GreenZap Review and Profile

GreenZap no longer appears to be active as a direct sales company.

On June 29, 2007, the California Department of Corporations issued a desist-and-refrain order against GreenZap and Damon Westmoreland. The regulator found that, beginning around January 2006, the company had offered and sold 10% Series B convertible debentures to California residents through its website without qualifying the securities under California law. The order required GreenZap and Westmoreland to stop offering or selling those securities in California unless they were properly qualified or exempt.

Original Npros business profile for GreenZap, preserved below for archival purposes:

GreenZap, Inc. was a San Diego, California-based online-payment company formed in 2005. Led by Damon Westmoreland, the company promoted itself as a lower-cost alternative to PayPal that allowed individuals and businesses to send, receive, and spend money online using an email address. Customers could fund accounts through checking accounts, money orders, or personal checks, and GreenZap claimed to have approximately 777,600 registered users at the end of 2006.

GreenZap offered free Green accounts and paid Gold accounts. Its proprietary WebCash credits could be used for transaction fees and selected purchases through GreenZap-affiliated merchants, but WebCash was not ordinary cash and could not be withdrawn or sold. Promotional materials offered new users $25 in WebCash and an additional $5 for each referred user. Customers could upgrade to a Gold account for $100, which included additional WebCash, lower transaction fees, and access to community referral rewards.

The Gold program used a network-style referral structure rather than a conventional product-based direct-selling model. Gold members could receive rewards when personally referred customers upgraded and could qualify for payments tied to Gold members elsewhere in their referral community. Promotional materials described escalating reward levels of $5, $10, $20, or $30 per qualifying community member, depending on the number of personal Gold referrals. Rewards were divided between cash and WebCash balances. GreenZap therefore had multilevel-style referral elements, but its underlying service was an electronic-payment platform rather than a traditional MLM selling consumer products through independent distributors.

GreenZap's active business period was brief. The Federal Reserve Bank of Boston later cited concerns involving its referral-based WebCash rewards, complaints to the California BBB, and the company's apparent shutdown