There is a new player on the MLM scene. TVI Express, a UK based company doing business in more than 50 countries has now come to the United States. TVI or Travel Ventures International, deals in travel and tourism, offering significant discounts on travel packages to exotic locations around the world. In addition, they offer a profitable business opportunity with a very lucrative compensation plan and other incentives. The cries of "Ponzi Scheme" and "Illegal Pyramid Scheme" are already being heard. But is TVI Express a Ponzi scheme or a Pyramid? Let's take a look and see. In this discussion I will deal with the Ponzi allegations and leave the accusations of Pyramid for another time.
To determine the truth of these accusations, we must first know what a Ponzi Scheme is. After researching several dictionaries online and off, this is what I found. The name Ponzi comes from Charles Ponzi, an American swindler who made millions of dollars in a 1920 postal scam selling phony discounted International Postal Reply Coupons. A Ponzi is an investment scam in which early investors as well as the perpetrators of the fraud are paid unrealistically high returns out of funds put up by later investors rather than from any actual profit earned on product sales. In fact there is no real product, at all. Often these scam artists will go back to earlier investors and convince them to reinvest both the original sum plus any profits earned. The system is destined to collapse because the earnings, if any, are less than what has been invested.
Now let's look at TVI Express. When someone joins, for a one time fee of $275 they have purchased a product consisting of some very nice travel benefits; a 6 Nights/7 Days Vacation in a 3-5 Star Property, a free flight ticket offer as well as lifetime access to TVI promotional deals, a VIP Members only forum and discounted travel packages. Plus, as a distributor they have the ability to earn thousands of dollars a month in commissions and additional travel benefits by introducing this membership opportunity to others. This is no different than any other MLM. What has people crying Ponzi regarding TVI is the Travel and Executive boards, a revolving matrix that pays the distributor a return of $15,000 ($10,000 in cash and $5,000 in travel) on their $275 investment once the they have cycled all the way through the boards. On the surface, this could seem like an illegal Ponzi scheme.
However a detailed explanation of the boards will prove this is not a Ponzi, where no product is sold and payout exceeds the amount invested. The product as we have seen already is travel. The boards work this way. In order for someone to cycle all the way through, they have to do two things, sponsor two new members who receive the travel packages above and build a team based upon two sponsoring two sponsoring two, etc. It takes 80 new members to cycle just one person all the way through both boards where they receive their $15,000 in cash and travel. Let's do the math. 80 x $250 = $20,000. So, for every $15,000 payout the company has taken in $20,000. Investments exceed payout, the company makes money and members receive some great products. In no way is this a Ponzi Scheme. It's a legitimate model, just one that is very profitable.