False Claims and Broken Promises in Multi-Level Marketing

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Robert FitzPatrick, an internationally recognized authority on multi-level marketing and pyramid schemes and a court certified expert witness on MLMs and pyramids, details the lies told in MLM in this article, A Disguised Pyramid Scheme: The Non-Retail “Direct Selling” Company:

Instead, the non-retail direct selling schemes present a compelling and very alluring picture to potential recruits that diverts attention from the flawed structure and its disastrous outcome. Virtually all companies of this type in every country they operate in make the same alluring and misleading promises to recruits:

1.Opportunity to earn “residual” income, that is, ongoing commissions on the purchase by others whom you recruited or whom they in turn recruit. This expands earning power well beyond ones own personal efforts. You can be freed from “wage slavery.”

2. Continuous income without continuous work. Most products are “consumable” goods that people might re-use month after month. The most common commodities in these schemes vitamins, food supplements, skin care products, long distance phone service and household cleaning products are the most prevalent.

3. Extraordinarily high-income potential, much higher than most salaries or professions would normally promise. This is claim is based on the theoretical potential of expanded recruitment efforts of others. A typical presentation shows the potential of one distributor recruiting just five other people that each recruit five and this continues just seven “generations.” The result is over 78,000 sales representatives. Commissions on all of their purchases, the promotions claim, will go to that one sales person at the top, month after month. That person could be you. Does your current job offer that kind of income opportunity?

4. Possibility of early retirement provided by a continuous, residual income stream from the labors of others in your sales organization. No need to work and save all your life.

5. Personal freedom, financial independence as a self-employed person. No more bosses.

6. Time flexibility to set your own work hours. More time with the children, to take vacations, and to do more in life.

7.Security provided by self-sufficiency against the many changeable and unpredictable factors in today’s economy, including corporate downsizing, government cutbacks, inflation, corporate profit taking, increasing requirements for high tech competency in the job market and job discrimination against older workers. You are protected from all that.

8. Opportunity to enter the business for a low initial investment of money. No risk.

9. No need to develop highly specialized skills or obtain higher education in order to succeed. Anybody can do it.You already have what it takes.

10. No marketing expenses or “cold calls” to strangers are required because your friends and associates are your first prospects. Your first recruit is as close as your next door neighbor or your own mother in the next room.


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