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Cellphones Wireless Networking

One Year Later, Zer01 Web Site Disappears 155

Posted by kdawson
from the perilously-close-to-ponzi dept.
alphadogg writes "Zer01 Mobile — making promises of flat rate, no contract, unlimited cell phone service — made its grand entrance at the annual CTIA wireless convention about a year ago, but now the company's Web site has disappeared. The site recently began redirecting visitors to Google.com. Zer01, which was lauded for its plans in the mainstream press, aligned itself with a multilevel marketing company called Global Verge (whose founder had earlier been convicted of securities fraud), and the two companies began recruiting salespeople who paid a monthly fee to be part of a sales program. (Since then, Global Verge and Zer01 parted ways and Global Verge filed a lawsuit against its former partner.) But no mobile service from Zer01 ever materialized. Salespeople were promised payment based on how many other salespeople they signed up to the program, although few appear to have received payment. But as late as the fall CTIA show in October, Zer01's CEO was still promising to launch the mobile service."
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One Year Later, Zer01 Web Site Disappears

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  • by Anonymous Coward on Tuesday March 16, 2010 @05:21PM (#31502284)

    So, based on no further information than that in the article... can you say Multi-level marketing scam? I knew you could

  • People never learn (Score:5, Insightful)

    by cytoman (792326) on Tuesday March 16, 2010 @05:24PM (#31502316)
    A simple adage - "If it's too good to be true, it probably is". People never seem to learn it. Always falling for scams. I'm not surprised.
  • by Sparkycat (1703438) on Tuesday March 16, 2010 @05:36PM (#31502436) Homepage

    "Salespeople were promised payment based on how many other salespeople they signed up to the program, although few appear to have received payment."

    The only newsworthy part of this is that Slashdot and others thought this business model was newsworthy in the first place.

    It's a Pyramid Scheme with the phrase "Cell Phone" tacked on, anyone who bought into this deserved what they got.

  • by SomeJoel (1061138) on Tuesday March 16, 2010 @05:37PM (#31502440)
    Most people are bad at math and logical reasoning. The sooner you accept that, the sooner the world will suddenly make sense.
  • by cosm (1072588) <<moc.liamg> <ta> <3msoceht>> on Tuesday March 16, 2010 @05:40PM (#31502484)
    If you market to people's hopes & dreams, you will always find suckers for your hollow ploys.

    Cosmetics are generally useless from a utilitarian standpoint, and yet mass marketing pushes that shit out to the female demographic as if they would evaporate without it, and now we're stuck with the fucking Barbie generation. Give somebody the hope that you can fulfill their dream, and you will have their wallet.
  • Our Old Friend (Score:5, Insightful)

    by cosm (1072588) <<moc.liamg> <ta> <3msoceht>> on Tuesday March 16, 2010 @05:48PM (#31502584)
    Is that you Amway? [amway.com]
  • by L3370 (1421413) on Tuesday March 16, 2010 @06:06PM (#31502756)
    multi level, or network marketing is a legal scheme provided that there is a tangible product or service in the mix, like those herbal juices you see advertised on the back of peoples cars. Zer01 only sold the idea of a future product...vaporware. This doesn't seem to be an "MLM" type scam to me, but a full fledged 100% illegal pyramid scheme.
  • by houghi (78078) on Tuesday March 16, 2010 @06:19PM (#31502908)

    recruiting salespeople who paid a monthly fee to be part of a sales program. [...] Salespeople were promised payment based on how many other salespeople they signed up to the program,

    That has pyramid scheme written all over it. I wonder why it took so long and why no legal action was taken against them. Or are these scams legal in the US?

    The moment somebody comes to me and tells me I can earn a lot of money, but first I need to pay a bit up front will NOT be my new employer. The will NOT be my business partner. They will be sorted under scammer. If I need to recruit people and payed on basis of how many people I can enlist, I will NOT work for that company (unless I am HR.)

    Why were they not closed sooner? Even without the links to other dubious companies, this sounds like a first class pyramid scam.

  • by Anachragnome (1008495) on Tuesday March 16, 2010 @06:24PM (#31502942)

    Greed is probably the greatest foe of common-sense.

    I say "probably" only because I think religion is neck-and-neck.

    Combine the two, and, well...you end up with the likes of the Trinity Broadcast Network and Joel Osteen.

  • by KahabutDieDrake (1515139) on Tuesday March 16, 2010 @06:42PM (#31503094)
    Compared with the vast majority of slashdotters (for instance) that saw this as a scam from the very get go. I think my point here would be that you are "bad at math and logical reasoning" if you can't spot a pyramid scam the second someone shows it to you. Even real MLMs are only just barely not scams, and it doesn't take a genius to work out just how stupid this entire scheme was.

    I'm not implying that I expect the majority of people to be "good" at math and logic, I just expect them to not be retarded either. Clearly I'm going to have to work on my expectations, as they are off a bit.
  • by Anonymous Coward on Tuesday March 16, 2010 @06:48PM (#31503150)

    You can be bad at math without being worse than average. It's possible for the average to be bad. If 80% of people answer 5 when you ask them for the square root of 36, then 80% of people are bad at math.

