More than a year after I started to write about the evils of United First Financial, its representatives are still trying to dazzle the crowds with bogus claims of factorial math.

It’s become clear that the primary method for selling consumers on this ridiculously expensive software that the consumer doesn’t even own ($3,500) is by confusing them. Prattling on about the massive algorithm used to determine the “optimal” method of paying down one’s debt to save the most money.

Kevin Thompson hires himself out to multi-level marketing companies to give them legal counsel. Supposedly he knows his way around the legality of MLMs, just like my buddy Gerry Nehra supposedly does.

So I was perusing Kevin’s website and came across this interesting diatribe about what separates “legitimate” MLMs from illegal pyramid schemes. I’ve written a lot about Mary Kay Cosmetics, Usana, Herbalife, Prepaid Legal, and the like. And guess what? All of them seem to violate the most basic rule Kevin sets forth… to be legitimate you have to sell mostly to people not affiliate with the scheme, but these companies have distributors who purchase the bulk of the products!

Recruiting for multi-level marketing companies has become a game of strategy. How many times have you been invited to hear about “an opportunity,” but the person inviting wouldn’t tell you the name of the company? We’ve all heard about this tactic… The recruiters don’t want anyone to “pre-judge” or show up with opinions before they’ve heard the sales pitch.

My friends at ShopToEarn and ShopToEarth have figured out this part of the MLM recruiting equation too.

UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

Earlier this year, Barry Minkow and Fraud Discovery Institute railed on Medifast, a company with a weight-loss plan being marketed with a multi-level marketing plan. The company was built primarily through marketing of the weight loss program through physicians. The Medifast executives realized that the MLM structure was their golden opportunity.

Earlier this week I wrote about the MonaVie lawyers going after bloggers who do unflattering critiques of the company. Their premise was silly: You can’t use our name in a URL. Here’s exactly what they said in their threatening letter to blogger “Lazy Man”:

When will companies learn? Trying to silence critics of them with bogus threats of legal action just isn’t effective. We have something called “freedom of speech” here which guarantees us the right to speak our minds, so long as we’re being truthful. Yet that doesn’t stop multi-level marketing companies from trying to bully their critics.

All year long we’ve been seeing news story after news story about how “direct selling” (the name meant to disguise multi-level marketing and confuse consumers about the true intent of the companies) is a great option for making money during difficult economic times.

A reader of Fraud Files recently contacted me to offer some information on the inner workings of ShopToEarn. Readers of this blog have had plenty of questions about the company and its founder, Patrick Welsh. One reader did a bunch of research, and came away with more questions than answers.

The information provided by the latest reader, who we’ll call Jamie, is interesting to say the least. Here’s what Jamie had to say about Shop To Earn…

Times must be tough over at Mary Kay. Instead of focusing on “enriching women’s lives” as the company is so fond of saying, they’re instead busy running around suing all kinds of people. A couple of weeks ago, Mary Kay filed suit against Yahoo for including advertisements with Mary Kay keywords in their email service.

One of the credibilty builders (i.e. smokescreens) that United First Financial agents use when trying to sell their Money Merge Account is… “It’s based on the Australian banking system!” The claim is that this “system” has been used successfully in Australia for years, and so we should believe in it too!

However, the truth is that this “system” is all but dead in Australia because people (and regulators, to some extent) figured out what a scam they were.  Here’s some information provided to me by someone in Australia who has done extensive research on the issue of mortgage acceleration: