The Death of Lifetree World

Do you remember Lifetree World?

They were the Multi Level Marketing scheme that I tried to warn people about in 2016 and 2017. They were based in Manchester and people who joined had to buy their shopping through them. They ended up buying stuff they didn’t want or need, and it was produce that had been discontinued.

There were delivery problems, scandals with the ‘prize cars’ and a lot of unhappy people who joined the scheme. Even while the scheme was falling apart, people were promising it was all fine and soon they would be selling fresh produce and delivering the next day. For a while they tried to sell cable packages, until it turned out they shouldn’t be.

I showed how the prize cars were actually hire purchase and couldn’t be given away. Defenders of Lifetree world explained I was wrong, despite the evidence. See the blog post I wrote in July 2016 with all the problems exposed.

People couldn’t get their bonuses from the company and I warned people not to put more money in. Lifetree world responded by trying to get people to put even greater amounts of money in so they could climb the pyramid more quickly. Some of the reps’ experiences are documented in this blog post.

People started leaving in droves, realising the company was doomed.

In March 2017 Lifetree World went into liquidation. You can see the documents at Companies House.

Dissolved

On 28th December 2018 Lifetree World was finally dissolved. You can access the documents at Companies House if you want to read all the details for yourself.

What sort of damage did Lifetree World leave when they disappeared?

The car

The Dacia Duster car that they had was returned to the finance company with more money owed on it than it was worth. This left the finance company out of pocket.

Suppliers

Lifetree World had a rocky history with their suppliers, one even sued them for non payment of bills. At least they managed to settle that before the whole company collapsed. When the company was liquidated £13,996 was owed to suppliers who will never see that money again.

The Landlord

The building that LTW operated from was a small building on an industrial estate in Manchester. Here is a picture of it.

There are many suites in that building and LTW rented Suite 2. They were unable to pay their rent and owed their landlord £3,000.

Taxes

LTW owed £30,600 in VAT and other tax. This is money that will not be able to be collected.

Gateway account

As with all MLMs, money is paid to reps through a complicated system. Instead of the company paying people direct into their bank account, they pay it via a convoluted system which usually ends up with the reps having to pay to get their money out. LTW used a company called Gateway. Towards the end, reps found they couldn’t get their money out. They were told it would be ok, it was just a glitch. Some worried reps speculated that the owners had cleared out the money and disappeared with it.

The liquidators tried to find out how much money was in this account. They didn’t have much luck.

Previously, the LTW bosses had told the liquidators there was £11,000 in the account.

Director/shareholder loans

A director loan is an amount of money that the owners of a company can pay themselves. They should pay it back into the company later. It is something to do with delaying a tax bill. Unsurprisingly, the directors of LTW had taken out some money when there was some. They had taken £281,746. There was no sign of this being paid back to the liquidators.

The reps

The people that signed up under LTW with the promise of earning huge amounts of money were owed £74,992. This amount consists of unpaid bonuses and unfulfilled orders. I don’t know how many people that would affect. Even if there were a few thousand reps, the average payment due to each one would have been significant.

The reps are the real tragedy here. They invested their money in products they didn’t need, waited days or weeks for them to arrive and many instantly regretted their decision to join. They had trouble leaving and getting any sort of refund. Often they recruited friends and family with lies of the success they could make in the scheme. A lot of them felt stupid and naive for getting involved in the scheme.

The only ones I don’t feel sorry for are the high earning professional MLMers who made a lot of money quickly by recruiting a lot of people, knowing most of them would fail. Once they left the sinking ship, they took their ‘teams’ with them to the next big promising scheme where they will continue recruiting and draining money from fresh victims.

The death of LTW should serve as a warning to anyone in an MLM or anyone who is thinking of joining one. They are run by people who are out to make money for themselves and often it all ends abruptly with no warning for the poor reps at the bottom of the pyramid. Time and time again we see these companies closing and people left out of pocket that still keep trying their luck with other similar companies. This is not how a responsible company should behave. They show no respect to the reps and no regard for how they are affected. The reps are the customers and they are paying money into the scheme to keep it afloat. I just wish they could see it.

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Why do traditional businesses turn MLM?

Multi Level Marketing generally differs from traditional business models. MLM has ‘independent contractors’ that buy the products and sell it to make a profit for the company. They often spend a lot of their own money on products to meet targets necessary to earn commissions. They pay fees to be members of the company and pay for ‘conferences’ and ‘trainings’, again, making money for the company.

It is common to find these MLM companies saying that they are cash rich and debt free. Of course they are, they have very little overheads as they leave the marketing and selling to these ‘independent contractors’. These MLM companies can sell products at an inflated price because it doesn’t matter that it is essentially an unmarketable product on the open market. They know the people caught up in these schemes will buy the products anyway. The product becomes just a way for the reps to earn a higher position in the pyramid.

We are used to seeing poor or average quality products being sold in MLMs. Which is why it can be puzzling to see a traditional business with well known, or even loved, products in an MLM way. Let’s have a look at some examples. Here, I attempt to research what the reasons are behind the MLM decision. Ultimately, this is an opinion piece as I attempt to draw conclusions from the evidence.

The Body Shop

The Body Shop was established in 1976 by Dame Anita Roddick and had solid ethical foundations. Then in 1994, it branched out into MLM and ‘The Body Shop at Home‘ was launched. I wonder why? I thought initially that the company might have been struggling financially, but this is not what Companies House information says.

I have asked The Body Shop why they started an MLM branch. It does seem like quite a risky move to make, considering their strong stance on ethics, cruelty free products and their current marketing slogan…

Mars

Yes, that’s right. Mars, as in the chocolate company. It has an MLM branch called The Cocoa Exchange. They were formerly known as  Dove Chocolate Discoveries. They call their reps ‘curators’. They talk about uplines, and amounts needed to sell to remain ‘active’. They sell online and do parties at home. They sound like any other MLM, except their product is a well known brand. They started in 2007.

Mars have their products all over the world and they can be found in any number of shops. Why on earth would they feel it necessary to follow the MLM model? I found this article in ‘Confectionary News.com‘ where they go some way in explaining the decision. They acknowledge that not many large companies have strayed into MLM and it admits there is a stigma involved in this type of selling. They say that this way of selling fits in with Millenials and their love of companies like Uber and Etsy. They say that there is a need for people to have an extra income. Because Mars don’t make money from the starter kit, they think that they are avoiding the pitfalls of most MLMs. They say they are different to other companies because they don’t promise to make people into millionaires.

Twice in their FAQ section on their website they mention earning a 6-figure income.

Mars claim that the aim of their MLM is to generate sales to customers of their products and to provide an income to the reps. They will certainly be successful in generating sales, but whether anyone apart from Mars makes any real money is yet to be proven.

