Essential Oils Scam: NOT a Medical Treatment

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Social media has been exploding over the last year with claims that essential oils have cured all sorts of diseases and illnesses. Obviously, this is a total scam. Even worse, essential oils are being pushed through multi-level marketing (also a scam) with companies such as doTERRA and Young Living.

What is the real story about essential oils and multi-level marketing? As our friend Lazy Man has said: No, Your MLM Health Product Doesn’t “Work.” Continue reading

Why Multi-Level Marketing “Million Dollar Earner” Status is Nonsense

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Multi-level marketing companies are quick to tout the success of their “million dollar earners.” Sounds impressive, doesn’t it? Who doesn’t want to make a million dollars?

Except that phrase “million dollar earner” hides the truth:

  • What they don’t clearly mention is that this is cumulative earnings over a number of years, typically between 5 and 20 years.
  • They also fail to mention that this is gross income, prior to any business expenses. The business expenses in multi-level marketing can get very high, and will include product purchases (in order to stay active and/or meet requirements for certain commission levels), travel, office expenses, training costs, business insurance, supplies, prizes for customers and downlines, venue rental for events, food for events, etc. The expenses can easily equal 40% to 60% of gross income.

Continue reading

A Former Primerica Representative’s Story

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This woman says that Primerica Financial Services representatives lie and misrepresent the business opportunity to others  in order to get them to join and stay an active part of the plan (even if they’re not making any money).

Hi. My name is Anne and I was a Primerica representative (full time) for about 7 months (from May ’07 to December ’07).  I ended up in a multi-level marketing job in Primerica as a young adult.

I like what the company stands for and stuff (as far as helping families with their products), but it’s such a difficult position to be in.  A lot of your success is based upon how many people you know.  I knew the products backwards and forwards, became a decent sales person, was able to conquer most objections, but because I didn’t have a big warm market to start out with, I sucked.

When I first joined into the company, I was promised that everything was easy and I’d be making as much if not more than I was at my full time steady desk job… so I quit my regular job because at the time when the opportunity was presented to me, it was a “regular” paying job just with very flexible hours. Continue reading

Why Multi-Level Marketing Companies are Pyramid Schemes

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Bill Ackman and Pershing Square produced an educational video about multi-level marketing companies and how and why they are pyramid schemes. Yes, I often hear:

  • “Pyramid schemes are illegal!”
  • “If XYZ Company was a pyramid scheme, the government would shut them down!”

Yes, pyramid schemes are illegal. No, our government generally doesn’t shut down pyramid schemes masquerading as multi-level marketing. Continue reading

Jennifer McKinney (MckMama) Update… Another Foreclosure!

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Jennifer McKinney Mugshot

It has been quite a while since I have written about professional con artist Jennifer McKinney, known by some as MckMama from her blogging days. Previously, we have discussed her bankruptcy fraud (debts NOT discharged and forever payable by her thanks to her dishonesty about her income and assets), her repeated lies about paying off her debts, and her shilling for Xyngular (a multi-level marketing program which peddles crappy and possibly dangerous diet supplements).

Despite bragging repeatedly that she makes $30,000 per month with Xyngular, Jennifer Howe Sauls McKinney now has entered a FOURTH foreclosure on a home. Previously she lost three homes to foreclosure :

  1. 316 W. 2nd Street, Chaska, MN – Purchased 8/30/04 for $210,000; Notice of Foreclosure 12/2/08
  2. 6016 Beachwood Road, Mound, MN – Purchased 6/30/07 for $465,000; Notice of Foreclosure 2/5/09
  3. 14464 98th Street, Becker, MN – Purchased 8/28/09 for $485,000; Taken by bank 4/19/11

In the past, MckMama has bragged about how they stopped paying the mortgage and instead “saved” the money to buy another house. No doubt she is doing the same thing this time around. Continue reading

Herbalife’s Fake Business Opportunity

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MLM bussines structure.In a video released this week, Pershing Square (the hedge fund that exposed the Herbalife fraud) contrasts Herbalife’s public statements about the “business opportunity” with the statements made behind closed doors.

