UPDATED 11:04 A.M. EDT (U.S.A.) Plenty of AdViewGlobal (AVG) members are quick to criticize the U.S. government and the Federal Reserve for propping up sick companies.
Under pressure from “advertising” participants, however, the autosurf firm may be on the verge of implementing its own bailout plan for rank-and-file members who are sick of “low” payout rates.
The plan appears to feature accounting tricks and a redistribution scheme of the same ilk some AVG members accuse the government of foisting on the American people. If implemented, it may go down in history as the first example of Autosurfism, an economic theory that apparently holds wealth can be created by taking away vast holdings from some members so other members with smaller stakes can enjoy higher daily payout rates from the company’s advertising rotator.
AVG members say the company is considering a plan that would reduce the maximum number of “page impressions” (ad-packs) an individual member may hold to 250,000. Some members reportedly have more than 1 million page impressions on the books. Their holdings would be reduced to 250,000 by fiat, with the excess placed off the books in a nonearning state of suspended animation for at least 30 days.
After 30 days, members said, AVG would try to place the excess holdings back on the books. It is unclear how the system will be able to sustain the excess then if it cannot sustain it now.
One promoter, with hopeful words, said AVG expected to record multimillion-dollar sales soon by offering a suite of communications services. AVG announced the new services earlier this month, about five months after the surf launched.
Smoke And Mirrors?
Capping the page-impression ceiling at 250,000 may raise serious concerns about solvency, an issue frequently associated with the autosurf trade. Liabilities typically cannot be erased simply by pretending they don’t exist or by hiding them until it is more convenient to own them, anymore than assets can be created by divining them into the system. (See Enron.)
In the autosurf trade, liabilities accrue the instant a member completes a paid-to-surf session. If a surf has thousands of members, liabilities due each surfer accrue daily. A company is insolvent if its liabilities exceed its assets or if it cannot pay liabilities as they mature.
AVG members said the company was considering a scheme by which the maturation dates of liabilities would be pushed back to 210 days. The initial maturation date, members said, was 150 days. In other words, members who expected to receive back 100 percent of their advertising expenditure, plus profit for clicking on ads in AVG’s rotator, would have to wait two more months to get their payouts — while clicking every day during the two extra months to qualify for the maximum payout.
Members said AVG may place millions of page impressions in a state of suspended animation, something that could be construed as a bogus accounting practice. One of the principal accounting tricks of the autosurf trade is to pretend liabilities don’t exist by saying “rebates (payouts) aren’t guaranteed.” This infamous line is what permits autosurfs, in effect, to wipe away liabilities by fiat or to disguise liabilities by treating them as assets.
Despite the plan, which promoters are positioning as a means by which AVG can improve the daily payout rate from its current state of near 0 percent to 1 percent, members insisted AVG has a healthy balance sheet. AVG, however, does not publish audited and certified financials and largely operates in an environment of secrecy, saying it is a “private association” headquartered in Uruguay.
Promoters have said the Uruguay location was chosen to insulate the company from agencies such as the U.S. Securities and Exchange Commission.
Did The 200 Percent Promotions And AVG Cash Button Backfire? Members Complain About Manipulation And Abuse
AVG created conditions that enabled some members to acquire vast numbers of page impressions, in part through an almost nonstop series of 200-percent, matching-bonus promotions for prospects and sponsors. At the same time, the company provided a member-to-member cash button that reportedly was rife with abuse by promoters who “stacked” friends and family members within their organization to maximize daily earnings within individual downline groups.
The member-to-member cash button — coupled with the matching-bonus promotions — heightened concerns about wire fraud and money-laundering, but some members said their colleagues simply were taking advantage of a service AVG provided. Others disagreed, describing “stacking” as unethical.
Upon the launch of a new website earlier this month, AVG quickly did away with a whopping, 250-percent, matching-bonus program it had implemented to celebrate the website launch. Although the 250-percent program was advertised to last through June 29, AVG moved the expiration date back to June 5.
The surf removed the cash button after a member shared a strategy by which sponsors could gather payments directly from prospects, deposit them in the sponsors’ banks, send checks by overnight mail to processors in Canada and Panama or use the banks’ wire facilities to route the money to the offshore processors, and then cause the processors to wire the funds to AVG.
Under the strategy, sponsors would fund their own AVG accounts with prospects’ money, and then use the AVG system to transfer the money back to prospects’ accounts so they could quality for the 250-percent matching bonuses. The bonuses alone created astronomical liabilities.
Some members, though, described the convoluted, money-transfer process as all in a day’s work for helpful sponsors committed to the success of their downlines. Others called it wire fraud and money-laundering.
A number of AVG members have called for the company to identify members who abused the system and to claw back ill-gotten gains from them. AVG, however, may encounter difficulty defining what constitutes abuse, since the company itself provided the means that made the purported abuses possible.
Moreover, some members favored by management could have benefited from the same practices other members described as abusive.
Processor Problems And New Debit Card
Meanwhile, members are reporting that AVG — which purportedly is based in Uruguay — is having trouble with SolidTrustPay, a payment processor based in Canada. At the same time, members say, AVG is recommending that members cancel current payout requests through SolidTrustPay and route the requests through StrictPay, a payment processor based in Panama.
AVG also is pushing a debit card, which members say costs $30 and one day is envisioned as the preferred payout method. The card currently can be used to pay AVG, but cannot be used for cash-outs.
The card comes with this fee structure:
- Monthly fee: $7.95
- ATM fee: $2.00
- International ATM fee: $5.00
- International inquiry/decline fee: $1.50
- ATM declined fee: $1.50
- ATM inquiry: $1.50
- Point-of-sale purchase fee: $1.50
- Point-of-sale purchased declined fee: $1.50
- Pinless transaction: Free
- ACH inbound to card fee: $7.00
- U.S. wire inbound to card fee: $10.00
- International wire inbound to card fee: $15.00
- Moving money from AVG account to card fee: $3.00
- ACH outbound fee: $7.50
- Domestic wire outbound fee: $25.00
- International wire outbound fee: $35.00
- Other fees may apply.
The card is known as First Debit Gold, and is issued by a company in Texas known as Secure Cash Network Inc. (SCN). In its Terms of Service, SCN says the card may not be used to purchase illegal goods or services. Many governments view the autosurf trade as an illegal enterprise.
Amounts members place on the card are stored in SCN’s computer system are are not insured by the FDIC, according to SCN’s Terms of Service. The amount members can place on the card is unclear. Some members said $10,000; others said $1,000.
Some members said AVG was selling the SCN card through PayPal. PayPal’s Acceptable Use Policy expressly prohibits use of its services for pyramid schemes and Ponzi schemes. It is unclear if the PayPal account used by AVG is in AVG’s name, but the advertising-rotator facet of its business frequently is associated with Ponzi schemes.
AdSurfDaily, a company with close ties to AVG, was accused by federal prosecutors last year of operating a multimillion-dollar Ponzi scheme and by state prosecutors in Florida with operating a pyramid scheme.