(Photo: Mars)

Neal’s Yard Remedies (Home) Ltd

Neal’s Yard remedies sell essential oils and beauty products. This company have high street shops, as well as an MLM arm. Again, I am surprised. Look at their ethical claims–

The company started in 1981 and branched out into MLM in 2009, see Companies House for their details. It seems the UK company owns the Neal’s Yard company in the US. Peter Kindersley was director when the MLM branch started and he loaned the company £486,616 indefinitely.

Peter clearly has a very large influence over the company but I can’t find any previous links he has had with MLM. He has been involved in a lot of businesses, but they have all been in publishing or organic farming. I have looked into the actions of his wife, Juliet, and there is no sign of MLM in her history either. She is an environmental activist and is often seen working alongside her husband.

I wonder if someone sold the idea of MLM to Peter as an ethical and great way for people to earn money, empowering them and generally being a force for good? Neal’s Yard was doing well financially when the MLM side started up, so it wasn’t an act of desperation from a struggling company.

There are no income statements from NYR but the sales and profits continue to grow for the owners. I wonder how the owners would feel if they realised how badly their ‘consultants’ are doing financially, and how unethical their company really is.

Anne Summers

Anne Summers was established in 1970 in UK. They sell lingerie and sex toys and have a high street shop presence. In 1981 Jacqueline Gold (current chief exec) started the MLM wing of the company. It is said that this is due to the laws relating to presenting sex-toys in a shop. A shop selling sex toys needs to be licenced as a sex shop. If the proportion of toys to other stock is low, it can be classed as a retail shop. By selling in people’s home, this technicality becomes irrelevant.

Jacqueline said in this interview that she came up with the idea of MLM for her company when she attended a Tupperware party.

Tupperware

Tupperware products were invented in 1946 and didn’t sell well in shops initially. Their website says that the products were so innovative, customers needed to see demonstrations to understand how the products worked. In the 1950s the concept of selling Tupperware in homes really took off and the company became very successful.

These days people know how to operate the products and they can be found in shops, alongside similar products made by other companies. It would seem that there would be no need now for an MLM side. I guess there is also no need to remove that aspect of the company because it has become so well known and it continues to make a very large income for the owners.

Brownie Wise, the woman behind the ‘party plan’ concept for Tupperware (from Tupperware.com)

AVON

AVON are a very well known brand and are often held up as an example of why MLM isn’t such a bad thing. The company was started by a travelling book salesman, David McConnell. It was initially women selling perfumes door to door and earning a commission for their efforts. Technically, this is called Direct Selling.

In recent years they adopted the MLM model and allowed people to recruit into their team and earn commission based on their team’s performance. They were members of the Direct Selling Association, but ended this relationship in          2014, citing a fear of being associated with pyramid schemes. It seems AVON were concerned that the DSA were not worried about MLM companies having a low proportion of real customers, and that the real customers were the reps themselves. They have had many battles to contend with in recent years, see Pyramid Scheme Alert’s article here.

The article above discusses the fact that sales are falling but rep numbers are increasing, lending doubt to the legitimacy of the ‘business model’. Without the sales to the reps themselves, how well would the company fare? AVON are in a difficult position of being involved in something they find uncomfortable, but seem unable to extricate themselves from it.

(Photo credit to AVON)

 

Swarovski

The MLM branch is called Touchstone Crystal.

This company is known for the crystals they sell. They were founded in Austria in 1895 and turned to MLM in 2006 under Dan Cohen and Elizabeth Dipaolo. Dan is a descendent of the original founder of Swarovski. Elizabeth is described as being the Vice President in 2018.

This Direct Selling article describes the start of Touchstone Crystals. The article describes how in 2009 Swarovski started in MLM with kits where people made their own jewellery. The reason given for this venture was that the company were looking for innovative ways to make their jewellery more accessible to the public. Apparently this experience of MLM showed the company that ‘the opportunity was great’. I am assuming this means that it made money for the company.

In 2010 finished pieces of jewellery were introduced into he home parties. This is where Elizabeth DiPaolo was brought in to oversee the MLM side of the company. The Direct Selling 2011 article above says this of Elizabeth-

All I have managed to find out about Liz is that she previously worked as Vice President for an MLM called Princess House Inc. She will have brought her knowledge of how profitable MLMs can be for the company.

It looks like Swarovski moved into MLM with reasonable intentions, ie to sell more products. When Liz became involved, it is probable that she explained how profitable MLM could be to the company. I guess we will never know if a discussion was had with Dan about how damaging MLMs can be to the people who participate in the scheme. There are no Income Disclosure Statement to show how poorly the ‘Glambassadors’ are doing financially.

(Image from Touchstone)

Usborne

Usborne originated in the UK as a publisher. It was founded in 1973 by Peter Usborne.

In 1978 Usborne books started being distributed in America through The Education Development Corporation. (Source) In 1989 Usborne started using the MLM model in the US. At the same time as having reps sell his books in parties and fairs, he was selling to Amazon and large chains of shops. This strategy started to fail and the business was in danger of shutting down in 2012. There had been 9 years of decline and the reps were not happy. They saw Amazon as unfair competition. In 2012 Randall White took the decision to stop selling to Amazon, and just sell the books through the MLM way and a few toy shops and specialist bookshops. See this Business Insider article about it.

This is what Peter Usborne had to say about the move to almost exclusive MLM selling.

“We weren’t involved in the decision,” says Usborne, who continues to do business with Amazon in the UK and elsewhere. “Randall just told me he’d done it. He quite likes a fight, and I think he was looking down the wrong end of a shotgun. It looked pretty grim for a while, but now it seems he’s the wind in his sails.”

After making the change the company started improving financially, reversing the downward spiral it was experiencing.

In 1992 the MLM branch was set up in the UK called Usborne Books at Home and School. This company is now showing as a dormant company, as it has from when it was set up. It seems to be trading as a subsidiary of Usborne Publishing Ltd. I’m not sure about the significance of this and would like to hear from anyone who might know what it means.

In 1993 The American Publisher Scholastic took a 26.25% share in Usborne Publishing.

In the UK Usborne books can be bought on Amazon, in bookshops and in supermarkets. The books are very easy to get hold of, which raises the question of why there is a need for an MLM section? Who would buy from a rep when there is more choice and less hassle, and possibly a cheaper deal to be had in a shop?

I have searched and searched for why Usborne is MLM in the UK and I cannot find any statements anywhere. What a wasted evening! All I can do is take a guess. The inspiration may have come from the US where Randall White was using the method to sell his books. It wasn’t going so well for Randall in 1992 so it couldn’t have been just that. Maybe Scholastic had a hand in the move, the dates would fit.

Whatever the reason behind the decision to go MLM, it is working for the UK. Peter Usborne said in a talk he gave that the Home part of the business was doing very well. The number of reps seems to be growing. This is despite the books being widely available in retail outlets.

 

(photo from Usborne)

Conclusion

Pyramid or Multi Level selling is a very good way for a company to make money. The company will very rarely lose when it adopts this way of selling its products to people who will buy products and market them for free. The only downside to this model of money making is the poor ethics associated with it. People are realising more and more how bad it can be for the people involved in it who are trying to make a living.

