Reactions to new TelexFree compensation plan

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telexfree-logoAfter accepting $289 AdCentral investments on the promise of a $52 a week ROI for roughly two years, TelexFree recently announced some upcoming changes to its compensation plan.

Some details of the plan have emerged in Portuguese but as of yet no official English documentation has been released. Two days ago Carlos Costa, one of TelexFree’s owners, released a YouTube video that sought to cover some of the main aspects of the new plan.

Published on TelexFree’s official Facebook page, at the time of publication more than 1400 comments have been left in response to the video – mostly from Brazilian affiliates of the company.

Today I thought we’d take a look at some initial reactions to TelexFree’s upcoming compensation plan changes.

One aspect of the change that hasn’t gone unnoticed by affiliates is the fact that Carlos Costa has been reassuring affiliates that TelexFree’s current plan wasn’t a Ponzi scheme and was totally sustainable. He’s done this through no less than thirty-two released “TelexFree News” YouTube videos, preaching a mantra most Portuguese affiliates are now all too familiar with.

Without even getting into the details of the plan, TelexFree’s compensation plan change raises two very important questions:

Jhonata Paula: Why change the plan?? Now you guys have given the Brazilian government proof that the plan was ilegalll!!

Darlan Andrade: I could be talking the greatest nonsense … But this new plan will encourage leaders have always known and are well positioned in the nets …. But Carlos Costa said that the sustainability of the company’s plan was reliable, so why do they want to change (it)??

On the first count it’s worth noting that TelexFree’s business model itself was proof alone the company is a Ponzi scheme. The change only offers some acknowledgement from the company-end that something is up.

As for Brazil, I imagine the change will have no impact on the Acre Public Prosecutor’s case against the company. TelexFree have already transferred hundreds of thousands, if not millions of dollars under the existing plan. You don’t get to run a Ponzi scheme for a few years, change the plan and then just walk away.

Darlan Andrade’s observation is quite revealing, but unfortunately Carlos Costa would be able to answer it – and I doubt that’s a video we’re going to be seeing anytime soon. Still, it’s great to see some critical questions being asked by TelexFree’s affiliate investors.

Speculation in Brazil appears to focus on this being an attempt to appease Acre’s Public Prosecutors in the face of twenty something appeal rejections in Brazilian courts. Whether or not these affiliates are aware that the US state of Masachussetts has confirmed they are investigating TelexFree and has subpoenaed individuals to appear before the state’s Securities Division next week, is unclear.

Personally I’m seeing this change as an unofficial response to the US investigation. TelexFree must have known for some time they were being investigated, and this is their attempt to weasel out of it. Costa rejected the notion of making any changes to TelexFree’s business model back during the Acre pre-trial mediation negotiations.

They’ve had ample time to make any changes after Acre shut them down in June 2013, and with the timing of the Massachusetts confirmation, I’m having a hard time believing any of this is coincidence.

Onto the plan itself and what everyone essentially wants to know: Can I continue to dump $289 into TelexFree and collect $20 a week for a year?

The answer would appear to be yes, however the cost of the investment has changed, along with what affiliates have to do to “earn” it.

As best I can tell at this stage, affiliate’s now have to have 5 non-affiliate (retail) VOIP subscriptions active if they wish to collect their AdCentral ROI.

Rafael Rente: staff the 5 active VOIP are required both in the family and in the family plus.

Mauricio Mazier: Bad Bonus Plan, to buy a family Plus open that invest $887.00 + $250.00 (5 packages monthly Voip) = $1,137.00. Each month we have to consume or sell 5 packages of Voip calls, so buy these 5 packages of Voip calls, we must consider our account $250.00 monthly, although return us $225.00 of Commission, must have the balance to buy.

On the other hand people who can only enter telexfree with 1 package, it will be difficult to grow your business, before I could buy additional packs to $340.00 or $290.00, the could buy in less time, now will be more difficult which satisfies $887.00, growth will be much more slow. HOPEFULLY IT WILL NOT BE SO THIS PLAN.

