BULLETIN: Club Asteria Says Revenue Has Plunged ‘Dramatically’; Firm Blames Member Lies For Crisis, Compares Situation To Run On The Bank
BULLETIN: UPDATED 6:44 A.M. EDT (U.S.A.) Club Asteria, a Virginia-based company that claims to elevate people out of poverty globally by involving them in an MLM-like income and recruitment scheme, has acknowledged a revenue plunge and described it as dramatic.
In an audio recording posted online, the firm blamed its current state on lies from members and bad publicity. The audio is dated June 24.
“It’s taken our revenue, and it has hurt it dramatically,” the company said.
Club Asteria, which described itself as a ’cause’ marketing company concerned about the impoverished people of India and other countries across the world, conceded it has been swamped by “thousands” of support tickets from members.
Eight weeks ago, approximately a year after its launch, Club Asteria discovered that it had liars in its ranks, the company claimed in the recording. The liars created problems, according to the firm.
Among other places, Club Asteria is being promoted on forums linked to numerous Ponzi schemes. A Club Asteria thread on TalkGold, for example, has been active since April 5, 2010. Meanwhile, a Club Asteria thread on MoneyMakerGroup has been active since May 29, 2010. Both forums are referenced in federal court filings as places from which Ponzi schemes are promoted.
Club Asteria did not say in the recording precisely where it believed its problems with untruthful promoters had begun. Nor did the company say how much money it believed it had collected as a result of lies told by its freelance sales staff or what it planned to do with tainted proceeds.
“The challenge that occurred is that, all of a sudden, we found that our membership — many of our members — were presenting Club Asteria in an inaccurate, untruthful manner,” the company said.
False claims and “all kinds of distortions” were being made “all over the Internet” that Club Asteria provided “passive” income of $400 per week, the company said.
Members — and not the company itself — were responsible for the false claims, the revenue plunge and putting the firm at risk, the company suggested in the recording.
“It’s like a bank where somebody says, ‘They have no money left.’ And everybody runs to the bank and takes their money out,” the company said. “Of course, the bank is going to be in serious trouble . . .”
Many Club Asteria members have claimed preemptively in promos for the firm that Club Asteria was not operating a Ponzi scheme. Why the firm chose a bank-run analogy to describe its problems was not immediately clear.
Some Ponzi schemes topple — the Bernard Madoff scheme, for instance — when a company encounters cash-flow problems and cannot meet redemption requests, the Ponzi equivalent of a run on the bank. In a classic Ponzi scheme, no real business exists — and a firm takes money from “new” members to meet the payout expectations of “old” members.
Club Asteria said it hoped to reverse its financial course by inspiring members to sell more products and services to increase revenue. Meanwhile, the firm said it hoped to sell a tablet computer to members on time payments beginning on a date uncertain. Club Asteria did not identify a manufacturer for the computer, but said the device would help members become better equipped to run successful businesses.
Whether impoverished members of Club Asteria could afford a tablet computer or whether such a computer would be operable in all the countries of the world was not made clear in the recording.
Pricing for the tablet was not revealed. The firm also said it planned to offer apparel, vitamins and other products.
There have been claims in recent weeks that Club Asteria has slashed cashouts, which some members claimed provided a return of 10 percent a week. Other members said Club Asteria normally paid between 3 percent and 4 percent a week. In recent days, there have been claims that the firm suspended cashouts altogether. These claims followed on the heels of claims that Club Asteria had offered bonuses convertible to cash to lure members to join.
Club Asteria did not say in the recording whether it believed its bonus program had contributed to its problems. Nor did the firm say why it had come to recognize only weeks ago that false claims about its business opportunity were appearing online.
In a strange turn-of-phrase, however, the company did say this: “We offer them products and services to purchase under the guise of ’cause’ marketing.”
The firm described “cause” marketing as an inspirational “concept” that targets people globally who may be enduring personal poverty and motivates them to climb the ladder of economic success by giving them something in which to believe.
Two of the problems the company is experiencing are that fewer people now believe in it because of the lies told by members and because members were complaining in public about the firm, Club Asteria said.
Listen to the recording.