A company should have to answer for their decision to make money through potentially exploiting people and causing financial problems for thousands of people. Hopefully as MLM becomes more widely understood by the public, it will become less popular for traditional large corporations to dabble in.

 

Pyramid Schemes and Multi Level Marketing Explained

I have just done a radio interview about pyramid schemes and why they are a bad idea. I only had ten minutes so I struggled to get in all the information. Click on the image below to listen to it. I am at 1.32.

 

 

Here, I cover the information I gave, with references and further information that I couldn’t cram in.

What is a pyramid scheme?

It is useful to think of pyramid schemes on a spectrum. Just before you get to pyramid schemes, there is Direct Selling. This is where people sell things and get a commission from the sales. Like a double glazing salesperson who goes door to door and gets a cut of the sales. That is perfectly legal, although it can be hard on the salesperson to earn money if they don’t sell much.

On the other extreme, after pyramid schemes, there are Ponzis. These are schemes where people pay a fee to join. They have to recruit to people and they recruit two people, and they recruit two people. When the pyramid is a certain size, all the joining fees from the people on the bottom rung go to the person at the top. They then retire with a large amount of money and everyone moves up a rung. To be successful and leave with money, 64 people would have to pay the fee. Quite often, not al the spaces can be filled and the whole thing collapses. An example of a Ponzi is the Airplane game.

Ponzi schemes are illegal in the UK. In Albania in 1997, there was a civil war due to a Ponzi scheme collapsing. Two thousand people died and a government was toppled.

Between Ponzi schemes and direct selling, you have pyramid schemes. These are defined by the Fair Trading Act 1973, under the section called ‘Part IX Pyramid selling and similar trading schemes’. The law calls these schemes ‘Trading schemes’ that have to comply with the pyramid selling regulations. It talks about the pyramid structure of the schemes. In 1996, when the Trading schemes laws were being updated, there was an attempt by Amway ( a large multilevel marketing scheme) to have the term ‘pyramid scheme’ defined as an illegal scheme. The Government stated that they saw the terms ‘pyramid selling’ and ‘multi level marketing’ as interchangeable.

It doesn’t sound very good though, to say that you are in a pyramid scheme. It would be very hard to recruit people if you said you were in a pyramid scheme. The Direct Selling Association (DSA) are a trade association and promote these schemes, trying t make them appear respectable. Of course, they wouldn’t want to put off people joining their schemes so they say this on their website.

I challenge them to show me where in law it says pyramid schemes are illegal. I believe in fact checking and looking at the evidence and I will be happy to change my statements if they are wrong.

So what is a pyramid/multi level marketing scheme? The 1997 consultation document makes this clear-

More simply, this means that people are in a trading scheme if they sell products, usually in their home, and recruit others to do the same. They can earn commissions from the sales of the people they recruit, and also get bonus payments. The structure is pyramid in shape. To be considered legitimate, they must adhere to a set of rules. These are The Trading Schemes Act 1996. The Pyramid Selling Schemes Regulations 1973 , and later The Trading Schemes Regulations 1997  lay out the conditions that a scheme must follow to be considered legal. If any of the conditions are broken, the scheme is illegal. Importantly, the law says that the definition of a ‘trading scheme’ remains the same as in previous legislation.

““trading scheme” has the same meaning as in Part XI of the Fair Trading Act 1973.”

These are the conditions-

Part 3. Adverts for the scheme must say the name of the company, describe what is being sold, and give the statutory warning.

Part 4. A written contract has to be given to anyone joining up.

Part 5. The contract can be cancelled within 14 days. People must be told of their financial obligations for the first year. Further minor contract details.

Part 6. When someone leaves a scheme, they are entitled to a refund for the products bought in the previous 90 days.

Part 7. Some technical rule about refunds.

Part 8. People in these schemes must be given receipts from the company for every transaction.

Part 9. Rules about commission payments once someone leaves a scheme.

Part 10. People cannot pay more than £200 in the first week of joining a scheme.

Part 11. People who join up are under no obligation to buy anything unless it was clearly stated in their initial join up agreement. They should not be tricked into buying anything.

Section 1, part 3 of The Trading Schemes Act 1996 says that trading schemes must provide products or services to external customers. The participants can’t just purchase products for themselves.

That is quite a list of rules that a company must adhere to be considered legitimate. You can see why it is difficult to determine if a scheme that is being presented to you is ok or not.

These schemes cause problems for people, regardless of whether they are legitimate or not.

These problems are-

1. Dr Jon M Taylor analysed the statistics of MLMs and found that participants typically lost money in 99.9% of cases. He concluded that gambling on roulette gives 286 times more chance of winning money than earning anything in Amway. These statistics were presented to the Federal Trade Commission.

Image from MLM-The Truth Website.

2. People lose money through paying for training, going to conferences, buying their own marketing products, petrol costs from driving everywhere, buying nibbles and drinks for in-house parties, buying samples, buying prizes for raffles, buying products for themselves, paying for stalls at fairs.

3. People in these schemes follow the Law Of Attraction where they are taught to believe that bad things happen if you have bad or negative thoughts. They also believe that good things happen if you exclusively concentrate on positive things. The Law teaches that if you want something, you can have it if you want it hard enough and visualise it enough, sending out the correct ‘vibrations’. You are encouraged to act rich if you want to be rich. The theory is that you acting all successful will attract success and will attract recruits who want to be like you.

Hence you see memes like this

People in these schemes become afraid to think of their failure and will not allow themselves to focus on the money they are losing. This type of dangerous thinking could be called a mind control technique. People stop themselves from being critical and lose the ability to be rational. This is a very dangerous state to be in. It keeps people in these schemes longer than they would otherwise stay.

Another side effect of this way of thinking is that people are encouraged to cut contact with people who are being critical. I know people who have lost brothers, sisters and children through these schemes. They were taught that the negative vibrations from these people would bring failure. This further isolates people and they surround themselves by other scheme members who are all believing the same thing.

A further problem with this type of thinking is that when people inevitably fail, they will blame themselves. They will have attracted the failure to themselves. This makes them feel ashamed and they will often try to forget about the whole thing, and not come forward to speak about their experiences. So the deception continues. When people leave a scheme, they often find themselves ostracised from the group, who now see the person as a failure who could bring them down. They are now left feeling like a failure, lost friends/ family and no support group. This can make people feel terribly isolated.

4. People in these schemes are often seen making false health claims for the products they sell. This is because the products are expensive due to the added amounts that are needed to be fed up the pyramid. The sellers become desperate to make sales so that they cam achieve their monthly targets and to earn money themselves. The products are nothing special so people will lie about how good they are, breaking advertising laws and encouraging people to ditch their medications in favour of their snake oil.

