So I got this little gem of an email in my inbox this week.

GREETINGS MY NAME IS ANGEL AND I AM THE DIRECTOR OF MEDIA REPRESENTING VISUAL MEDIA IMPACT IN TARRYTOWN, N.Y. I AM EMAILING YOU BECAUSE I SEE POTENTIAL IN YOUR TRAFFICKING DUE TO MY EXPERTISE OF SEARCH ENGINE OPTIMIZING. I HAVE OVER 10 YEARS EXPERIENCE WITH INTERFACE AND COMPUTER DEVELOPMENT AND WOULD LIKE TO RAISE YOUR CAPILIZATION RATES EXPONENTIALLY VIA- SPIDERS AND CRAWLERS AND OTHER COHERENT MECHANISMS AND STRATEGIC MANNERS WITH PAY-PER-CLICKS AND FULL SERVICE MARKETING MOBILE AND I-PAD XHTML APPLETS VIA-PORTABLE DEVICES. CALL ME ASAP! I NEED TO GIVE YOU A FREE CONSULTATION AND SEE YOUR FISCAL TOLERENCE LEVELS. IF AM AM NOT IN MY OFFICE TALK TO JERRY. I WANT TO FLY OR YOU FLY SO WE CAN GATHER PHOTOGRAPHS AND DEVELOP A STRATEGIC PLAN FOR VIDEOGRAPHY.

P.S- I’M PUTTING YOU ON MY FACEBOOK FOR “FREE!”

Wow. I’ve never had anybody tell me they wanted to “raise [my] capitalization rates exponentially via coherent mechanisms.”

It gets worse.

The email above was also accompanied by a voice message:

After introducing himself, “Angel” says he is “reaching abroad in a manner transcontinentally cuz I wanna network with you and I REALLY like you a lot.” After cumbersomely explaining what he does, he reveals he wants to “see my fiscal tolerance level.”

What begins as an over-the-top compliment is really just a poorly disguised sales pitch.

By the way, wasn’t it just this week that I warned you that flattery often precedes an effort to defraud?

Let’s look at all the red flags in this sales pitch:

• It begins with flattery — flattery from a stranger, no less!

• He wants to see my “fiscal tolerance level.” This phrase is designed to get the recipient to feel prideful (“Why, by Jove, I’m a man of means!”).

• He wants to fly out to see me. Again, another element to make the mark feel important.

• He mentions that he’s “put me on his Facebook for free.” Naturally, this is an effort to make me feel indebted so I will reciprocate by calling him back.

Three parts flattery plus one part reciprocity.

Overall, the pitch is perfectly horrid, even laughable.

But it’s a good example of how con men lead with flattery so you will lower your defenses.

Know the triggers and be on your guard. Not all efforts to defraud are as easy to spot as this one…

-Ryan M. HealySimilar Posts:

• Make Your Prospect Feel Special
• Three Business Models Explained
• Video #4: Copywriting Fees
• Answers to Your Most Important Questions About How to Build a Copywriting Business
• How to Spot a Con Man

Some taxes never get put to a vote. Such was the case with the “Christmas tree tax” that was announced today in the Federal Register.

The tax is a 15-cent per-tree tax on growers and importers of fresh Christmas tree. Believe it or not, this tax was supported by many growers.

Why, you ask?

Good question.

It’s because tree growers wanted a reliable source of advertising dollars to fund the promotion of fresh Christmas trees. Says this Fox News report:

The 15-cent tax on Christmas trees was announced Tuesday in the Federal Register and was meant to pay for a new board tasked with promoting the Christmas tree industry. It was supported by Christmas tree growers, who wanted a stable source of revenue to fund a new marketing campaign.

Similar taxes have been implemented in the dairy and beef industries to bring you such slogans as “Got Milk?” and “Beef. It’s what’s for dinner.”

I have to wonder, why bother going to the federal government to get a new tax on Christmas trees entered as law? Why not just set up a voluntary collective of tree growers who contribute to a common marketing budget?

Seems like it would be simpler. Members could come and go as they please.

Oh, yeah…

That’s because it’s all about control.

