Over the last few months more and more people have been asking us about TelxFree. In each contact I have made it clear the red flags and regulatory scrutiny, plus the seemingly lacking concern from TelexFree about all the issues for too long, causes me concerns. From the outside looking in and from reading court records and critics editorials, I would say this company has Ponzi and Pyramid issues written allover it.
Now let me be very clear. At this time NO North American regulatory agency at a State of Federal level has publically called TelexFree’s business model into question. And just because TelexFree has violated Brazil’s regulations, means they have violated any North American laws… But I have found where independent reps are promoting the company illegally and in doing so is causing TelexFree to be promoted as an un-registered security, which is a violation of the 1933 Securities Act here in the USA.
Below are some of the issues already facing TelexFree and why I personally believe the risk is too high for this to be a long term play for independent professionals. Unless TelexFree changes their business model, this company will close and forever be seen as a ponzi or pyramid scheme.
The civil investigation initiated by the prosecution of Consumer Protection (No. 01/2013) shows several controversial issues and possible crimes that put consumers at risk in time to accept this kind of business. Among the possibilities, there is a breach in the Federal Law No. 1.521/51, art. 2, according to which it is a crime: “Obtaining or attempting to obtain illegal gains at the expense of people or indeterminate number of persons for speculation or fraudulent processes (‘snowball’, ‘strings’, ‘pichardismo’ and any other equivalent)” including Ponzi pyramid.
The Justice Acre decided to keep the injunction suspending the activities ofTelexfree . The interlocutory appeal was dismissed on Monday (12) by the 2nd Civil Chamber of the Court of Acre (TJ-AC).
During the trial, the public prosecutor William Silva asked abstention claiming to have ‘interests’, as members of his family invested in the company. Instead, the prosecutor Alvaro Pereira gave the opinion of the prosecutor.
The Superior Court of Justice (STJ) and deemed extinguished early on Wednesday (28), the injunction that the company Ympactus Comercial LTDA was filed in the last 21 days. The decision was issued by Minister Maria Isabel Gallotti and posted on the website of the superior court.
We have also seen where like most ponzi types of businesses the USA side of TelexFree is now getting hit with fraud and that is causing huge issues. This last week we even saw where GPG the company providing payment and merchant services to TelexFree severed ties.
Global Payroll Gateway (GPG) can no longer support TelexFree. Therefore TelexFree will be transitioning all worldwide commission payouts to the new TelexFree E-Wallet system, powered by International Payout Systems (IPS).
You should expect a welcome email from the new TelexFree E-Wallet system by tomorrow, Friday 9/13.
All requests from TelexFree starting with September 3rd will be processed by this new system. All past transactions that were loaded into GPG will be processed by GPG.
Please contact TelexFree directly if you have any questions.
Global Payroll Gateway