Pyramid Scheme Alert Reflects on 2007
Multi-level marketing will go down in history as one of the great frauds of our times. It deceptively wraps its harmful scam with the real needs and desires of people today – additional income, stay home with the family, independence, entrepreneurship, high income without high investment or training, and a group that will help you succeed. MLM is an Enron story, glossy and exciting to those who invest. But in the end, it causes massive harm, employs sophisticated deception, and it is corrupting our government.
MLM is an American-based “sales ” scam, and has spread to more than 70 other countries, just as Nigeria has spread its famous “bank account” scam worldwide.
Yet, 2007 marked a turning point.
- Amway/Quixtar, the largest and oldest of all MLMs, was put on trial for fraud in EnglandAmway’s top insiders blew the whistle and sued the Amway/Quixtar scheme for fraud
- The well respected fraud investigative firm, Fraud Discovery Institute, founded by Barry Minkow, has turned its professional skills of investigation on MLM. Devastating reports have been released on Usana and Herbalife, tracking their recruitment behavior all the way to China with undercover video tapes.
- Deception by the MLM, Usana, against both consumers and shareholders has been uncovered and numerous lawsuits have been filed against the scheme.
- More websites to expose MLM are appearing now in Europe and in Mexico and in USA.
- When fraud is protected by government and flaunts its ill-gotten wealth in the marketplace, real courage is required to stand up to it and declare the truth.
Congratulations to all who had the courage in 2007 to recognize MLM for what it is and to tell the truth about it.
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Tags: amway, enron, pyramid scheme alert, quixtar, usana
Comments (9)
I would be a lot happier if the FTC Bizop Rule was passed!
Me too, but I think it’s just a pipe dream. I fear that the political forces will keep it buried forever.
My sense is that the FTC Staff has done a terrific job and that the new Biz Op Rule is not likely to be buried.
Too much good work already done.
I hope you’re right. I’ll be rooting for good to win over evil on this one!
“Multi-level marketing will go down in history as one of the great frauds of our times.”
Interesting opinion. I’m trying to understand how a “fraud” could go on for almost 50 years. If it wasn’t for this “fraud”, I wouldn’t be able to afford to have the career I love as a Firefighter/EMT. Trainig wise, I hold the equivilent of a Masters degree, yet even base CPA’s make more than we do! Anyway, just my 2 cents worth.
John perhaps you should read this article:
http://www.pyramidschemealert.org/PSAMain/news/MLMInfluenceBuying.html
I see a loooooong road ahead, before MLM-based pyramid scams are put to death permanently.
To Mr. Atkins,
“’m trying to understand how a “fraud” could go on for almost 50 years.”
I’m trying to understand how Hitler managed to talk millions of fellow citizens into World War II and gas millions of Jews in the process. And yet, he did. It´s part of a one-decade-period in World history.
Regards from Portugal,
Pedro Menard
What can we do to help pass the FTC Bizop Rule???
If it passes on the US we’ll have a very good precedent overseas….and we need this to put this thing down once and for all.
We have a blog….the subject: MLMs
http://industriadadecepcao.wordpress.com.
There’s a lot of very good stuff there (articles, comments). I’d be pleased if anyone could acess and read, maybe even contribute.
Best regards (from Brazil)
Renata
Revised Proposed Biz Op Rule is out now, as from 18 March.
http://ftc.gov/os/2008/03/R511993business.pdf
From what I could understand from this extensive document, Pyramid Schemes and fraudulent MLM ID methods will be left out for now… FTC feels the Biz Op rule lacks any means necessary to differentiate between legit MLM and Pyramid Schemes.
FTC, for the time being, will continue to follow Section 5 of the FTC Act to evaluate possible fraudulent situations. However, a door into further propositions seems to have been left opened.
The Initial Rule has been changed in accordance to complaints of MLM salespeople. 95% of the letters received during a 2 year reflection period came from them.
Both PSA and CAI have been awarded dedicated parts of the document, enabling FTC to demonstrate some of their points of views. Quite frankly and unfortunately, I think they have been ignored,.
So, will the rule pass? I think it will.
Will it be sufficient to stop MLM frauds? No, not a chance.
Best Regards,
Pedro Menard, Portugal.