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Take Back Control of Your Life, Fire Your Boss and Join My [MLM Scams]
The Ender
Registered User regular
Registered User regular
http://www.youtube.com/watch?v=zZiw15VgWoIYou are extremely fortunate to have stumbled across this post! I am going to let you in on a secret - but before I do, I need to know the answer to two important questions:
1) Do you have the personal ambition to become flat-out dangerously wealthy, to wake up in the morning of your own volition, and to--
This sounds like one of those pitches from those 'GET RICH AT HOME WEBSITES' I sometimes accidentally get bounced to when I click an AdWord I didn't mean to
No, wait! This is different than those other scams! This is an opportunity! I was shown at least half a dozen written testimonials from people I was assured really exist!
Please don't go! I took out a high interest loan to get my first case of BitPartz Whirl-N-Gigz - the eco-friendly type - and I just need 5 people to build my sales team! We'll all be rich by July!
...Okay. What is involved in becoming a member of your sales team?
You just need to pay a flat membership fee every month! I'll do all of the sales! Just write a check out to BitPartz ltd for $50.00 every month, and you'll be registered as one of my team members! I'll get residual income from any sales you do happen to want to do, and a commission from your fee every--
That sounds like a pyramid scheme. I've heard of this 'residual income' crap before
No no no! It's not a pyramid scheme! See, this company is legit, because it has an inverse monetization matrix! And it also has a sales target bonus paradigm!
What the Hell does that even mean?
I don't know, but you can't draw a pyramid around those things like Jim did in The Office, so it's not a pyramid scheme!
http://www.youtube.com/watch?v=iTpGTdHGCJASo, there was some dissent in the Bitcoin thread over whether or not Bitcoin itself could be fairly labeled as either a scam or a pyramid scheme, and there was a necro'd topic in H/A that involved quite a few forum users dealing with MLM bullshit, so I thought maybe we could use a dedicated thread here for Network Marketing, 'Multi-Level Marketing', Pyramid Schemes, whatever the Hell you want to call these things nowadays.
What is an MLM scam?
A multi-level marketing scam is a direct-sales 'opportunity' offered by a company that preys on mostly desperate people trying to find a way to work from home. They typically promise that the prospective sales rep will make thousands of dollars per month with very little effort, and claim that most revenue will come in the form of some 'residual income stream' or 'pay grid' or whatever bullshit they want to call it. Essentially, you go and find 5~ other people to convince to become reps, they pay the company (either a membership fee or for an initial case of whatever product), and you'll get a portion of whatever sales people you've recruited make. And you also get a cut of whatever the people underneath them make! Before you know it, you'll be adrift on your own continent of money, upon which you can erect the estate of your most far reaching fantasies!
Except that by the time you go about 13~ levels down, you'll have to have recruited the entire population of the Earth into your downline. Of course, most MLM scams don't mention that part.
They also don't mention that third party studies show that every MLM scam has a worse than 99% failure rate for it's representatives.
The products offered by these companies are almost always overpriced, and almost always crap in comparison to what you could just go and buy at Wal Mart. They have a captive audience to buy the crap (the scammed reps), so - of course - they have no reason to be cost competitive in the retail space, and no reason to offer quality. Some companies tout special qualities for their products (MonaVie and Kangan Water make magical healing claims, for example), so I suppose a real hustler could find a market of desperate sick people to sell water bleaching equipment & kool aid to.
People that are scammed into becoming reps are almost always stuck with products that there is no market for, high interest loan payments that they had to make in order to secure those products in the first place, and a bunch of junk science that they're expected to try and peddle to gullible victims.
What are the most common MLM scams?
The biggest contemporary companies are AmWay, Melaleuca, USANA, Nu Skin, Isagenix, Forever Living, Legal Shield, ACN, HerbaLife and 4Life.
But there are hundred, if not thousands, of these companies. It's impossible to create a comprehensive list. Basically, if you are told that you can work at home and make thousands of dollars per month doing [X], it is a scam (it may not be an MLM scam, but it usually is).
