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Economics, Politics, Legalities, Ethics and Sociology of Pyramid Schemes / Multi-level Marketing.
The False Profits Blog, published by PSA President, Robert FitzPatrick, is a sane, rational and fact-based forum. Read, get podcasts, make comments, subscribe.

Ponzis and Pyramids, an Audio Series

Ponzis and Pyramids is a consumer education audio series that examines multi-level marketing and revealing the similarities between Wall Street Ponzis and Main Street Pyramids. Ponzis and Pyramids is sponsored by Pyramid Scheme Alert and supported by donations from dedicated consumer activists, attorneys, and authors. Each show is 60 minutes long and is in MP3 format for downloading to iPod or any MP3 player. (Click on the PSA Logo.)

Click here to Visit the new, redesigned Pyramid Scheme Alert website.

If you've arrived here from a link from another site, please know that we've moved! You can find all the latest information about pyramid schemes by clicking here.


Also See News Archive

Buyer Beware: What Is Not Disclosed when You Are Recruited to Join a Multi-level Marketing Scheme

March, 2010

What if a multi-level marekting scheme disclosed the full truth when a consumer is recruited? What would "full disclosure" include? What is being left out at the recruitment rallies? Is the income opportunity really "unlimited"? What are the costs? How much time is really required? What are the loss and turnover rates?

See what full disclosure would include. More...

New Audio Series Focuses on "Main Street" Ponzis and Pyramid Schemes (downloadable MP3)

December, 2009

Pyramid Scheme Alert has launched an audio documentary focused on Main Street Ponzis, such as multi-level markerting, aka MLM or Network Marketing, cash gifting schemes, and other "business opportunity" scams. In recent years, light has finally come to Wall Street’s frauds but Main Street’s remain largely disguised as upstanding enterprises, just as Enron and Bernard Madoff operated “legally” for decades. "Pyramids and Ponzis" is hosted by PSA President, Robert L. FitzPatrick. The first show explored the pervasiveness of fraud in multi-level markerting from first misleading introductions to deceptive recruitment tactics, to the promotions of bogus "success tools."

Each segment of the series can be downloaded for listening on MP3 players.

Fortune High Tech Marketing Ordered to Halt Doing Business in One State in the USA

December, 2009

The MLM scheme, Fortune High Tech Marketing has been ordered to stop doing business in the state of North Dakota by the state's Attorney General. 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 income and "making money while you sleep."

Leaders of MLM Scheme, Gold Quest, 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 nations where it is outlawed. Such is the new boldness of pyramid scams. More than 100 investors and recruiters were arrested at the airport in Iran upon returning from a recruitment program in Thailand. More...

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 structure based upon transferring new investors' funds to earlier ones, causing massive losses to virtually all who are induced to invest. A similar class action case was also filed in 2007 against Amway by consumers in the USA. That suit is active and pending.

Federal Judge Rules that Herbalife Can Stand Trial on Pyramid Scheme Charge Filed by High Level Ex-distributors

October, 2009

Former high level Herbalife distributors have charged that Herbalife is an illegal pyramid scheme - a fraud. Herbalife tried to get the charges dismissed. Now a federal judge has ruled that the charge is worthy of a trial. The case could be devastating for Herbalife and many other MLM schemes. More..

Pre-Paid Legal Hit with Subpoena from SEC

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. More...

China Leads the World in Battling Illegal (USA-stlye) MLMs; New Crackdown on the Frauds

September, 2009

China is battling American-style MLM's with armed police, arrests and public education. A new consumer organization has been formed to help consumers break free of MLM's cult-like powers that employ lies and false promises. A new book has been published in China exposing the tactics of deception. MLM is illegal in China while true direct selling (retailing) is allowed. Yet, MLMs are operating illegally and USA-based MLMs are lobbying to get "endless chain" pay plans legalized. More...

China Leads the World in Battling Illegal (USA-stlye) MLMs; New Crackdown on the Frauds"

September, 2009

China is battling American-style MLM's with armed police, arrests and public education. A new consumer organization has been formed to help consumers break free of MLM's cult-like powers that employ lies and false promises. A new book has been published in China exposing the tactics of deception. MLM is illegal in China while true direct selling (retailing) is allowed. Yet, MLMs are operating illegally and USA-based MLMs are lobbying to get "endless chain" pay plans legalized. More...

