General

Too good to be true?

Jacob Miller is a 22-year-old former gambling addict from Melbourne. He says he used to “blow” 80 per cent of his weekly salary at Crown casino. These days, he just bets on the AFL for fun. But around two months ago, he found himself being introduced to a US-based company called International Markets Live LTD.

IML is a network marketing company that sells products aimed at teaching the average person how to make money trading foreign currency. The service costs customers roughly $250 per month, plus an extra $70 up front. Because IML is not a brokerage company, customers also pay brokers’ fees once they start trading. They are rewarded for recruiting new members through cash payments or free access to the company’s products.

Jacob Miller. Supplied by Jacob Miller.

Miller says he was introduced to IML by an old friend of his girlfriend, Nato Bounader, who messaged Miller’s girlfriend after noticing negative posts on her Facebook page. According to Miller, Bounader asked his girlfriend what was going on and what her partner did. Miller’s girlfriend told him to get in touch with Bounader to learn about how he could make some money. He says he did and Bounader introduced him to IML over video messaging service Zoom.

Miller says introductions typically follow a similar structure. The leader of the call, in this case Bounader, will begin by introducing themselves and telling people why they got involved with IML. Then they explain what forex trading is, before describing what IML is and how their services work. The final thing discussed on introduction calls is the reward system IML uses to encourage customers to recruit new members.

Existing customers receive cash payments for recruiting new members. The more people they recruit the higher the payments. If someone gets three new people to join they are paid $37.50 USD a week, for 12 new members they get $150 USD a week, all the way up to $125,000 USD a week if someone brings in 30,000 new customers.

The Australian Securities and Investments Commission’s financial guidance website, Moneysmart, describes forex trading as extremely risky, even if traders have years of experience. But Miller says during his introduction to the company he was told if he put in the effort he could make easy money, that “trading [would] become second nature”.  Bounader did not mention IML’s history with financial regulators across the globe.

Last year financial regulators in Spain, Belgium and France warned consumers about IML operating in their countries without a licence. According to Belgium’s financial regulator, “the system proposed by International Markets Live exhibits feature characteristics of a pyramid scheme”.  France’s regulator recommended that consumers not do business with IML or suggest others do. The U.S. Commodities Futures Trade Commission sued the company for operating without a licence. That law suit was settled for $150,000 USD in September last year and included a clause requiring IML to not publicly dispute the CFTC’s findings.

International Markets Live chief operating officer at the time, Frank Gomez, told Truth in Advertising.org in June last year the warnings from European regulators were a “misunderstanding” that were being remedied. IML did not respond to requests for comment.

Conversation between Miller and Bounader about CFTF lawsuit. Source: Twitter @LynxJD.

But Miller says knowing about IML’s history would not have changed his decision to join the company. Miller questioned Bounader about an article which summarised the CFTC’s suit against IML, via a Facebook message, and Bounader explained it as a blog writer trying to make a personal gain off bad-mouthing a company. Bounader also declined to comment for this article.

Since joining IML Miller has been sitting in on introduction calls and says he has contacted a “few people” trying to get them to join. Miller calls Bounader a mentor and says he wants to help people around Australia. “I want to be a mentor, I want to travel around the world being an educator,” he says.

“I want to be a part of the upbringing of Australia in this because, Australia, we’re a country that’s happy living week by week.”

He says he’s not worried about the risks involved with forex trading because everything in life involves risk, and through its training IML mitigates those risks.

University of WA Finance Professor Raymond Da Silva Rosa says forex trading is not profitable for the average consumer. Profiting on forex trading relies on correctly predicting when a currency will increase or decrease in value. Da Silva Rosa says while you can make assumptions, such as if a currency is trending up it will likely continue to trend up, not even experts can accurately predict currency fluctuations.

He says while some long-term forex trading strategies can be profitable, such as when Japanese people invest in Australia due to higher interest rates, daily trading is very dangerous.

He is “deeply sceptical” of companies selling forex educational material because the material won’t help or provide much valuable advice.

According to IML’s website, existing customers are not allowed to make any claims about potential income to new customers. Past, potential and actual earnings are not to be used when recruiting new people into the company. Despite these policies, people like Bounader still post on social media promoting events which claim customers will be able to “create their own income 100 per cent from [their] smart phone”.

Facebook post promoting forex event. Source: Facebook – Nato Bounader.

Miller says he has attended a couple of the events promoted by Bounader. He also helped promote the event on February 17 via social media. Miller says the purpose of the events was to build trust between potential new members and existing customers. The leaders of the meetings provide motivation to new recruits and show how IML can be used to make money.

The majority of people attending these events are between the ages of 18 and 23, according to Miller.  In its warning to consumers France’s financial regulator said IML particularly “targeted very young people, including high schoolers”.

Josue Luna is a 19-year-old college student from El Paso, USA. He says he wasn’t surprised to hear the French financial regulator warned consumers that IML targets young people. He says he was first introduced to IML by a friend two years ago, in his senior year of high school. His friend convinced him to attend a seminar where people spoke about the benefits of joining IML. At the time Luna was 17 and, with hindsight, says it was quite silly of him to join.

“There [were] plenty of red flags that I myself should have noticed,” he says. “But at the time, it was more an emotional thing, a feelings thing, because my job was really getting to me.”

He says the speakers promoted IML as an educational platform which could teach people how to make money from trading currencies. El Paso is on the border between the United States and Mexico, so Luna said he was aware people could buy and sell foreign currency.

After around four months of using IML as an educational website, Luna said he began to question the company’s recruiting practices. He wasn’t learning anything except how to recruit new members. Luna decided to leave the company after making a phone call to one of the ‘mentors’ who spoke at his first seminar. “Recruitment is all we focus on, that’s how we make the most money,” the mentor said.

Luna says anyone thinking about getting involved in IML should follow their instincts. “If you’re being told you can make thousands, even millions within months with IML, trust your gut.

“It’s always too good to be true.”

Categories: General