My friend and / or family member is being scammed! I have tried to warn them, but they will not listen! What do I do?
Here I will admit with much shame that I was once taken for a ride with an MLM scam. It was a long distance service provider (it doesn't ever really matter what the product is; it's always just some inferior, expensive crap), I was recently out of work, and I went to a meeting and just swallowed the whole package. I think your brain just turns off it's bullshit-o-meter when it just desperately wants or thinks it needs something to be true.
My roommate at the time very, very patiently explained to me why it was a scam. I didn't listen. Sure, I could never get the 5 levels worth of reps I'd need. So what? I'd just sell the long distance package. How hard could it be? I was given the statistics at the time from a lawsuit in Wisconsin, where the tax returns of the top 200 reps from 200,000 reps involved in MLM scams were examined, and the average income was found to be negative $900.00. Eh, so what? Most people are terrible at sales. I was good at sales! I'd beat that average, no sweat.
Yup. Once the retard-think sets in, none of that silly 'logic' can shake it loose.
In my case, what happened was after I paid the initial $1000.00 for my 'license' to sell the long distance package (lolz), and I called my brother to try and sell him some of that sweet, sweet LD, his wife immediately understood the shit I was in, and offered to stick a roof over my head, no questions asked. That caused the retard-think to more or less immediately be jettisoned, and I got a partial refund on the stupid 'license fee' after a bit of hassling on the phone.
So, anecdotally, what I try to recommend people do is figure out why your friend or family member wants to engage in the MLM scam, and see if you can find a different solution for them. If there's no problem that you can think of that caused them to walk over that bridge... unfortunately, I don't know what you can do. Most of these companies are very good at putting presentations together, and know how to dig the hooks in.
With Love and Courage
The Ender on
+4
Posts
So, basically, not only is it selling a scam, but its selling a scam that primarily targets the desperate and the mentally disabled.
(Actually, scams and fraud of the elderly is becoming a problem now. If you want to commit identity theft, why not do it to someone who won't be able to remember when they don't get their checks?)
These are all separate, of course, from that special kind of scam that occurs when people who have half a clue about finance realize just how dumb the rest of us are about said finance.
HAHA! I am always one one step ahead of you!
For only $20.00 per month, I have access to the best legal advice on the entire planet. Your fancy-pants lawyers in their slick suits with their big ties don't scare me!
Well, okay, they kinda do. But I can call other lawyers, or people who at least say they are lawyers, and I'm sure that's just as good as having actual legal representation. It says so right in the pamphlet!
I've always been sure that this is the case, but I've never been able to find good statistics to support the idea. I don't suppose you happen to know where I could find some?
I swear, of all the job fairs I've been to lately, seems like a third of the companies there are these people (another third being college recruiters and the last third being actual companies).
"Um, do you remember where I'm from?"
"No, where?"
"New Zealand."
"Oh."
Personally have a strong dislike of MLMs due to their tendency to target vulnerable people. They try to make a profit by exploiting the elderly, the sick and the poor. I have a health condition (CFS) which leads me into contact with crazy people trying to sell me crazy cures from time to time. So many of them are tied up in MLM schemes amongst their other red flags.
Under no circumstances should someone attempt to make Avon or tupperware their primary income source, however.
I have a friend that sells it (she's really good to, managing to take family vacations based on sales awards), but it's also not her sole source of income.
That Legal Shield though... Dude had a little presentation and everything, like a power point minus the computer, and just as soon as he's done with his pitch, here's his "boss" trying to close the deal. Also, I skipped the first meeting that I signed up for and the dude called me trying to get me to reschedule. Twice.
My impression of Avon or the like was that it's more like running a tiny franchise that, afaik, you don't actually have to pay for and you use mostly to give you and your relatives/friends access to some pretty good products.
Like, there's no real pyramid at work or anything.
The difference between Tupperware, pampered chef, avon, etc and mlm is they try to sell you a product and achieve brand loyalty and not Recruit you into a sales team to recruit others into the team.
