A new bill is making its way through Congress, and it’s titled “Anti-Pyramid Promotional Scheme Act of 2016.” What’s it all about? It is an attempt by the Direct Selling Association and multi-level marketing companies to make sure that their pyramid schemes are never shut down. It is a bunch of fluff that is designed to look like it protects consumers, while the bill is really protection for MLMs. It makes inventory loading (getting recruits to buy inventory to “qualify” for commissions, regardless of the fact that they will likely never be able to sell that inventory) perfectly legal under basically all circumstances.
Attorney Douglas Brooks has analyzed the bill and dubs it the “Pyramid Legalization Act of 2016.” This is his analysis:
In the guise of an “anti-pyramid” bill, the proposed legislation would more accurately be called the “Pyramid Legalization Act of 2016.” The bill would make it extremely difficult if not impossible to prosecute the most pernicious forms of deceptive multi-level marketing programs and product-based pyramid schemes.Continue reading
Mina Kimes did an outstanding job of digging into AdvoCare’s empty promises to distributors. It’s a long article, so I’m going to pull out some of the most interesting excerpts for you. Here is one of the most important things to remember: ESPN has nothing to gain from misleading you. They don’t care one way or another if AdvoCare or any other MLM is a legitimate opportunity. AdvoCare, on the other hand, lives or dies by the public perception… they are fully invested in consumers believing that they push a good and beneficial opportunity.
On selling hope:
AdvoCare, which has used athlete endorsers and event sponsorships to cultivate deep ties to the sports world, portrays itself as a company that “offers the average American the chance to make an above-average income,” but, in truth, only a tiny percentage of salespeople ever make significant money.
Slight correction: Only a tiny percentage of MLM salespeople ever make any profits.Continue reading
ESPN has been investigating AdvoCare, a multi-level marketing company that sells a “business opportunity” using nutritional products as their hook. Today, ESPN’s investigative news show Outside the Lines is running a segment in AdvoCare, airing at 1:30pm Eastern time. The broadcast will be replayed on Sunday, March 20th at 9:30am Eastern time.
The broadcast must be good, because Advocare launched into damage control mode a few days ago. The company has posted a video that purports to be an excerpt from the interview, but it is clearly a self-promotional piece. They also are promoting the hashtag #AdvoStrong. on Twitter.
The truth is that MLM is not a “business opportunity.” Almost everyone who participates is guaranteed to lose money. You can follow all the instructions, talk to everyone you know, invest money in the scam, and you will still lose money. Why? Because MLM is nothing but a pyramid scheme in which all the people at the bottom of the pyramid will lose money.
Check out this new video featuring victims of the Herbalife “business opportunity.” They put lots of money, time, and effort into their “businesses” and ended up losers.Continue reading
It’s the recruiting, meaning bringing new distributors into our company, which is the most vital part of our bloodstream. We bring new distributors in, we grow. It’s that simple. It’s that simple. And the company has built its whole reputation, its whole life, on recruiting.
But every time someone publishes this audio or video footage, Herbalife makes a bogus copyright claim and has it taken down.Continue reading
Michael Johnson, CEO of Herbalife, talks about how the company is based on recruiting. ” Today, we’re recruiting. We’re still a recruiting company, and we’ve got to never not be this [again pointing to the word “Recruiting” on the slide behind him]…”
The multi-level marketing industry is no stranger to ruses that make it look legitimate. The Direct Selling Association (DSA) that has held itself out as an MLM industry watchdog. In fact, it is essentially a lobbying organization whose job is to convince lawmakers to keep their scams legal. And so it follows that “TAMM” would give out silly awards to those who perpetuate multi-level marketing scams.Continue reading
In its most general sense, a fair use is any copying of copyrighted material done for a limited and “transformative” purpose, such as to comment upon, criticize, or parody a copyrighted work. Such uses can be done without permission from the copyright owner. In other words, fair use is a defense against a claim of copyright infringement. If your use qualifies as a fair use, then it would not be considered an illegal infringement.
The clip was a part of a longer video (about 71 minutes long) was first reported on in June 2015 by Michelle Celarier at the NY Post. The video clip posted last week was about a minute and a half long, and it was posted in order for people to comment upon it. No one was trying to steal some copyrighted materials from Herbalife and infringe on that copyright. Instead, the whole point was to expose what Michael Johnson said about Herbalife’s recruiting.
So why would Herbalife want to make a bogus copyright claim? Because the clip of CEO Michael Johnson put the company in a really bad light. And we can’t have that!Continue reading
This week New York State Senator Jeff Klein and Public Advocate Letitia James issued a scathing report on multi-level marketing company Herbalife (NYSE: HLF). The report, The Amercian Scheme: Herbalife’s Pyramid ‘Shake’down, is based on complaints filed by 56 Herbalife victims. It definitively calls the company a pyramid scheme and highlights the company’s deceptive practices.
The key findings include:
Since 2004, only 56 Herbalife victims in New York have been brave enough to file complaints against the company. Most victims are afraid of betraying family, friends, and neighbors.
The 56 victims that have filed complaints reported nearly $1 million in financial losses ranging from $90 to $100,000. The average amount loss was approximately $20,000.
Over 60 percent of new members make initial investments larger than the required $60 to $100 for the new member kit. The average initial investment is $1,800, but some are as high as $10,000.
Herbalife distributors purport that supervisors can make as much as $20,000 in monthly income.
Of 56 complaints analyzed, only eight victims received a check directly from Herbalife for their royalty claims. The average amount was $100.