  • by Jer (18391) on Tuesday March 16, 2010 @06:49PM (#31503162) Homepage

    Most people are bad at math and logical reasoning. The sooner you accept that, the sooner the world will suddenly make sense.

    Meh. Many people are greedy fools who think they're smarter than average and can't be easily tricked. Con artists have time-tested, good methods to exploit these attributes. Pyramid schemes are actually a great tool for exploiting people who think they're smarter than average - after all they only have to con X other people into the scam and then they're set. Clearly they're going to be able to find X other people who are dumber than they are that they can exploit and get money out of. And the X other people they con into the scam? Who cares - they're idiots and shouldn't have let themselves get conned into a pyramid scheme...

    Nobody in a pyramid scheme thinks they're going to be left holding the bag at the end. That's how pyramid schemes work. They work great even if all of the participants are fully aware of the fact that they're in a pyramid scheme because everyone at every level is convinced that it's only the suckers below them who are going to lose their shirts and that their own risk is minimal. Even if everyone has awesome logical reasoning skills if they start from a faulty premise (i.e. I'm too smart to be left holding the bag at the end of this scam) they're going to reach a faulty conclusion.

  • by PopeRatzo (965947) * on Tuesday March 16, 2010 @06:54PM (#31503206) Homepage Journal

    From the summary:

    began recruiting salespeople who paid a monthly fee to be part of a sales program

    What more do you need to know?

  • by nedlohs (1335013) on Tuesday March 16, 2010 @08:03PM (#31503674)

    If the expected returns on the investment does not meet the expected payouts and the difference is made up by new contributors then it is by definition a pyramid scheme.

    Social security funds are invested in treasuries. The expected returns on those are crap (since interest rates are being held low). And of course the Treasury doesn't have the money to pay back those bonds anyway - the government balance sheet is in the red. Of course it can print it, but that leads to a whole bunch of other problems.

    What would happen if SS contributions were cut to 0 tomorrow - no more contributions to social security (the equivalent on no one earning any taxable income). Could SS make all the payments it is on the hook for now? What about when the baby boomers all retire? If not then it is a pyramid scheme since it is relying on future contributions not investments to make payments.

  • by MrNaz (730548) on Tuesday March 16, 2010 @09:04PM (#31504040) Homepage

    You fail to grasp the postmodern movement. In the modern epistemological paradigm, if 80% of people agree that the square root of 36 is 5, then the process we are morally obliged to embark upon is a redefinition of what the square root of 36 is, followed by a re-evaluation of all of the principles that are based upon the old, now-incorrect fact.

    Failing to undertake this could result in children being left behind. We cannot afford to allow this to happen. Thus, we must allow not allow inflexible principles of mathematics to handicap the education of our children or the development of society as a whole.

    (Just in case it's not clear: This post is sarcastic.)

  • by vegiVamp (518171) on Wednesday March 17, 2010 @07:04AM (#31506824) Homepage

    Tupperware parties ?

  • by Teancum (67324) <robert_horning@n ... minus physicist> on Wednesday March 17, 2010 @07:33AM (#31507042) Homepage Journal

    I use this criteria for telling off a MLM distributor:

    If you can get me a better deal by buying your product through you as opposed to what I can buy at the local Wal-Mart or from other local retailers, I'll buy it from you.

    Sadly, I have yet to get a single MLM marketer to take me up on the offer. The truth is they can't compete except on sky high promises and on schemes that ultimately put so many hands into the profit stream that you can't get a reasonably priced product even if you tried. In fact, as a part of the sales pitch they will start to tell me that I can get these fabulous discounts if you become a high ranking salemen, which is where you can start to have prices compete with conventional retail outlets. The truth is even with these so-called discounts they still aren't all that good of a deal.

    What these companies are selling is dreams, and as such it is a scam. The 17% to non-members may even be high, but I'd have to agree with you that it is a problem.

  • by sorak (246725) on Wednesday March 17, 2010 @09:07AM (#31507938)

    People in financial trouble tend to get desperate and throw all logic out the door. I got taken for an incredibly stupid scam, once. It was one of those "The post office is hiring. Pay us for the training kit" scams, and I cannot stress hard enough that it was stupid. But, I had an unemployed wife and a baby to support, and I had just lost my job.

    Things seemed desperate, and in those situations, people tend to throw logic out the door. So, the problem isn't just that most people are stupid, and some of us are smart. It is that our critical thinking skills are often impaired when we are at our most vulnerable, and that is the truly pathetic thing about these scams. Get rich quick schemes are not taking advantage of the people who have some money and want more. They're most effective when taking advantage of the people on fixed incomes, the unemployed, and anybody else who doesn't know how the next bill will be paid. They are profiting by kicking those of us who are already down.

"In the face of entropy and nothingness, you kind of have to pretend it's not there if you want to keep writing good code." -- Karl Lehenbauer

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