No, there is. Avon salespeople earn money both by selling and by recruiting new salespeople, and salespeople have to pay various fees and make commitments to buy product. Which is not to say that they don't also sell to end consumers. It can be tricky to tell a pyramid scheme from an ostensibly legitimate (or at least legal) MLM business. It generally turns on how much the company earns from people buying its product to (ultimately) use versus money it gets from it own "employees", either from fees or from buying product to sell which is never sold to an end consumer. But because the employees almost always use the product themselves, and because anybody who uses the product is also encouraged to become a salesperson, it can be hard to disentangle.
The current interesting one is Herbalife. Hedge fundy Bill Ackman thinks it's a pyramid scheme and took out a several hundred million dollar bet to that effect. But Bill Ackman is an asshole and so several other big investors bet the other way to embarrass him. So now there's this huge fight, nominally about whether or not Herbalife is a pyramid scheme but which is really a dick-measuring contest between bored billionaires.
http://www.businessinsider.com/ackman-icahn-feud-flowchart-2013-2
It's amazing how big companies can get in on this type of scam. Primerica is a good example. When I went to an "interview" for them (read: hour long pitch for the company) they were part of CitiBank, but it looks like they have separated now.
So, here would be my rule of thumb. If a job interview consists entirely of being pitched a product and told how much money other people have "made" selling it and almost nothing is asked about you, run away. Possibly slash tires on your way out.
(don't do the tire-slashing thing. You are probably in need of money and it might get expensive if you get caught)
This is the key. A legitimate company wants to know if YOU are right for THEM. MLM shops only care that you have a wallet and a pulse.
This was the entirety of every retail job I interviewed for during college for summer work. Radioshack twice(two seperate summers I worked for them). It was exactly the same as the Cutco "interview" without the "just pay us X first to get started!"
Funny you should put it that way, considering that taking Herbalife made me impotent. The effect didn't completely wear off for nearly a month after I stopped taking it.
That company can go to hell and I hope Ackman gets filthy stinking rich destroying them.
It was some sort of cell phone something or other gimmick that required him to sign an NDA and they would send him a link to a video...
Yeah, I saw it coming a mile away, my dear parents though, would have been taken had I not been there.
I've never seen or heard of (in Canada anyway) an Avon lady trying to recruit anybody. They just sell the stuff.
I don't know them very well and its not my place but I really wish I could help them. They've given over $70,000 to these people and gotten very little of it back but "any day now!"
When i was in 9th grade my mom was taken by one of these, but at the meeting the guy was like "I'm a millionare so im better with money than all of you so give me your money and we'll all share the benefits as partners". So you're looking for... investors? do you usually look for investors amongst the very poor? Then he went on about how his colloidal silver would cure everything and hospitals DIDNT WANT YOU TO KNOW
So I asked, so you have a cure for cancer? can you cure my grandfather, I'm sure it'd be cheaper than his insurance, hell it'd probably be cheaper than his copay. The guy had to insert the legal disclaimer at that point that IT WAS NOT FDA APPROVED AND RESULTS VARY.
At this point bells go off, and when he gets to how "normal products dont work but we have taken the silver atoms and reduced their size by half". Now I was taking ninth grade physics at the time, and after asking him some ninth grade level physics questions at this meeting he was doing his best to dance around the science because "the establishment would shut him down!"
For years I couldn't understand why 15 year old me wasn't fooled by this guy for a minute but my 45 year old mom was clinging onto his every word for many, many years because I had not yet known desperation and I didn't know just how dire the financial situation was. She was looking for anything
These people make me physically ill.
Eh rich people still have morals, its just mostly about keeping the money amongst themselves. Scam artists are different though, many aren't originally rich, they're just smart and evil and that made them rich
Matchstick men are almost never rich. They just put on the appearance of wealth.
It's not so hard, as long as you're banking on the short term. Take out some big loans, maybe rent a luxury vehicle when you need to make a big show, take some photographs of yourself standing in front of expensive houses and/or shaking hands with local celebrity figures, get one or two nice suits. Anyone who just looks at the surface will see a successful-looking wealthy businessman.
