Is Public Gold an MLM scam?

March 20, 2007 10:36 AM

ScamFilter: Is Public Gold a multi-level marketing scam? Or a "legit" MLM?

A friend of mine is involved with something called "Public Gold", and will be extending me an invitation to a meeting. When she showed my the website, and it looks a little dodgy - has all the earmarks of an MLM scam. (BTW, if you go to the "base site", http://www.publicgold.com/, you get prompted for ID or member name. Odd.)

Doing a google search resulted in a number of PG "user sites", but not much more. Further digging at MLM "watchdog" sites (mlmwatch.org, mlm-thetruth.com, etc.) didn't yield anything either.

Saw one link in MLM.com forum that mentioned it in unflattering terms. Compared it to another potential scam called Gold Unlimited (I also know nothing of them). And mlm.com is a site for people running MLMs! So if they think it's a scam...

Does anyone know anything about Public Gold? All info, anecdotes, stories, links are welcome. Thanks!

posted by ObscureReferenceMan to work & money (8 comments total)

What I know is that the US Mint authorizes dealers of US Eagle gold bullion coins. Authorized dealers get a bulk discount, but still over the spot gold price, and most resell to the public in any desired quantity at a slight profit, usually something like a percent or two. If you buy from an authorized dealer, in many areas sales tax is not even charged on the transaction.

I see a lot of ads to buy these coins from third-party resellers at prices much higher than the current spot price of gold - talking twenty, thirty percent higher - all caveated that the offering price in the ad isn't actually a guarantee of selling the gold at that price. It appears to me that basically these folks are preying on ignorance - folks who want to own US gold bullion but don't know that they can get the best price from their local authorized dealer.

Throw MLM into that mix, now, and it gets worse, not better.
posted by ikkyu2 at 10:51 AM on March 20, 2007

a multi-level marketing scam? Or a "legit" MLM?

You are seeking a distinction where there is none.
posted by Ynoxas at 10:55 AM on March 20, 2007 [2 favorites]

You are seeking a distinction where there is none.

That's why I used quotes. As I understand it (correct me if I'm wrong), there are legitimate (i.e. not illegal) MLMs - like Amway. Some are more reputable than others. Although I have no ideas where different MLMs fall on this scale - just that some are better than others.
posted by ObscureReferenceMan at 11:20 AM on March 20, 2007

I'm with Ynoxas on this one. If your question is whether this is a "good" MLM or a "bad" one, they are all in fact either "bad" or "worse". I only did a couple quick searches, and this does seem likely to be an MLM (I'd have to look into it more though). So if your question is "is this an MLM", my answer is an undefinitive "it seems that way." If your question is "is this a 'bad' mlm or a 'worse' one," my answer is, "I don't know". Sorry to stray from the question, but if it is an MLM, please do not get involved either way. You will either be preyed on, or be the one to prey on others (or both). I realize most businesses engage in activities of questionable morality, but MLMs cross the line.
posted by gauchodaspampas at 11:20 AM on March 20, 2007

So there is an absence of quality feedback, and the only feedback you can find is negative. This probably indicates that it's very new and somewhat shady. I would wait 6-12 months, and then see if you can find more information (perhaps some longer-term impressions from your friend) before signing up.

But yeah - in case you haven't been involved in an MLM before, statistically speaking most "legit" ones are still unethical. Be careful who you get involved with - the promises of effortless income are universally untrue. To succeed in an MLM operation (which is very rare in itself) you need to be extremely driven and will probably have to spend all of your energy building a network over the next several years. I was involved with a legit one

If you have that kind of drive and energy and want to make money off of people working under you, start a business.
posted by chundo at 11:32 AM on March 20, 2007

I consider all MLMs to be scams. If their product is so great and so much money can be made selling it, why are they letting you in on the action? Why don't they sell it to stores, or set up their own stores to sell to the public? Because they can't make any money that way and neither can you.

Beware of anybody who would rather sell you their entire business model instead of just selling you their product.

yeah dad tried to make a living selling amway.
posted by ilsa at 12:13 PM on March 20, 2007

I should have added more info originally, but... I don't plan on joining (or even attending a meeting), but was hoping to gather some more info for my friend to help disuade her. But I am doubtful. It sounds like she's already involved. Oh well.

Full disclosure: Grandma was a die hard Amway rep.
posted by ObscureReferenceMan at 12:21 PM on March 20, 2007

Obscure: I know the feeling. It is very hard to loosen the grip of MLM hysteria once it has set its hooks in someone.

I know someone who is very intelligent, industrious, and successful, and I fought him for years trying to show him how Amway was a scam. He was a True Believer (tm). And after a certain amount of time, he had so much invested, that he was afraid to tell the truth that he'd been had. My estimate is that he paid 10x more into Amway than he ever received via deposit.

The best way I know to show someone the truth:

After 3 months, ask her to take a piece of paper and draw a line down the middle. On the left, have her list all her expenses related to her new MLM system. On the right, have her total all the deposits from said system.

Total the columns.

Then have her explain to you how people make money in MLM's.

MLM's cannot be profitable without a never-ending stream of new recruits being added to your downline.
posted by Ynoxas at 7:04 PM on March 20, 2007