Defenders of multi-level marketing (MLM) are often heard saying that it’s a legitimate business method! Even government regulators say MLM is legitimate. And it is true that state and federal governments in the United States generally allow multi-level marketing companies to operate with little oversight. This is despite the fact that structurally and operationally, MLMs are nothing more than pyramid schemes.
Oh sure, the MLMs are careful to use lots of window dressing that makes it appear they don’t violate anti-pyramiding laws. There are even lawyers who whore themselves out to tell owners of MLMs how to “stay legal.” And of course, the massive lobbying on behalf of “direct sellers” and multi-level marketing companies ensures that current laws against pyramid schemes will not be enforced, and that no new laws impeding MLMs will be enacted.
Some multi-level marketing (MLM) companies release income disclosures or earnings disclosures. These documents theoretically provide insight into how much distributors earn in commissions or overrides.
However, the disclosures are generally worthless. What is more important than the information in these documents? The information that is not disclosed in the documents.
Multilevel marketing companies purposely omit important information that would allow potential distributors or investors to have real insight into these plans. Continue reading
Fox News in Los Angeles did an exposé on multi-level marketing company Fortune Hi Tech Marketing. This video exposes the truth behind the company: operating like a pyramid scheme, dismal failure rates, false earnings representations, few making any money, broken promises, FHTM lying about its relationship with big name companies.
Fox interviewed me for their story, but you should note that the comments they used in this video were comments I made about MLM in general, not specifically FHTM.
54% of representatives who qualified for commissions got an average of $93 per month
41% of representatives who qualified for commissions got an average of $256 per month
These figure are before all business expenses. Those who have been involved with multi-level marketing know that there are plenty of expenses, including fees for meetings, travel expenses, promotional materials, sign-up fees, renewal fees, and marketing costs. I doubt many of these 95% of representatives receiving commission checks actually turn a profit.Continue reading
There are so many ways to get people to buy into the idea of joining an MLM. These days, you will hear about unemployment and financial pressures, and how companies like Fortune Hi Tech Marketing offer an opportunity for unlimited earnings. The recruiters will tell you that even if you don’t get rich with FHTM, you can still make some money to help pay bills.
Be your own boss… make an unlimited income… control your own financial future… provide a better life for your family… pay a few bills each month… make money from things you’re already buying… All of these things sound attractive to almost anyone, and that’s why they are used in recruiting pitches.Continue reading
Fortune Hi Tech Marketing is one of hundreds of multilevel marketing companies that operate in the U.S through a combination of clever lawyering (“Let me show you how to set up your MLM so it appears to abide by the laws.”) and failure of law enforcement to enforce the laws against pyramid schemes and business opportunity scams (aided in large part by the Direct Selling Association and its lobbying efforts).
What makes FHTM different? Nothing, really. Every multi-level marketing company seems to claim it is different! It either has magic juice, special vitamins, the supposed opportunity to make money on things you already consume anyway, or any of a number of claims of uniqueness.
FHTM was founded in 2001 by former Excel Communications superstar Paul Orberson. This news story on Fortune Hi Tech Marketing from WHAS11 in Louisville, KY say that the company has 200,000 representatives and brings in revenue of $500 million per year. (Although the company’s CEO, Tom Mills, claimed he didn’t know how many representatives FHTM had. Incredible!) Oddly enough, this multi-million dollar business is run with only 60 employees at headquarters.Continue reading