Rabbit’s High Yield Adventure

Some of you have asked me what went wrong with Compactsurf. Almost a month ago I had it on a pedestal, now it is no more. Like I a lot of you, I lost money in the program. Looking back at what transpired over the past few weeks, I should have seen what was coming (and should have been in profit instead of a loss). Let's go back and analyze what took place to see if there are any lessons to be learned from this saga.

A few weeks ago I mentioned that Compactsurf was planning to launch their own payment processor. I said that it was a concern of mine because programs that start their own payment processors usually end up with issues not too long after. Still, I gave them the benefit of the doubt and continue to upgrade in the program.

The truth is there is no reason for a program to start its own payment processor. There are already a myriad of third party payment processors out there. Why start another one? One exposes him or herself to double the risk when one uses a payment processor tied to a program. Not only are you risking your funds by participating in the program, but you are also risking your funds by keeping it in their payment processor. This is a lesson that Compactpay users learnt the hard way this past week. 

In closing shop, Compactsurf blamed the 20% drop in e-gold the past few weeks as the reason for their cash crunch. While this was definitely a factor, I believe that fund mismanagement (if not fund misappropriation) was the primary reason for the demise of the program. I believe a lot of funds were poured into getting Compactpay and the Compact Lottery up and running post-haste. I also believe that they spent way too much money on advertising. I read somewhere that they spent tens of thousand of dollars at the MoneyMakersGroup site alone. I am a firm believer that a good program should be able to sell itself. If a program is good, then word of mouth is all the advertising you really need. Anyhow, the lesson to be learnt from this is that we should take our money and run whenever a program launches its own payment processor.

The launch of Compactpay was the first sign of smoke to appear. The second sign of smoke was the talk of increasing the payout time from 48 hours (that people were used to) to the 7 days stipulated in their terms of service. Still, the flames really started to show when "Luuk" the main admin reported that payment delays were due to his illness. The fact that he claimed he was ill was not the red flag. The red flag was that it took him several days to let people know what was going on. The delay would have been understandable if Compactsurf was a one man operation. However, Compactsurf had three admins - Luuk, Nicholas and Olivia. Couldn't Olivia and Nicholas report that Luuk was ill and that there would be a delay in payouts?

Looking back, I cannot believe that I miss these signs of trouble. They all appear within a short time frame (about 10 days). However, this should have been enough time to take action. I get upset every time I think about it, but what can I do? If anything, it shows that I am not perfect, and is prone to make mistakes every now and then. I am hoping that by doing this analysis, people can learn from some of the tell-tale signs of trouble in a program and take action when necessary.

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