A NEW SCAM! SAME GANG AS GLOBAL GAS CARD!
Jan 2012. The new scam just like Global Gas Card is a frugal scam reusing the software from Royal Cruise Matrix and before that US GAS REBATES. With all the recycling of software and saving money couldn't these promoters run an honest company! There are still complaints coming in from Global Gas Card and people getting ripped off. Especially hard hit were people that signed up for ACH withdrawl from their bank accounts. They are still being hit! Editor's Note: Read below Take a look, FIRST TRAVEL NETWORK! DO NOT SIGN UP FOR THIS 2012 RE-CYCLE OF OLD SCAM!
10 MARCH 2011. Gas prices are going up so it is time for all the pyramid scheme gas games to come crawling out of the dark corners of the web. Global Gas Card is a frugal scam reusing the software from Royal Cruise Matrix and before that US GAS REBATES. With all the recycling of software and saving money couldn't these promoters run an honest company. Editor's Note: Take a look, DO NOT SIGN UP FOR THIS 2011 RE-CYCLE OF OLD SCAM!
US GAS REBATES NOT PAYING? SEE ABOVE
Editor's Opinion: Eric Dalius and his US Gas Rebates are causing the WatchDog complaint grief. I talked to Eric at one of the MLM legal conferences that I speak at. He earnestly said he wanted to never screw up again... and now? ! This! I looked over US gas rebates and the complaints on no pay and came to the conclusion that he really did not think this thing out. What I saw:
1. The relative ratio of the "US Gas Rebates" Binary was .086 which is mathematical insanity (pay out too much) in the Binary + plus the promotion bonuses he was paying had to be a killer. Remember binaries (that I like) have to be designed by someone with a math background or they kill the company. I don't think he stole money as some distributors calling claim. He screwed up with a TOO HOT BINARY compenstation pay plan.
2. Obiviously with Eric's speckled past (below) he could not get a credit card merchant account to run credit cards. He used ACH bank withdrawls directly from distributor's bank accounts.....
3. The law of Unintended Consequences = Eric didn't think out! The only way for a distributor to stop or get their money back from a ACH account withdrawl........ is going to the local police and file a police report, then going back to their bank and the bank reverses the charges. Per complaints received, that is what SOME US Gas Rebate distributors are doing.
4. Read below past history + police reports = Ouch!
MLM GAS CARDS REPORT #4
GASOLINE CARD PYRAMID SCHEME LET LOOSE -- GASUPUSA
EDITORIAL ON MLM GASOLINE CARDS
1. When the company started some/many of the cards did not work and the amount of money paid out was artificially low. Any audit that did not do a random sample of card buyers to see if the cards worked for the buyers was flawed, really flawed. Or the Auditor was sucker enough to use a "salted" list (provided by GasUpUSA) of happy customers. Once again, I had distributors complain that were not happy because of funky cards!
2. Some companies that started with gas as the hot spot - used a coupon book with controlled breakage built into the gas rebates. These are the only ones that would relate to or generate breakage for gasoline (which is the same as money). These companies fit into the model of incentitives and breakage. They are in line with the breakage article of AAA that Gasup USA argued with the AG.
3. Gasup USA worked on pure money in and money out. They sold that it was "convenient" to get your money back (even in groceries). To compare a straight pyramid ponzi scheme -- money in and money out to an auto club leaves your editor rolling on the floor crying (ROFC) at the how dumb auditors can be! No wonder we have Enron and Worldcom debacles!
4. It is my opinion that the Gasup Auditors were bamboozled, incompetant, scammed or absolutely incompetant based on the data I have received in the past.
AG Fisher files lawsuit and separate contempt of court charges against Berks County businessman/president of 'Gas Up USA' Eric J. Dalius
Issued: Tuesday, July 29, 2003
HARRISBURG - Attorney General Mike Fisher today announced the filing of two separate legal actions in Commonwealth Court against Eric J. Dalius of 51 Bushkill Court, Reading, who is accused of violating a prior court agreement with Fisher's Office and operating a deceptive multi-level marketing scheme that generated 377 complaints from consumers nationwide.
