Friday, 9 February 2018

'LuLaRoe' - Yet another fake 'home business opportunity' exposed as an 'MLM' cultic racket.

Image result for pseudoscience

Statutory Warning

More than half a century of quantifiable evidence, proves beyond all reasonable doubt that:
  • what has become popularly-known as 'Multi-Level Marketing' (aka 'Network Marketing') is nothing more than an absurd, cultic, economic pseudo-science.
  • the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim rigged-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).
  • Apart from an insignificant minority of exemplary shills who pretend that anyone can achieve financial freedom simply by following their example and exactly-duplicating a step-by-step-plan, the hidden overall loss/churn rate for participation in so-called 'MLM income opportunities,' has always  been effectively 100%.

In 'MLM' rackets, the innocent looking products/sevices' function is to hide what is really occurring - i.e The operation of an unlawful, intrinsically fraudulent, rigged-market where effectively no non-salaried (transient) participant can generate an overall net-profit, because, unknown to the non-salaried (transient) participants, the market is in a permanent state of collapse and requires its non-salaried (transient) participants to keep finding further (temporary) de facto slaves to maintain the illusion of stability.

Meanwhile a tiny (permanent) minority rake in vast profits by selling into the rigged-market and by controlling/withholding all key-information concerning the rigged-market's actual catastrophic, ever-shifting results from its never-ending chain of (temporary) de facto slaves.

It is possible to use any product or service to dissimulate a rigged-market swindle aka pyramid scheme. There are even some 'MLM' rackets which have hidden behind well-known traditional brands (albeit offered at fixed high prices). 

In 'MLM' rackets, there has been no significant or sustainable source of revenue other than never-ending chains of contractees of the 'MLM' front companies. These front-companies always pretend that their products/services are high quality and reasonably-priced and that they can be sold on for a profit based on value and demand. In reality, the underlying reason why it's mainly only been 'MLM' contractees who buy the products /services (and not the general public) is because they have been led to believe that by doing so, and by recruiting others to do the same etc. ad infinitum, they will receive a future (unlimited) reward.

I've been examining the 'MLM' phenomenon for around 20 years. During this time, I've yet to find one so-called 'MLM' company which has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

The key-information which all 'MLM' bosses seek to hide concerns the overall number of persons who have signed contracts since the front companies were instigated and the retention rates of these contractees. 

When rigorously investigated, the overall hidden net-loss churn rates for so-called 'MLM income opportunites' has turned out to have been effectively 100%. Thus, anyone claiming (or implying) that it is possible for anyone to make a living in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Some of the biggest 'MLM' rackets (like 'Amway') have hidden in plain sight and secretly churned tens of millions of losing participants over decades.

Despite the fact that the bosses of the 'Amway' copy-cat blame-the-victim 'MLM' cultic racket known as 'LuLaRoe,' have been committing fraud, and obstructing justice, on a vast scale by withholding key-information concerning the catastrophic quantifiable results of their fake 'income opportunity,' currently, their chances of being held fully to account (i.e. stripped of all their stolen wealth and thrown in jail by federal, or state, prosecutors enforcing anti-racketeering legislation) are virtually Zero.

Some of the mainstream media's reporting of the 'LuLaRoe' tragicomedy has been completely devoid of common-sense. In the above linked-video, the 'LuLaRoe' bosses, Deanne Brady and Mark Stidham, were allowed (apparently without challenge) to recite a paranoid new chapter of their pernicious fairy story - implying that the persons who say they have lost money and who have filed a billion dollar class-action lawsuit against their company, are a bunch of liars who are part of a conspiracy organised by (unamed) competitors. 

Meanwhile, Messrs. Brady and Stidham have not not yet been asked:

  • How many persons in total have signed annual 'distributor contracts' with your company, since it was instigated in 2012?
  • What percentage of these persons have remained under contract for: more than one year, two years, three years, four years, five years, etc.?
  • Could you offer any lawful reason why the key-information contained in the truthful answers to the above questions has never been disclosed publicly?
Furthermore, not one of the 'LuLaRoe' shills interviewed in the above linked-video was asked to back up their anecdotal claims to be earning thousands of dollars per month with income-tax payment receipts.  Neither were they asked whether their claims represented gross or net income. 

Not one of the 'LuLaRoe' shills was asked what percentage of their claimed 'sales' have been profitable retail transactions made to members of the general public, as opposed to unlawful losing-investment payments made by (transient) contractees of 'LuLaRoe' (based on the false-expectation of future reward), but laundered as lawful sales (based on value and demand).  

Just like the bosses of the 'Amway' mob, the bosses of the 'LuLaRoe' mob have also included 'money-back guarantees' in their pernicious fairy story.