Truth in Advertising (TINA) have documented some false health claims they came across with MLM products. They found that of the DSA member companies in the USA“( 97%) have made or are making — either directly or through their distributors — claims that the companies’ products (which include supplements, as well as devices, clothing, and skin care products) can treat, cure, prevent, alleviate the symptoms of, or reduce the risk of developing diseases or disorders, in violation of the law.”

Who joins these schemes?

Anyone can be vulnerable to joining one of these loss making schemes. People who need money and are not getting what they need from their current situation could join. They are vulnerable because often it is a trusted person who approaches them to join and people don’t think their loved ones would lie to them. Often, people are promised that it is easy to earn money, just follow the system, recruit people and you will be successful. Examples are held up of the few people that earn large amounts of money.

Image from TINA.org

It is easy to see why people would want to try pyramid schemes when their current situation is less than ideal.

Intelligent people and professionals are sometimes targeted because they can lend credibility to the company. I have seen adverts on Facebook aimed at NHS staff, trying to recruit them to sell MLM products and the opportunity.

It is important to realise that anyone is vulnerable to being recruited. The best protection is to educate yourself. Stay one step ahead and be as aware as you can. If you are on Twitter or Facebook, follow me or the MLMtruth coalition. There are a few campaigners you can add to the people you follow. Keep these scams at the forefront of your mind and you may be better able to resist.

What to do if a friend is involved

This can often be a very difficult situation. Your friend may be asking for your support and may be desperate to make a success of it. They may not know of the full facts around MLMs and may not be willing to hear it.

I wrote a blog post full of tips that you can look at for ideas on how to deal with your situation. Have a read of it here.

If you have a friend who goes from one scheme to another, get them to read this article on how to choose their next one. You may not be able to help them leave just yet, but you might be able to stop them joining one of the more ridiculous ones.

If your friend is maybe open to the idea of listening to reason and they want to hear what you have to say, get them to read this or this.

If you would like more of an insight into what is going on with your friend, you would do well to read up on cults. Pyramid schemes have been described as commercial cults or greed cults. Once you read up on why they are cults and how they work, it can be quite concerning. However, it will give you a good understanding of the behaviours you might be witnessing. Have a read of Steve Hassan’s work. He has written two really good books on the subject called Combatting Mind Control and Freedom of Mind. Margaret Singer has a good book on the subject too, called ‘Cults in our Midst: The continuing fight against their hidden menace’.

Cultwatch explain how cults work, and they delve into commercial/greed cults.

Steve Hassan has a website about cults that you may find useful.

I have written a piece on MLM and cults with John Evans from Juice Plus Lies website.

How to fight MLM

Become a Bot Watcher and join the team. You might be able to help us or the coalition if you have any skills or experience that might be useful in our cause. Perhaps you could help with some research or advise us.

If you have had an MLM experience, consider telling us about it and we can get your story out there to warn others.

Write emails to complain if you see something dodgy going on. Complain to fairs that allow MLM stalls. Complain to schools if they allow MLMs anywhere on the premises. Write to your MP if you feel things need changing. I have some letter templates here to help you guide your writing.

Report dodgy health claims to the ASA and get the advert pulled. Blog post on understanding about health claims.

Order something from the coalition’s little shop to help our cause and help spread awareness.

 

Take the cup to work to spread the message. Keep cards in your pocket to slip to people that you might hear being prospected. Someone we know has been slipping the cards in library books aimed at MLM reps!

Please contact us if you need any advice with any of the issues discussed in this article.

If you come across a Ponzi scheme or a pyramid scheme that you suspect is an illegal one, complain to Trading Standards via their Consumer Line. You can also report illegal schemes and fraud to Action Fraud. They are part of the police.

Sue’s Dalliance with The Body Shop at Home

The Anti-MLM Coalition

Sue Denim (not her real name) joined The Body Shop At Home about six years ago in Australia, and had a less than enjoyable experience.  She has kindly offered to share her story so that people considering joining can see what can happen.  I am not saying this will happen to everyone who joins or that all ‘consultants’ are going through this. This is her story and she wants you to understand what happened to her. I have written my words in red, and hers in black, to make for clearer reading.

I was fresh on 19, and looking for work. I’d never heard of multi-level marketing before — sure, I knew some of the companies by name, but I didn’t know that they were bad or that they prey on the weak. It was November 2012, so all the usual MLMs were putting out advertisements for their Christmas gear…

View original post 1,116 more words

The stages of leaving

From helping many people through their journey away from Multi Level Marketing, I have noticed common themes. I have attempted to describe them here. Have you been through these stages? Would you add any others?

Trigger

There is often a single event that unsettles people. This trigger goes against their personal ethics or crosses a line that is important to the person. For example, someone finds out that Younique is not as animal friendly as they were led to believe or they witness an upline encourage lying. Perhaps they find out the CEO is a homophobic tax evader or the charity the company supports is a sham.

Whatever the trigger is, it is enough to upset the person on a level where they cannot deny the wrongness of it.

Dawning realisation

Once someone has been awoken to the trigger they are more easily able to see other troubling things around them. They start questioning like never before. Niggling doubts become real concerns. The nagging upline can now be seen as the bully they are. The little lies they have been encouraged to make are now seen for the deceptive recruiting tactics that they are.  The rep becomes more and more horrified at what they have become involved in.

Fear

The fear at this stage is real. Timeless Vie looked into the fear that is instilled into MLM members. The fear is probably worse the longer someone has been involved in the company. They will have been faking it to make it. This would have involved presenting the image of success to their friends and family, telling them they are making money. They will have had conversations with friends and tried to persuade them to join them in this successful venture.  If they then decide to leave, they will lose face.

The worst fear will come from the realisation that friends will have been lost due to the MLM. Often people are encouraged to ditch their friends and family if they are less than totally supportive. They could have unfriended people and upset long standing friendships. Slowly their friend groups will have been replaced with their MLM family, their Senesisters, Y-sisters, other family/group name of belonging.

 

It’s a bit culty actually. People spend a lot of time with their MLM ‘family’ and feel a real connection with them due to the immense amount of time they spend with them. The slow backing away from friends and the encroaching influence of the MLM group creeps up on people and they can feel quite isolated when they realise how alone they really are.

This isolation can be worsened when people left their normal jobs (‘sacked the boss’) or if they have mental health issues.

There will also be fear from the thought of how the upline and team will react. They will have seen people leave the team before and heard how they were treated. They may have witnessed the blocking, isolation and character assassination that often occurs to the traitors that leave. They are blamed for their failure and lack of commitment to the group. Again, the cult vibes surface here. The excommunication and vilifying of outsiders is a feature of cults and MLMs.

Action

In this stage, the person decides that they can no longer continue in the MLM and they have to do something. They know it will be hard to take action but they know that they must. The question here is what they need to do. Do they stay members and let it fizzle out? Do they have a raging argument with their upline? Do they just delete and block everything and pretend it never happened? Do they tell an old friend and seek some perspective? Do they contact Bot Watch, Elle Beau or Timeless Vie for support and advice?