In one legal action, Fisher said, his Bureau of Consumer Protection filed contempt of court charges against United States Marketing Enterprises Inc., and Eric J. Dalius, individually, and as the company's chief executive officer, president and owner. The contempt petition accuses Dalius of violating a 2000 court settlement that permanently barred him from violating Pennsylvania's Consumer Protection Law.
Fisher said his office also filed a lawsuit naming Dalius and his business, Gas Up USA Inc., 51 Bushkill Court, Reading, as defendants. The suit alleges new violations of Pennsylvania's Consumer Protection Law.
According to the lawsuit, Gas Up USA advertises and sells memberships that offer consumers a number of benefits, including a pre-paid gasoline debit card to purchase gasoline at a discounted price.
According to investigators, members are entitled to obtain $25 worth of gas at a price of $19.75, as many as eight times per month. Each time the card is used, the amount spent is automatically deducted. Consumers are instructed to add money to the account to keep the card active throughout the membership period.
In 2002, the annual membership fee was $149.99. Currently, consumers interested in becoming members are asked to pay an annual fee of $324.87 or $24.99 per month, plus a $24.99 initiation fee. The company promotes the card with claims that Gas Up USA members can save as much as $42 per month or $504 per year.
"This offer was extremely enticing to consumers who were told they could save a lot of money on gas at a time when gas prices were rising," Fisher said. "However, this promise was not fulfilled for hundreds of consumers who said they paid for memberships but never received the discount cards, had difficulty adding money to the cards or tried to use the cards but they failed to work. Others who signed up as distributors for the company said the defendant has failed to pay, in some cases, thousands of dollars that they are owed in sales commissions."
The lawsuit also claims that some consumers were double-billed for membership fees or failed to receive the promised advertising materials. Consumers said despite their repeated requests for delivery of the discount cards or their money back, the defendants failed to produce the cards and refused to issue refunds.
The lawsuit asks the court to order the defendants to:
- Pay $130,000 in restitution to 315 consumers, plus pay restitution to other consumers who come forward with documentation that they were harmed by the defendants.
- Pay civil penalties of $1,000 per violation or $3,000 per violation if the victim is age 60 or older.
- Permanently forfeit their right to conduct business as a multi-level marketer in Pennsylvania.
- Cease multi-level marketing and the sale of distributorships to independent representatives.
- Pay the Commonwealth's investigation costs.
The lawsuit also requests that the court freeze the defendants' assets and appoint a receiver to collect the assets to fulfill the court's order. In a separate legal action, contempt of court charges were filed against Dalius and United States Marketing Enterprises Inc. for failing to comply with the terms of a February 2000 "Assurance of Voluntary Compliance" agreement with Fisher's Bureau of Consumer Protection.
According to the settlement, Dalius allegedly accepted consumers' money to purchase sales contact lists but failed to deliver the lists. Dalius and his business United States Marketing Enterprises, advertised, promoted and sold the lists to consumers who were sales distributors for various companies. Consumers complained to Fisher's Office that they paid Dalius between $134 and $402 for the contact lists, which they never received.
As a result of the investigation, Dalius entered into the agreement and was required to pay full restitution to affected consumers. Dalius was also required to: Pay more than $1,500 in civil penalties and investigation costs; Comply with all terms of his contracts, warranties and guarantees, and fully comply with Pennsylvania's Consumer Protection Law in the future. The contempt petition accuses Dalius of violating the Consumer Protection Law by engaging in deceptive business practices as operator of Gas Up USA.
"We contend that Mr. Dalius again defrauded consumers, which is a direct violation of our prior settlement," Fisher said. "My office will show that the defendant's alleged failure to comply with the law, has created an even larger group of victims who have documented significant losses. In our view, these new allegations are a blatant disregard of the law and warrant a permanent ban on doing business in Pennsylvania." The contempt petition asks the court to:
- Require the defendant to pay restitution to all eligible consumers.
