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.
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!!'
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.