Is Karatbars a Scam?
As is the case with any progressive business, you will find Followers and Challengers. For example, the term ‘Computer Virus’ did not exist before Microsoft appeared on the scene; the Challengers’ way of trying to stop the tsunami that was, and still is, Microsoft… This may be a bit of a harsh comparison (sorry, Bill… 😉 ), but the point is made.
Please watch the following short video for context…
The AMF Ruling
The video makes mention of the AMF (Autorité des Marchés Financiers) that issued orders prohibiting Karatbars and its affiliates from selling its marketing packages in the province of Québec. This order was formally retracted by the AMF and Karatbars issued a statement to all its Affiliates, with links to the very detailed judgement.
Click the image to read the full story…
Highlights of the Québec/AMF Case
In retrospect, this court case turned out to be a significant testimonial for Karatbars, attesting to the credibility and integrity of this phenomenal organization. The following exerts are taken from the highly detailed court case (in French) to highlight just some of the key points that swayed the Tribunal in reversing the AMF’s Ex parte injunction against Karatbars in Québec (the original text from the ruling follows for transparency);
Karatbars does not require a minimum purchase from its affiliates, it does not charge a mandatory entry fee nor pays its Affiliates for the clients they refer. Original text: “Mais en même temps, a été détaillé en preuve non contredite le fait que Karatbars n’exige pas d’achat minimum de la part de ses affiliés, qu’elle n’applique pas de frais d’entrée obligatoire et qu’elle paie ses affiliés pour les clients qu’ils lui réfèrent.”
Participation in the affiliate program is free, the value of the package is higher than its cost and the success of the affiliates depends essentially on their own efforts. Original text: “Or, a-t-il déclaré, la participation au programme d’affilié, sujet du présent dossier, est gratuite, la valeur du forfait est supérieure à son coût et le succès des affiliés dépend essentiellement de leurs propres efforts.”
Affiliates can benefit from commissions without having to pay a penny, not even entrance fees – Original text: “Il a soumis que l’adhésion au programme d’affiliés de Karatbars est gratuite; les affiliés peuvent bénéficier des commissions sans devoir nécessairement débourser un sou, pas même de frais d’entrée, ce qui a même été admis par l’enquêtrice de l’Autorité.”
The price paid for Karatbars gold is competitive. Original text: “Sa preuve est à l’effet que le prix payé pour cet or est concurrentiel. L’Autorité avait prétendu qu’il pouvait avoir été payé trop cher mais, en contre-interrogatoire, l’enquêtrice de l’Autorité a dû rebrousser chemin à cet égard et reconnaître qu’elle n’avait pas toujours fait l’exercice de vérifier les prix des concurrents de cette société.”
“The costs of transportation are competitive and Karatbars has enough gold to fulfil its orders. Original text: “Une preuve convainc également que Karatbars possède assez d’or pour remplir ses commandes. Une preuve convainc également que Karatbars possède assez d’or pour remplir ses commandes.”
Finally, the case of the only witness of the AMF who actually bought a Karatbars package underlines the legitimacy and quality of the Karatbars experience – He testified that the business package was not an investment but a business opportunity. According to him, he recruited 15 to 18 people and received commissions, including gold. He had 30 to 35 people under him in the organization, directly or indirectly.
He then lost his Karatbars MasterCard debit card on which Karatbars pays their commission income to affiliates. He also lost the password to access the Karatbars website, the back office and his affiliate account. He expressed in his testimony a certain disappointment as to the results he hoped to have obtained, believing he had even made losses. Little by little he had ceased his activities in this respect, no longer believing in them. Then, during the hearing, his password was found and he was able to access his account on the site of Karatbars.
He then found that he had in the meantime earned commissions for an amount of € 1,408 which represented six months of commissions, not to mention the gold grams he had accumulated. That dispelled his doubts. This witness has proved, almost to the point of absurdity, that the Karatbars system works and that the efforts that the affiliates put into the business delivers the rewards as promised.
Original text: “Rappelons enfin le cas du seul témoin de l’Autorité qui ait acheté un forfait de Karatbars. Il a d’ailleurs témoigné que ce n’était pas un investissement mais une occasion d’affaires. Toujours selon lui, il a recruté de 15 à 18 personnes et a touché des commissions, dont de l’or. Il avait de 30 à 35 personnes sous lui dans l’organisation, directement ou indirectement.
Puis, il a perdu sa carte de crédit Master Card Karatbars sur laquelle cette société verse leurs revenus de commissions aux affiliés, revenus qu’ils peuvent ensuite encaisser. Il avait aussi perdu le mot de passe lui permettant d’accéder au site Internet de Karatbars, au back office et à son compte d’affilié. Il a exprimé dans son témoignage une certaine déception quant aux résultats qu’il espérait avoir obtenus, croyant même avoir fait des pertes. Il avait peu à peu cessé ses activités à cet égard, n’y croyant plus beaucoup.