It’s about getting the force of law behind you so you can force every tree grower to pay the tax, even those who don’t want to.

It’s about getting a personal advantage at the expense of your neighbor.

It’s shit. That’s what it is.

The federal government has absolutely no business giving out favors to business. Yet they do. They contribute their money and influence to the growth of the dairy industry, the beef industry, and hundreds of other industries.

All to buy votes.

To maintain their control and power.

It’s wrong. But it goes on.

Of course, the title of my post is facetious. I don’t want any favors from the government. As soon as you accept one, you’re bought and paid for, subject to whatever arbitrary rules they force on you.

That’s why I refuse to participate in tax-advantaged plans like HSAs and 401(k)s. I don’t want to give the government any more control over me than they already have.

Anyway, the backlash to the already-infamous “tax on Christmas” has been considerable, the critics many. And so the tax will be sidelined… for now.

I can only hope similar public outcries will fall upon other companies and industries who’ve lobbied the government for special taxes, favors, and benefits. (I’m talking to you, DMI!)

-Ryan M. HealySimilar Posts:

• Big Government Targets Freelancers
• How Taxes Kill Business
• What Do My Tax Dollars Get Me? Government Incompetence, Of Course!
• Internet Sales Taxes and Government Fairness
• Why the Government Hates Small Business

Boiler room scams are on the rise, so I feel it’s important for you to know how this type of scam works.

• Step 1: You buy an inexpensive product or accept a “Free plus Shipping” offer from an infomercial or similar marketing medium.

• Step 2: Get a call from a boiler room where you are pitched an expensive coaching or mentoring program.

Now comes a decision point. Do you buy what was offered in Step 2 or not? If you don’t, there is no Step 3. But if you do…

• Step 3: Lose a whack of money. Could be $2,000. Could be $30,000 or more.

This kind of stuff happens every day in America and in the U.K.

Right now, boiler room scams are on the rise in the U.K. The most insidious scam involves persuading retirees and middle-aged investors to buy non-existent shares that are supposedly going to significantly increase in value in the near future.

Most boiler room scams in the U.S. involve capturing a person’s credit card information and then making unauthorized charges. Usually, there is a mysterious monthly charge that is less than $100. These charges can go undetected for months. Once noticed, it is difficult if not impossible to get the charges stopped without canceling the card.

Other boiler room scams use high-pressure sales tactics to get authorization, and then charge the card one time for a large four-figure or five-figure amount.

The victims of these scams almost never get refunds. A rare few are able to get chargebacks, but are forced to waste inordinate amounts of time and energy in order to do so. The majority never go to the trouble and just take the loss.

In Britain’s latest rash of scams, the marks are asked to wire money to a bank, usually off-shore, in order to buy the non-existent shares being pitched. Of course, once money has been wired to another bank, there is no way to get the money back. Once it’s gone, it’s gone forever.

The Telegraph reports:

DH, a Telegraph reader lost £400,000 to such a scam. He was conned by a company that appeared to be genuine – it had an FSA authorisation number and an HSBC bank account, albeit offshore. He has little hope of recovering a penny. [...] The average amount of money lost is £20,000, but the biggest individual loss to date recorded by the police is £1.2m.

The situation in the U.K. has gotten so bad that banks are now issuing letters to their customers warning them of boiler room fraudsters.

Are You on a “Sucker List”?

Boiler rooms usually work off compiled lists of people with similar demographic and psychographic traits. These lists are affectionately called “sucker lists.”

An easy way to get on a sucker list is to do what I described in Step 1 above: Buy an inexpensive product or accept a “Free plus Shipping” offer from an infomercial or similar marketing medium.

Of course, buying an inexpensive product from an infomercial is no guarantee you’ll be put on a sucker list. But it helps if that product is about a business opportunity or has something to do with making money.

This is because boiler rooms prey on vulnerable people who are desperate to make money. Greed is a common factor among those who get taken.

My Personal Experience with Boiler Rooms

I can say from personal experience that I’ve never had a good experience with a boiler room. I’ve spoken with a few, and even paid for some way-over-priced programs back in my early 20s when I was what they call a “hyper responder.”