There is no simple answer here as each person’s situation will be different and their ability to cope will vary. I would strongly advise, whichever tactic people use, that they stop spending money on the products/ training/ any MLM activity. Take time to decide what to do, but stop trying to make it work. Once you have gone this far down the decision making process, you will not be happy in MLM any more. The visor has been lifted and you can no longer pretend it might be ok. The person will be OK, but not if they stay in MLM.  It can be harmful to keep trying to lie to yourself and knowingly lie to others to recruit.

 

Consequences

This is the part where people have to deal with the upline, contact head office, admit to friends what happened. Sometimes people need to admit to partners about the money that they borrowed or face their downline and try to make amends. They need to deal with friends who can no longer quite trust them due to previous attempts to recruit them and the perception from friends that they were seen as a way to make money. There must be the problem of coming across people who are thinking ‘I told you so’.

This part can be very isolating and can be difficult when you have been told repeatedly to just follow the plan and to reject the ‘normal’ way of working by having a J.O.B. So much hope and energy and money will have been invested in the dream of succeeding in the MLM. The actual process of leaving will be unchartered waters and can be very scary.

Healing

This is a very important part.  People need to be able to sit back and lick their wounds. Often a mental health problem such as anxiety or depression could be worsened. Previously strong people might be feeling fragile. Their belief systems have essentially been shaken to the core and everything they were working for has come crashing down.  Sometimes a reaction can be to start blogging and becoming an active voice against the MLM can become all-consuming. The anger and distress can be overwhelming and people seek to channel it.

If you have been through anything like this, it is very important that you slow down and take time to process what has happened. Please realise that you have been subjected to many techniques designed to keep you in the company, spending your money and working every spare minute to send money up the pyramid to the owner. You have been manipulated and it will take a lot of healing to overcome the damage.

If you have a friend who has been through this process, be gentle with them and allow them to talk about their feelings. You may have to occasionally step in and offer  a different perspective when their faulty logic shines through. They may blame themselves for things that happened that wasn’t their fault. They may have a negative view of themselves and their abilities. Be gentle with them and be patient.

Please contact Bot Watch if you need help, support or advice.

Some other articles you might find useful on this site are

How to help someone in an MLM,

How to leave an MLM,

How to be a Bot Watcher,

Why do people join MLMs?

Network Marketing is a cult.

MLM Expectation vs Reality

Quick and simple guide to why network marketing is a bad thing.

This blog post has been written at the request of a follower who wants to present information about MLMs in a simple format that can be printed onto a sheet of paper that she can distribute to some people to explain why MLMs are a bad thing. Anyone is welcome to copy and paste this into a word document. It will all fit onto one page if you make the font size 10. Make your own title as you think is appropriate.  The information may seem simplistic but it is this way on purpose.

Earning money

Most people do not earn money. The only people that do earn money are the people at the top who have recruited thousands of people under them. A lot of people lose money.  You will be told about many people who are earning money and that you can too. You can’t unless you already have a team of hundreds that all join at the same time as you. People often lie about the money they make because they want you to join and to think it is a good business opportunity. Do not believe anyone who says they earn a lot and want to recruit you.

Products

The products are very expensive and people don’t want to buy them. This is because some of the money goes up the pyramid to pay all the levels above. No one wants to pay the expensive price. You will end up buying it or friends will buy it because they feel sorry for you. People can buy products for cheaper in a shop.

Your friends

Your friends will get annoyed if you keep trying to sell to them and they will be even more annoyed if you try and recruit them. Do not use your friends and family to make money from them, it is not kind or friendly. If you lie to them to trick them into joining you, they will never trust you again. Friendships and family relationships can be ruined.

Control

Often, people in these schemes are told to do things that they feel uncomfortable doing. They are told to follow instructions and do things that don’t feel right, like lie about the products, buy a lot of stock for themselves, lie about how much money they are making, trick people into going to meetings. People start off doing some of these things and feeling bad, until soon they are doing lots of these things and it feels normal. Right and wrong start getting confused and the person changes into someone they don’t like anymore.

Hope

People realise they will not make money. They are told they are not working hard enough. They are told they are not being positive enough and if they spend more time and money they will start earning money. They are told to stop talking to friends and family who have been saying these schemes don’t work because their negative talk will make them fail.

The reason people do not make money is because only very very few can make any money and most lose money. It is not the person’s fault, but it is the way the company is set up. If you keep trying and keep spending money and keep hoping, you will still lose. But you will lose even more. And you will lose friends, time and more money.

Your own business

You are told you are an independent business person and you are in charge of what you do. You are not a boss. You do not own anything. You are just a salesperson who only gets paid commission. You do all the advertising, recruiting, training, selling and buying and take all the risks. You can be fired for many reasons and companies like these often fire people just for asking questions or saying they won’t do something.  You are responsible for following advertising laws, paying your taxes, registering your business properly, following the correct legal procedures for selling, storing and distributing products. There are a lot of rules to follow that you might not know about and you can get in trouble for. The company won’t get in trouble if you break the laws, you will.

 

This article has been translated into West Africanised French. Thanks to the Bot Watcher that did this for me.

 

Gagner de l’argent

La plupart des gens ne gagnent pas d’argent. Les seules personnes qui gagnent de l’argent sont les personnes qui ont recruté des milliers de personnes sous leurs ordres. Beaucoup de gens perdent de l’argent. On va te parler de nombreuses personnes qui gagnent de l’argent et on te dira que toi aussi tu peux gagner une fortune. Tu ne peux pas gagner une fortune sauf si tu as une équipe de centaines de personnes qui rejoignent l’affaire en même temps que toi. Les gens mentent souvent sur l’argent qu’ils font parce qu’ils veulent que tu les rejoignes et que te convaincre que c’est une bonne opportunité. Ne croit pas quiconque qui dit qu’il gagne beaucoup et veut te recruter.

Les Produits

Les produits sont très chers et les gens ne veulent pas les acheter. C’est parce qu’une partie de l’argent monte la pyramide des gens pour payer tous les gens qui sont arrivés avant toi. Personne ne veut payer le prix fort pour des produits chers. Tu finiras par acheter les produits ou tes amis vont les acheter parce qu’ils ont pitié de toi. N’oublie pas que les gens peuvent acheter des produits moins chers.

Tes Amis

Tes amis vont s’ennuyer si tu continues à essayer de leur vendre des choses et ils seront encore plus agacés tu essayes de les recruter. Utilise pas tes amis et ta famille pour faire de l’argent sur leur dos , ce n’est pas gentil ou amical. Si tu leur ment pour les inciter à te rejoindre, ils ne te feront plus jamais confiance. Les amitiés et les relations familiales peuvent être ruinées !
Le Contrôle de sa vie
Souvent, les gens dans ces affaires sont invités à faire des choses qui les mettent mal à l’aise. On leur dit de suivre les instructions et de faire des choses qui ne leur conviennent pas, de mentir sur les produits, d’acheter beaucoup de produits pour eux-mêmes, de mentir sur le montant d’argent qu’ils gagnent, d’amener les gens à se rendre aux réunions. Les gens commencent à faire certaines de ces choses et se sentent mal, jusqu’à ce que bientôt ils font beaucoup de ces choses et ça devient normal pour eux de mentir a leurs amis et leur familles par exemple. Le bien et le mal commencent à devenir confus et la personne se transforme en quelqu’un qu’elle n’aime plus.