Tom Simpson: summary of the new plan: You will earn $ 200 per month and pay $ 250!

If you’re wondering what the talk of “pay $250″ is about, it’s a calculation of five $49.90 VOIP packages, which is what affiliates will now earn on (The AdCentral investment positions as we know them are gone).

So, with affiliates accustomed to TelexFree being a passive investment opportunity, they themselves buy five packages (under fake accounts they create) at a cost of $250 a month.

The problem is that this would appear to no longer return a positive ROI.

Some affiliates are suggesting the retail viability of TelexFree’s VOIP service, but as one affiliate pointed out:

Alex Bombeiro: I did a quick search and found MANY companies selling VOIP, eg: the total monthly cost is $ 11.09 for 2,000 minutes … kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk how do I fool people selling 99Telexfree USD $49.90?

And therein lies the problem most affiliates are seeing. Outside of the AdCentral investment scheme, TelexFree’s VOIP service has never been viable as a standalone product.

This has resulted in some affiliates demanding the company refund their money:

>André Ricardo: Give back my money!! (Will delete this tbm? I have all day)

Pablo Moraes Almeida: For God’s sake, is illusion, it never works right. And all the money locked when they will return?

Vinicius Evaristo: I want to know how can I get back what I put in telex Brazil lost real got a cent n 6mil

Others aren’t so bold, but outside of a few supportive comments (from affiliates I get the sense don’t quite understand what they’re in for), the tone is mostly critical, if not bordering on a sense of betrayal:

Leandro Lopes: The Telexfree, no longer Telexfree and became a Herbalife, and a Polishop life …

Cleisson Silva: do not want this new model. How to attract people to this plan? We want the old one back!

Carlos Carvalho: what is the value to become a member?

Manoel Castro: This should ta eating marijuana, what the fuck is this commercial if the company blocked?

Silvio Negreiros: It’s a shame when a company changes only aiming at their own interests and forget the advisers … unfortunate ..

Raquel Cristine: Bye Telexfree I’ll just finish my annual contract

Felipe Henrique: Screwed

Wilian Tartaro: I think it had to be embarrassed into making these videos … not solve our situation and are making propaganda al .. be embarrassing enough …

Charles Elton Multnível: Telexfee dug his own grave!

Caio Santos: advisers Telexfree migrating to other marketing’s in 5 … 4 … 3 … 2 … 1

Marcelo Gazzafi: this plan was very good! good for Telexfree! hahahahaha ….. comedy …..

Deacon Mark: this guy should be arrested

Roberto Cesar da Silva: About the new plan: I think with this change the Telexfree will have to eat the VoIPs it. Nobody will pay to work …. The company’s success was right where it was stirred now. I guarantee that if you insist on the new plan as are the rates of future accessions will fall by 90% in the first month ….

Neo Ricalex: think 99% of us will not join the new plan. Now ask ….. how’s the pay Telexfree botafogo and honor our contracts?

Nicelio Soares: Now Top shit are doing our damnedest to convince people that this plan is “wonderful.” Pure waste of time, this plan is a catastrophe for now, in a few months after the start of the new plan memberships will drop equal that of the Russian asteroid.

Mario Nuno: Kkkkkkk silence strange huh? No leader has yet to make a video! Everything exploded. To laughing to keep from crying. … to really pissed!

Marcelo Salgado: I THINK THE PROMOTERS HAVE FORGOTTEN THAT OWN CARLOS COSTA SAID IN HIS PREVIOUS VIDEOS THAT WOULD EVER CHANGE THE PLAN OF THE COMPANY, AND TODAY AFTER ALL WE’VE BEEN THROUGH WITH THE BLOCKING OF YMPACTUS, THE SAME MAKES A VIDEO FOR THE MOST CHUTZPAH, CHANGING ALL THE COMPANY’S COMPENSATION PLAN!

