Zeek Rewards announced a mandatory compliance certification course for all members a week ago. The course, priced at $9.95, or $4.95 for early registrants, aimed to address misleading advertising of the Zeek Rewards investment opportunity.

Originally set for January 23, the launch of the compliance program has been delayed. Zeek Rewards stated that "the process of testing the course, writing the feedback, getting modifications in place and re-testing is going to take a few weeks at least." No firm deadline for the rollout has been provided.

Compliance measures are common in multi-level marketing (MLM) and usually covered in terms and conditions or distributor agreements. Zeek's decision to implement a separate, paid agreement that requires an extended finalization period raises questions.

Zeek's legal compliance is unclear, even with attorney Kevin Grimes involved. Members can invest in VIP bids, transfer them back to Zeek Rewards, and receive a daily return regardless of whether the bids are actually distributed. Zeek generates returns on bids that have not yet been given away.

This fundamental flaw in the compensation plan likely causes the compliance course delays. Paul Burks and other Zeek Rewards administrators appear to be struggling to modify the plan without alienating members who treat it as a direct investment. The company cannot be legally compliant unless it stops paying returns on bids before they are actually given away.

Zeek initially cautioned members against advertising that sponsoring or recruiting is unnecessary to earn income. This advice came despite the fact that Zeek's system allows members to earn returns by giving bids directly to the company. The company later decided that this was insufficient. Forty-eight hours ago, Zeek announced, "no independent marketing materials are allowed to be used for the time being." This ban includes member-created websites, banners, classified ads, and any marketing campaigns.

The company's actions suggest it acknowledges the questionable nature of its investment scheme. Zeek seems to restrict how members describe the opportunity, rather than fixing the underlying issues. The usual "don't advertise income potential" disclaimers common in MLM are not enough for Zeek's operation.

Zeek Rewards members are also discussing their tax liabilities. Many members reinvest their daily returns into more VIP bids to increase their daily ROI. This practice has created uncertainty about whether these daily payouts count as taxable income or a business expense when reinvested.

The daily cash payout from Zeek Rewards to members is taxable income, regardless of whether it is reinvested. The question remains whether bid purchases or repurchases can be claimed as a business expense. If they are, it solidifies Zeek Rewards as an investment opportunity. Early members with substantial VIP bids, accumulated through heavy reinvestment, face significant tax obligations on their Zeek Rewards income. An 80/20 investment rule seems to be in play.