MLM Scams: Stop Being Scammed by These Crooks!
These days it seems there’s always someone around the corner who is trying to rip you off. They are waiting for an uneducated person to prey on and to put it bluntly, steal their money. Some companies are lying to their consumers willfully and have no remorse for their actions or business practices. I’m not going to name any names but if you follow industry news you will know that there are a few Multi-Level Marketing companies (MLM) out there who are currently being sued for illegal practices—pyramid schemes. If you’re like me, you probably get emails and messages from distributors and people associated with these terrible businesses regularly. It seems as if I get at least one every day and that’s no joke. Frankly, I find it annoying—on many levels.
9 times out of 10 when I get a message from someone who is part of an MLM company, they have absolutely no idea what they are talking about other than the fact that they wholeheartedly believe that their products are the best on the market and can “change your life.” Well, it can change your life, by draining your bank account and getting zero results from the products. These are impressionable individuals who can easily be convinced that something is great without knowing anything about it or even asking any questions. Rarely do they ever have any type of background or education that would validate they know what they are talking about. Some of the people selling MLM products look like they never worked out a day in their life or know how to stop putting a fork in their mouth. MLM as a whole is not only terrible for the industry, but it’s terrible for business in general.
How does this MLM scam work?
It’s actually quite easy. The company sets up a few distributors (people out in the community who they consider “leaders”) for their MLM business. They then have those people go out and recruit more cronies to work under them and their umbrella. So when those individuals go out and sell, not only does the initial distributor get money, but so does the MLM company. Then the people who were under the first “distributor” start to bring people on under them. And so on and so on. The pyramid scheme is then built. The people at the top make the most money while the others under them make a little less. This isn’t necessarily about selling products to a consumer as it is building a “network”.
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Many MLM companies seem to be more worried about this “network” than anything else—including making sales and moving product. Some of these MLM businesses pay out bonuses to distributors who recruit the most people to join under their individual network as well as paying for leads on new recruits. The Federal Trade Commission (FTC) has been investigating many of these MLM business and digging deep into their business practices to see if legally they are following all laws.
The FTC has shut down businesses in the past for pyramid schemes. It seems like more are on their way of getting shut down as well while others will simply get slapped on the wrist and have to pay a fine. Some MLM’s will even lie about their business practices just to make the FTC go bother someone else. Everything about MLM is shady and should be avoided at all costs. Joining a MLM business is like making a deal with the devil. There’s no positive outcome in sight.
Why are MLM businesses bad for the industry?
This is actually a no-brainer if you ever sat down and asked the individuals selling these products how they work. What are the ingredients? What do those ingredients do in order to yield the results they claim? MAJORITY of these individuals have zero knowledge other than the fact they are told they can make a nice commission each month for selling the products. All they need to do is go out and tell all their friends that they are a rep for this company and selling their snake oil, I mean nutritional products. Their friends trust what they are being told and buy into this terrible business model. Not to worry though, they will quickly find out that the products they are using are not doing anything for them and will eventually stop purchasing them.
Many of the MLM companies out there on the market today will hold meetings or conferences in a luxurious location and invite all of their distributors and networks to come to the presentations to learn all about the new programs launching, new products, and sales techniques. They make it look all glamorous to ooh and aah people into thinking they are a profitable and legit business. Some even go as far as allowing these people to bring friends in hope that they will come on board and start selling their products as well. They tout all the positives going on with the company and the network that they have built across the US. They pull up to the meeting/conference in a fancy car and dressed to impress. The distributors and their henchmen hear about all the commission checks that are being sent out every month and how people are making upwards of six-figures a year by only having to work part-time. Honestly, I’m sitting here shaking my head as I type this, that’s how disgusted I am with these MLM businesses and their unlawful business practices and blatant lies.
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