EDITORIAL: $7,260 An Hour: The Dangerous Allure Of Autosurfs

I first learned about Ad Surf Daily and Andy Bowdoin in July, prior to the asset seizure, back when I served as a Moderator at the Warrior Forum. ASD members swore by the company, flocking to the forum in droves when Andy Bowdoin had become a topic of widespread conversation on the Web.

Some of the Warrior Forum discussions became heated, and people who had no previous connection to the forum suddenly registered as members. ASD supporters, it seemed, couldn’t even fathom that other people might have opposing points of view. Few senior Warriors have anything good to say about autosurfs and cash-gifting programs. In general, they see them as poor excuses for a business pursuit, let alone an actual business.

Lots of Warriors make their own information and/or software products, largely eschewing cash-gifting and autosurfs as the playgrounds of hype purveyors. The dream of many senior Warriors is to make products that fill an information vacuum and add value to customers’ lives. Some of them are “How To” publishers. Others write software and scripts or sell MRR, rebrandables or Affiliate products. Virtually all of them are resigned to the fact that actual work is involved. It takes time to build a brand and a business. Very few see the act of plunking down $12,000 and surfing for six minutes to claim a daily paper profit of $120 a noble pursuit.

Walking Back The Claims

One of the first claims we read about ASD was that a member was making $1,000 a day ($365,000 a year) passively by surfing a handful of websites with a daily time investment of only a few minutes. If true, it would have meant the member had directed about $100,000 at the company or accumulated that amount by surfing and reinvesting. The most shocking extrapolation, however, was that $100,000 could morph into $365,000 in a year’s time.

No legitimate company offers such a return. It was a dead giveaway that ASD’s days were numbered, even though people were citing the $1,000-a-day profit claim in promotions as a reason to join. They might as well have taken out an ad in the New York Times that read, “We Are Just Dying For The Government To Investigate Our Favorite Autosurf Because It Likely Is A Ponzi Scheme.”

Some of the biggest Warrior Forum fights involved cash-gifting programs. Perhaps the biggest of all occurred when an ad for a gifting program accidentally got approved by a tired, overworked Mod in the Warrior Special Offers (WSO) forum. WSOs are supposed to be products you created. This particular WSO was a 30-page PDF ad for a gifting program, complete with pictures of fabulous homes, fabulous cars and fabulous piles of money. Senior members went nuts, and the ad was deleted quickly with a sincere apology.

Naturally some opportunistic members stepped in to speak out in support of gifting programs, defending them with velvet talk and claims of superior knowledge and unquestioned propriety, despite very public warnings from the Federal Trade Commission. Senior members don’t let that kind of talk go unchallenged. Gifting as a business? You’re kidding, right?

Most senior members feel the same way about autosurfs.

Due Diligence?

All kinds of declarations were made that people had done comprehensive due diligence on ASD. The thought alone was preposterous, as are current claims about comprehensive due diligence having been performed by investment companies that directed money at disgraced financier Bernard Madoff, now accused of running a massive Ponzi scheme.

It is simply impossible to perform due diligence on a financial product absent verifiable financial data. “Trust” is not a synonym for “due diligence,” no matter now many times promoters confuse the terms, either deliberately or because a neuron misfires and instructs them to invest based on feeling, not fact.

The phrase “I got paid” used in autosurf promotions also is not due diligence. Ponzi schemes thrive precisely because they pay people. Then those people tell other people they got paid. The cycle repeats itself until:

  • A.) The mathematical deception no longer is sustainable because too many people want too much money simultaneously. (Madoff reportedly faced $7 billion in simultaneous redemptions and had run out of shells to move.)
    B.) The Ponzi becomes too worrisome for the operator or technological problems become unmanageable and drain interest or create a run on the bank.
    C.) The autosurf Ponzi operator decides he is going to keep all the money he’s collected because he’s reached a secret target and covered himself in the Terms of Service.
    D.) The government intervenes.

Echoes On The Web

The same defenses that surfaced for Andy Bowdoin have surfaced in other autosurf Ponzi schemes. Research the scheme, and you’ll find the defenses, up to and including the all-caps, screaming, deflection defenses.

“IT’S NOT A PONZI SCHEME, [EXPLETIVE!]” is, perhaps, the signature deflection, with the “HOW DARE YOU EVEN SUGGEST THIS UPSTANDING BUSINESS PERSON WOULD BE INVOLVED IN SOMETHING UNTOWARD?” deflection coming in a close second. “GET READY FOR THE LAWSUIT” comes in a close third.

