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Some of my followers have asked me to take a look into Karatbars. Karatbars International GmbH claims to specialize in the sale of small 999.9 pure gold bars and gift items. Here is what I have found out about their business opportunity.

Karatbars Business Packages:


Bronze approx. 99 € / no gold

Silver approx. 285 € / 1 gram of gold

Gold approx. 635 € / 2 grams of gold

VIP approx. 1,620 € / 3 grams of gold

Package prices may vary in price, due to the gold content and fluctuating daily gold prices.

In my video, I incorrectly said that the packages may contain ounces of gold.  They contain grams of gold.

If selling gold is what Karatbars is all about, why do their business packages have little or no gold in them?

Here is the warning that was issued by the AMF in Canada about Karatbars:

The AMF is the body mandated by the government of Québec to regulate the province’s financial markets and provide assistance to consumers of financial products and services. The Bureau holds that Karatbars affiliates are investors, that the contracts between the affiliates and Karatbars are investment contracts, and that, accordingly, they are subject to the rules the AMF is responsible for enforcing.

The Bureau has prohibited Karatbars from directly or indirectly trading in securities under any form of investment covered by the Securities Act issued by Karatbars, whether via the Internet or otherwise. It has also prohibited them from acting as securities advisers. The Bureau is concerned that, without these orders, the respondents will continue to solicit investors.

Several pieces of evidence submitted by the AMF at the ex parte hearing raised concerns for the Bureau and prompted it to rule as it did, including the following:

  • Karatbars’ activities are similar to a pyramid scheme;
  • Karatbars already has over 5,300 “affiliates” in Québec;
  • “Affiliates” do not sell products and are essentially promoting Karatbars’ activities, lured by the possibility of earning large payouts;
  • Karatbars and its promoters are promising a return of $15,000 to $136,000 per month, representing returns of between 874% and 2,172%, only 12 weeks after the initial investment;
  • Despite the AMF’s warning, information, and investor solicitation meetings are still taking place where potential investors are being told that Karatbars is not under AMF jurisdiction;
  • Some financial sector participants have attended information meetings and have been asked to promote Karatbars’ affiliates program;
  • Contrary to what Karatbars and its promoters state, the company Prosegur does not store gold on behalf of Karatbars investors, raising concerns about the storage of gold purchases;
  • The promoters of the Karatbars investment program are apparently fine-tuning their activities in order to find other investors.

– Source

Update: This warning has been removed from the AMF website after a court hearing and fines were issued to Karatbars and some Karatbar’s representatives.

You can buy Karatbars but why on earth would you want to when you’re paying nearly 30% more for them? – Source

Gold Cost (Updated 2/27/2016):
Karatbars 1 Gram Gold €57.61 ($66.58) $99.99% Pure
Shipping: €18.50 ($21.38)

JM Bullion 1 Gram PAMP Suisse $50.93 99.99% Pure
Shipping: Available Free Shipping

AMPEX 1 Gram PAMP Suisse $51.30 99.99% Pure
Shipping: Available Free Shipping

Produits Artistiques Métaux Précieux – artistic precious metals products – better known as PAMP, is the world’s leading bullion brand, and one of the most trusted refiners and fabricators of precious metals.

PAMP products are accredited as ‘Good Delivery’ by:

  • London Bullion Market Association (LBMA)
  • London Platinum and Palladium Market (LPPM)
  • Swiss National Bank (SNB)
  • The leading futures markets: TOCOM, COMEX/NYMEX
  • Dubai Multi Commodities Centre (DMCC)
  • Shanghai Gold Exchange (SGE)

Karatbars representatives claim that their gold will help protect you from a failing money system in the United States. They assert that in cases of hyperinflation or global crisis, gold will retain –- and even increase –- its value, which far outweighs its other investment risks.

They are lying to you. The United States government can confiscate gold owned by private individuals. For example, in 1933 the Emergency Banking Act was passed, it broadened the powers of the President during a banking crisis which allowed him to require all those who held gold to turn it in to the government via approved banks. People were given a short time to comply with this order and were paid the current spot rate of $20.67 an ounce. Kartbars Gold does not protect you from a failing money system in the United States.

There are multiple reviews that are used by representatives to justify the Karatbars scam:

One of the most common reviews is a video by Jack Baugher a Scam Buster.  The problem with this video is that Jack Baugher is affiliated with Karatbars.  He is not providing an independent scam review.  This is a massive conflict of interest.

Jack Baugher is the owner of – Source is presented by some representatives as an independent review of Karatbars.  How can that be when an affiliate runs it?

Here is how one previous Karatbars member explained the Karatbars scam to me:

Karatbars International GmbH is a German Ponzi scheme that uses psychological entrapment to help fund the owner’s next Lamborghini.

Karatbars members don’t complain because it operates like a loyalty-based cult where the cult leaders operate as a herd to drown out any voice trying to expose them.