Conflicts of Interest May Influence Better Business Bureau's Arguments about MLM Scheme, IJango, which it Warns Is a "Pyramid Scheme"

September, 2009

The Better Business Bureau is warning consumers that the new multi-level marketing scheme, IJango, may be a pyramid scheme. IJango founders have ties to a previous, now bankrupt, MLM, Excel Communications.

Why is the BBB targeting this one start-up? Is it engaged in practices all that different from hundreds of other MLMs? No, not really. Better Business Bureaus seldom identify multi-level marketing companies as pyramid schemes. The Dallas BBB was sued in 2006 for questioning a MLM.

But there is much more to this story, including conflicts of interest at the BBB and misleading arguments about how consumers should identify harmful pyramid selling schemes. More…

Report on FTC Neglect and Corruption Now Available

August, 2009

The new report from Pyramid Scheme Alert, "The Main Street Bubble: A Whistle Blower's Guide to Business Opportunity Fraud; How the FTC has Ignored and Now Protects It" is now available to the public at no charge. If you have an interest in seeing this report, email PSA. Include the words "FTC Report" in the subject line.

In the wake of the Bernard Madoff Ponzi scheme collapse and other Wall Street frauds, there have been shocking revelations about neglect, collusion and incompetence at the Securities & Exchange Commission (SEC). A similar pattern developed at United States Federal Trade Commission (FTC), the federal agency charged with investigating and prosecuting "business opportunity frauds" and pyramid schemes.

In 2001, virtually all consumer protection in this area stopped at the FTC. What happened to cause this radical change? How did the FTC move from protecting consumers to protecting pyramids?

The whole story has been researched and presented in a new report authored by Pyramid Scheme Alert president, Robert FitzPatrick, with help from many other consumer activists. The 21-page report details political influence-buying, conflicts of interest, and failure to protect the public. The story is eerily similar to the recent revelations of the SEC, which led to Wall Street frauds and the Bernard Madoff scam.

MLM Scheme, Stream Energy in Texas, Sued for Operating a "Pyramid Scheme"

August, 2009

The Texas-based MLM, Stream Energy, which sells gas and electric utility services in Texas and Georgia, has been sued for operating a pyramid scheme. The civil suit, which is seeking class action status, claims that Stream Energy misrepresents income potential, misleads consumers to invest as salespeople, is causing the great majority of "sales people" to lose money and is destined to collapse. More…

Florida-based MLM, Own My Travel, Is Sued by SEC for Operating a Pyramid Scheme

August, 2009

A small MLM in Florida called Own My Travel has been sued by the Securities and Exchange Commission for operating a pyramid scheme and selling unregistered securities. The scheme claimed it is a typical MLM and that it offers a product – discounted travel services – and is not paying people for recruiting. The SEC claims that the scheme merely is charging membership fees and then transferring portions of the fees from later investors to earlier ones. Some readers will see a stark similarity between Own My Travel and the Canadian scheme, Business in Motion. More...

Finland Hit by Madoff-Style Ponzi Scheme

August, 2009

Finland has recently discovered that thousands of its citizens were duped in a near clone of Charles Ponzi's original scam and a close relative of Bernard Madoff's. The scam in Finland was originally called WinClub, but after some negative publicity and inquiries, changed its name to WinCapita. The scheme ran for more than three years with no government or media investigations, just as Madoff did. In October 2008, the scheme attracted attention only when its website closed down and the promoter disappeared. More.

MLM Travel Scheme May Be Finished Off by State Regulators

May, 2009

California state regulators are doing what the Federal Trade Commission (FTC) will not do – protect the public from pyramid selling scams, also called “business opportunity frauds.” The latest example is the scheme, Your Travel Biz.com, a classic pyramid in which consumers buy the right to become “travel agents” and then make money when they recruit other “agents.” California Attorney General, Jerry Brown, has struck a fatal blow against the scheme and provided a great benefit to hundreds of thousands of consumers. More.

Multi-Level Marketing Exploits Recession; Promises "Safe Haven" and Financial Rescue

May, 2009

Unemployment is rising. Loans are hard to get. Foreclosures are skyrocketing; small business owners are closing their doors. Into this sad situation comes multi-level marketing (MLM), claiming to offer consumers a "fall back" or rescue. They call it "direct selling" and they claim it is "recession-proof."