Some purveyors of autosurfs are so accustomed to people saying “yes” and settling for velvet talk in response to legitimate questions that they reflexively demonize anyone who strays from the company line. They’ll try to maintain the veneer of superior knowledge even if the autosurf is in failure mode, explaining that such occurrences are a natural part of doing business online and demonstrate the need to have a “diverse” portfolio.

They’ll sell autosurfs as an investment in one breath and, in the next, deny that customers had purchased an investment. Why? Because they don’t want to get sued by their downlines and don’t wanted to be named a defendant in a fraud or a securities beef.

It’s common for them to suggest they pitched a failed autosurf in good faith, pointing out that nobody should have invested more than they could afford to lose. Forum posters, including people who got fleeced, want to think the best of their sponsors and even thank them for their “candor.” It’s a curious online cousin to Stockholm Syndrome.

What’s lost in the discussion is the fact the government clearly views the autosurf model as illegal, because virtually all autosurfs operate as Ponzi schemes that sell unregistered securities and because they raise concerns about criminality.

Anyone can purchase an autosurf script or even find one for free. Plug in the variables — the daily “rebate,” for example — and you’re the owner of your very own Ponzi scheme. A terrorist could join and you wouldn’t know. A criminal surfing team could join and you wouldn’t know. A criminal or terrorist could be the autosurf operator and you wouldn’t know.

Another common defense is that the government doesn’t understand the model. Yet another is that the autosurf operator has discovered the magic pill that makes the model legal, separating it from illegal programs that use a similar model but exclude the magic pill. Still another is the selective-enforcement defense: With so many other autosurfs out there, why go after this one? When all else fails, of course, the most ardent defenders always can attack the prosecutors as mindless fools, free-market opponents, Socialists, perhaps even calling them names and comparing them to Satan.

One defense staple is the argument that the government has no right to mess with autosurf Ponzi schemes if it continues to permit Social Security to operate. Indeed, changing the subject is a critical skill if your aim is to defend the autosurf trade.

$7,260 An Hour

One particularly desperate defense for Bowdoin, uttered by a supporter in the aftermath of Bowdoin’s decision to take the 5th Amendment at the Sept. 30-Oct. 1 evidentiary hearing, was that he was “too honest” to testify.

One of the questions prosecutors could have asked is how it was possible to morph $100,000 into $365,000 in a year’s time — simply by clicking on ads — when there were no additional profit centers that generated huge amounts of revenue.

Walk it back: Give Bowdoin $100,000. Surf for six minutes a day (2,190 minutes over the course of the year, or 36.5 hours). Emerge with your $100,000 principal back, and a tidy profit of $265,000. Your profit computes to $7,260 an hour. ($265,000/36.5 hours.)

Yes, $7,260 in profit per hour from clicking on ads. Where did that money come from? Work just three hours and you’ve topped the yearly earnings of an average Walmart employee. In just nine hours you’ve topped the average yearly earnings of a middle-class manufacturing worker or teacher in the United States. See, now, why selling the autosurf dream is so important?

It’s always convenient to hate bureaucrats and the cops until you need them.

Smoke And Mirrors

The argument that Bowdoin was selling “advertising” and not a financial product is absurd. So is the corresponding argument that ASD was an autosurf like none other, the one that figured out how to get everything nice and legal. The ASD Terms of Service (TOS) was among the most consumer-unfriendly documents we have ever read.

Basically, participants were agreeing to give Bowdoin license to collect amounts from $10 to $12,000 (or more, with special permission), while empowering him to keep the money even if he chose to quit paying rebates. “Advertising” purchases were nonrefundable. Rebates weren’t guaranteed. Essentially all he had to do was show ads to honor the contract.

Boxed In

What’s interesting about the Feds’ approach to Bowdoin is that, to date, they’re not trying to bust the contract. They’re saying, in effect, “OK, Mr. Bowdoin. Want to hide behind your contract? Well, start showing your customers’ ads without paying a corresponding rebate. Let’s see how happy somebody who paid you $40,000 will be if you run off 40,000 ads, one painful $1 click at a time.”

As a side note — and using a figure of $50 million as a conservative estimate of Bowdoin’s advertising liability — Bowdoin would have to deliver 50 million clicks if ASD came back online. Where is the audience going to come from if the deal doesn’t include rebates for viewing? It could take forever for the ads to be displayed.

Nice contract, huh?

What the government did by telling Bowdoin he was permitted to show ads is neatly expose the wink-nod nature of autosurfs. Imagine the insurrection that would result if ASD suddenly came back online and began to run off 50 million ads — $50 million worth of ads backed up in the queue — one painful click at a time. Every person who complained to the government would neatly expose himself or herself as a co-conspirator, a wink-nod participant. After all, rebates weren’t guaranteed. Only ad views were guaranteed. You paid for advertising only, right?

What Bowdoin’s TOS seems to have done is box in participants as possible co-conspirators.

In our view, prosecutors’ best card is the assertion he was selling securities and calling them advertisements.  We base this view on the fact the government is 3-0 in autosurf prosecutions, dating back to 12DailyPro and including CEP and PhoenixSurf.

One difference — and it’s a notable one — is that Bowdoin didn’t surrender upon seizure and has a well-known law firm challenging the government’s forfeiture case on his behalf.

That ASD is lawyered up, however, does not change the plain fact that the government believes — as it did in previous auotsurf cases — that the autosurf model involves the sale of unregistered securities disguised as advertisements.

Prosecutors weren’t born yesterday. They lack the budget and manpower to chase down all autosurfs, but they understand the game. And, in this particular area of law, they have significant advantages over defense lawyers because the law is weighted toward them. It’s that way by design: Ponzi schemes and the sale of unregistered securities on a mass scale pose a clear and present danger to the economy.

From the government’s point of view, a security is a security no matter what you call it. You can call it an “advertisement” until the cows come home and it still will be a security.

Emerging Models

“New” autosurf models emerging in ASD’s wake appear to be incorporating even more smoke and mirrors to skirt regulation, perhaps even moving offshore or adding gaming or social-networking elements. The rebate underpinnings still appear to be in place, which means they, too, will come under scrutiny. It’s highly likely that their own promoters will bring them down because they won’t be able to restrain themselves from using glutonnous hype.

Remember that $1,000-a-day claim? New operators won’t be able to stop the hype purveyors, any more than Bowdoin could stop them.

I never planned to do more than a few stories on ASD’s troubles. What kept my focus riveted were constant attacks against this Blog by ASD supporters. Almost all of it was drivel, nonsense of the highest order, often served up in ad hominem or passive-aggressive fashion. I never minded posting opposing points of view. What I minded was a lack of sober thought and the stunning commitment to intellectual dishonesty. In all the time I’ve published news and opinion on ASD, I have not received a single comment from an ardent ASD supporter that did not attempt to change the subject in some way.

Not one.

About the Author

12 Responses to “EDITORIAL: $7,260 An Hour: The Dangerous Allure Of Autosurfs”

  1. Nice writing style. Looking forward to reading more from you.

    Chris Moran

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  2. Incredible read, and should be required reading for everyone in ASD, those who are considering joining AD View Global, AD Gate World, and whatever Clarence Busby is going to call his pay-to-click version of ASD.

    May I have permission to reprint on our website, with full acknoledgment of course?

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  3. Patrick: This is brilliant and very much needed.

    Due diligence: Someone pointed out long ago that not being able to find ANYTHING about Andy Bowdoin on the web, except articles written no earlier than 2006, composed and planted by his flunkies and their flunkies, should have been a HUGE red flag. That’s SO true; other than some real estate transactions in Quincy, he’s no where to be found on the web. I go to a lot of meetings all year long, and I’ve been working for years, so I’m all over the WWW simply because the meeting minutes are posted on the web, but also for other things as well — nothing important but its not as if I suddenly sprang into being in 2006. But Andy? Nothing.

    Andy worship? Here’s a link to an article, and a few excerpts, about Amway, written by a law professor at Notre Dame. He had this to say about the “culture” that permeates Amway; in fact it’s a required attitude to remain “in the circle.” http://www.amquix.info/blakey.html

    **The Amway business has a “family” structure parallel to that found in organized crime. With respect to both organizations, the family orientation is twofold. First, every participant;in the business is considered a member of a “family,” led by a particular individual at the top of a chain of command. Second, the business stresses involvement by participant’s family members, such that wives and children are drawn into the business to perpetuate their family influence over time. Family dynasties result that may be passed from generation to generation.

    ** The Amway business stresses that once you are involved, you are a member of the Amway family, and your upline and downline are part of your family. You are to “EDIFY” or honor your upline, and “counsel” with them regularly.

