In this first of a series, I issue a public warning relating to the Hong Kong-based barter business BBX. BBX supposedly has an international presence of nigh on 100,000 cardholders but the reality is vastly different to that claimed. Due to recent developments, it is certainly destined for demise, and my take on things is that this will be sooner rather than later. It has serious management and credibility issues with long-term major currency debasement, internal conflicts and other dishonesty from its principals. Unfortunately the barter industry, like I have shown with Bartercard, is riddled with corruption – the temptations associated with being able to create and manage a private currency are often way too high for those involved. It’s a sad but oft repeating story . . .
[ORIGINALLY POSTED in February 2017 at http://www.dennis.co.nz/2017/02/public-warning-bbx-barter/index.html]
I start with the background to the barter industry; explaining how a trade exchange works, setting the scene for a series where I investigate BBX. My investigation into BBX is likely to be an ongoing investigation for several reasons:
- the issues are not made simple by the deceivers;
- it takes time to gather the evidence;
- investigations develop in intensity as the facts come into the public arena and
- it takes time for the deceived to wake up and smell the roses.
Even after a king hit, or perhaps a series of hits, crooks, criminals and crazies will still attempt to protect their patch, be it the reputation or income streams or whatever and this keeps things bubbling along long after the death has actually occurred.
In the case of BBX, I have moved relatively quickly to produce a public warning following recent semi-public revelations because I see not only huge issues, but issues that have the potential to affect many across the globe relatively quickly. Many have already had their fingers burned, some with very substantial financial losses and others at huge personal cost.
I also have received a lot of what I would consider highly credible evidence making the job a lot easier for me to go public with my warning in confidence. When you are dealing with people’s lives and their livelihood, it is incumbent upon people like me to get it right, or at least substantially right from the outset. because you can easily hurt people if you get something wrong. Getting this balance between going early with a story and waiting until every last little skerrick of evidence is in and ready for a trial, I believe I do well.
While the principals of IRTA (the International Reciprocal Trade Association) have claimed I lack credibility and have done a lot behind the scenes to destroy my reputation for their own political ends, for the discerning, my track record stands unquestionably unequalled in this industry niche:
- I took on conman Daniel Evans and his Ormita fraud – head-on, in public. He’d caused all manner of real problems for some that didn’t understand his psychiatric state and made things worse for themselves. It was a six month fulltime investigation that totally removed his fraud from the face of the earth. What’s more, it took only three weeks following publication of The Ormita Report. He had no choice but to fold due to the extreme pressure that I brought to bear on his operations by simply bringing the facts to the light of day. I not only tracked Daniel in realtime to South Africa when IRTA and their lawyers spent years simply trying to even find him, I still have communication with him in hiding through one of his aliases! That’s a deep understanding and penetration of the industry that gives me power, but with which comes responsibility that I recognise well;
- I detailed mismanagement of the Universal Currency in realtime and put panic into the corrupt leaders within IRTA who acted in desperation to cover up, actively hiding and misquoting a vital damning report into their management. They DID eventually react, but quietly of course, by writing off bad debts that they were previously using for personal gain. Furthermore from that exposure, the industry now knows the extent that IRTA has protected Bartercard by using their Universal Currency. You won’t find any public thank you for this from IRTA or the industry for this though!
- I hammered Ron Whitney and Annette Riggs (IRTA ‘s leadership) relentlessly over their dodgy appointment of conman Rob Van Hilten from Tradeqoin (totally against IRTA’s own rules BTW) to the International Board of IRTA. This was nepotism and corruption in full view but denied in public. For me to claim that IRTA was a central, knowing and willing party to perpetuating the Qoin con was a HUGE and costly call on my part, but it was the truth; I did it and willingly paid the price. The discerning found out from this expose the true nature of the IRTA lot and as I understand it, they have taken a huge hit as a consequence with some major members lost recently.
- My clean, clear simple investigative blogging detailing the dodgy Bartercard prospectus (ASX:BPS); the accurate warning of their pump and dump operation that was proven absolutely true with one of the Directors getting his ‘golden parachute’ and showing how their entire operations work as a Ponzi Scheme with a simply massive hidden trade deficit stands on its own as a devastating critique of an industry leader (one of the biggest out there) and by default the bulk of the commercial reciprocal/barter trade exchange sectors. Sure there are some clean operators in pockets out there. Bartercard though, is not one of them!