The problem is, the "income opportunity" peddled by most multi-level marketing companies is not direct selling. More…

Mannatech Pays Millions to Victims in State Prosecution of False Marketing

March, 2009

Mannatech Inc. will pay $6 million and its founder will pay $1 million to settle the Texas attorney general's allegations that the company made false claims about the health benefits of its vitamins and supplements. More…

Canadian MLM, Business in Motion, (BIM) Exposed in Television News Show

February, 2009

The award-winning Canadian Broadcasting Corporation (CBC) television news show, Marketplace, dedicated its February 6, 2009 show to a devastating exposé of the Canada-based multi-level marketing scheme, Business in Motion. PSA President Robert L. FitzPatrick was invited on the show to attend a BIM meeting in Toronto (undercover, with hidden cameras and microphones) and then to offer an expert analysis. More…

PSA Calls for Vigorous Regulation from SEC And FTC in Wake of Massive Wall Street Ponzi Fraud

December, 2008

In a letter to the chairmen of the FTC and SEC, Pyramid Scheme Alert charges that the lapse of government regulation of pyramid and Ponzis in the financial and home-business markets has led to an epidemic of pyramid frauds. The recent scandal involving the former chair of the NASDAQ, Bernard Madoff, is emblematic of a much wider and larger pattern. This pattern is likely to worsen as the Recession deepens and drives more people to economic desperation and to unconventional income-producing schemes. More…

ACN Phone Scheme Is Focus of Fox News (Los Angeles) Investigation

November, 2008

The MLM scheme, ACN, was featured in a news investigation by Fox News in Los Angeles, CA. As in other similar news reports on this scheme, the story focused on the obvious – ACN looks and behaves as a blatant pyramid scheme. In particular, the story asked why ACN recruits pay the company $499 for the right to sell the product and questioned the link of this payment to rewards for recruiting other ACN "sales" agents. More…

Pyramid Scheme in Nation of Columbia Causing Chaos – A Warning to Other Countries that Ignore Pyramids and Ponzis

November, 2008

Two people are dead, 13 towns under police curfew and the country's top banking regulator has resigned. This is part of the fallout from the collapse of a large pyramid scheme that operated openly and "legally" in Colombia. The consequences are tragic. However, the more significant story from Colombia is one that is being repeated in many other countries. The authorities let it happen, even as the signs of a massive fraud were obvious. More…

R. Earl Mendel and Freelife's "Goji Juice" Expose in CBC Marketplace Investigation

December, 2008

Pyramid Scheme Alert has previously reported on the financial slaughter of consumers who become "distributors" of the MLM scheme, FreeLife International. The data on FreeLife's payout is included in the report, "The Myth of MLM Income Opportunity," along with full data on 10 other MLMs. The analysis revealed that less than 1% (those at the top) of FreeLife's "active" distributors received over 75% of the total company payout; 70% of all Free Life distributors earned no commissions at all; and the mean average payment to of the bottom 99.08% of FreeLife Distributors who remained active for one full year was $4.86 per week (before expenses and taxes are deducted).

On the product side, the well respected Canadian television news show, Marketplace, has aired a half-hour investigation of the FreeLife scheme's flagship product, Himalayan Goji Juice. The report is a devastating revelation of deception, exaggerations, false claims, fake credentials, and bogus studies promoted by FreeLife spokesman, Dr. Earl Mendel. See the CBC Marketplace video.

"Gifting" Pyramid Schemes Sweeping North America, UK; Focus of New Website

October, 2008

As a sign of the economic crisis, "Cash Gifting" pyramid scams are springing up and spreading across Canada and the US. These same types of pyramid schemes were widely exposed and prosecuted more than six years ago. At that time, the most popular was aimed at women. It was called "Women Helping Women." Others have targeted Latinos, African-Americans, blue collar, and some religious communities. Most of the scams promise 800% returns on investments (called "gifts"). Some attach some form of product, and claim to be "sales" companies, but most deal in cash and maintain the pretense of "gifting.". A star from the UK's version of the TV show, "The Apprentice", was recently caught by a BBC television show running a gifting scam. Government prosecutions are slow and in some areas non-existent. Often, members of the police, sheriffs' departments or prominent politicians or their spouses are themselves involved in the scams, stifling law enforcement. The close resemblance of these schemes to multi-level marketing causes some regulators to tread lightly, fearing being pressured to apply the laws to those types of "endless chain" scams also.

