October 8th, 2008 Posted in Real Estate Fraud | No Comments »

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These days “fraudsters” are becoming more inventive. One type of real estate fraud is done by a supposedly “new” multi-level marketing company. In countries that are “havens” of networking companies,this is especially true and it works like a magnet for retirees, overseas workers, anybody who wants to have their own house and lot, housewives, practically anybody who wants to earn big, and those who have savings and are looking for a business to put their hard earned money into. These companies would attract people with a ready networking group, whose members are each willing to invest a considerable amount of money, telling them that for every recruit , they reach a certain sales level position in the company, and they will also earn from the cash investments of their recruit up to the nth degree PLUS the PLUM, which is their “dream home”. This is where fraud sets in. If the networker has not done his homework, meaning the company was not given a thorough background check as to its company history including its affiliates, reliability, credibility and capability to deliver products (actual houses that are already built and ready for occupancy), then they could be in for a shock and total disappointment not to mention the loss of their investment, because there is no actual house and lot that will be given.These companies usually develop tie ups with developers/building contractors to show prospective investors that they have the capability to build houses. However, the usual scenario is that the networking company uses the people’s investment to finance their other businesses, a method which creates an adverse effect. Eventually, a number of investors have fulfilled all the requirements for them to be entitled to their “dream home” but it (the house) can’t be built and given to those entitled to it yet because there is actually no money that can be used to do so. The recruit’s dream home remained just that - a dream!