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The Case for Reopening the Amway Pyramid Scheme Case: An Inquiry into the Legality of Multi-Level Marketing

by Robert Fitzpatrick

$19.95 Adobe Acrobat File -- PDF File will be emailed to you within one day.

How can a consumer determine whether a multi-level marketing (MLM) company is legitimate or a "devastating con game" as 60 Minutes correspondent Mike Wallace recently exposed one fast growing MLM?

The lines of legality for the multi-level marketing (MLM) industry were drawn 20 years ago when the Federal Trade Commission charged that the Amway Corporation was operating as an illegal pyramid scheme. The ruling of an Administrative Law Judge cleared Amway of the charge at that time and laid down guidelines for legitimacy.

This booklet makes the case that current marketing practices of Amway and much of the MLM industry have so widely deviated from those guidelines that a new inquiry is called for by the Federal Trade Commission.

It is the first in-depth analysis of the 1979 ruling that provided Amway and the MLM industry its current basis of legality. Issues reviewed include:

  • The "tools" business
  • Front loading
  • Market saturation
  • Retail sales level requirements
  • Pyramid collapse
  • "We only sell to ourselves!"
  • The silent victims of MLM
  • MLM's impact on legitimate businesses
  • The spread of MLM to poor, under-developed nations
  • Reform and regulation of MLM

The best and most succinct treatment of the history of Amway and its ongoing legal controversies. This booklet also provides the clearest distinctions for measuring the legitimacy of all other MLMs.
This page last updated on 11/1/10