Il a alors pu constater qu’il avait dans l’entretemps gagné des commissions pour un montant de 1 408 € qui représentait six mois de commissions qui lui étaient dues, sans parler des grammes d’or par lui accumulés. Cela a dissipé ses doutes. Ce témoin a prouvé, presque jusqu’à l’absurde, que le système de Karatbars peut fonctionner et que les efforts que les affiliés y consacrent rapportent ce qui leur est promis.”
It is an unfortunate fact that a minority of unscrupulous elements are always the core reason why otherwise credible entities become questionable in general. But that’s life – As Bill Gates on occasion stated to students; “Life is not fair; deal with it!”
The key messages that all adversaries are spreading can be summarized as follows;
- Karatbars is a MLM (Multi-Level Marketing) Scheme
- Karabars is a Pyramid Scheme
- Karatbars is a Ponzi Scheme
- Karatbars is Expensive or Overpriced, compared to ‘Reputable Gold Dealers‘. Please note: ‘Dealers’ (or Traders) in this context usually trade on Stock Exchanges giving rise to ‘spot’ pricing, NOT ‘retail’ pricing; the difference is huge – the average man in the street will never be able to purchase gold at spot price. The public can participate in precious metals ETF’s, but that carries risk; the biggest (in my humble opinion) being the fact that the investor (you) don’t physically hold the metal, you only hold a certificate that entitles you to it. This is no different to fiat currency in the context of wealth preservation – You need to hold the physical gold in your vault, not some piece of paper…
But when you get into the meat of these articles and your reviews are objective, you come to understand the true motives behind them (I love to digest all reviews, positive and negative, in order to understand the true motivation/agenda behind the review);
- They lure you to their websites in the hope that you will click on their advertising links (e.g. Google AdWords), which is their way of generating income.
- Their own businesses may be taking a knock at the expense of Karatbars (e.g. their subscriber list may be shrinking due to subscription cancellations)
- Their own Karatbars marketing campaigns were less than successful (Karatbars requires complete honesty and integrity from its Affiliates; there is no room for hype or BS)
- They leverage negative Karatbars propaganda to boost their own offerings
and Karatbars is most definitely;
- NOT an MLM – Although some elements of the Karatbars Affiliate compensation plan may be confused with traditional MLM practices, the differences are very clear. The Karatbars sales methodology is entirely based on Referral Marketing, with the key diffetentiators between the Karatbars compensation plan and typical MLM plans being;
- Karatbars have ZERO Daily/Weekly/Monthly/Yearly/Centennial/Whatever recurring fees! Membership is completely free, forever, for both Customers and Affiliates.
- There is ZERO monetary incentive for referring (or ‘recruiting’ as the term applies in a typical MLM) people to join Karatbars as either a Customer or Affiliate. The focus for referral is ENTIRELY on PRODUCT – an affiliate may have thousands of referral members in his/her organization, but s/he will earn ZERO in commissions if there are no product movement.
- All Affiliates are, first and foremost, their own best Customers – they all purchase gold for the exact same reason as anyone else; to hedge their savings against inflation and economic crises. The core product is not a Consumable product (gold cannot be ‘used up’, like lotions or potions)
- Karatbars Affiliates are NOT required (actually, the correct word is ‘allowed’) to keep stock for resale to their members, at certain margins depending on status levels, etc. EVERYONE (Customers and Affiliates) purchase the same products from the same vendor (Karatbars) at exactly the same price – Retail.
- The Karatbars compensation plan does NOT require Affiliates to achieve certain minimum qualifications or sales targets in any period or term in order to earn commissions.
- NOT a Pyramid Scheme – The base of the business is built upon a very solid, non consumable Commodity; Gold (although there are compelling arguments that gold is not a commodity, but money). And the fact that everyone in the know (mostly the highly informed and very rich, until now…) strives to hold gold as part of their investment/saving/retirement portfolios, is what makes the Karatbars gold offerings such a no-brainer.
- NOT a Ponzi Scheme. The Karatbars sales strategy is based on Direct Marketing, leveraging the Referral Marketing methodology to market their product. There is no ‘investment’ whatsoever (refer the AMF ruling above).
- NOT expensive – Refer to the Is Karatbars Expensive? page for a detailed analysis. The biggest mistake almost everybody makes is to Google ‘the price of gold’, and 100% of the time they will be presented with the spot price, not the retail price, and there is a huge difference. If you are a Trader/Investor, then by all means, trade in ETF’s, but if you simply want to augment your saving portfolio with gold, as a hedge against inflation, you will never be able to buy gold at the spot price; when you buy a 1 ounce Gold Eagle coin and have it delivered to you, you pay the retail price.
Karatbars does not employ a massive international marketing division with large budget Sales Forces and Distribution/Retail Networks; it provides every one of its Customers the opportunity of becoming a Business Partner (Affiliate), and in so doing, effectively cutting out all the middle layers that would otherwise consume the sales commission budget – Karatbars Affiliates are the Sales Force!
Harald Seiz – Founder & Visionary: “My mission is to produce the highest quality gold available in the market, make it easily accessible to the masses of honest people around the world at a price point everyone can afford. My goal is to help millions find financial freedom from the current system of debt with Karatbars.”
Enough said; there is enough data here and on Google for you to make your own informed decisions.
Some additional resources for you to explore;
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