Shinny opportunity or sham pyramids?
Kampala, Uganda | THE INDEPENDENT | Chances are high that what we describe below has happened to you. If it has not happened yet, chances are high that it will happen soon; especially if you work in the corporate or business world.
It starts when you least expect. You could be relaxing with friends at a restaurant, bar, or lounge. Suddenly, someone in the group will flip open a tablet or other smart device, to reveal a slideshow promo of exciting travel photos under a heading such as “enjoy endless adventure, beaches, nightlife”. This will zoom into an online travel club called WorldVentures, and its flagship package; DreamTrips.
You will be told you can buy discounted travel packages super cheaply if you just pay WorldVentures entry fee, plus a monthly fee to earn points per dollar you invest. And, you will be told, this is not just about opportunities to travel at discounted rates. You will be told you can actually make money – by becoming an associate and recruiting others to join WorldVentures/DreamTrips.
That is a typical pitch of a Worldventures agent; someone on the prowl to get at least four people to become paid members of WorldVentures/DreamTrips. These agents labour under Worldventures promise that as soon as the four people sign and pay, WorldVentures/DreamTrips will waive their monthly bill. Instead, they will sit back, pick a dream trip from a package offered by WorldVentures/DreamTrips, and start flying to the most exciting destinations.
What is rarely mentioned is that WorldVentures/DreamTrips is a very controversial business and does not cover the flight costs. If you want to fly, you must pay for your ticket. The WorldVentures/DreamTrips offer only begins when you land at your destination. Despite such caveats Worldventures has been growing.
Founded in Plano, Texas, USA, in 2005, WorldVentures has more than 500,000 members in nearly 42 countries with revenue of US$947 million in 2016. In June 2018, it announced surpassing cumulative US$2 billion in sales over the past three years (2015 to 2017) and expanding to 12 new countries. That is no mean achievement for a company that many had predicted would collapse under the weight of Ponzi schemes.
Uganda, where it started in July2017, is one of the latest entrants to the WorldVentures web. It is part of the Africa region, headquartered under WorldVentures Marketing South Africa.
In a statement at Uganda’s entry in July, WorldVentures founder Wayne Nugent, said it is part of a strategy to power growth by creating new markets and changing the landscape of existing ones.
“Africa is a strong area of focus and expansion there demonstrates our ongoing commitment to share the WorldVentures opportunity with every person across the globe,” Nugent said.
The statement said Ugandans with entrepreneurial ambitions can join hundreds of thousands of Independent Representatives across the globe who are earning income by selling WorldVentures’ flagship product — DreamTrips™ Memberships. Additionally, DreamTrips members in Uganda can enjoy the curated group travel at competitive pricing and exclusive, local dining and entertainment experiences that are hallmarks of the DreamTrips brand.
Early this year WorldVentures also established operations in France as a branch of its Dutch operations. “Today, we have the vision and leadership to thoughtfully enter into new markets to bring more fun, freedom and fulfillment to people around the world,” said WorldVentures CEO Josh Paine. The company is also keen to grow in Southeast Asia.
Trailed by controversy
But WorldVentures/DreamTrips has also been running into trouble lately. In neighbouring Rwanda, the government in September sent out an advisory against it.
Although WorldVentures was new and not established in Kigali, it was picking up pace pretty fast. But the Rwanda Development Board which registers all businesses in Rwanda kicked it out on three counts; first it was not officially registered, two; it could never be registered because, in RDB’s view, Worldventures possess business practices of a pyramid scheme, and three; pyramid schemes are illegal in Rwanda.
According to a statement, RDB researched extensively on WorldVentures; including reaching out to the company’s offices in South Africa and the United States. The RDB said although the company brands itself as a travel agency facilitating international travel, investigations into its operations revealed that majority of its members were in it to earn money not travel on so-called “DreamTrips”. Apparently, many excited Rwandan were seeing WorldVentures/DreamTrips as another job opportunity.
World Ventures reacted to developments in Rwanda with a terse statement that it does not do business in Rwanda. But it received similar caution in China last year and was banned in Norway over similar concerns.
So anyone looking to make money off World Ventures/Dream trips could do well to look into stories out of Durban, (South Africa), Oslo (Norway), or Australia.
In South Africa, it is estimated World Ventures signed up more than 20000 members, many of them based in Durban. It was first registered there in 2009. Nine years today, World Ventures South Africa appears in deep trouble.
World Ventures has a catch line that says `make a living while living’ and they use promoters who pose in the most beautiful places with banners saying “You should be here.”