How does the Karatbars Ponzi scam work?

A whole army of so-called “leaders” produce fancy compensation videos to attract their audiences with elaborate arguments in favor of gold ownership as a hedge against the collapsing “fiat-currency” monetary system, through a supposedly affordable “affiliate” program. The arguments for gold are only a distraction, whilst the main focus is not gold ownership, but new member recruitment and pyramid team-building for the sake of direct and “cycle” income, paid out in…. you guessed it… Euro is a fiat currency!

How exactly does a Ponzi scheme operate?

An investment fraud known as a Ponzi scheme draws investors with claims of great returns and no risk but fails to invest the money as stated. Instead, it pays off earlier investors with money from future investors while maybe keeping a portion of the profits. These schemes typically fail when recruiting investors becomes challenging or when multiple investors attempt to cash out. They depend on a steady flow of new buyers to operate. They are called after Charles Ponzi, who ran a similar scam using postal stamps in the 1920s.

Otherwise, why bother putting over 10,000 videos on the net if it was simply about anyone buying gold as a hedge against inflation or fiat currency? Even if the economic argument for gold is solid, the pyramid scam is not.

These ‘leaders’ insist that Karatbars is not multi-level marketing and yet their affiliate bonuses can be paid through infinity levels of a multi-level structure, hmmm… They insist that this is not a pyramid scam but the back office shows the binary “dual” system to look exactly like, wait for it… a binary Pyramid!. They also insist that one can join with the “free” option and then happily tell you that you will get tiny, flash-in-the-pan compensation after a lot of hard work so you might as well “upgrade” to full affiliate status and “buy a package” thereby joining the ranks of over 300,000 Karatbars pyramid scheme victims.

Psychology of Karatbars entrapment part one

First off, many people looking for income and a better lifestyle will be immediately attracted to Karatbars because of the implied income potential and that glittering gold re-packaged in a way never seen before. A unique product, but part of an elaborate scam. Whilst they are distracted by all kinds of talk about the economy, Karatbars system, the product, quality, etc, at NO POINT EVER is it made clear in the thousands of entrapment videos that this company has a strict zero refund policy.

That’s Right! ZERO refund is offered, the very moment you pay your “package” fees by online card or by wire transfer. They don’t tell you that, ever. It’s your job to discover this. So don’t feel cheated when you are told you should have read the terms and conditions!

What’s more, your package amount is immediately redistributed all the way up the pyramid, instantly, with no possibility of reversing those payments and thereby feeding all upper levels with YOUR money. The very exact and traditional definition of a Ponzi scam. Remember Bernie Madoff? Yes, just like that. no refunds. Whatsoever. The trouble is that nearly all newly recruited affiliates are first blinded by the videos and “private gold reception enticements” and have been misled by all the noise about several types of compensation that they forget to read all 15 pages of terms and conditions carefully enough to realize that they are handing over money forever with no legal right to claim it back, ever. Email su*****@ka*******.com and they will tell you exactly that. F*£k off and read the Terms and Conditions, in short. And what do the new affiliates get for the exorbitant “package fees”? A cardboard box. That’s it! A large, FedEx-delivered cardboard box with less than 10% of the value of gold actually contained in the box. For example, the VIP box is almost U$ 2,300 (shipment and transaction ‘fees’ are extra charges) and you get 3 grams of gimmick gold (approximately U$ 180 in value) therefore 90% of what you paid for is the cardboard box.

Now, here’s the psychological entrapment part. Every new VIP grade sucker pays the $ 2,300 knowing that it only contains 3 grams of gold but the reason they paid the extra cost is to supposedly join at a higher income level which pays 20% direct commission on every new package sold and USD 100 for each cycle. Notice the trap? The income potential is subject to successful recruitment PRIMARILY, not an entitlement to earn on the company’s global sales, but only by growing your very own pyramid and entrapment of new suckers with the glittering lure of gold. If you knowingly paid 9 times more for the box than the worth of the gold inside, you can’t complain if you don’t earn when you fail to recruit like the other established leaders. Feel the trap yet?

Psychology of Karatbars entrapment part two

Ask yourself this. Why should a German company selling products online in Euros from it’s official location in Germany, route its entrapment “package sales” via China? To be precise, via merchant name FHT CHENGD WANXI?

Answer: because your payment will most likely be declined for suspicious vendor location/name.

Question: What use is that?

Answer: in your eagerness to get your pyramid entrapment package, you will have to phone your card provider and get the payment done on the phone sometimes waiting hours to make sure the payment is accepted.

Question: And how does that help?

Answer: After all this hassle, you will now think twice about telling your card provider, or even Karatbars, that you made a mistake, or changed your mind, or have second thoughts about it, because why else did you want the payment to be processed on the phone if now you realize there is no way on earth they will refund you anything at all? ZERO cooling off period. ZERO refund because you just forced a phone payment which would have been better if left alone when declined in the first place. Can you feel the trap?