Now a dedicated website has been published focused specifically on "cash gifting." The site, called "Cash Gifting Watchdog", offers factual information on the schemes' illegality, the financial traps, the mathematical odds, and the inevitable scenario of collapse. Reflecting the fact that hundreds of thousands of otherwise honest people are joining these illegal scams, the site does not judge or even make recommendations, but only offers factual information Visit the Cash Gifting Watchdog site.

Monavie Scheme Snaring "Failed" MLMers

October, 2008

The MLM scheme that is reaping the benefit of the increased vulnerability of consumers, who already lost at least once in another MLM, is Monavie, a MLM promoter of bottles of $40 fruit juice. Amway, Nuskin, Usana and other MLM victims are flocking to Monavie. Led not only by Mona Vie’s claims about “extraordinary” income and miracle fruit juice benefits, but are being personally guided by trusted upline leaders from other MLM schemes. Some of Amway’s top schemer’s and “tools” promoters, for example, are now guiding their followers over to Monavie. Are these MLM refugees finding their fabled "success" at MonaVie? More…

Financial Crisis: A Mirror Image of MLM

October, 2008

For those who are asking how our national economy fell into the current financial crisis or how the nation’s business leaders could not have seen it coming or how the federal government could have allowed it to happen, a study of multi-level marketing (MLM) – which attracts more than five million Americans each year with its “income opportunity” – can offer answers. MLM serves as a mirror image of the real estate/banking/Wall Street catastrophe. The basics are all the same. To understand Wall Street’s motives and tactics, therefore, we need only look into the MLM mirror More

MLM Scheme, YTB, Sued by California Attorney General as "Gigantic Pyramid Scheme"

August, 2008

Your Travel Biz.com (YTB), one of the hottest MLMs, a member of the Direct Selling Association and a company that is publicly traded on the stock exchange, has just been sued by the Attorney General of California for operating a "gigantic pyramid scheme." YTB has a "sales force" of over 340,000 and drew nearly 20,000 participants to its annual meeting in St. Louis. In the last year, the number of YTB "agents" grew 67%..... More…

Forbes Magazine Reports that Former Top Gun Amway Recruiter Now Running Same Scheme at Monavie

July, 2008

Orrin Woodward, a former top level distributor at Amway/Quixtar made millions recruiting consumers into Amway, 99% of whom lost money. He told them if they bought his special “marketing tools” they could make money in Amway, and they could earn additional money by selling these tools to other recruits. The tools scheme was called “Team.” 99% of those who bought into the “Team” income scheme lost money. So, 99% of Woodward’s recruits never earned a profit in Amway/Quixtar. And of those who invested in his separate "Team" marketing business, 99% of them never earned profit from that scheme either, compounding their losses on top of their losses in the Amway scam. Now, Woodward is running exactly the same scheme at the MLM scheme called Monavie. A recent Forbes magazine article details the scheme and documents that 99% of the consumers who are buying into Woodward's Team income plan never earn a profit selling Team "tools"... More…

England's Case against Amway and Efforts to Throw It out of the Country Continue

July, 2008

fter a judge's ruling that severely restricted Amway's operation in England, the English government has appealed the ruling and renewed its case to close Amway down and kick it out of the country. The Department for Business Enterprise and Regulatory Reform in England charges that Amway is "inherently objectionable" and must be "wound down" (closed down in USA-English). The government claims that Amway violates England's Fair Trading Act 1973 among other laws. More…

What's the Matter with Canada?

July, 2008

For pyramid and Ponzi schemes, Canada is emerging as a "global scam capital." The schemes range from the "Women Helping Women" that began there and spread worldwide to Treasure Traders International which also began in Canada and was shut down in England, only to re-emerge in Canada under a new name, and, most recently a Canadian-based ponzi scam that ruined farmers. Canada appear to spawn and protect Ponzis. Canadian anti-pyramid and fraud laws are not being enforced. Private citizens are even sued by schemes if they dare question their legality. Are Ponzi's and pyramid schemes legal in Canada? More…

Are Ponzi Schemes Legal in Canada?

July, 2008

Failure to enforce anti-pyramid scheme and fraud laws in Canada and recent statements from Canadian officials have raised the question of whether Ponzi schemes are, in fact, legal in Canada. Has Canada narrowed its interpretation of pyramid scams so much that many can now operate openly and "legally" in Canada and then spread worldwide? More…

Canadian Ponzi Fraud Collapses; Farmers Ruined; Regulators in USA and Canada Stand by and Watch

June, 2008

The Ponzi scheme disguised as a pigeon breeding business, called Pigeon King International, is now finished, bankrupt and closed. As many as 1,000 family farmers in Canada and the USA were lured in. Many are financially ruined. Hundreds of thousands of pigeons are at risk of neglect, and the Canadian government has still not taken action. More…

PSA Research Reveals 99% Consumer Loss Rates among Major MLMs
A Special Consumer Report: PDF Download Available

May, 2008

Data supplied by MLM companies reveal that tens of billions in consumer losses are caused annually by MLM Recruitment Schemes as 99+% of all participants "fail" each year in these "business opportunity" scams.