In every case, the offer being pitched was a course, method, or opportunity for making money.

• The first time, I paid $5,000 for H. Roger Neale’s Fast Flip Real Estate Home Study Course. It was, in my opinion, nowhere near worth that much. I didn’t agree with the methods he taught, so I never used them. A complete waste of money.

• The second time, I bought into an MLM opportunity. It was an investment of about $2,000 or so. Again, I realized too late that I disagreed with the marketing tactics being employed. Fortunately, I was able to ship everything back for a partial refund. I think I lost a few hundred dollars on this deal.

• The third time, I made the biggest financial mistake of my life: I paid $30,000 for five vending machines. Although a boiler room was involved in the initial steps of the marketing funnel, the sale was commenced in a one-on-one meeting after a live presentation.

I began to wise up after this third episode.

So when I sat down to discuss buying the Denver, Colorado, territory for the Glazer-Kennedy Inner Circle business franchises that were first offered at the 2006 GKIC SuperConference in Chicago, I decided against the opportunity. (I have never regretted that decision.)

Why You’ll Give Thousands of Dollars
to Somebody You Don’t Know

Because of these experiences (and a handful of others where I said “no”), I began to catch on to how they were getting me (and many others) to part with large sums of money.

And while there are multiple persuasion tactics being used (authority, social proof, and urgency chief among them), the single biggest persuasion tactic is the use of consistency.

Humans want to be consistent — and congruent — in their behavior. Marketers know this. So the sales scripts they use rely on building small commitments in the beginning so that it’s difficult for you to say “no” in the end.

If you agree in the beginning, you can’t say “no” later without contradicting yourself and making yourself look bad.

So pride gets the best of most people and they plunk down a bunch of cash for an opportunity or coaching service that is not going to improve their life in any way.

Fraud: An Inside Look

If you have a few minutes, I highly recommend you watch this video. It covers many of the tactics boiler rooms use to manipulate their marks.

Take note of how the manipulation occurs. Jim Vitale, the former boiler room sales person in the video above, explains how it works:

• Authority – Authority is established right up front. “Hey, how are you Jim, the first thing I want to do is to grab a pen, I want you to write my name down. (Now I have control. I’m already telling you what to do).” If a person asks too many questions, the authority is reinforced later through the use of what Jim calls a “slap take-away.”

• Social Proof – Jim says that after setting an appointment to talk with a prospect, he’ll give the person references. This is the use of social proof. If other people have had success, then you are more likely conclude that you can, too. Unfortunately, many so-called “references” are being paid by the company. In other words, they are fraudulent.

• Urgency – The phrase “ground floor opportunity” has urgency built into it. If you don’t get in fast, you might get in too late. Urgency is also built into the take-away. It’s common to mention a limited number of areas or territories, and that other people are “waiting in line” for the opportunity to get one. This is urgency created by scarcity.

It’s not that authority or social proof or urgency are inherently bad. But they can be used to manipulate people into making irrational and harmful decisions. This is why they are tools of the trade in every boiler room’s toolbox.

How to Protect Yourself
from Boiler Room Scams

If you find yourself tempted to buy into an expensive business opportunity or coaching program, please protect yourself by keeping these tips in mind…

• Tip #1: Always do your research before making an investment. Search Bing for negative/positive reviews and see what you can dig up.

• Tip #2: If it sounds too good to be true, it probably is. Don’t let yourself be manipulated by promises of easy wealth.

• Tip #3: If you must use a credit card to pay for the opportunity, then do not proceed. Say no and hang up.

• Tip #4: If you must take out a second mortgage to pay for the opportunity, then do not proceed. Say no and hang up.

• Tip #5: If the sales person asks for your credit card limit or how much credit you have available to use, then do not proceed. Say no and hang up.

• Tip #6: Do the math! Figure out how much you could realistically make in the next 3 months. Then cut that number in half. Then halve it again. Does your investment still make sense?

• Tip #7: Plan for the worst case scenario. If you none of the income claims are true, and you never make a penny, will you be able to recoup part of your investment? Can you resell whatever it is you’re buying? If so, what is the going rate on eBay right now?