Psychology of Karatbars entrapment part three

You will see tons of affiliates make videos on “how they beat the dog to the door when FedEx arrive with the Karatbars package”

Well, guess what genius! Once you sign for the package, even your own credit card company will tell you NO CHARGEBACK!

So in the first instance, Karatbars DENY you a full refund within seconds of handing over your money, citing Terms and Conditions which NOBODY elaborates on thousands of Youtube videos but then, in the following instance YOU deny yourself any effort to reverse your payment out of a sheer mental block of having just forced it through by phone, and finally, after signing off the FedEx package, your CARD provider will deny any refund. Triple whammy, your money is gone forever, loser!

Psychology of Karatbars entrapment part four

The company insists that there is a “free” account option without a package. Whoopiedoo! The income potential is so minuscule that you could never build, and nobody has ever built, a half-decent income as a “free” account holder in a developed country. And in all other countries, that kind of volume of sales is simply not possible, and no such example exists. This “free” option is to get around regulators and does not work for anyone on the planet, while all the time the “option to become a paid affiliate” stares you in the face as an enticement to earn more according to the “package sales” dual plan. The “free” option helps explain to regulators that the affiliate plan is not mandatory, however, the income potential is so poor that the “free” option exists exclusively to plug a legitimacy loophole.

Psychology of Karatbars entrapment part five

The company insists that there is a “customer” option for those who do not wish to become affiliates and only wish to purchase gold cards for themselves. Price comparison aside, why should anyone buy gold with a heat-treated plastic card stuck on all sides? Because it’s a unique new product, apparently. This begs the question that if this product was indeed so superior (which it isn’t), why has a five-year-old company not made any significant progress in affiliate numbers? Answer: because the customers are so few and negligible in volume sales the company almost entirely operates on inward-looking affiliate member purchases. This a classic sign of a Ponzi scheme because the product has no real traction with consumers outside of the affiliate member base, and therefore it’s an internal money recycling pyramid whose volume is generated almost exclusively within, not outside.

Why don’t regulators take more interest in this Ponzi scheme called Karatbars?

Because people don’t complain. Affiliates spend their initial few weeks and months trying desperately to recruit, failing which the package cost is already mentally written off as a loss, and then comes the embarrassment of having to admit you failed. Why would you then write to any financial regulator and admit that first you tried to get others trapped in the pyramid scheme, and having failed, you now realize that it’s a ponzi… nobody would go through the bureaucratic hassle of dealing with a regulator. The securities regulators don’t usually cover gold or physical assets, the banking regulators don’t usually cover precious metals, and there aren’t any international watchdogs to evaluate which Ponzi continues to entrap fresh members with a thinly veiled guise of a legitimate eCommerce business. To tackle this problem, Karatbars have now introduced potions and lotions with a K logo in order to appear more legitimate. But even the German regulator BaFin would not care, after all, Karatbars are not hiding their system when thousands of affiliates tell you exactly what you need to hear in order to be entrapped. The more important aspects of this ponzi will only be discovered when you join, pay, and realise how shallow the entire business model really is, how restrictive their terms and conditions are and how poorly you would be treated even after becoming a fully paid VIP member – as in my experience, expect to be treated like trash unless you come highly recommended by one of the established leaders.

Death of Karatbars

If only 10% of paid affiliates were offered a full refund on their package cost, the whole structure would come crumbling down because this is exactly what happens to every ponzi scheme. To get a refund, this pyramid scheme would need to change their rules under pain of regulatory instruction. This, in turn would require existing members to write to their respective regulators. Outside of Quebec’s AMF, it appears as if the other regulators have not yet taken an interest in this pyramid. Why should they, if the majority of affiliates would rather watch the binary “power leg” grow on one side and with no ability to grow the other side, all they wind up doing is allowing fresh people to be trapped in the system, top leaders laughing away at the gullibility of the new joiners, and of course, all new package sales end up supporting the cost of the Karatbars owners latest Lamborghini.

If you want gold, Karatbars ponzi is not the way to acquire it! Know first what you are getting into before you even entertain the idea of joining a company based on “hot air” rather than any industry recognition or genuine awards of any kind.

Karatbars Review Conclusion

In my opinion, even with a quick review of the compensation plan you can see that Karatbars is focused on recruiting new people into the pyramid scheme and having them invest in the Ponzi that has ridiculous return claims. Karatbars is a product-based pyramid scheme/Ponzi that uses over priced gold to sucker in its victims. Avoid them.

2.6 Total Score

Karatbars is focused on recruiting new people into the pyramid scheme! Stay a thousand miles away from Karatbars!

  • Pyramid Scheme
  • Shady Owners
  • No Guarantee of Payout
  • Unreliable Payment Scheme
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