Thursday, 27 March 2014

Feds Launch 'Herbalife' Investigation... but What About All the Other 'MLMs?'

Notice the Orwellian wording of the 'Herbalife/MLM Income Opportunity ' lie. The verb, 'to realize,' has several senses. Presumeably, the 'Herbalife' racketeers will now steadfastly pretend that they meant 'realize,' in the sense of, 'be fully aware of,' rather than 'convert into actuality' or 'achieve.'

On March 12, the US Federal Trade Commission (FTC) announced that it has officially opened an investigation of one of the oldest and largest of  'MLMs, Herbalife.' The investigation announcement marks the first FTC public investigation of a major 'MLM' since 1975! Something new is definitely occurring. As 'Herbalife' goes, so might the entire 'MLM industry.'

The FTC is responding to mounting charges and evidence presented by Wall Street firms, business media, class action lawsuits and consumer and Hispanic organizations that 'Herbalife' is not a legitimate sales business but an illegal pyramid scheme.

 What About This One? Free Audio Report

Enough evidence has already emerged to dispel the myth that 'MLM' is a modern form of 'direct selling.' Some 'MLMs' actively discourage selling. Instead, they tell the recruits to 'be their own customer' or just 'buy from yourself' and then find others to do the same. How do you make money buying from yourself? And if  'finding others to do the same' means making money from recruiting, isn't that the perfect definition of a pyramid scheme? It is indeed difficult, if not impossible, to find a single individual that actually makes a sustainable profit from just selling 'MLM' products. But 'MLM' recruiters are everywhere! 

As a result of painstaking research and courageous whistle-blowing the other myth about 'multi-level marketing' has also been demolished. It is that 'MLM' offers an 'income opportunity' to the average person. The data verifies that 99% never earn a profit. Factoring costs and product purchases means that more than 99% lose money in 'MLM.' This extraordinary fact had been hidden from view for decades. Now that is in the news, 'MLM' companies are changing stories to claim that few people who sign MLM sales contracts are even interested in income at all. They couldn't care less about money, 'MLM' promoters say of the enrollees. They just love the products. 

Other tricks of diversion include renaming the millions of failed 'distributors' as 'members' or 'end-users,' or my all-time favorite, 'volunteers!!' 

So, if 'MLM' is not about 'direct selling' and it offers no viable income opportunity, then what the heck is it?

Two documents are presented in the current edition of Pyramid Scheme Alert's Update that address that question.

1. THE PYRAMID SCHEME INDUSTRY: Examining Some Legal and Economic Aspects of Multi-Level Marketing

2. "What Is this Thing Called "Multi-Level Marketing?"

Robert FitzPatrick, President Pyramid Scheme Alert.
I urge you to read these documents to learn about the legal and the financial records that determine whether 'MLM' is the 'greatest income opportunity in the world' or the world's biggest scam; whether it is 'direct selling' or pyramid recruiting; and whether it is a 'sales network' or a financial cult. 


Robert L. FitzPatrick, Pres. 


  1. The FTC officials who allowed this, should be under investigation!

  2. Let's face it, America is on trial here, but I'm not sure that America is sufficiently grown-up to be capable of facing the ugly reality lurking behind the pretty 'MLM' lie.

  3. Great Blog. Do you have any experience knowledge regarding Seacret Direct?

    Side note, I am curious regarding your stat of 99% of MLMers lose money. In the future, your blogs would be more reputable should you include the source of statistics (although I do not discount it - yet do not fully absorb it either)

    1. Anonymous - This article was written by Robert FitzPatrick.

      He states that:

      'The data verifies that 99% never earn a profit. Factoring costs and product purchases means that more than 99% lose money in 'MLM.'

      The very scale of the 'MLM' lie, makes it almost impossible for the average observer to take in. But if you tell a big enough lie and keep repeating it, eventually people will come to accept it as the truth

      The truth is that, if you disregard the insignificant minority of kitsch shills at the top the biggest 'MLM income opportunity' rackets, and examine all of the declared annual numbers of participants, alongside the declared annual drop-out rates, you find that the overall hidden loss/churn rate for participation in 'MLM,' has always been effectively 100%.

    2. Anonymous - By the way, 'Seacret Direct' is yet another blame-the-victim 'MLM Income Opportunity' racket.

  4. MLM's are financial cults. Their recruiters are robots.

    Most folks know that no one really buys MLM products except the robots who try to recruit everyone they know to become buyers of the products trying recruit everyone they know to become robots.

    This is stealing people's minds not just their money.

    1. Anonymous- You sound as though you might have had a painful experience with MLM robots?