• Tip #8: Talk to trusted friends and family members about the opportunity or coaching program you’re considering. Get their honest feedback — and take it seriously. The people who love you most are interested in protecting you from making a bad decision.

• Tip #9: Last but not least, never make a decision the same day or even the same week. Give yourself at least two weeks to consider any big investment. After you’ve “cooled off,” you’ll be more rational about the decision.

These tips, combined with the information above, should provide you with a good defense if you ever find yourself on the receiving end of a boiler room scam phone call.

Oh, and one last thing…

Do you have a story or experience about getting scammed by a boiler room? Please share by leaving a comment below.

-Ryan M. HealySimilar Posts:

• 7 Traits Scam Artists Have in Common
• Workers of Iniquity in the Internet Marketing Cesspool
• A $300 Infomercial Marketing Lesson for Free!
• Creating a Common Enemy
• More Thoughts on Writing with Authority

I recently stumbled upon a shocking story in which a scammer privately confessed to the scams he’d been perpetrating on Warrior Forum.

The scammer in question (Andy Tudor) charges from $250 to $500 for a solo ad to an opt-in list with 50,000 subscribers.

The problem: There is no list.

You pay a few hundred bucks and in exchange you get a bucketful of anger and regret.

I never go to Warrior Forum, and I have no interest in doing so.

This is just one reason why:

• Warrior Forum Scammer Confesses

-Ryan M. Healy

P.S. Want to be better at spotting scammers? Read my article “7 Traits Scam Artists Have in Common.”Similar Posts:

• 7 Traits Scam Artists Have in Common
• A Brief Guide to Psychopaths, Scam Artists & Con Men
• How to Spot a Con Man
• Five on Friday, Issue #12
• This May Surprise You, But…

Have you ever wondered how all those boiler rooms in Utah get away with so much fraudulent behavior without any apparent repercussions?

Answer: Mark Shurtleff, Utah’s Attorney General

Some of the largest call centers in Utah have given Mark sizable campaign contributions (i.e., “protection fees”) over the years.

For their contributions, they get carte blanche to defraud consumers out of millions of dollars.

To learn more about Mark Shurtleff and how he’s turned Utah into a safe haven for white collar crime, I encourage you to read this:

Mark Shurtleff: Attorney General of MLM (warning: strong language)

-Ryan M. HealySimilar Posts:

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• I Like Your Plain Language
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In December, there was one story I followed that completely fascinated me.

It all started with a November 26 New York Times article my dad forwarded. The article was “A Bully Finds a Pulpit on the Web.”

The article detailed the business practices of Vitaly Borker, a man who essentially misrepresented his products and then bullied his customers when they asked for replacement products or refunds.

According to Borker, ridiculing and threatening his customers boosted his bottom line. In his own words (“Stanley” is Borker):

“Hello, My name is Stanley with DecorMyEyes.com,” the post began. “I just wanted to let you guys know that the more replies you people post, the more business and the more hits and sales I get. My goal is NEGATIVE advertisement.”

It’s all part of a sales strategy, [Borker] said. Online chatter about DecorMyEyes, even furious online chatter, pushed the site higher in Google search results, which led to greater sales. He closed with a sardonic expression of gratitude: “I never had the amount of traffic I have now since my 1st complaint. I am in heaven.”

Well, as the saying goes, loose lips sink ships. Such was the case here.

As soon as the New York Times published its exposé, it began to go viral among SEO, marketing, and technology web sites.

Google responded quickly:

By treating your customers badly, one merchant told the paper, you can generate complaints and negative reviews that translate to more links to your site; which, in turn, make it more prominent in search engines. The main premise of the article was that being bad on the web can be good for business.

We were horrified to read about Ms. Rodriguez’s dreadful experience. Even though our initial analysis pointed to this being an edge case and not a widespread problem in our search results, we immediately convened a team that looked carefully at the issue. That team developed an initial algorithmic solution, implemented it, and the solution is already live. I am here to tell you that being bad is, and hopefully will always be, bad for business in Google’s search results.