- Taking on industry darlings Qoin and showing that not only was their Tradeqoin a total con but that their entire Dutch operations were a long-term deception designed for personal enrichment was again a very unpopular move when some big names were in tight with them. That after a three year investigation and many tens of thousands of words about those Dutch shysters (Edgar Kampers & Rob van Hilten), their illegal conduct and disgusting operations around their Qoin thing are now ceased, adjudicated bankrupt (to the tune of E500k BTW) and are essentially, like Daniel Evans vamoose – totally erased from this industry is proof that not only have I got the b*lls to speak it, I do the work and get it right, time after time.
This is the personal background I bring to investigating and analysing another “barter business with bravado” in a decidedly challenging global marketplace . . . BBX.
The Core Issue – Generally Speaking
Barter as a concept is fine. So too is commercial barter. So too is the traditional commercial barter exchange like that which Bartercard and BBX have operated for years, in theory.
The problem is not the business model, it is the operation OF the business model, thus the personality, conduct and integrity of the principals of the barter business has to be assessed. If you know for sure that the people at the top are straight, and by this I mean honest – paying their taxes and honouring their word sort of thing – their barter business is likely to be sound as well.
Likewise though in reverse – if you know that the dude who owns or runs the show is a crook, then you can be VERY sure that there will be corruption of some sort ‘under the hood’. The temptations of greed and self-interest are universal as this is human nature. Across the globe you can see the haves and the have-nots; political corruption; some being a little more equal than others. The same thing too occurs in the barter business.
The core issue for the principals of barter businesses, and it is the one faced across the globe, is how to deal with the huge opportunities that creating a currency brings across our desks. When we control the currency, when we have first access to trading opportunities within our exchange, when we make opportunity for our members benefit on a daily basis, we have incredible virtually unlimited opportunity. This then gives rise to the temptation – to feather our own nest. It’s a HUGE temptation to put self first. Most don’t resist it!
Unfortunately many come into the industry specifically because of this opportunity. I’ve mentioned several above who are in this category. Many though slip into this corruption because their moral compass permits them to ‘bend the rules’ a little, which then grows as the pressure comes on them after having done the dirty on [usually] their members.
Bartercard’s leaders and the other conmen above have all either deliberately created or taken advantage of the opportunities that came their way. Take note though that the corruption within IRTA however is more akin to opportunism than deliberate deception, although one often leads to the other. Many an exchange owner has slipped into practices that have grown in time to become a problem for them. There too can be good people within a corrupt system or brand, or in this case a system, brand and currency.
The Core Issue – Applied to BBX
At the centre of any traditional barter exchange is a currency. There is also a mechanism to trade (such as web-based tools, electronic cards and so on) plus a brand, often a marketing system based on memberships. The line between loyalty systems and multiple currencies has become a lot fuzzier in the second half of Internet age and makes it a little more complex, but in essence a company such as BBX (and Bartercard) as examples will promote their brand; their membership system and attempt to gain increase through taxing their members for the use of their services. Commissions on trade volume (a percentage of the ticket price) is the common way to make a buck. Aggressive trade exchanges will charge entry fees, high commissions on trading and a whole range of monthly and other fees.
BBX does this.
The currency though is right at the heart of an exchange. As I have explained previously when exposing Bartercard as essentially a Ponzi Scheme, in an ideal situation the debits and credits of an exchange will balance. When everyone has credits in the system and can’t find goods or services ‘on trade’ or on ‘full trade’ then you know that inflation has struck; the currency has devalued; there is nothing (or little) backing it and therefore is no longer trusted. Of course 99% of the time this shrinkage has been used to feather the nest of the currencies owners!
As at today, I assess BBX to be in a similar position to Bartercard in terms of its backing of its currency – essentially there is none. Everyone (well pretty much so) is in credit thus the currency has clearly been debased by its owners. I say this not from guesswork or gut feel but because I know this to be the case.
BBX on the other hand will fight tooth and nail, as will any country or bank in the world, to protect its perception in the marketplace. If people think that the currency is going down, or going under then they will stop selling; try to cash up and get out. That’s an exchange owner’s biggest fear, that members will work it all out and stop using their currency. All BBX Franchisees would lose their income streams and possibly their business as members stop trading after it has been become clear that it is debased. I expect this to occur now with BBX and with increasing momentum as word gets out, and as things evolve naturally over the short-mid term.