    ** The Mafia uses “omerta” and violence for control. Amway has other methods, with similar effect. Distributors must always honor their upline. No negative talk or action is permissible. A distributor who steps out of line is punished. Punishment may start off with being vilified by uplines as a “loser,” as “negative,” or as “brain-dead” which are typical Amway appelations for anyone who does not believe in the Amway system and the riches that allegedly flow from it. More serious offenders may be dealt with by having portions of their business taken away – e.g. they can no longer appear at rallies, or downline distributors are “re-routed.” There are also reports of violence against those who attempt to take action against Amway.

    Sorry, Patrick, I know this is too long but it just reeks of Andy worship and I couldn’t resit sharing it. There’s lots more.

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  4. Hi Chris,

    Your note is much appreciated. Thanks.

    Patrick

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  5. Hi Lynn,

    Thanks for the compliment. I sent you an email.

    Regards,

    Patrick

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  6. Hi Marci,

    Thanks for the kind words.

    I read the link you sent along. Unless I’m mistaken, the professor was retained as an expert witness in a lawsuit, so that has to be taken into consideration when weighing his opinion.

    Speaking in general, there is something unseemly about the way these organized MLM teams do their work. I’m all for supporting online commerce, but the ceaseless hype and the relentless dream-brokering only add to the difficulty of competing online. In general, people new to the Web have heard nightmare stories about endless scams, and they may paint with a wide brush. Their caution is well-advised.

    There is a certain Stepford feel to some of it. I remember reading about people getting banned at Surfs Up! simply because they asked pertinent questions. Early on — perhaps it was at a different forum — there even was a call for a loyalty oath. I’ve seen people shunned and ridiculed simply for offering an opinion that strayed from the ASD company line.

    Thanks again for the note, Marci.

    Patrick

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  7. Pat,

    You are a narrow minded idiot that knew nothing about the success of ASD and it’s members.

    If not for the US Gov interference (and idiots like you) that did not understand the concept or business model) ASD would have nearly 1 million members by now.

    ASD will eventually settle their civil lawsuit with the US Gov and resume operations. There are no criminal charges filed against anyone connected to ASD.

    The bottom line: ASD paid it’s membership commissions each and every time upon request until the government took their assets and forcing them to cease operations. They had a much better payment record than Walmart (notorious for not paying their vendors on time).

    If Bowdoin had criminal intent he would have skipped the country 2 years ago with millions of dollars instead of openly keeping the funds in US banks. This is the reward he got for his honesty.

    Why don’t idiots like you and government agents concentrate on real criminals such as Wall Street crook Bernard Madoff running a real investment Ponzi, and leave honest business professionals alone.

    There are dishonest pay to click sites and a big difference between high quality advertising programs such as ASD and Ad View Global compared to these crooked boilerroom basement operations such as surfpal.

    Your small time website will not sway the massess that understand the future trend of advertising.

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  8. Brent,

    You’re entitled to your opinion that I’m a “narrow-minded idiot” and an “idiot” who doesn’t understand the business model.

    Patrick

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  9. I guess I must be lucky because he just called me an “idiot” instead of a “narrow-minded idiot.” I would like to know the difference as I feel I might qualify for both definitions. Otherwise I feel slighted I am just an”idiot” because I don’t understand the business model of ASD.

    Then I guess we should not feel too bad about it since ASD’s own attorney and star attorney expert witness didn’t seem to understand it either. Does this make them just “idiots,” or “narrow-minded idiots” too?

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  10. Brent !!!!!!!!!!!!!!!!!!!!!!!!

    Why on earth ???? are you being as rude as you are to “Patrick” who has written valuable information most people dont even know and is exposing the naked truth what ASD is/was all about ???? ASD was like a spider web that could only survive as long as the spider continually spun new webbings, SPEAK: Bowdoin conducting “money supply” rallies in different US cities where attendees where emotionally and mentally seduced by false criterion to plunk down their life savings, money from having mortgaged their homes, maxed out credit cards, the list goes on !

    I am an ASD member myself and know what this is all about and I have 2 words for you: WAKE UP ! and DO NOT be as rude as you are to Patrick who is doing everyone a GREAT SERVICE by posting information most people do not and NEED TO KNOW !!!!!!!!!!!!!!

    SHAME ON YOU !

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  11. Hi curious.as.a.cat,

    Appreciate your words. Thanks.

    I’ve seen a lot of “your’re an idiot” arguments from autosurf supporters.

    Since August I’ve been waiting for an argument that didn’t deflect or change the subject in some way, and I’m still waiting.

    Regards,

    Patrick

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