- Impose enhanced civil penalties of $5,000 per violation.
- Require the defendant to immediately cease any and all multi-level marketing activities.
- Order Eric J. Dalius to forfeit his right to conduct multi-level marketing in Pennsylvania.
- Freeze any assets received by Gas Up USA or Eric J. Dalius.
- Appoint a receiver to collect the assets of Eric J. Dalius and his other corporations.
The lawsuit and contempt of court charges were filed in Commonwealth Court. The case is being handled by Deputy Attorney General Michael F. Butler of Fisher's Bureau of Consumer Protection Office in Allentown.
# # #
GASUP USA GAINS MAJOR COURT VICTORY
Analysis by Len Clements
Last week the Attorney General's office of Pennsylvania agreed to terminate their proceedings against GasUp and founder Eric Dalius. The agreement states in part that any harm suffered by those involved with GasUp were caused by their bank freezing their assets rather than from any wrongdoing on the part of Dalius or GasUp.
Patriot Bank, concerned about the viability and legality of GasUp and after receiving $949,000 in returned charges (8.6% of total charges), froze over a million dollars of GasUp funds in December of 2002 which essentially halted their operation. The PA AG's office has now stated this was an "improvident" (rash, wreckless) freezing of properly deposited funds.
GasUp USA and Dalius have filed a Civil Action against Patriot Bank in January 2003 which currently remains in the early stages of progress.
It's interesting that before I wrote my "GasUP USA: Points of Concern" article. I sent a list of all my questions and concerns (by mail and e-mail) to Eric Dalius and I never received a response of any kind. But he had no problem personally e-mailing me the press release about the AG's decision (www.gasupusa.com).
In my opinion, the only thing this decision demonstrates is that the deputy Attorney General who signed off on this agreement doesn't understand the math as well as Patriot Bank, or me. Allegedly accountants were brought in to analyze the GasUp business model and determined that it was profitable as the time the assets were frozen, and due to breakage (unpaid commissions in the compensation plan and unredeemed debit card funds) they likely would have remained that way.
Here's why, as I said in my article, GasUp was very likely profitable at that time, and why they very likely would NOT have been much longer:
The numbers in this example are different than the actual GasUp numbers. I'm oversimplifying it to make the point easier to understand. The general point of this example would still apply to the GasUp model. Let's say, hypothetically, you sold a debit card for $100 that allowed people to purchase $10 worth of goods per month for 15 months. Obviously after 15 months you're $50 behind (took in $100, paid out $150). But you don't actually start losing money until month eleven. In month nine you're still have a $10 profit. In month six you're still rolling in cash.
GasUp was less than six months old when the freeze hit and had over 78,000 members, each of which could purchase up to 8 "Gas" cards per month. Most signed up in the previous three months. At that point GasUp was likely swimming in a sea of green.
The breakage argument is based on the claim that most GasUp participants were voluntarily not cashing in their gas cards (which they paid $20.75 for and could purchase $25.00 worth of any goods sold by any establishment that accepted the card - even for groceries). Even if this rather unbelievable claim were true, to build a business on the extremely tenuous premise that a high percentage of your customers will knowingly and willingly abandon FREE MONEY is fool hearty. There was the potential for as many as 7,488,000 gas cards purchased per year (78,000 x 8 x12) at a loss of $4.25 each. Even if a more realistic fraction of that number were to cash in their card, that's still a huge loss. And all of this isn't even counting all the other bonuses and expenses GasUp was and would have continued to incur. They also charged $159.99 for a membership to a discount buyers program, but claimed on their web site they had an annual administration cost of $99.00. This left them with only a $61.00 profit before any compensation was paid and they claimed a potential maximum payout of 70% which would have put them over $50 in the hole before even a single gas card was used.