But the backlash didn’t stop here. Borker’s behavior toward customers went beyond “bad”; it was criminal.

On December 6, 2010 — just 10 days after the initial New York Times story broke — Borker was arrested in Brooklyn where he lives.

While this is an extreme case, there are a few lessons to learn here.

1. Be careful of what you say or do online. Sometimes information travels faster than a rumor in Washington.

2. Bad customer service is always a bad strategy. Boasting about bad customer service is even worse.

3. The Internet never forgets. What you say or do online (even behind “closed doors”) could end up living for decades on the Internet.

4. Never taunt Google. You’ll get slapped from Google’s 1st page of results all the way to Bing.

5. Take an active role in managing your online reputation. It could mean the difference between failure and success online.

-Ryan M. HealySimilar Posts:

• The Fluidity of Google Search Results
• Leverage What You Already Have
• Your Diminishing Privacy
• Are You Lifting Your Kilt for Google?
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Most marketers suck.

Here’s what I mean:

They dish out BIG benefits, HUGE promises, and OUTRAGEOUS claims in their sales pitches… and then… fail to deliver.

I was recently reminded of this when a client told me about “the biggest piece of crap I have been sold” (his words, not mine).

He and I both sat through the same sales pitch for a product being sold by a well-known marketer. The price: $500 for a marketing strategy document.

My client sent me the final “product” and I had to agree. It was, indeed, crap — albeit a particularly expensive variety of crap.

Which is why I believe…

Marketers Should Be More Like Hitler!

Seriously.

The man knew how to keep a promise.

Elie Wiesel will back me up on this. He writes on page 99 of his memoir Night:

“I have more faith in Hitler than in anyone else. He alone has kept his promises, all his promises, to the Jewish people.”

Many marketers have a bad habit of making starry-eyed promises… and then failing to keep them. They forget this little detail called “the product.”

“Let your ‘yes’ be yes and your ‘no’ be no,” says a man from Galilee.

And let your product always live up to (or exceed) your promises.

-Ryan M. Healy

P.S. By the way, in the case of Hitler, I wish he hadn’t lived up to his promises.Similar Posts:

• Now, Let’s Talk about Jesus…
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• Copywriters: Guilty as Charged?
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A couple weeks ago, I got an email from a fellow marketer and product launch manager Jeff Pezzella. He had read my Jeff Walker “damage control” post and had some questions for me. I gladly answered them.

When I’d finished, I had the makings of another blog post. So rather than keep my answers private, I’ve decided to publish them here. If you have any additional questions for me, please leave a comment.

1: How long did it take you to write that Jeff Walker article?

First draft? Maybe an hour, 90 minutes tops. But then I had a couple guys review it and give me feedback. I made some changes, sat on it for two weeks, then made some minor edits on my final pass through.

So I spent more time on this post than I do on most other posts, mostly due to its sensitive nature. I don’t want to publish something like that unless it’s as bullet-proof as I can possibly make it.

2: Why do you believe so strongly in exposing these guys?

I’m not sure, really.

The few times I’ve exposed people, it was because:

1. It was a hot topic on many people’s minds.
2. The behavior was egregious.
3. I felt I had no other choice.

This is not to say I’m perfect… not by any stretch. I’ve ventured into plenty of ethically “gray” areas (mostly unintentionally) because of what I do for a living (writing sales copy).

But in Eric Graham’s case, he was taking $5,000 and failing to deliver on his promises or honor his refund policy. There were multiple customers who’d spoken out publicly against him on consumer protection sites and even their own blogs.

What’s more, after I published my post, I was contacted by an attorney asking for help locating victims to file a formal complaint with the Consumer Fraud Division of the Missouri Attorney General.

When it gets to the level where attorneys and law enforcement are getting involved, I think it’s way past time to expose criminal behavior. Allowing crime to continue because I feel some vague friendly feelings toward the criminal is not a legitimate excuse to stay silent.

Some readers were upset and thought I should have confronted Eric in private. The thing is, multiple people had contacted him in private already. He had had plenty of chances to rectify the situation, but chose not to. That’s why I helped to publicize the issue. (For the record, I only referenced things that were publicly available online — I revealed no private information.)