 

L’Espoir

Les gens se rendent compte qu’ils ne feront pas d’argent. On leur dit qu’ils ne travaillent pas assez dur. On leur dit qu’ils ne sont pas assez positifs et s’ils dépensent plus de temps et d’argent, ils commenceront à gagner de l’argent. On leur dit d’arrêter de parler à leurs amis et à leur famille qui ont dit que ces programmes ne fonctionnent pas parce que leur conversation négative va les faire échouer. La raison pour laquelle les gens ne gagnent pas d’argent est que très peu peuvent faire de l’argent et la plupart perdent de l’argent. Ce la faute de la personne, mais c’est la façon dont l’entreprise est mise en place. Si vous continuez à essayer et continuez à dépenser de l’argent et continuez à espérer, vous perdrez toujours. Mais vous allez perdre encore plus. Et vous allez perdre des amis, du temps et plus d’argent.

Avoir Sa Propre Affaire

On te dit que tu es un homme d’affaires indépendant et que tu es responsable de ce que tu fais. Mais n’oublie pas tu n’es pas un patron.Tu ne possede rien. Tu es juste un vendeur qui ne reçoit que des commissions payées. Tu fais toute la publicité, le recrutement, la formation, la vente et l’achat et tu prends tous les risques. Tu peux être viré pour de nombreuses raisons et les entreprises comme celles-ci virent souvent des gens simplement parce qu’elles posent des questions ou en disant qu’ils ne travaillent pas bien. Tu es responsable pour payer tes impôts, pour enregistrer ton entreprise correctement, en suivant les procédures légales correctes pour vendre, stocker et distribuer les produits. Il y a beaucoup de règles à suivre que tu ne connais peut-être pas et tu peut avoir des ennuis a cause de ça. La compagnie n’aura pas de problèmes si tu enfreins les lois, mais toi si.

 

 

 

 

How to be a Bot Watcher

 

 

Fed up of the scamming MLM companies you come across?

Is it time you took a stand and took your interest further than just observing from a horrified distance?

If you would like to join the fight, here are some things you can do.

Twitter

Join Twitter if you haven’t already and follow the people/ sites that are likely to offer upto date information on MLM developments. If you are new to Twitter, have a look at this Wikihow article on how to get started.

I have compiled a list of people/organisations to get you started. If you subscribe to the list, you will see all the valuable tweets they make. Add in some companies or people that you have an interest in as well. Make sure you also follow other non-MLM people/ pages of interest, otherwise you will be inundated with depressing tweets. Follow your favourite companies, actors, musicians to balance out the dark stuff. ‘Faces In Things’ is quite funny if you need a distraction.

Take a stand and comment on MLM tweets, showing up their lies. Tell people in MLMs that are making health claims that they are wrong. Follow the MLM companies’ official accounts so you can see what they are up to.

Retweet tweets that need to be spread so that awareness can be spread to your followers.

Using Twitter as a Bot Watcher can be a passive or active activity. You can join in the arguments, retweet stuff, or just watch and gain information to stay up to date.

Don’t forget to follow Bot Watch. Click on the twitter symbol at the top of tis page to join us.

Facebook

We are on Facebook so you can watch us there for some updates or join in the discussions there. Sometimes MLM supporters turn up, trying to defend their companies. Feel free to join in the arguments, whichever side you are on. We will not block you just because you support MLM, but we will if you try to recruit or we think you are using us to gain traffic to your ‘business’.

To follow us on Facebook, click on the link at the very top of this page.

Here are some other Facebook pages you can follow-

Juice Plus/MLM Lies Exposed  People post things they have seen and heard about MLMs, and there is often quite an enthusiastic discussion on the posts. It reveals the deceptive practices and obvious lies that people tell to try and recruit or sell their products.

Elle Beau The Antiblogger.  Elle was a presenter with Younique until she saw through the lies. Now she tries to spread awareness to protect others from making the same mistakes she did.

Timeless Vie Their original page was taken down due to people reporting them for using that well known hate/ racist word ‘Hun’. This page is a back up one. They offer support and information to victims of MLMs, as well as being a spoof MLM.

Sounds like MLM but OK This group has over 22,000 members so there is a wealth of information posted. Lots of discussions about the items posted. You’ll see a lot here.

 

Internet discussions

You could join in or observe discussions about MLMs, asking questions or sharing knowledge you have. You are sure to learn a lot here.

Mumsnet  This link will take you to the ‘money matters’ page. From here, look for the thread that contains the words ‘MLM botwatch’. The people here are very knowledgeable and you are welcome to join in and ask questions/ make contributions. I hang out there under the name TooBusyToWee.

Reddit have a subreddit where MLM subjects are discussed.

Report

If you see an illegal health claim or dodgy advert for an MLM product you know is banned, report them. The Advertising Standards Authority in the UK are the people to report advertising infringements to. They have advice on their website about what you can complain about.

If you see an MLM is due to appear at an event, try complaining to the organisers, warning them of the MLM’s intention. If they are sponsoring an event, complain. Let people know about the event and complain, and others can also let their feelings be known. If you want to remain anonymous, pass on the information to us here and we can complain about it. Make a noise. Tell people on Twitter, write letters, email, mention it on forums. If you want to explain to organisers why MLMs are a BAD THING, you can copy and paste from this piece or give them the link.

If you see someone in an MLM making claims or doing something dodgy, confront them or report them to their own MLM. MLMs have compliance departments that investigate dodgy behaviour. They are very quick to sanction people. So much for them being ‘independent business’ people! I try not to go down this route because people are often the unwitting victims and do not know what they are involved in. Sometimes, however, it is justified. Use your judgement.

If you see a scheme that is behaving like an illegal pyramid scheme you can report them to the police at Action Fraud via the phone or online. If a business is operating without having customers or breaks any of the pyramid scheme laws, they can be reported for investigation.

 

Share your experience

Tell your story and help spread the truth. Make sure there’s lots of evidence out there for people researching joining one of these schemes. Make sure that the truth outweighs the propaganda. You can do this in a number of ways-

1. If you are a talented writer, consider writing a blog. Either write a post for someone else’s blog or start your own. If you want your story telling but don’t want to write it yourself, consider speaking to Bot Watch, Timeless Vie or Elle Beau to see if they could use your story.
2. Give a brief rundown of what happened or what information you have so you can go on Bot Watch’s database. You might be needed when a reporter contacts us, looking for people to interview. This happens quite regularly. Unfortunately we are often not able to find people who are willing to help. This means the story doesn’t get written. It would be really useful to have you on our list, along with details of whether you need to anonymous or not. Drop us an email at botwatchmail@googlemail.com and tell us how you can help.
3. Add your voice to the twitter discussions or website forums and make sure people hear what you have to say.
4. If you have any professional experience and wish to give your take on something, e.g. a dietician who has looked into Juiceplus or a business person who wants to give an analysis, please let us know. You might be able to act as an adviser or write your own post.

