Analysis: Amway Accused of Fraud; Pays $150 Million; Where’s the FTC and DOJ?
Amway is the largest, oldest and best known representative of “multi-level marketing” (MLM). It is the most prominent member of the Direct Selling Association. This icon of “direct selling” just announced that it has agreed to pay restitution to consumers and reform costs estimated at over $150 million. The payments are in response to consumer accusations that...
Read MoreAnalysis: Montana/ACN Settlement Displays the MLM Loophole, Once Again
The state of Montana played David against the multi-level marketing (MLM) Goliath, ACN, when it recently accused that company of operating a pyramid scheme. ACN’s boastful promoter is the millionaire, Donald Trump, and the scheme’s product, a video phone, is promoted on Trump’s national TV show. ACN claims to have 200,000 sales reps worldwide. Montana is a state with less a...
Read MoreWife of Bank of America’s Former CEO Admits to MLM Recruiting
Charlotte, NC…Wife of Bank of America’s Former CEO Admits to MLM Recruiting for an MLM Prosecuted in Two States, and in which nearly All Consumers Lose Money According to the local NBC affiliate television news channel in Charlotte, North Carolina, “Several prominent Carolinians, including the wife of former Bank of America CEO Ken Lewis, have signed on as sales reps for a...
Read MoreCanadian MLM, Business in Motion, Appears Doomed
The long and sad story of the Canadian MLM scheme, Business in Motion (BIM), may finally be ending. The scheme has sent letters to its investors (salespeople), announcing it may be closing down. As in all such schemes, the actual percentage of losers (nearly all lose) was pre-determined from the start. The closing only lays bare the fraudulent structure and ends the falsely raised hopes of...
Read MoreRegulators Charge Fortune Hi-Tech Marketing
Fortune High Tech Marketing Charged with Illegal Operations in Two States April, 2010 Update: The MLM scheme, Fortune High Tech Marketing, was ordered in ’09 to stop doing business in the state of North Dakota by state regulators. FHTM is one of fastest growing new versions of “endless chain” recruitment schemes based in the USA. Promoters are making the usual promises of high...
Read MoreBuyer Beware
What Is Not Disclosed when You Are Recruited to Join a Multi-level Marketing Scheme March, 2010 Consumers often ask: Even if multi-level marketing companies are pseudo-businesses, pyramid schemes and financial traps, couldn’t they run legally if they just disclosed how they are structured and operate, the actual financial loss rates, the quitting/turnover rates, the costs, the absence of...
Read MoreGold Quest Leaders Arrested in Iran
December, 2009 Iran joins other countries in efforts to protect citizens from multi-level marketing(MLM) scams. The MLM scheme, Gold Quest, which was a knock-off of the former US-based MLM scheme, Gold Unlimited, was banned in Iran in 2005. It has also been prosecuted in India and Sri Lanka. Yet, like many similar MLM schemes, it continues to operate in other countries and even seeks to return to...
Read MoreCanadian Class Action Suit Against Amway
Canadian Consumers File Class Action Lawsuit Against Amway, Charging Deception and Pyramid Scheme November, 2009 A new class action lawsuit has been filed against Amway in Canada. Though unconnected to the recently released book by Eric Scheibeler, the new lawsuit asserts the very same charges against Amway in Canada that are detailed in the book: false income claims and a pyramid selling...
Read MoreFederal Judge Rules that Herbalife Can Stand Trial
Pyramid Scheme Charge Filed by High Level Ex-distributors October, 2009 A federal judge has ruled that accusations by former top level Herbalife distributors that the MLM, Herbalife International, is an illegal pyramid scheme are worthy of a trial. A trial of Herbalife’s legality is expected in the near future. Herbalife had sought to have the charges dismissed. The ruling is a huge legal...
Read MorePre-Paid Legal Hit with SEC Subpoena
October, 2009 The MLM, Pre-Paid Legal, has been served a subpoena from the Securities & Exchange Commission (SEC) demanding documents related to its treasury stock repurchase program, marketing practices, membership information, and disclosure practices, among other matters. Pre-Paid’s stock plummeted more than 20% when the news became known. Read...
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