But the promise of fun and adventure shrouds a venture which requires hefty entry costs, depends on recruiting others over actual sales, and requires members to buy and use company products; including training events and materials.
In South Africa, for example, representatives allege they were recently “scammed” into paying US$160 (Approx. Shs600,000) for a product called the Flye Smart Card from WorldVentures, which was meant to have several benefits for members yet it could not work in South Africa.
In August, members angered by a slew of unfavourable practices; including non-payment of commissions and being forced to buy such useless World Ventures products, started a campaign against it. They posted placards around cities with the words “You should pay me. Share all over social media. Don’t join this movement. People are losing all the way”.
Well, possibly not all the way because not everyone in World Ventures is losing money. In fact, some are raking in tonnes of money.
Among them are South African couple Devraj Soojay and his wife Cassandra. They were the first people to join in South Africa and joined in 2009. And they have been earning good commissions largely, as they claim, 70% of World Ventures membership in South Africa is due to their work. And the way the World Ventures payment is structured, they are entitled to a commission from money paid by each member below them. So by July 2018, they collectively demanded commissions worth more than South African Rand 1.5 million (Approx. Shs400 million). That puts them among the top WorldVentures earners in South Africa. And that is when their problems started. World Ventures failed to pay them. And Devraj Soojay and wife sued World Ventures in a court in Texax, USA, in July. They also quit WorldVentures.
According to reports in some South African newspapers, they said that since October 2017 WorldVentures had paid them only US$65000 (Approx. Shs240 million), instead of the US$156000 (Approx.Shs580 million) due to them for commission earned. WorldVentures, through its spokesperson Sophia Stoller, agreed to pay. They blamed fraud in some of their markets abroad for causing the delays in payouts.
Technically, WorldVentures can wiggle out of being branded a pyramid scheme because it sells actual products –vacations, access to great deals on hotels and car rentals, cruises and day trips, and other WorldVentures activities. However, it has a tough time shading another badge usually slapped on it by its detractors – that it is simply a Multi-Level Marketing (MLM) network of sales agents although the DreamTrips are treated separately.
According to popular definition, an MLM is a money-making venture where a commission agent makes money not just through their own sales, but from recruiting other salespeople and making a commission from any sales that they make. When, as Devraj Soojay and his wife Cassandra did, you recruit enough people below you and you can just relax and watch the money roll in.
In World Ventures case, it has a payment schedule build on two pyramid-shaped hierarchies comprising seven ranks each. The first pyramid is called the `lineage’. The recruiter sits at the top and everyone they have personally recruited is added directly them, and those they have recruited is below them, and so on. That is a lot of people if that pyramid cascades through the seven ranks – which mean a higher rank for the recruiter and bigger commissions.
The second pyramid meanwhile is called the `binary organisation’ – because the pyramid spreads out in twos—the top spot sits directly above a left (reps you recruit) and a right spot (reps they recruit), each of which sits above its own pairs, and so on. A recruiter can earn bonuses based on sales made by the binary organisation. If that sounds complicated, you can hire an accountant to figure it out for you or attempt to use the MLM Commission Calculator on the internet.
Meanwhile, remember two facts; one that World Ventures sits on top of all pyramids – meaning it gets the biggest commission. Secondly, that you pay World Ventures to offer you the opportunity to become its agent. The payment includes the one-off payment of about US$100 and the monthly fee of about US$11 (Approx. US$120 per year). So you have to deduct that as operating expenses as you count your money.
According to one such calculation, a WorldVentures agent needs to recruit at least 30 sales representatives before they can start making money. In the process, you start climbing ranks from `Enrolled Rep, Active Rep and Qualified Rep, then to “Senior Rep, “Director and “Marketing Director, before finally reaching the lofty heights of `Regional Marketing Director, National Marketing Director and International Marketing Director’.
Alternatively, you can get real and simply read the reported statistics of what this really means – that it is possible to travel on World Ventures dream trips (if you can pay the flight fees and enjoy travelling in groups). But it is very hard work if not impossible to make money off World Ventures.
According to WorldVentures’ 2016 Annual Income Disclosure Statement, 80% of its independent representatives did not earn a commission or override between January 2016 and December 2016. Of the 20% of independent representatives that did earn a commission or override, the middle figure earned was US$200. (Source: Better Business Bureau; an American business trust rating organisation).
World Ventures is not shy about that. Some of its promotional material states there are “no guarantees regarding income”. “The success or failure of each Independent Representative in WorldVentures, like any other business, depends on the Independent Representative’s own skill, dedication, personal effort, leadership qualities, and market available,” it says.
SOURCE: The Internet