In Jeff’s case, the reason I wrote my rebuttal to his blog post was fourfold:

• His post was totally public — so there was no need of concern on my part of revealing any private information.

• I felt his post was highly manipulative — an effort to reframe the story in his own favor.

• He made a blanket statement that people who listen to “bile and hatred” (a.k.a. one particular consumer protection site) are too stupid to be customers — which is a gross oversimplification and total lie.

• I read two uncritical blog posts highly recommending Jeff’s post.

Frankly, the first three reasons were not enough to get me to write the post. I had been thinking about writing the post for two weeks, always deciding against it.

But the fourth reason is what really got me fired up. Upon encountering these uncritical recommendations, I literally stopped my workday and wrote my rebuttal immediately.

3: How are you benefiting from the whistle blowing?

I see some pretty big traffic spikes as well as backlinks from other bloggers when I post controversial stuff.

But… I’m almost positive I’m not going to be getting any referrals from anybody remotely connected to The Syndicate. And I’m probably no longer welcome at most Internet marketing seminars.

4: Are you making any money from it?

Not that I’m aware of. If I have made more sales, I haven’t noticed and would not be able to trace them back to my whistle blowing activity.

My list of subscribers has grown (modestly – just look at my Feedburner count on the side of my blog) and perhaps that will translate into future sales. But that has never been my goal in publishing controversial posts.

I publish controversial content because it’s a part of who I am. In fact, I recently realized that I’ve been a whistleblower for years. I’ll probably end up writing a post called, “My Life as a Whistleblower” with links back to all the exposés I’ve written.

5: Did anything happen in particular via some bad info product/marketing experience that fires you up to write about these dudes?

No, not really. In fact, I’ve had mostly positive experiences buying information products.

I just feel compelled to speak the truth as I see it. And it annoys me when gurus get cocky and prideful and spread blatant lies and manipulations. It annoys me even more when all their followers start butt-kissing in the hopes that maybe one day said guru will mail for them.

Possibly WAY more than you wanted to know, but there you have it.

-Ryan M. HealySimilar Posts:

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So far, we’ve gotten an insider’s view of a phone consultation between two high-profile Internet marketers. And we’ve caught wind of other anticompetitive practices that may or may not be going on inside the Internet marketing space. But has anybody actually done anything wrong?

Here’s a great comment Antone Roundy made here on this blog that sheds light on this question:

Up to a point, what these guys are doing is just smart business: build industry connections, promote each others’ stuff, time your product releases so that they don’t drown each other out (not sure whether that’d be illegal or not by itself).

But if they’re promoting each other regardless of product quality or value for the price, that’s unethical at best. And if they’re agreeing to a pricing scheme or taking products off the market during other peoples’ launch periods to reduce competition, I’d expect the FTC to be breathing down their necks really soon.

With that in mind, here’s a list of specific business practices I’d consider blatantly wrong:

• Fake Endorsements – I’ve said it before and I’ll say it again. Fake endorsements are wrong. You should not recommend a product unless you’ve personally reviewed it or used it yourself. In cases where you can’t review a product in advance (for instance, a seminar), then hedge your recommendation; tone it down a bit; let people know you’re making the recommendation based on the person’s reputation and not necessarily the product or service itself.

• Non-Payment of Affiliate Commissions – Let’s call this for what it is: theft. If you promise to pay a commission to your affiliates based on their performance, and then you refuse to pay them after they’ve performed, then you’re committing a crime. I know this happens quite a bit because people have a tendency to spend the money they owe to affiliates. Then, when it comes time to pay, they have nothing left. The trick is to discipline yourself so affiliate commissions are always paid first, no matter what.

• Paying A-List Affiliates, But Not B-List Affiliates – If you selectively pay out affiliate commissions, you’re guilty of favoritism. This is yet another form of theft (non-payment of affiliate commissions), but it’s more sinister because it indicates you actually do have the financial means to pay your affiliates — you just choose not to pay certain ones. It’s willful theft versus theft due to stupidity.

