Review of The Prosperity Automated System
Scam? Pyramid Scheme? Or So-Called Self-Promoting Home-Based Business? Read this Review of Prosperity Automated System to learn a LESSON from it!
Review
Prosperity Automated System (PAS) got more than 8500 members in less than 1 year. It is still under SEC investigation and may be shut down. What is the PAS? Is it a scam or pyramid scheme? Legal or illegal?
The Prosperity Automated System is owned by the Prosperity Network, Inc. - a company based in California and was launched on Oct. 2005. PAS is so called self-promoting business. Its services include calling prospects and closing sales. In addition to promoting itself, 6 links are allowed to put on individual PAS site.
1. PAS is nothing but pyramid scheme?!
Prosperity Automated System provides real services: lead following up and calling your prospects. The issue is: PAS owners make profit almost from recruitment, using a so-called 1-up compensation plan. For eg. , when you purchase a system with $3895, $3000 is for your upline and $895 is for the company. After your first sale is rolled to upline, you are qualified and earn $3000 commission thereafter.
PAS looks just like a sophiscated pyramid scheme. Let's do a simple mathematics here. PAS member can make profit if he or she made 3 sales. Suppose there are X members who smile now, then there are about 3X who don't. That's is: only 1/4 or less can really make money.
"A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered." From Wikipedia.
Latest news: Prosperity Network Inc (PNI) is still under SEC investigation. The result may come out in the near future. It was said that PAS has been sold to Mega Wealth Group and new business model called Prosperity International was lauched. (please bookmark this site to know further inside news of PAS.)
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19848 / September 27, 2006
Securities and Exchange Commission v. William M. Osterhout and Prosperity Network, Inc. d/b/a Prosperity Automated System, Civil Action No 1:06-CV-2318 (N.D. Ga., filed September 27, 2006)
The Securities and Exchange Commission announced today that it has filed a Complaint and Application for Emergency Relief in the United States District Court for the Northern District of Georgia to halt an ongoing pyramid-scheme fraud by William M. Osterhout ("Osterhout") of Citrus Heights, California and his company Prosperity Network, Inc. ("PNI"), also located in Citrus Heights, California. In the Complaint, the Commission charges that, since at least July 2005, Osterhout and PNI, an entity he controls, have conducted an unregistered and fraudulent offering of securities through the sale of membership interests in the so-called Prosperity Automated System ("PAS") - a supposed web-based "marketing portal" that Osterhout and PNI have claimed to investors will generate "substantial passive income" with "[n]o prospecting," "[n]o advertising," and "[n]o selling." In fact, PAS is nothing more than a fraudulent pyramid-scheme that is destined to collapse and leave the vast majority of investors with substantial losses. The Complaint alleges that the defendants, using a series of approximately 25,000 interconnected PAS websites, have sold more than $15 million in PAS memberships to more than 5,000 individual investors.
The Complaint further alleges that in order to purchase a PAS membership, prospective investors submit their personal information into an existing PAS website and agree to be contacted by a PAS team leader, who then directly solicits the investor. Investors who choose to purchase PAS memberships receive the following: (1) their own unique replicated PAS website that automatically offers PAS memberships to additional prospective investors; and (2) the services of PAS team leaders to solicit new prospective investors. The proceeds from an investor's first sale of a PAS membership must be paid to an earlier investor; thereafter, PAS investors retain commissions for each subsequent sale of PAS memberships to new investors while directing part of the sales proceeds to PNI. Although PAS can purportedly be used to market goods and services in addition to PAS memberships, PAS is designed to generate returns for existing investors based almost entirely upon the sales of new PAS memberships to downline investors. As there are a finite number of prospective investors who could ultimately choose to invest in PAS by purchasing a membership, PAS is a pyramid-scheme that will collapse when there are no further investors, leaving the majority of downline investors with losses.
The Complaint also alleges that Osterhout and PNI's conduct violated Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In the Complaint and Application for Emergency Relief, the Commission seeks a temporary restraining order, preliminary and permanent injunctions, an accounting, asset freeze, disgorgement of ill-gotten gains, prejudgment interest and civil penalties against Osterhout and PNI.
The litigation remains pending as to all parties. (from http://www.sec.gov )
2. How do you pay and get paid?
You will get paid right after the sale is made because the payment is processed through individual merchant account, check, e-gold, wire transfer etc. This makes it very hard to track or ask for refund.
3. Warning
1-Step System, Predator Marketing System and newly lauched Prosperity International are similiar to the scheme of Prosperity Automated System. Many High Yield Investment Programs (HYIP) are probably pyramid schemes. Doing research before you join!
Three Entry Levels of PAS:
The PAS Premier Package at $3,895
At the Premier level, after your first sale passes to your referrer (qualify sale), you' ll receive $3,000 commission per $3,895 sale – or $1,100 per $1,995 sale.
The PAS Basic Package at $1,995
At the Basic level, after your first sale passes to your referrer (qualify sale), you' ll receive a maximum of $1,100 commission each sale irrespective of the value of the sale.
Associate position available at only $49.95
You will have to pass your first three product sales prior to becoming qualified.
"How Prosperity Automated System works"
The ideal sales and closing process of the Prosperity Automated System software is as follows:
A person searching for a business opportunity responds to an ad online or offline through marketing that is provided by the company. Also, this person could be actively searching for an opportunity via any one of a multitude of search engines.
After touring the PAS website, if the prospective visitor is still interested, he or she may decide to fill out a Callback Request Form directly on the website. This will schedule a phone call from a knowledgeable and professional PAS Team Leader. The Team Leader is not a salesman, but is a PAS representative who is instructed to answer questions and to help the prospect understand the Prosperity Automated System opportunity.
Ideally after speaking with the Team Leader, the prospect will feel very comfortable becoming a PAS member and will sign up immediately with the guidance of the Team Leader. As of this editing, the Properity Network, Inc. states that the Team Leaders have an approximate closing rate of 80%.
The Team Leader will then inform the PAS member that his/her website has generated a sale and payment is on the way via check, money order, bank transfer or any method at the discretion of the PAS member.