You will likely see BBX dive into panic mode to do ANYTHING to try to protect their reputation. Lies, legal, attacks on whoever, more deception and stuff all designed to show that the currency is sound. That’s what all currency owners/managers do when they are under threat is it not – right up and on through to the USD; and back through the centuries to the Romans?
There is no doubt in my mind that BBX is “toast” and that its demise is certain. I can also identify the causes, personal and practical that have brought it to its conclusion but I cannot yet predict the time and sequence of events moving forward from here. Watch this space though.
In the next posts in this series I will be addressing BBX’s challenges in much more detail and explaining WTF went wrong with an operation that is presented to the world as one led by an ethical, switched on family who has just lost the Founder, father, husband and guru. A large part of this will be new to the world, and much will be revelatory to BBX members too. Some will be known by BBX insiders but they too will likely learn things as I stitch it all together into one coherent, logical revelation of reality.
It’s like cutting an infected wound – you want to punch the doctor but he has to do the job in order for the wound to heal. With BBX opened up and its most extraordinary story deliberately hidden under the cloak of “the [legendary] Touma family” and “the BBX family” I believe that the world will be a better place.
I get very specific about BBX, working my way through a list of questions from a departing BBX Franchisee. Ex-employees are a goldmine of nuggets for an investigator – they are usually motivated to spill the beans, they have the ‘goss’ and it is usually fresh. One has to take into account that they usually have an agenda, to punish/hurt/get back, but most can see and understand this when their agenda comes out. Like a couple of school playground tit-for-tats mud can stick and the truth is usually half way between. A bit of kiss-and-make-up and all is well again though is unrealistic in the adult world where livelihoods and careers can be at stake and we think we know how better to deceive.
In my next post I find huge credibility in the bulk of a BBX insider’s implied claims; an ex-BBX franchisee who has pulled out recently and invited those in the know to ask some pertinent questions. BBX is indeed an exchange in deep trouble!
The BBX Investigation Series
- PUBLIC WARNING: BBX Barter (2381 words)
- 2. War Erupts Within BBX Barter (4090 words)
- 3. BBX is Busted – Working it Out (2388 words)
- 4. BBX has big, Big, BIG Problems (1778 words)
- 5. The Demise of BBX (3489 words)
- 6. BBX – A Summary (1308 words)
- 7. Reflections on Investigating BBX (6394 words)
- 8. BBX – The First Criminal Charges (3625 words)
- 9. BBX Crimes – The Significance (2,710 words)
- 10. BBX Causes Problems for IRTA (2,251 words)
- 11. BBX: Rats Off a Sinking Ship (1,715 words)
- 12. BBX Data Security Breach (1,852 words)
- 13. BBX Threatens – Sue Me PLEASE! (1,511 words)
- 14 The BBX Knives Are Coming Out (1,791 words)
- 15. BBX Memberships – Names in a Database (2,774 words)
- 16. BBX UK & The Franchise Show (2,840 words)
- 17. OPEN LETTER 1 – BBX Members (162 words)
- 18. BBX Currency Analysis – 10c/$1.00 (1,527 words)
- 19. The BBX People Speak (11,726 words)
- 20. More Words from BBX People (15,206 words)
- 21. How BBX Did It – Lies & Theft (3,663 words)
- 22. BBX – Winding Down/Winding Up (3,217 words)
- 23. BBX New Zealand Analysis (828 words)
- 24. BBX UK Membership Analysis (1,143 words)
- 25. BBX NZ – Serious Fraud Office (1,261 words)
- 26. BBX – Thailand Member Analysis (1,165 words)
- 27. BBX Minor Countries Analysis (574 words)
- 28. The BBX People (2,290 words)
- 29. BBX International in a Nutshell (295 words)
- 30. The Raw BBX Data (4,463 words)
- 31. BBX Members React – It’s War (5,617 words)
- 32. BBX and Issues of Morality (1,363 words)
- 33. Warning to BBX Staff & Associates (1,944 words)
- 34. BBX Devaluation Helps With Tax Losses (1,269 words)
- 35. BBX Rips Open the Barter Industry (1,237 words)
- 36. MEDIA RELEASE: Barter Tax Avoidance Warning (516 words)
- 37. BBX Whistleblower: Cameron McKean (4,994 words)
- 38. The BBX Investigation Final Comments (1,504 words)