• Positioning a Product as a “Magic Bullet” When You Clearly Know It’s Not – I’m fine with enthusiasm, conviction, and metaphors in the sales process. If you have a great product, do your best to sell it! But I personally believe that you should not position a product as a cure-all if you know it’s not a cure-all.

• Using Intimidation to Prevent Competitors from Running Promotions at the Same Time as Your Launch – If you and a partner have agreed to promote each other’s products, then of course it makes sense to run your promotions at separate times so you can support each other. As Antone Roundy pointed out in his comment, it’s just smart business. But trying to prevent other promotions from happening by intimidating your competitors is just slimy — almost like what you’d expect the Mafia would do if you marched into their territory and started offering competitive “protection services.”

I’m sure there are other practices that should be included in this list, but these are the ones that come to mind.

So, what should you do when you see these things happening? It’s simple, really. You opt-out of the sales process. You unsubscribe. You choose not to buy.

As Stephen Dean pointed out in a recent blog post, November 2 was voting day. But so is today. And tomorrow. In fact, every day of the year is a day you get to vote for the businesses and charities you want to support.

Rather than get hung up on past financial mistakes you may have made, decide today that you’re going to make better choices. Decide today that you’re going to vote with your dollars and support credible businesses with good reputations. That’s really the best recourse you have — and the fastest way to effect change.

-Ryan M. HealySimilar Posts:

• Affiliates Are Still Being Ripped Off
• List Management, Fake Endorsements, and The Syndicate
• 5 Business Predictions for 2011
• How Many of Your Affiliate Links Are Dead?
• Best Link Cloaker?

The Salty Droid dropped a bombshell this week by publishing select portions of a private phone call between Andy Jenkins and Jeff Walker in which they say some things that are not especially flattering for their public image.

I guess it could be argued that “all PR is good PR,” but in this case I have my doubts. Here’s the recording, in case you’d like to hear it.

Andy Jenkins and Jeff Walker Riff About the
Video Boss Launch, Salty Droid and Ken McCarthy

In case you don’t have 7 minutes right now, or you’d rather not be exposed to the swearing, here are a few of the highlights:

Audio Highlight #1

• “The fact is, [Video Boss] is not a magic bullet, even though we’re going to position some of it that way.” -Andy Jenkins

My comment: Not a good idea to intentionally overhype your product or consciously deceive your customers. Even worse to admit to it on a recorded call.

Audio Highlight #2

• “I’m going to be relying on Syndicate to hit this thing really, really hard.” -Andy Jenkins

My comment: This call is from circa January 2010, so The Syndicate has been around at least since then.

Audio Highlight #3

• “The Droid I’m sure will go ballistic, but he’ll go ballistic no matter what you do. [...] He is like a little pimple on our butt. He has no reach, never will have any reach, will blow himself up. He’s non-existent. He’s less a threat to us than Mike Long was. Far less a threat to us than Ken McCarthy.” -Jeff Walker

My comment: Salty Droid has no reach? That was wishful thinking even in January 2010. (His current Alexa ranking is 18,303.) And is Ken McCarthy more dangerous than the Droid? Possibly. More on that in a minute.

Audio Highlight #4

• “Just think about this, like, with the Droid. He’s saying we’re evil because we’re charging a lot of money for our product. And that’s why we’re evil. Which is like the most ridiculous thing because it’s not like we’re like holding someone at gunpoint and saying ‘give us your money.’” -Jeff Walker

My comment: I don’t think Salty Droid’s crusade is based on charging high prices (although that may be part of it). I think it has far more to do with the anticompetitive behavior of The Syndicate, which is essentially an Internet marketing cartel — a “good ol’ boys club.”

Is Ken McCarthy More of a Threat Than Salty Droid?

During the call, Andy and Jeff mention Ken as an even greater threat than Salty Droid. This has prompted a lot of people to ask, “Who is Ken McCarthy? And what is his part in all this?”

In case you’ve never heard of Ken McCarthy before, he has been teaching Internet marketing since 1994, longer than just about anybody else online. He is also the creator of the System Seminar, an annual Internet marketing training event.