Recognise an MLM/Pyramid scheme

To be a Bot Watcher, you need to make sure you know what you are looking at. If you see a company and you suspect it may be an MLM, you could look it up on the Directory of MLMs here at Bot Watch. If it isn’t there, it still might be an MLM, but just hasn’t been put on the list yet (there’s so many).

If you Google the name of the company, followed by ‘MLM’, often you will get loads of results if it is one. Look for posts of people trying to recruit into it.

The key things you are looking for are-

1. There is usually a mention of a ‘compensation plan’ instead of a wage or hourly rate.

2. Look for terms like ‘team building’ or ‘recruiting’ or a chance to grow your team.

3. Are there pictures of cruises, holidays, cars, piles of money? Promises of what you can obtain if you join?

4. Search for the company on Twitter, Facebook, Instagram etc. Are the sellers using a lot of emojis and unable to spell correctly? They may be making outrageously incorrect statements or just seem dodgy.

5. Do not rely on websites that claim it is not a scam or pyramid scheme if they then try and get you to join. It is a very common thing to see people put titles on posts such as ‘Is company X a scam?’ or ‘Don’t join company X until you read/watch this’) These are always written by people in the schemes trying to trick people who are suspicious and change their minds to join them. Don’t fall for it.

6. If in doubt, email, FB message or comment on posts here. I’ll get back to you                  pretty quickly with an answer. Then I can add the details of the company onto                  the Directory.

Research

Learn what you can about these schemes. Have a look at some blogs on the subject, read some books, watch some programs or short YouTube clips to learn more. Here are some ideas to get you started.

Websites

Timeless Vie’s blog has some interesting exposes, interviews with victims and articles that look at MLMs from a feminist angle. On their menu, they have a drop down bit where you can look up different MLMs that they have written about.

Elle-Beau’s blog  This is a multi part story on a Younique presenter’s experience from beginning to end. Funny and addictive. You’ll learn about the tactics used.

Ethan Vanderbuilt‘s website has details of many individual MLM scams as well as more general articles and MLM news. He has videos and written articles.

Pyramid Scheme Alert is a consumer organisation that confronts the abuses of MLMs. Full of information.

Truth IN Advertising (TINA) is an American website that fight false and misleading advertising. As such, there are many mentions of MLM scams.

False Profits by Robert Fitzpatrick, an MLM academic and expert witness on the subject.

MLM The American Dream Made Nightmare by David Brear gives detailed analysis on the subject. He’s been researching MLM for over 20 years.

Videos/ programs to watch.

 

Betting On Zero is a very informative documentary that looks at Herbalife and the deceptive practices that go on. It also looks at the financial battle going on with the company’s shares. It’s more interesting than I’m describing here! You can buy this film on Netflix or iplayer. Here is a  free trailer for it.

 

 

This episode of John Oliver’s ‘Last Week Tonight’ takes a satirical look at Multilevel marketing, focusing on Herbalife but the message applies to all MLMs.

 

 

Documentary where an investigative reporter looks into MLMs that prey on people in Uganda, selling them false health products and promises of riches.

 

 

 

How to spot a pyramid scheme video. This explains the basics of how pyramid schemes/MLMs work. 6 mins 21 seconds long.

 

 

 

This video contains the testimonies of many Herbalife victims. It is really quite sad.

 

 

Reading list

        

Complain

If you discover that an MLM are going to be at a jobs fair or will be running a stand at a fete, please let the organisers know what these companies are like. Ask for them to reconsider the inclusion of the company and give them a list of problems associated with MLM. Some templates you can use can be found on this blog here.

Why Network Marketing is a Bad Thing.

What’s the harm of network marketing/ distance selling/ multilevel marketing? It’s just normal, everyday people making a bit of spare cash from selling things harmlessly to friends and online, right?

MLM creates victims

Victim 1- friends and family of the rep

You should see some of the heartbreaking stories I hear from people about their worries for their loved ones. It has ruined relationships. Not only can it dramatically ruin close family relationships, it can make working relationships and friendships awkward when someone tries to involve you in their scheme.

Here’s a selection of messages from Bot Watch’s Facebook inbox.

 

Victim 2- customers

The people who buy the products are most likely only buying out of pity for their friend or relative. They might be trying to support their friend but do not actually want the product. Have you seen the inflated prices? They have to be high in order to pay all the people up the pyramid.

This is water available to purchase from Forever Living. 12 bottles for £14.76.

Here is exactly the same water from the same source, not from Forever Living.

24 bottles for £12.72.

Forever Living sell at £1.23 a bottle, 53p from another company.

 

Victim 3- legitimate homeworkers/ small businesses

How many real small business people/ home workers and life coaches have been met with scepticism or an eye roll when they reveal what they do? People who have spent time and money and skills building up a real business are not taken seriously because MLM have sullied the reputation of genuine businesses.

Some reps describe themselves as life coaches, which must sting genuine life coaches who have had training and built up a reputation, helping people to make the best of their lives and overcome obstacles they are experiencing. Reps come along and call themselves coaches, with the express aim of recruiting people, coaching them to recruit people to coach them to recruit people to coach them to recruit….You get the idea.

 

Victim 4- The rep’s finances

It has been well established that it is impossible to earn a good wage in MLM, unless you are high up with the right connections. The people that earn money are reliant on having a large team beneath them, most of whom will lose money, before they feel a failure and slink off feeling worthless.

There have been many, many people coming forward with stories about losing money. Have a read of Elle Beau and her story of Younique. People hide their losses to themselves and family. Most do not even realise they are losing money because they do not keep a proper track of their expenses.

Victim 5- Women

Women are targeted for this industry, often in a patronising way, using their vulnerabilities and patronising them along the way. What is this, the 1950’s? Have a look at Timeless Vie for some of their work on feminism and MLMs. This article is a particular eye opener.

Here is one example from Bot Watch’s inbox of vulnerable women being specifically targeted.

Victim 6- free thought

It is becoming increasingly evident that MLMs are cults. People are subjected to techniques that condition people into thinking and speaking in a certain way. They are taught to ignore their inner questioning thoughts and to blindly do as they are told. They are conditioned to think all fault lies with them and anything good is down to the MLM. They speak of their team members as family and are encouraged to reject friends and family that raise concerns. This post goes into more detail about it.

 Victim 7- People with health conditions

For some reason, many MLMs tout products with amazing properties that can cure any illness. People target sufferers with conditions and tell them their products can help. This is not only deceptive and fraudulent, but illegal and dangerous as well.

