Consumer Protection

Is MLM a Legitimate Business Method?

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pyramid-scheme-mlmDefenders 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.

Typical positive MLM talking points include:

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Primerica Reviews on Glassdoor

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People researching multi-level marketing (MLM) company Primerica seem to end up on this blog. I wrote previously about the fake job interview that is really a recruiting session for Primerica, some of the scammy aspects of Primerica, and one former Primerica representative’s story.

I even get Primerica reps emailing me to tell me how awful I am for saying bad things about their company. It’s just a fact that MLM investment and insurance companies sell products that aren’t as good and are more expensive than traditional insurance and investment companies. They have less educated representatives, many of whom are dabbling in the field.

For fun, I looked for reviews of the Primerica “business opportunity” (no, MLM is not a business) and was pleasantly surprised with some findings on Glassdoor. Of course brainwashed reps have been asked to flood the site with positive reviews to tip the scales in the company’s favor. But there are still plenty of honest reviews about what a terrible “job” it is.

Here are some of the negative reviews of Primerica from Glassdoor:

SCAM

Pros

None absolutely none period run fast run far

Cons

all of them this is a pyramid scheme they hire people through friends and they get a commission when they do. Ive been one of those people. You pay $99 and then 25/month to access the website. SCAM. Then you sell life insurance through family and friends. These people are lower than scum. I would say more but more people can say it better than me. Whatever people said about Primerica is absolutely true. ITS A SCAM

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Updates to MLM Income Disclosure Statements

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For years I’ve been collecting income disclosure statements issued by multi-level marketing (MLM) companies. These are the proof that you have almost no chance of making money in MLM, no matter what the company or product. Across the board, you see that the vast majority of the distributors make almost nothing in commissions. The “average … Read more Updates to MLM Income Disclosure Statements

Wisconsin Election Conspiracy in Milwaukee

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Set aside for a moment your opinion about whether or not the Wisconsin April 7 election should have gone forward in light of the COVID-19 pandemic and the statewide “safer at home” order.  Let’s talk about what happened in Milwaukee on election day. Milwaukee is a city of approximately 600,000 people. Normally, there are 180 … Read more Wisconsin Election Conspiracy in Milwaukee

Paycheck Protection Program (PPP) Loans and Child Support (COVID-19)

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A family lawyer asked if a loan received under the Paycheck Protection Program (PPP) will be considered income for purposes of the child support obligations of the business owner.

The simple answer:

Loans are not income. The business is not receiving money as a result of selling any products or services. It’s simply a pile of cash from which the business can operate, and under normal circumstances, the business has to pay back the money.

The complicated answer:

A business owner often has two sources of income that are factored into child support calculations: a paycheck and the net profits of the business. Let’s start with the paycheck. The purpose of the PPP money is to continue paying employees. That includes the business owner. For many business owners, there will likely be no change here. He or she got a paycheck before, took out the loan, and continues to get the same paycheck.

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COVID-19 Coronavirus Stimulus Check Scams

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Coronavirus stimulus check scams have already started. This is shameful, but not entirely unexpected.

U.S. taxpayers will be receiving payments of up to $1,200 per adult and $500 per child, with reductions for special circumstances. To receive a payment, you must have a social security number. Nonresident aliens, people without a social security number, and adult dependents (ex. your college student who is claimed as a dependent on your tax return) are not eligible.

To receive the full $1,200 you must have income less than $75,000 per year (single) or $150,000 (married). Those with income of $75,000 to $98,000 (single) or $150,000 to $198,000 (married) will receive a reduced amount. Those receiving social security retirement or disability payments WILL get a stimulus check, as well as veterans and those who are unemployed

The $500 per child is only available for a child under the age of 17 who is claimed as a dependent on your income tax return.

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Shark Tank’s Barbara Corcoran $400k Fraud Victim

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Barbara Corcoran lost $400,000 to a fraud scheme. Or did she?

The headlines were that the real estate mogul had nearly $400,000 stolen from her with an email phishing scam. It makes for good click-bait, but there was so much more to the story.

What really happened was that Barbara’s bookkeeper paid an invoice that she thought had been approved by Barbara’s assistant. The invoice appeared to be from a renovation company in German, and seemed legitimate because of all the real estate projects Barbara is involved in.

But… the email from the other employee was a fake. The email address was off by one letter, and the bookkeeper didn’t notice it. She wired $388,700 from a German bank to an account that was owned by the Chinese scammer. The bookkeeper then emailed Barbara’s assistant to let her know that the invoice was paid, and the scam was revealed. The assistant knew nothing of the transaction and saw that the original email was a fake.

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Who Has FIVE Foreclosures?

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Jennifer McKinney, that’s who!

Years ago I delighted in writing about mommy bloggers who earned gobs of money at the expense of their readers (and the advertisers who wanted to get in front of them), but were dishonest in one way or another. I’ve written about the shenanigans of Dooce, but we spent a lot of time on Jennifer McKinney, known as MckMama. She frauded her way through bankruptcy court and went on to shill for MLM company Xyngular.

McKinney is currently one of the top producers for Xyngular, and has been recognized as a “million dollar earner.” She started with Xyngular in 2012, and by mid-2014 she made $500,000. (Made… means commissions paid to her plus the value of trips and prizes given to her.) In late 2015 she was up to $1 million cumulative. Then $2 million cumulative by the middle of 2017. It was $3 million cumulative by mid-2018. She has likely surpassed $4 million cumulative by now… which is an average of $500,000 per year for the last 8 years.

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Dooce Will Sleep With Your Husband

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From time-to-time, I used to talk about mommy bloggers here. Primarily the fraud that is Jennifer McKinney (MckMama), but occasionally I would mention others. One such person was Dooce (Heather B. Armstrong), the “original” mommy blogger.

Dooce made a mint off her blog when it was in its prime, which led to her buying a 9 bedroom, 9 bath house in Salt Lake City. But following her divorce, her income sources dried up and she was forced to sell for $1.247 million. (That led to blog posts about living in a small house, waaaaahhhhh!) By all appearances, Heather had all sorts of opportunities for sponsorships, television shows, speaking engagements, and other lucrative gigs… but her bad attitude, inconsistency, and failure to follow through led to those revenue sources evaporating.

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Windy City Rehab Fraud?

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Windy City Rehab is an awesome reality show on HGTV. Alison Victoria (legal name Alison Gramenos) and Donovan Eckhardt are the faces of the show, and they find properties in Chicago to rehab and sell. But construction projects don’t always go as planned, and a lawsuit filed in Cook County on December 30 alleges that the Windy City Rehab team defrauded James and Anna Morrissey.

In March 2019, the Morrisseys bought a 4,000 square foot home at 2308 West Giddings Street in Lincoln Square for $1.36 million. The property was sold for $645,000 in October 2017 and then underwent renovations featured on an episode of Windy City Rehab.  (You can even see this episode next week, 6pm central on January 14!)

The couple says that the house leaks… that the day after they closed the shower on the second floor leaked gallons of water into the kitchen. They say they paid for a new roof, but that the old roof was simply repaired and now it leaks. The windows allegedly were installed improperly throughout the house, with water coming in the windows in the master bathroom and the bedrooms. The Morriseys further say that the masonry and mortar are crumbling on the outside of the house, and the front door is crooked.

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