Many of today’s gurus got their first chance to speak on stage at the System Seminar. As Ken points out, “Some did good things with the opportunity. Some leveraged the exposure into criminal enterprises which I’ve had nothing to do with.”

It’s not always easy to judge a person’s character when you first meet them. Sometimes you may know a person for a few years and still not really know them. So as soon as Ken realized some of the shady things going on, he warned his subscribers. Here’s what Ken says in his own words:

1. I was one of the very first people to teach Internet marketing and thousands of people learned from me…

2. Including many of the people who became members of the Syndicate.

3. When I realized what they were up to I very publicly warned my students and customers to avoid them, thus earning the Syndicate’s undying enmity.

So why is Ken considered a threat? Probably because of his credibility and his reach. If he really wanted to, he could make life miserable for the Syndicate.

Even if he could, it’s probably not necessary. After all, for nearly two years now, the Salty Droid has been wearing the mantle of “Chief Internet Marketing Muckraker.” And since his most recent post…

The Gurus Are Now Distancing Themselves from… Themselves!

Regardless of whether or not Ken McCarthy is the bigger threat, Salty Droid’s most recent sleuthing seems to have caused the usual suspects quite a bit of consternation. In fact, at least two of them have now written blog posts trying to recast themselves as paragons of virtue.

• Mike Filsaime has published a post outlining his “best practices” that will now govern who he will (and will not) promote. (I find this post a little bit suspect since it seems to me that Mike has in the past repeatedly violated his own best practices.)

• Frank Kern has published a post challenging his subscribers to not buy any advice for a month. (According to one source, Frank then emailed his list to promote the Kajabi launch a few days later.)

Even Rich Schefren, who hasn’t promoted major launches the last couple years, felt compelled to send out an email to his list explaining why he no longer associates with the Syndicate.

But Here’s the Strangest Part…

Probably one of the weirdest parts of all this is that Mike Filsaime publicly said he would “address” Salty Droid and essentially set things straight. He stated this on his “best practices” post linked above. But then, for some strange reason, he had second thoughts and deleted all references to Salty Droid/Jason Jones.

For the record, here are two of the things Mike said publicly on his blog:

Jason Jones is a sad human being and I pitty him. And you for following him. I will deal with him soon. Jason Jones will finally hear from me. Now go run to his hate blog and warn him about me. I will expose him for the low life he his. Go now minion, go run to your powerful OZ. Jason Jones, you reading this. Get your costume on and make your post. It’s my turn. A sad human being will now be seen for what he is.

And in a separate place:

Minions of Jason Jones. I have spent the better part of the day talking to the 5% of you that are coming from his blog to try to spin this and trash me as you stated you would on his blog. We had good comments coming from people. All of a sudden a minion posted my blog on his blog and you are all coming here now to trash talk the same things you are saying there. As I said, this week I will address Jason and his hate confused followers.

Then, on the night of October 5, 2010, Mike revised his blog post and all mentions of Jason Jones mysteriously vanished into cyberspace. Even Google cache can’t find them (although they are still reproduced in the comments on Salty’s blog). Here’s what SD wrote:

The Gnome just deleted all his references to “Jason Jones” and turned off commenting. [...] I’ll still be expecting that big expose Gnome :: I wouldn’t want you to disappoint all your fans :: you rockstar you.

So is Mike’s rebuttal still on its way? Who knows. At the very least, it appears it will be delayed. (UPDATE: I stand corrected. Mike has responded, just not on his own blog. He has responded on Mike Young’s blog: 8 Things You Should Know About Mike Filsaime)

Anyway… What do you think? Is the Salty Droid a real threat to The Syndicate? Or, as Walker puts it, is the Droid simply a “little pimple on [their] butt”? Leave a comment to add your two cents.

-Ryan M. HealySimilar Posts:

• Is Salty Droid Even Human?
• How Free Market Economics Really Works
• Jeff Walker: Disingenuous Damage Control
• Why SOPA and PIPA Must Be Stopped
• Disinformation, Subterfuge, and Propaganda