What Is this Thing Called Multi-Level Marketing
This newest article by Robert L. FitzPatrick presents a the first economic “portrait” of multi-level marketing (MLM) in the USA ever compiled using the statistical data on three large MLM companies, Amway, Herbalife and Nu Skin. Together, they represent 10% of all MLM operations in America. The data show shocking loss rates among participants and an extreme transfer of money to the 1% at the top. The study also examines the potential for “retail” sales by distributors for these three companies in America, which turn out to be non-existent. Finally, the report examines what the chances are for a new recruit joining any of the three today, given the millions of people that have already joined and quit over the years. READ
An Investors’ Guide to Identifying Pyramid Schemes
Anyone considering buying or speculating in MLM stock should know the risks for prosecution of any MLM company as a pyramid fraud. Prosecutions often lead to total collapse of stock value. Legal expert, Bruce Craig, former Asst. Attorney General of Wisconsin, provides an overview of the risks and the laws that apply. The article, published on the popular “Seeking Alpha” financial column, addresses the most basic fraud that all MLMs face possible prosecution for – promising all participants income based on recruiting of more participants, a classic endless chain that dooms the vast majority to failure. Bruce Craig addresses prosecutions that could come from state or federal agencies or from lawsuits brought by victims. READ
Eight Reasons for the Silence and Lack of Complaints from MLM Victims
Journalists, analysts and some regulators doubt that MLM is harming people due to absence of large numbers of complaints to the authorities by MLM victims. This view reveals lack of understanding of MLM’s deceptive workings. As in all other kinds of successful frauds, MLM victims are either unaware they have been bilked or circumstances of their involvement inhibit their going public (fear, self-incrimination, shame, etc.). This article lists the 8 most common reasons that few people complain after losing money in MLM. To be clear, many people do complain and the FTC receives thousands of such complaints, enough to indicate widespread fraud. However, relative to the millions who lose in MLM, the numbers are minuscule. The article explains why.
Notes taken during an undercover investigation by Robert FitzPatrick on the “Business in Motion” (BIM) Scam that is sweeping through Canada (2007-9).
Working with producers of the award-winning Canadian Broadcasting Corporation show, Marketplace, FitzPatrick attended a BIM meeting with hidden cameras and microphones. The Marketplace show that exposed the scheme aired on Feb. 6, 2009. The notes are published to answer further questions about how pyramids and Ponzis work and why FitzPatrick concluded that BIM is a harmful pyramid scheme. READ
The Amway Myth, with an Analogy to the Days when Smoking was “Harmless.”
England wants to kick it out of the country; China banned its pay plan; its offices in India were raided; Top Gun insiders sue it as a massive pyramid scheme; a class action case brought by distributors claim it is an illegal fraud under American law; books and websites detail victim losses. Yet, Amway maintains the myth of being a “direct sales” company (though it has no retail customers) and a “unique income opportunity” (though indisputable data show that 99% of all Amway distributors lose money.) Amway maintain the “Big Lie” much like Big Tobacco has us believing smoking was good for us. READ
The “Non-Retail” Direct Selling Company.
As market-based economies become the prevailing global model, millions of people are being exposed to sales promotions, income opportunity solicitations, and investment schemes with which they have no experience or knowledge. Vulnerability to deception and the need for consumer education correspondingly reach global heights. READ
THE TEN BIG LIES OF MULTI-LEVEL MARKETING
This article is among the mostly widely read, popular examinations of the flaws, deceptions and false promises in multi-level marketing. It has been translated into at least four other languages and referenced in the news media worldwide. READ
MLM, a Consumer Fraud
Understand how MLMs defraud consumers through a calculated program of deception and a business model in which 99% of all new recruits will and must lose. READ
When Should An MLM or Network Marketing Program Be Considered an Illegal Pyramid Scheme?
Where’s The Harm?
How do North America’s three largest MLMs stack up against gambling in Las Vegas? READ
The American Scam
Just as thousands of Americans have been tricked by the “Nigerian Scam”, millions of people in other countries around the world are losing money in the “American” Scam called multi-level marketing. READ
The Meaning of Pyramids
A broader perspective on how and why so many people are falling into pyramid fraud today. It reveals how pervasively and deeply the pyramid model has imbedded itself in the American economy and social thought. READ
Amway’s Fleecing of India
Recent news of the heroic efforts of some law enforcement and consumer advocates in India to stop the spread of Amway’s US-based pyramid selling scheme. The articles document the losses suffered by millions of Indian citizens, many living near subsistence. READ