Truth In Advertising have looked at the bogus health claims made by MLMs and they came up with quite a list.

DoTERRA got in trouble for saying their oils could cure Ebola and got in trouble with the FDA about it.

Below is a common type of social media post. What are they trying to do? Tell you that any condition you have can be cured by their oils/ juices/ tablets/ coffee? Yes, that is exactly what they are doing. I hope that they are just deluded and really believe in their products. Because otherwise, they are deliberately getting people to spend over the odds on products that will have no effect on anyone’s health. At least it won’t improve any conditions.

 

What to do about it

If you are an organiser of an event please consider banning MLMs from attending. People are becoming wise to them now and are are generally displeased when they see these stalls. People who do not know about them could be vulnerable to being recruited. This is especially bad when the event is a jobs fair, targeting a particular profession or aimed at people with health conditions or new parents. You could be enabling these companies to cause many problems for the people you are trying to serve.

If you see adverts for events that include MLMs please speak up about it. Read this article on what you can do to help.

If you have a friend or relative in an MLM and you want to help them, look here for inspiration.

If you are in an MLM yourself you might want to read ‘How to leave an MLM’ if you are at that point. If you are not sure what to do and are having a bit of a ‘moment’ and tying to work out what is going on, read this article on ‘having doubts‘. It might help clarify a few things.

 

Why do people join MLMs?

This is a question that is asked again and again. Once you can see it is a fraud, it can be difficult to understand how people can fall for it. Here, I will attempt to explain why people fall for it.

Is it a lack of intelligence or education?

No qualifications are needed and, quite often, posts are badly spelt and have poor language skills. The large number of emojis add to the effect. For example

Many people assume that bots must be stupid because of this, but it is not necessarily true. Sometimes they copy and paste posts because they are lazy or are told to by their uplines. Sometimes they might just be trying to appear fun or they are appealing to the type of people who communicate like this. Of course, they might be stupid, but it is not a prerequisite.

Some bots are nurses, teachers, lawyers, doctors and vets. We cannot assume a lack of education is the reason for joining an MLM.

There has been some research into why intelligent people fall for scams.  It is thought that they might have a misplaced sense of confidence and, once tricked, might not question their judgement. This riskology blog post looks into some of the reasons why intelligent people get caught in scams and gives links to some interesting research.

Some are tricked

Some people could be tricked by deceiving adverts like these-

It is made to look like a job advert. Primerica are a prime example of this tactic. They target jobseekers and offer ‘interviews’ to people so that it looks like a proper job opportunity. If you think you are applying for a job, you might not notice that you are actually being offered something else. A forensic accountant has written about how Primerica hides their recruiting as a job interview.

Fake it ’til you make it

This is one of the main reasons why people join MLMs I think. People post on their social media about their fantastic lifestyle and how it is achieved through their MLM. It looks to the casual observer that the bot is being successful and is earning money from their scheme.

People brag about how they have managed to buy the latest car, live in a big home, or just treat themselves to little things. They post pictures of nice things and imply that their MLM is the reason they can have these things.

In actuality, most of these claims are lies, designed to interest friends, family and colleagues into joining up so they can have nice things too.

 

The recruiter is often a trusted person

This is one of the main reasons for people falling into MLM I think. We automatically trust our friends and loved ones. If they tell us they are being successful we will believe them more than if a stranger told us. After all, why would someone who cares for us con us into a money losing scheme?

This begs the important question, why would our loved ones con us into a scam? It could be that they do not realise they are in a scam. It could be that they hope they will make money soon and they need you to join to help them be successful. Once you, and others, join them, they will be successful and then they will help you too so it will all be alright. I don’t think people join these schemes knowing they are scam and get their family involved in them maliciously.

I think that the fact your friend recruited you and you recruited friends will lead you to staying in the scam longer. You will feel an obligation to make it work for everyone.

 

Guilt

Women are targeted this way. They may be feeling like they can’t afford childcare or don’t want to go back to work after maternity leave. They could be feeling desperate and willing to try anything during their maternity leave to try and earn enough money to resign. It might be worth the risk to them and might be enough for them to suspend their scepticism. They might not have fallen for it before their babies were born.

Timeless Vie wrote a good article on the phenomenon of guilting mums into MLMs.

 

False claims

False statistics are commonly bandied around that make MLMs look good, like this one-

No one has been able to provide any proof for these statistics. John Milton Fogg, an advocate of MLM has examined the evidence for the 20% claim and says it is untrue.

It is easy to find out the truth about these facts when examined in isolation, but maybe it is more difficult if people are bombarded with ‘facts’ like these alongside other factors in this post. Maybe they would have no reason to disbelieve them due to who is telling them these ‘facts’.

Some people do earn money in MLMs, albeit a vary small number. Pictures of these people getting cheques are plastered all over the internet and prospects are told they could achieve this.

 

Prospects  might be shown earnings disclosures where it proves that some people earn good money. However, if you analyse these disclosures, you would see that statistically, you are likely to earn a tiny, tiny amount.

 

Love bombing

This is a tactic employed by cults as well as MLMs. The recruiters act as though they really care about you. They might call you and other people in their teams ‘hun’ and litter their social media with heart emojis and positive, uplifting messages aimed at raising your confidence and feeling part of a new ‘family’.

 

It is hard to dislike or mistrust someone if they seem like they like you and are helping you. This tactic especially works on lonely or vulnerable people who feel isolated. The effect is exacerbated when people ae isolated from their own friends and family. MLM people advocate unfriending and cutting out people from their lives if they question the new MLM family. A Them vs Us feeling is created. For each real life person cut off, the MLM bond is strengthened.

The above FB post is from a ‘life coach’ that coaches MLM members.

Confusing terms

Have you ever seen an MLM compensation plan? They are really complicated and with lots of small detail and levels and hoops to jump through. I don’t think anyone really understands the complexities of the structure. As people climb the ladder, they find more obstacles and changes to the way their pay works. It is not obvious at all how it works. People are assured by their uplines when they join that it is simple really. They are persuaded to learn as they go along.

Here is a link to It Works’s compensation plan, all 20 pages of it.  Have a look and see if you think people understand what they are signing up to. It is more likely that people come away with the main message from MLMs like ‘8 ways to be paid’ or ‘paid every 3 hours’, than the actual details.

One of the things I have noticed that all MLMs have in common is their substitution of money for other terms, such as Case Credits or PV. I believe this is the same tactic used by casinos. Casinos use tokens instead of money so they forget they are gambling real money. People in MLMs might get fixated on just needing 4 more CCs, and not realise they are spending their own money. Targets given in CCs don’t look as threatening as real money would. The person becomes distanced from what they are doing.

Conclusion

There are many reasons people fall for the MLM scam, and it is not simple by any means. We should all be very careful because any of us could fall victim to one under the wrong circumstances.