28 Nov

FTC Staff Take Further Measures to Protect MLMs, Making Consumers Easy Prey for False “Business Opportunity” Solicitations

From Pyramid Scheme Alert newsletter, by Robert FitzPatrick

The largest of all multi-level marketing companies, Amway, just agreed to pay $150 million in restitution and reform to settle consumer charges of fraud. The heart of the consumers’ complaints is that Amway uses false information to trick consumers into investing in its “business opportunity.” Among other reforms, Amway has agreed to change its “disclosure” of income averages. A similar lawsuit has been filed in Canada.

A front page story, USA Today on Oct. 15, 2010, entitled, “Fortune Hi-Tech: American dream or pyramid scheme?” documents widespread claims of deception, involving tens of thousands of US consumers, leveled against one of the newer and fastest growing MLMs. The MLM scheme has been prosecuted in two states and is under investigation by seven others states, according to the article. Misleading “disclosures” are at the heart of the charges and negative publicity. Read More

10 Feb

Even an MLM Scammer Says MLMs Are Scams…

stairsWho do you trust? That’s an issue that often arises for the former CFO of Crazy Eddie, Sam Antar. He’s been writing extensively about the financial statement fraud at Overstock.com, and has been dismissed by some as a con artist with ulterior motives.  But Sam has been vindicated, as Overstock.com has announced another restatement of earnings, meaning the company has a full decade of inaccurate financial statements now on file with the SEC. (Thankfully, the officers and directors of Overstock.com don’t have to take any responsibility for repeated misstatements of the financials, and are still getting health bonuses!!!!) Read More