Ponzi file #734529: Wincapita

No ifs, no buts, no howevers or on-the-other-hands about it - multilevel marketing is dirty, unethical stuff. Stay away from it and tell everyone you don't wish ill to stay away from it.

As a rule of thumb, multilevel marketing (or referral marketing or network marketing) is involved in all business schemes that seem legal and promise to make you very rich very quickly. It is as simple as that, and you don't need any other safeguards than bearing in your mind that if it was easy to get rich, you would be already. Pretty basic stuff.

I sincerely hope that the recent Wincapita (of which there's some excellent commentary in Finnish here, and a little bit information in English here, after that chart) episode will finally give the Finnish breed of multi-level scammers the public attention they deserve. We don't know yet how severe and widely-spread scam it has been, yet most educated online guesses - tipping off "thousands of people having lost tens of thousands of euros" - name it as the worst pyramid scheme ever in Finland. The National Bureau of Investigation has appealed, in Finnish and after there had been rumours of some normally law-abiding citizens, especially in the Republic's eastern and northern provinces, planning to take law temporarily into their own hands, that none of the disappointed investors would resort to violence, which to me can be interpreted as good news. For, as it happens, when there is a promise of violence, there must be headlines, and when there are headlines, there may be education for the masses.

Think about it, these kind of scams are really quite fucking awful. Just imagine a situation where a clueless husband and father has sold the family's car, taken a 10k loan and talked his in-laws into the scheme, or half of his workmates. It's tempting to think that he was evil or greedy and his referrals stupid and gullible, but the sad fact after all is that the pyramid schemes blossom, here and there and now and then, mainly for three reasons: most people (a) want to make easy money, (b) trust their friends and relatives, and (c) hate to admit their mistakes. First you have the most likable fellow of the neighbourhood getting roped in by some persuasive sponsor, then his mates with whom he genuinely wants to share his fast-track to wealth, and finally a bunch of bitter and disappointed people who have lost big bucks because they simply couldn't come to terms with the fact that they had made a wrong decision. Knowledge might have been power, but maybe they didn't have it; maybe they had never heard of multi-level marketing before.

After you have thought about that, think about Albanians. They were brought onto the brink of civil war because of a similar (the smoke-screen product - be it a soap, a rubber duck, a miraculous anti-balding pill or, as was the case with Wincapita, a little-known yet revolutionarily innovative computer software able to forecast currency rates in whose practically flawless bets you might be allowed to invest money, if only being referred by an established and trustworthy insider - always vary, but the underlying logic remains the same: the actual money is generated by the entry fees and therefore can benefit only the upper and older sediments of the pyramid) rip-off, and over 2,000 people lost their lives in the aftermath. That's quite a big deal, if you ask me.

In Albania it happened due to malaises of communism - your average Albanian in 1997 had fairly little experience of what markets are and how they work, i.e. he basically didn't know what money was - whereas a few silly boys back home in Suolahti six years ago, to my understanding, never had the same excuse. We had not been told about multi-level marketing in school or sauna, and one sunny summer afternoon it just happened to be so that my mate and some smoothly articulating and well-mannered Turku-born Hervanta-based uni drop-out named Olli were drinking my citron-flavoured mineral water around my apartment's kitchen table and telling me a lot of rubbish. I didn't initially recognise it as rubbish, though, and since Olli was a convincing, likable fellow and my mate very excited about what he was telling us, I promised to give it a thought. No one had ever spoke to me about this earlier, so the entire Central Finnish market was surely untapped and as I was going to need soap and shampoo anyhow, I could by all means buy them this way - nothing to lose, really.

Well, for a 19-years old conscientious objector with few savings, spending 900 markkanens* (approx 150 euros) on being permitted to buy soap, shampoo and rubber ducks from Sweden was nonetheless going to be a rather significant investment, so on the following day at work I did some additional desk research on the topic. There was no Wikipedia then but there were websites and links, and I did more research...and then some more...and more...and then I phoned my mate and told him to get real. And he didn't.

I and my other friends, with our better grasp of information warfare, made sure that he couldn't recruit anyone we knew even vaguely (a favour he didn't appreciate), yet weren't able to do much for the new-born entrepreneur himself. I don't know how much money he wasted on that crap during the two or three years he was involved in it, though given that he - suddenly convinced that study or ordinary work was not for him - was living merely on welfare, it must have sucked a fairly good chuck of his disposable income. I shrugged that if you want to believe, then you apparently believe, and never brought it up after a while. Today he is fine and working, so I guess he eventually figured it out himself.

Nevertheless, it is a lesson worth learning. Please don't let anyone else learn it the hard way. Spread the word.

*Correction: This blogger's processor obviously bet on a wrong currency - since the year was 2002, it is unlikely that we were using FIMs. So let's just agree that the actual sum was to be delivered in ShiMs, aka shitloads of money, ok?