GasUp corporate reps and their attorney have both used the insurance industry as an example of how people usually don't receive more financial benefits than they paid. AAA (road side auto service) was cited as a specific example. Sure, if every client were to suddenly submit a large claim, the insurance company would probably go under. They operate on a financial model where they know few enough claims will be filed that they can sustain profitability. But there is one Grand Canyon size hole in their argument. AAA and car, home, or health insurance are things you NEVER want to have to use! It's nice to have when you need it, but we pray we won't have to. We AVOID having to use it, and try to PREVENT the use of it. That's a little different that cashing in a card for free money. I'd think most people would want to do that as many times as they possibly could.
The PA AG at the time the assets were frozen had just publicly declared GasUp a "pyramid scheme" and claimed that most of the promised benefits, other than the gas card, were "readily available to consumers at no cost.'' It appears the AG's opinion changed sometime after their AG changed.
It is still my opinion that Patriot Bank did not "cause" the failure of GasUp USA. At worse, they simply hastened it. Based on their business model at the time of the asset freeze, it is still my opinion that their failure was inevitable and likely would have occurred anyway within 6 to 12 months.
I stand by my original article.
EDITORIAL COURT REPORT ON ERIC DALIUS
(AND $300 OF TELECARDS THEY SCAMMED ROD FOR)
Source: Morning Call; Allentown, Pa.; Jan 26, 2001
In 1994 and 1995, Eric Dalius and his partner Hensinger scammed MLM Distributors and customers out of more than $400,000 when they boomed out and hyped Telecom Solutions in Allentown Pa. Using a HOT BINARY pay plan they grew Telecom Solutions to the Hottest MLM in the USA! They promised $100,000 bonuses and a new Lexus.
Their hype was DISCOUNTED PHONE SERVICE with telephone cards. The trouble was they started using "lifted" telephone credit card numbers and pin numbers from a companies through a hustle. They then passed them off to their MLM LARGE LOYAL FOLLOWING as telephone debit cards. Even when their empire started crumbling LOYAL FANS sucked up the Dalius line.. It was going to be "fixed tommorow!"
The Judge gave Dalius a year at a work release center for convicted criminals. Too short to this editor but, when the FBI raided the Telecom Solutions office in 1995 of course they didn't find much, these shysters knew that it was coming! They had cleaned up and maybe hid a few million offshore!
The fraudulent scheme(s) netted the two about $200,000@ which the Watchdog thinks is a low figure considering all the phone cards that hit the street. The 3 TSI cards I bought were probably never on paper anywhere. They took the money from my wife, who was a customer, in cashiers checks. The amount on record was probably way low. This case needs re-opened, I want my $300 back! :>)
go to http://www.mcall.com/ then click on Archives
then enter Eric Dalius in the search box.
Then below that click on "All Dates."
- Spam With Great Illegal Earnings Claims Too!
Distributors Thumbing nose at Pa. AG?
----- Original Message -----
Sent: Sunday, November 10, 2002 6:19 AM <<Note Date Time group! Almost 2 weeks
Subject: New Prepaid Gas Card/GET FREE GAS! 8737-4 After AG visit!
This Program is EXPLODING !!!! When I joined on Sept. 17th there were 6,800 members. We're over 20,500 now, 28 days later, and growing at a pace of over 700 new members a day. Also, in my first 28 days I've earned $ 10,475.00: That's $9850.00 in commissions and $625 in FREE Gas!! And it's only 2pm EST at this writing. << Nothing like some illegal earnings claims to spice up your spam!
I am not telling you this to impress you - but to impress upon you the unlimited potential you have with this program if you just jump in and get to work; and take advantage of our VERY DUPLICATIBLE Systems! We have people from all walks of life in our group. From college students to retired folks; Single Moms and stay-at-home Moms, to nurses and airline pilots, school teachers, and a whole bunch of SUPER PEOPLE. A GREAT mix of REAL NICE people - all like-minded with the same kind of GOALS, DREAMS, and DESIRES! The sky's the limit with OUR GROUP !!