I have generally been critical of the Daily Universe. Articles devoted to dating and cooking hardly seemed like serious journalism. I must, however, give credit, where credit is due, and congratulate the DU for their exposure of 12daily Pro.
On the 30th of January, Jenny Davis broke the news about 12daily Pro. Her use of words like "unethical" and "illegal" in describing the practices of said scheme provoked a pretty passionate response from involved members of the Daily Universe readership. On the 6th of February, the Daily Universe published a more in-depth examination and analysis of 12daily Pro. Follow up reports by ABC4 News in Utah (hat tip: Marc Sitterud) and today, from KSL have essentially told the same story.
As a result of all the press, the Pay-Pal like company involved in the transactions--StormPay--has frozen all 12daily Pro associated accounts leaving contributing members high and dry. In an attempt to shift the blame and focus of consumer-group investigations, 12daily Pro officials have promoted StormPay as the guilty party. Because this is America (or rather, thank goodness that this is America) these disputes will probably be resolved by litigation and criminal investigation/prosecution.
In an effort to stop the bloodletting, Ned Hill, President of the Marriott School of Business, issued an email warning students against involvement in "ponzi" or other related and unethical schemes. He even mentioned expulsion as possible punishment for what has been characterized as a violation of the BYU Honor Code.
External history aside, here's my take.
About a week before the story broke one close friend approached me about 12daily Pro. He wasn't inviting me to join but told me that another mutual acquaintance had tried to enlist him. This friend asked me to take a look at the website and report back on what I'd learned. After about twenty minutes of close examination I concluded it must be one of those pyramid schemes I'd heard about. I've had friends do the multi-level network market thing ("it's not like other MLN's!), and knew that this wasn't that--there were no obvious streams of revenue. No herbal drug promising to cure cancer, no magnetic footbeds promising increased energy, no Costco-like bulk food sent straight to your house--there was nothing resembling a good being exchanged for cash. Now I'm not a business major (not even a minor) but I am taking Accounting 200 with my brother, and, as he pointed out, the ledger just doesn't balance. We have to debit one side to credit the other but with no obvious stream of revenue, the only obvious conclusion is that it is all a bunch of smoke and mirrors.
Now I know it's not just BYU students being suckered by these guys, but I am left to wonder at what seems like a disproportionate number of BYU students being taken. My brother, Matt, wondered the same thing and asked his career exploration teacher, a Psychology professor, what it was about the BYU/Mormon community that encouraged this type of thing. The answer was two fold: first, Mormons are hard-wired networkers. To these scam artists, LDS ward and stake units seem like custom made MLNs or pyramids just begging to be exploited (I'm paraphrasing here because he didn't use the word "exploit"). The second Mormon characteristic is the general believing attitude--we call it faith with relation to religious things. In business, I think they call it gullible.
I hope this post doesn't make it appear as though I'm gloating, because I'm not. If anything I feel sympathetic to those who fell victim to the promise of easy money. Though none of my money has gone to 12daily Pro or any similar scheme, I feel a sense of shared embarrassment--in part, I'm sure, because one friend from the University of Utah (a business major) will take me to task about BYU students prominent involvement in the scam. In fact, I'm hoping this post preempts his knee jerk (he can't help himself), kick to the collective BYU posterior.
The same two motivating factors--mixed with the intoxicating influence of the almighty dollar bill are the same things that induce hundreds, nay thousands, of BYU students to spend their summers peddling security systems and pest control. We should start a campaign, in fact, I'll start it here. Call it "friends don't let friends do summer sales or MLNs or pyramid schemes."
Spread the word.