted long term! In fact, the more well known ones were shut down for being ILLEGAL pyramid schemes! Do Ad Surf Daily, JSS Tripler, and Just Been Paid ring a bell?
Furthermore, they are not legally operating in any country internationally, especially in African countries! Unfortunately, most people have little to no knowledge of and experience in the area of regulatory compliance, they don't know how to properly evaluate opportunities, and they don't know the difference between a legitimate direct selling/network marketing opportunity and an ILLEGAL pyramid scheme, and as a result, they end up joining programs that are nothing more than internet money games and illegal pyramid schemes, putting themselves at risk for being arrested, prosecuted, fined, and jailed! (Top earners in Zeek Rewards as well as corporate officers were arrested on criminal charges, fined, and some will be lucky to avoid jail time, so for those people stupid enough to still be promoting TelexFree, my advice would be don't go spending any of the the money you're earning!)
The above is also problematic for the police and regulators, especially in Africa. One reason illegal pyramid schemes are able to last as long as they do is that the authorities don't have extensive knowledge and experience when it comes to knowing the difference between a legitimate opportunity and an illegal pyramid scheme, not to mention they may not have extensive laws in place regarding business opportunities, direct selling, etc. like they do in the U.S., plus they lack the manpower and resources to be able to keep up with all the scams and schemes that are out there today. (This is one reason why so many scams come to Africa! They know they can not only fool the people, but the authorities as well! for quite a while and rake in that much more money before it either slows down and collapses, or the authorities finally take action.)
Finally, just because the company pays people or that people have earned money does NOT make the program regulatorily compliant and legal! I can't tell you how many times I've heard people use this as a defense to justify the company's existence as well as their involvement in it. How do they think ponzi schemes, illegal pyramid schemes, and money games are able to survive in the first place? How do they think they become bigger?
One final note-I'm amazed at the number of people with little to no network marketing experience and no knowledge and experience in the area of regulatory compliance and MLM law want to argue with those of us who have extensive knowledge in these areas and over 30 years of industry experience! You would think that people would listen to such individuals, but instead they want to argue! Amazing, but true. You try to educate them and warn them in the hopes they make a smart decision and to help put them on the road to success, and instead of thanking you for the knowledge, information, and help, they want to argue with you and then tell you to "mind your own business," "let us make our own mistakes," etc. Such people remind me of the adage, "you can lead a horse to water, but you can't make it drink." They apparently haven't learned that it's far cheaper to learn from the mistakes of others than to make your own! We call such people "fools."
Moral of the story: Don't be a fool, which leads me to another well known adage: "A fool and his money are soon parted !" Personally, I don't and won't feel sorry for anyone who does lose money if and when the U.S. authorities hit TelexFree. It's not like you couldn't have done some proper due diligence in the first place! A simple Google search, doing some research and reading, and then applying some common sense should have set off warning bells! If one chooses to ignore all that, they deserve what happens to them! Unfortunately, in this case, it could mean being arrested, fined, and jailed if the regulators determine the program to be an ILLEGAL pyramid scheme, and you were a participant, especially a top earning participant !! Telexfree Under Investigation In The USA - SEC Involved?