As affiliates continue to vent their frustrations, others are predicting, should the changes go ahead, that TelexFree will deliver an imminent collapse:

Marco César: And then?? you always have to sell 5 monthly VoIPs or not to be eligible to receive $ 50 monthly? I was unaware!

Jessika Ferreira: horrible … the first 30 days ta one blz, but then turn around to sell voip, the simple plan if you can not sell do not get anything, you will have to use your own money to buy these VoIPs, and so the balance is negative. Have to sell the simple plan is slutty.

Ulisses Ribeiro Silva: sorry but this plan will reduce affiliates by 80%, Telexfree not u think the opposite of that … A lot of people will only finalize your annual contract and the old contract Bye Telexfree. I do not speak for me but is that really what’s going to happen.

Igor Morais Matias: WATCHED AND THOUGHT THIS NEW PLAN AND CAME TO A CONCLUSION. Friends this change has damaged 90% of the affiliate – that’s right .. GAME OVER!

TelexFree affiliate investor frustrations aren’t limited to Brazil and Portuguese either, with corporate appearing to be deliberately censoring the release of the new compensation plan in English.

Top TelexFree investor Faith Sloane published a copy of the English compensation plan, only to be told to take it down by the company. She complied, but following the release of Carlos Costa’s Portuguese explanation, she took to Facebook to announce she wasn’t happy about it:

Call me a BIG MOUTH KNUCKLE HEAD if you want to. LOL! It is okay… That is quite interesting.

I was asked to take down the TelexFREE Compensation Plan by the USA Executive Management team, and yet the OWNER of TelexFREE in BRAZIL, Carlos Costas, publishes a Portuguese language video with the EXACT same compensation plan I shared with everyone in ENGLISH. So why can’t we get one in ENGLISH from Corporate USA?

Now I know there are those out there WATCHING what I say and they will run like little cry babies and say “Wahhh! Faith is being negative! WAAAHH!” I say this “OH GROW UP OR GO SUCK AN EGG! YOU AIN’T DA BOSS OF ME! LOL!!”

My question is legitimate. Can we get an official ENGLISH speaking TelexFREE Compensation Plan video PLEASE so our English Speaking brothers and Sisters can BECOME JUST AS INFORMED?

Love ya’ll (yeah… i love you silly immature scaredy cat wimpy cowardly brown nosing spies too. LOL!) I LOVE EACH OF YOU.

I AM FOR EVERYONE ON MY TEAM AND EVEN THOSE NOT ON MY TEAM. That is what all of the guys at the top should be. They shouldn’t kick you to the curb. They should answer your phone calls and emails and skype messages. They should be OUR liaison to corporate. They should fight for us.

We are what made them successful. We are the ones responsible for the changes in their lives. We are the ones they should go to bat for .. who should tell corporate that we are people too!

We built this bad baby. So keep us in mind. REMEMBER US!

As it stands now, TelexFree corporate are busy partying in Madrid, Spain at a company event, so it’s unlikely that we’ll get an official comment from them till early next week. Steve Labriola, TelexFree’s International Marketing Director, told affiliates back in January (when the first confirmation of a US investigation were made public), that ‘if there’s something going on we’ll let you know’.

Whether or not Labriola delivers on his promise however remains to be seen.

My take?

With TelexFree officials set to appear before the Massachusetts SEC next Wednesday, I think regardless of the new compensation plan, the company is in a world of trouble. There isn’t going to be twenty something appeals, starvation protests, road-blocking vehicle protestsor hoax death threats against US prosecutors – it’s going to be swift and for TelexFree management and top affiliate investors, it’s going to get ugly.

And even if you completely discard the US Securities investigation and think everything’s going to be fine, take a look, a real look, at what TelexFree’s Portuguese affiliates are saying about the new plan.

To their credit TelexFree don’t appear to censor their Facebook page and, courtesy of Bing Translate, TelexFree’s affiliate reactions are thus available for all to see.