  • Before you join an MLM, read this document.
  • If you have a question about an MLM you are already in, read this document.
  • If you are concerned about a friend or relative who has joined an MLM, read this document. More. . .

Evidence on Herbalife Shows Fraudulent Marketing, Phony Lead Scheme, Health Risks and Massive Consumer Losses (Update: Herbalife President Resigns over Deception)

April, 2008

Herbalife, one of the largest America-based multi-level marketing schemes, shows multiple signs of deception and consumer harm. The president of Herbalife resigned when it was revealed he had falsified his own resumé.

Other evidence reveals a deceptive, pyramid business model, misleading recruitment practices, potential health risks of its products and massive losses from consumers who sign up for the "business opportunity. Herbalife promotes weight loss herbs and markets its products by selling "distributorships" in a multi-level marketing model. More…

MLM Scheme, Pre-Paid Legal, Charged with Operating a Pyramid Scheme and Selling Worthless "Insurance."

April, 2008

The MLM scheme, Pre-Paid Legal, is the target of a new investigative report that reveals the scheme's pyramid recruitment is declining as the scheme moves toward an eventual collapse. Additionally the Pre-Paid Legal product – a form of insurance – is being labelled worthless and misleadingly represented to consumers. More…

Banned in Sri Lanka, Indonesia and the Philippines, MLM Scheme, Gold Quest (Alias Quest Net) Is Now Prosecuted in India; Thousands Lose their Savings

May, 2008

Police in India have arrested leaders of the Hong Kong-based multi-level marketing scheme, Gold Quest. Consumer complaints and reports of life savings lost pour in More…

Update: Pyramid Scheme Class Action Lawsuit Against World's Largest MLM Scheme, Amway/Quixtar to Go Forward

April, 2008

Amway has lost its legal effort to stop the largest and potentially most damaging class action lawsuit ever brought against the multi-level marketing scheme from going forward. A federal judge has ruled that Amway's rules for settling disputes are "unconscionable" and unenforceable. He denied Amway's defense. The case will now proceed. More…

Travel Agents Say MLM Travel Scheme – YTB – and others like it, Are Corrupting their Profession, Cheating Vendors and Tricking Consumers

May, 2008

According to the MLM company, YTB (Your Travel Business), anyone can become a real travel agent just by paying the company about $500 up front and then $50 a month. You don't need training and you don't even need customers. At YTB, you can make "unlimited" income by just recruiting other "travel agents."

However, 2,300 actual travel agents – the ones that are trained and have real customers – are petitioning travel vendors to stop honoring the YTB "card." The American Society of Travel Agents (ASTA), the main Trade association of real travel agents, has published a consumer warning about YTB and other similar schemes. An analysis of YTB reveals that it gets nearly all its money from fees paid by the reps, not from selling travel. Additionally, almost no YTB reps ever earn a profit. More…

Update on Canadian Pigeon Scheme: Canadian Regulators Fail to Investigate; Two US Attorneys General Take Actions

March, 2008

Consumer demands for an investigation of an apparent ponzi scheme aimed at family farms are growing in urgency. Family farm magazines have researched the scheme, called Pigeon King International (PKI), and have sounded the fraud alarm. An inside whistle blower has provided damning evidence that PKI is perpetrating an investment scam – paying earlier breeder/investors with funds gained from later ones. Now , two state Attorneys General the USA – Iowa and Washington – have warned consumers of the Ponzi and have prevented the scheme from operating in those states. More…

Canadian Pigeon Scheme Snares Hundreds of Farmers

December, 2007

Hundreds of family farmers in Canada and the USA, many of them in Amish and Mennonite religious communities, have made large investments in an income scheme based on breeding pigeons. The trouble is that nobody knows where the money would come from for the farmers to sell the pigeons they are breeding. More…

Veteran Insiders Charge Amway/Quixtar Is a Pyramid Recruitment Scam

August, 2007

A group of Amway/Quixtar's largest and most senior distributors have confirmed what whistle blowers, attorneys and some journalists and business analysts have been reporting for years -- that Amway is a fraud, a pyramid scheme, a worldwide scam.