Herbalife claims to offer “the best business opportunity on the face of the earth.” But the reality is that it is an opportunity in which you are almost guaranteed to fail, with 96% of distributors making less than half of what is earned by employees making minimum wage (per the video). Despite Herbalife executives and high level distributors publicly repeating how lots of money can be made, the numbers really look like this (according to the video): Continue reading

Herbalife False Health Claims

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Multi-level marketing companies that advertise shakes and potions designed to help you lose weight and get healthier are generally all guilty of the same offense: Distributors making false health claims.  The products are generally terrible for losing weight and maintaining the weight loss. And the health benefits are nothing more than one could get from eating well and taking a simple multivitamin.

Nonetheless, people involved in MLMs routinely claim these potions cure things like ADHD, arthritis, high cholesterol, lupus, asthma, migraines, cancer, fibromyalgia, and more. The most disturbing part of this is when the distributors encourage people to stop taking medications that are critical to their health. This advice is simply dangerous.

Today Bill Ackman released a video demonstrating that Herbalife distributors are violating U.S. law by making false and deceptive claims about the Herbalife products. How do they get away with this? The company likely would contend that there is nothing illegal about distributors giving personal testimonials about the results they received from the products.  Good luck with that defense. Continue reading

Video: Multi-Level Marketing is NOT Like Corporate America

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One of the common statements made by people in favor of multi-level marketing is that it is just like corporate America. We call MLM a pyramid scheme, and corporate America is a pyramid too! That’s simply not true.

While the SHAPE of the hierarchy of people looks like a pyramid in MLM and in corporate Amercia (one person at the head of the company, a few below, managing several below them, and so on)… that is where the similarities end. Continue reading

Avon is NOT a “Good” MLM

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avon-mlmLast week I wrote about Good MLMs Versus Bad MLMs. The truth is that there is no such thing as a “good” multi-level marketing company. Oh sure… MLM supporters will tell you that some “direct sales” companies are doing it right, and some are doing it wrong. They will tell you that every company has “bad apples,” but that you have to look past those and see the good people.

These arguments are all false. Companies call themselves “direct selling” in order to direct attention away from the fact that they are recruiting schemes. MLMs are all endless chain recruitment schemes in which 99% of participants are guaranteed to lose money. That is not a business… it is a game rigging in favor of the owners of the company, and participants are guaranteed to lose no matter how hard they try. Promoting this as a “business opportunity” is unethical and immoral.

It therefore follows that if the company and the opportunity are unethical and are not a business, the people promoting the company and opportunity cannot be good. A horrible, deceitful “opportunity” does not change into something right, moral, and ethical, no matter how “good” the person promoting it is. Continue reading

Good MLMs Versus Bad MLMs

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pyramid-selling-scamDefenders of multi-level marketing (MLM) will tell you that some companies “do it” right, while some companies “do it” wrong. One such example is John Hempton, a clown who thinks that Herbalife is the greatest thing since sliced bread. He says the following in an article about Nu-Skin:

Disclosure: I am predisposed to believe that multi-level-marketing schemes like Avon, Herbalife or Nu Skin are likely to be good cash generative businesses. I have done much looking at Herbalife and got very long. I do not think a negative interpretation of Herbalife is sustainable. Herbalife’s business is legal, sustainable and will generate vastly more cash in five years. Nu Skin does not lend itself to such definitive opinions. History is littered with MLMs that no longer exist – and a few like Avon, Nu Skin, Herbalife, Amway and Mary Kay which have lasted decades.

The fact that a multi-level marketing company like Mary Kay Cosmetics has been around for more than 50 years does not define whether it is a fraud or scam. Remember Enron (in business more than 15 years prior to the fraud being discovered) and Bernie Madoff (whose investment firm was in business for more than 40 years before his Ponzi scheme was revealed)? Length of time in operation has nothing to do with whether something is a scam or a fraud. Being traded on the New York Stock Exchange is not an indicator of legitimacy either. Continue reading