Crash and BurnLounge

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FTC Vows to Put a Stop to a Blight on the Indie Music World
Who says the government is not on our side.

Over the past year many of you have emailed me about BurnLounge and asked if it’s legitimate. On June 12 the Federal Trade Commission cast its vote about the company in the form of a lawsuit.

Burnlounge offers you the opportunity to create your own on-line store and sell merchandise. However the real money comes in signing up other people. You get a cut of everyone you sign up and everyone they in turn sign up. It’s a basic MLM (Multi-Level Marketing) plan. Much like Amway.

One reason that getting information about the company was so difficult was because unlike most music business companies, who are anxious to have me give them a “thumbs up,” and therefore cooperate with my investigations, BurnLoung has never been very forthcoming.

Like me you have probably had many offers to join this “community.” If your instincts told you to hold off, then buy them a drink.

The FTC has now accused them of being a ponzi scheme. That’s an illegal enterprise where you borrow money from one person to pay back another and never fully capitalize your company. (Wait, isn’t that the same business model as the Federal Reserve, Municipal Bonds, and Commercial Banks?) The FTC claims that people who got involved with BurnLounge spent far more than they made, or ever could have expected to make.

Of course the same could be said about many other companies in the music space including many so-called digital distributors and record labels. What is the FTC doing about them?

Anyway, the link on the FTC’s website explains the details perfectly.

If you have a BurnLounge story, I’d like to hear it. Please email me and if it’s confidential please indicate so in the email.

Happy reading and condolences to all to spent money with this company.

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