The charges – which are effectively confessions – come from Amway's ultimate insiders, its "top guns", wealthy distributors with downlines that span the world and have worked with Amway's founders for decades. The distributors have filed a class action lawsuit. More…

Texas Attorney General Charges, MLM Mannatech, with Illegal Practice, Seeks Injunction

July, 2007

The Texas Attorney General claims that Mannatech, a multi-level marketing (MLM) company – very similar in type of product, company size, business model, and publicly traded status to Usana Health Science – is deceiving and misleading consumers with its product claims.

Like Usana, Mannatech sells products it says will improve health. However, the law strictly prohibits these companies from making claims of cures of any illnesses. Those who attend meetings report many blatant claims and testimonials about “cures.” More…

FTC Charges MLM, Burnlounge, Is an Illegal Pyramid Scheme, Goes to Court to Shut Down Operations

June, 2007

The United States Federal Trade Commission (FTC) has filed a complaint in the U.S. District Court for the Central District of California against BurnLounge, Inc. and is seeking a permanent halt to the illegal pyramid practices as well as other illegal practices alleged in the complaint. Thousands of consumers are affected, many in the music business. More…

Mary Kay Distributors Expose Abuses

February, 2007

After years of silence, Mary Kay distributors are now coming forward forcefully and openly to report abuses of inventory loading, pressure to recruit other MK salespeople, large financial losses and a company culture that blames its own victims. Several websites are now offered and they are attracting huge readerships. MK sales people now share experiences and get facts about the realities of the MK business. Anyone in Mary Kay or considering joining this business should visit these sites and carefully consider the facts and analysis offered in the Mary Kay-related consumer website. Here are their links and what the publishers say about their sites:

Pink Truth, - Pink Truth is a consumer awareness and consumer information website. The purpose of this blog is to provide information, opinions, and support to those looking for information about Mary Kay Cosmetics and the business opportunity. Whether you are a current sales director or consultant, former independent sales force member, or potential Mary Kay recruit, we hope to help provide you with real information about Mary Kay Inc.

Pink Lighthouse - Searching For Information About MaryKay? Then you've come to the right place. We'll help you sort through the hype. We're here to educate and inform. We provide resources so you can make up your own mind.

The Pinking Shears - To those who feel they have been "stung by the bee!" The Pinking Shears is primarily dedicated to sharing credible insight and information about direct selling companies (in particular, Mary Kay, Inc.)

Mary Kay Unmasked - official site of a new book coming out about Mary Kay

Few People Lose Money in MLM, According to MLM Industry, Or, if They Do, They Don't Mind It!

February , 2007

The Direct Selling Association (DSA), the official voice of the MLM industry and many individual MLM companies, gave their versions of reality to the Federal Trade Commission recently. They wrote to object to FTC proposed rules that would require MLMs to provide more information about loss rates, failures and business costs when they solicit consumers to join MLM schemes.

Pyramid Scheme Alert will soon be releasing a report on the fantastic claims and amazing logic used by the DSA to cover up the massive losses inflicted on consumers by multi-level marketing schemes and the lack of any “direct selling” in most MLMs. More…

Amway Fails To Muzzle Whistle Blower:

February , 2007

A Pennsylvania, court has denied Quixtar (Amway) its claim that former Amway Emerald distributor and whistle-blower, Eric Scheibeler, must submit to Quixtar’s infamous “binding arbitration” process

Scheibeler has written a widely read book, Merchants of Deception that details deception in the Quixtar recruitment program run by Quixtar “kingpins.” More

Amway Sued as Pyramid Scheme Fraud

January , 2007

In a crucial development that could rock the entire multi-level marketing business, a class action lawsuit has been filed this month against Quixtar (Amway) charging that the company is running an illegal pyramid scheme. (filed in US District court in the northern district of California on January 10, 2007, case number 3:07-cv-00201-EMC.)

The charges against Amway/Quixtar go to the very heart of the company's business practices and most other multi-level marketing (MLM) schemes', that there is no retail "direct selling" opportunity, only an endless chain recruitment program.