EDIT:
If you can find it, watch or listen to the American Greed episode on Kevin Cohen. Textbook scam artistry.
I'm reminded of a TV show where the main character does this to impress his boss's boss to get a promotion. Wrapping it up with "And it's all on my Discover card so I get $50 back when all this is over."
Honestly, if you were just a buyer, you probably would've done fine. It's not like Amway doesn't provide the products it sells; it just runs it's sales in a scammy way. I'm just not sure why anyone would buy Amway's crap when you can usually find a competing alternative for a fraction of the cost.
I was in a pretty bad place at the time and almost signed up myself, despite my dad warning me time and time again that down that road lie only pain. Luckily, just before they do this meeting where they pretend to try to find out if you're enough of an ambitious go-getter worthy of joining the elite, I got the job offer that started my career. Suddenly I was clear-headed and after the meeting I told my girlfriend that I wasn't interested in signing up for Amyway.
The next day she broke up with me.
I did some cursory research on one last week. I've been noticing a lot of handwritten signs on street corners around town, "real estate investor seeks students" or something similar with a local phone number. Why would an investor want students? Why would an investor seek them out by putting up signs on street corners? It turns out that this is related to a "real estate school" in Phoenix (I'm in Tucson coincidentally, but I've read this has spread all around the country. Go Arizona!). This school charges students $10,000 for a video course in "real estate" (which in now way is about getting you licensed). It's mostly a pep talk about seizing your potential or whatever. You can take more courses to seize even more potential! Of course, that bill adds up, and if your new real estate skillz have yet to pay off the good people at Nouveau Riche (seriously? That was the best name they could come up with?) will credit you $2,000 for every other student that you refer to the program! So you just get 5 friends to sign up and that covers your first class. And then they just need to get 25 people to sign up, and those 25 get 125 > 625 > 3125 > 15,625 > 78,125 > 390,625 > 1,953,125 > 9,765,625 > 48,828,125 > 244,140,625 > 1,220,703,125 > 6,103,515,625 > hopefully the Mars rover finds more people that want to learn real estate for level 14.
Of course this is just to break even. I don't think they'll actually pay you if you get more people than you need to cover your debt.
I want to print up some "scam artist seeks idiots" signs to plaster over the ones I come across, but I almost feel bad for the people doing this. That's the thing with MLM. Rarely are you dealing with the asshole who started it, but some poor bastard who's just trying to get what they lost back.
In regards to the information about the elderly being scammed, it was a topic we discussed in a Cognition and Aging course several years ago.
http://www.npr.org/blogs/health/2012/12/06/166609270/why-its-easier-to-scam-the-elderly
http://seattletimes.com/html/localnews/2018015502_grandparentscam19m.html
http://www.fbi.gov/scams-safety/fraud/seniors
At least two of the tables there were MLM schemes. One was selling Scentsy products (didn't realize it was a pyramid scheme at the time, it looked like the lady was genuinely trying to sell them), and another table was for a company offering looking for personal cooks.
All I saw was a sign saying "Would you like to set your own hours and wages?", and right off the bat, I knew it was a pyramid scheme.
"You can present the material but you can't make me learn."
No. Kidding.
Home economics should be a rigorous class, not sewing for beginners.
--LeVar Burton
I pretty much start any job interview by asking "is this W2 or 1099 status?"
If I get a wishy-washy answer, I might ask "is there a fixed weekly schedule?"
That doesn't just protect me from MLM shops, but from sketchy "contract" jobs that are endemic to IT.
the "no true scotch man" fallacy.
Thinking of scams, a little off-topic, but what boggles my mind is that it feels like 50% of all Internet ads are for teeth whitening or get weight loss or look younger schemes, and it's always the same ads over and over again. I'm not sure if that indicates an ongoing catastrophe of epic proportions wherein so many people fall for them that the scammers are able to keep buying ads legitimately, or whether ad delivery providers are just gullible too.