The charges are being brought by one of America's most prestigious law firms, Boies, Schiller and Flexner. David Boies of this firm represented Vice-President Al Gore in front of the US Supreme Court in the world famous case, Gore vs. Bush that contested the vote counting in Florida after the 2000 election. More…

Fraud Investigator Develops Public Awareness Website Regarding Mary Kay Cosmetics

November , 2006

Milwaukee, WI November 20 2006 — Tracy L. Coenen, CPA, MBA, CFE, a nationally-recognized fraud examiner and expert witness, has developed a website to educate and inform the public about the Mary Kay Cosmetics business opportunity. Pink Truth (www.pinktruth.com) has quickly become a valued resource to hundreds of thousands of women around the world. More…

China Has Outlawed MLM as It Is Practiced in the USA

September, 2005

In a stunning and unexpected blow against MLM schemes and promoters, the government of China has passed a law that outlaws the payments of commissions on purchases made by "downline" recruits in the scheme. Legitimate direct selling has been approved in the country.

PSA worked diligently with Chinese authorities in providing information about the harm caused by MLM recruitment-based schemes, as Amway operates in the US. More. ..

Amway Offices Were Shut Down in India. Government officials Cite Fraud

September , 2006

Offices of Amway (now called Quixtar in North America) were raided by police in nine different cities in the state of Andhra Pradesh, the largest in southern India. Police and government officials said that Amway violated laws against fraud and deception. Complaints were registered of people being pressured to join Amway. More than 80,000 Amway distributors were affected in the region. There has been widespread complaints against Amway in some parts of India. More. .

PSA President Delivers Speech to Association of Certified Fraud Specialists on MLM Fraud

September , 2006

On September 27, 2006 Robert L. FitzPatrick delivered a one-hour presentation at the 7th Annual Fraud Conference of the Association of Certified Fraud Specialists in San Francisco. ACFS is a professional organization of attorneys, private investigators, forensic accountants, corporate loss management and audit managers and federal and state regulators. The following report is based on his presentation and on meetings and conversations with the conference attendees. More. ..

International Heritage – Harbinger of Future MLM Prosecutions?

May , 2006

Recent prison sentences handed out to former executives of one MLM, International Heritage Inc., may offer a glimpse of the future in which MLM’s brief era of scamming will end.

The great harm that pyramid sales scams cause to so many people will ultimately catch up with them. The flaw and the deception in the business model continue to be exposed by whistle blowers and consumer groups. Also, federal court ruling precedents haunt the entire MLM industry. More. ..

Beware of Schemes Based in Utah, Scam Capital of USA

February , 2006

Utah has the highest concentration of multi-level marketing scheme headquarters per capita of any state in America. Now, the Utah state legislature has legislated a "safe harbor" amendment to its anti-pyramid scheme statute that legalizes the types of schemes that have been prosecuted by the FTC and other states over the last 30 years. Pyramid Scheme Alert has sent letters to Attorneys General in all other states warning them to be vigilant regarding any chain selling schemes that are headquartered in Utah. More. ..

Pyramid Scheme Alert Report Aids in FBI Investigation of Auto-Surfing Scheme,12Daily Pro

Feb. 14, 2006

Pyramid Scheme Alert president, Robert FitzPatrick was recently contracted by the Fraud Discovery Institute of San Diego, California, to evaluate a large "auto-surfing" scheme known as 12Daily Pro. The scheme, which is based in Charlotte, North Carolina, had enrolled 300,000 people and claimed to pay 12% for 12 consecutive business days on investments from $6 to $6,000. More

PSA Research Reveals 99% Loss Rate Among Major MLMs, A Special Consumer Report: 2008

Data supplied by MLM companies reveal that tens of billions in consumer losses are caused annually by MLM Recruitment Schemes as 99+% of all participants "fail" each year in these "business opportunity" scams.

  • Before you join an MLM, read this document.
  • If you have a question about an MLM you are already in, read this document.
  • If you are concerned about a friend or relative who has joined an MLM, read this document. More. . .

Now Available,
Updated, Revised and Expanded

  • The most comprehensive and easily understood analysis of Multi-level Marketing
  • The true facts about MLM income promises and claims.
  • Eleven (11) MLMs Analyzed with Income Data
  • Charts on each MLM with Summaries and Explanation

Read before you invest… Read if your friends or family want you to join an MLM… Read to understand why and how money is made and lost in MLM.

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Volunteer to be a PSA watchdog in your state and help stop the deceptive lobbying by MLM schemes to legalize pyramid sales scams. Contact us for more information.

This page last updated on 3/19/10