David Brear (copyright 2018)


Women say they lost thousands buying into home-based business LuLaRoe
CHESTER, Va. (WRIC)  —  You’ve heard the pitch: Work from home and make big money. But buying into a home-based business doesn’t always pay off.
8News investigated a popular multi-level marketing company called LuLaRoe. It sells colorful leggings, dresses and tops through Independent Fashion Retailers.
Amy Reece and her daughters bought into the company hoping to make some extra money. Instead, the Culpeper women are now left with $14,000 worth of clothing they just can’t sell.
“This is just ugly,” declares Reece as she rummages through the boxes of leftover merchandise sitting in her basement.
She explains that LuLaRoe chooses which patterns consultants receive and if you get stuck with less than popular prints, it’s tough to sell them.
“You get a box and you’re excited,” recalls Reece, “You ordered Irmas for the first time in however long and you order 5 of one size and all 5 are of the exact same ugly pattern that you still have 5 of sitting in the basement because nobody wants them.”
Even so, Reece says she felt pressured by LuLaRoe leadership to continue buying inventory. She explains at the time, the company paid out bonuses based on what consultants bought, not what they sold.
“Even though we weren’t selling, we were ordering like every week,” she adds.
Jeannette Mortimer is another former fashion retailer who says she felt pressure from LuLaRoe to invest more money on merchandise even though she was swimming in clothing no one wanted to buy.
“The Dorito print. The worma we called it. It looked like it had worms on it. I mean it looked like you handed a 3-year-old a coloring book and said here make our next 50 designs. It was awful,” says Mortimer.
The Chester mother of three, who works a 9 to 5 job claims LuLaRoe’s promise of part-time work with a full-time income fell short for her.
She says this is despite spending hours every night working her business and never going to bed until at least one in the morning.
“I’m like I didn’t start this so I didn’t have a life,” explains Mortimer. “I have a 12-year-old who was telling me, ‘Mom you’re here but you’re not really here because you’re always on your phone doing LuLaRoe.’ And I was like, you know what? I’m done.”
Reece felt the same way. “Done fighting to sell. Done fighting to order my inventory. Just done. I just wanted my house back. I wanted my life back. I wanted the craziness to go away,” she adds.
Going out of business only brought the women more anxiety.
While waiting for LuLaRoe to send them shipping labels to return unsold merchandise, they say the company changed its refund policy from 100% of their money back to 90%. Consultants would also now have to pay the postage to ship those heavy boxes back. In addition to that, the company could refuse to pay for some of the returned merchandise.
“If you got your shipping papers, you’re good. If you don’t screw you is pretty much what they said,” explains Reece, “And I was under the screw you part of that amendment because I have yet to receive my return authorization forms to send back that inventory.”
So her $14,000 investment sits in the basement. Reece isn’t sure if she’ll ever be reimbursed.
“Now my concern’s begin to be are they going to go belly up? If I send my inventory next week, will I ever really see my money,” she says.
Reece is part of a class action lawsuit demanding LuLaRoe honor that 100% refund policy.
The company is also being sued for $1 billion dollars by former retailers who claim LuLaRoe is a giant pyramid scheme.
8News reached out to the company which pointed out that it had more than 2 billion dollars in sales last year explaining “This is a testament to consumer confidence in our apparel.”
It added “Independent Fashion Retailers who are leaving the business have clear and established processes for contacting LuLaRoe to manage their cancellation process. As a policy, we do not respond to inquiries about the private and confidential business information of Independent Fashion Retailers.”


(Short) Questionaire for past, and present,
'Multi-Level Marketing Income Opportunity' contractees

(Respondents are advised first to read all the questions before making any answer).

1. Was the person who first approached you to participate in 'MLM,' a friend or relative (i.e. a person with whom you enjoyed a relationship based on love and trust)?

2. Did the 'MLM' recruiter present a bleak picture of the world of traditional employment in which most people are forced to go out to work for 45 years with only retirement and a limited pension to look forward to?

3. Did the recruiter present the 'MLM Income Opportunity' as a viable alternative to the world of traditional employment, in which it is possible for anyone to retire and enjoy total financial freedom, after a just a few years of concentrated effort?

4. At the time you were recruited, would you say that you were entirely satisfied with life; particularly, your achievements, education, career/employment status/prospects, home, relationships, social standing, salary, etc.?

5. How would you describe your level of satisfaction with your life at the time you were recruited?

6. When, and how, were you first approached to participate in 'MLM' and when was the name of the sponsoring company first mentioned?'
  • Was 'MLM' first presented to you individually or as part of a group?
  • Did the presentation comprise drawing circles containing numbers and percentages on a board or sheet of paper? 
  • Did you fully-understand the presentation?
  • Was the presentation given by a man with a woman nodding in agreement next to him?
  • Were you given to believe that anyone could understand 'MLM?'
  • Did the recruiters seem generally happy and excited as though they had wonderful news to share?
7. What prior knowledge did you have of 'MLM?'

8. What was your initial reaction when you were approached?

9. At the time you signed up, what did you believe to be the success-rate of persons participating in'MLM' schemes (i.e. about what percentage of participants did you think made an overall net-income out of 'MLM')?

10. Were you ever shown any independent quantifiable evidence (e.g. income tax payment receipts) proving that anyone has ever made an overall net-income out of participating in 'MLM?'

11. Did you ever ask to see such evidence? 

12. Could you give a brief explanation of what you understand by the term pyramid scheme or scam?

13. What would you say was the essential identifying characteristic of pyramid scams, Ponzi schemes, money circulation games, chain letter scams, etc.?

 14. Were you given to believe that 'MLM' schemes are not pyramid scams, because they involve the sale of products, and/or services, to customers and end users, and offer money-back guarantees?

15. Were you given to believe that 'MLM' schemes cannot be frauds, because  they have existed for decades and have been investigated and approved by governments around the world?

16. Were you given to believe that 'MLM' schemes cannot be frauds, because celebrities (including senior politicians) have endorsed 'MLM' schemes?

17. Were you given to believe that 'MLM' schemes cannot be frauds, because their sponsors have given money to charity?

18. Were you given to believe that 'MLM' schemes cannot be frauds, because they have sponsored professional sports stars and teams?

19. What was your main motivation for joining an 'MLM' scheme :
  •  to earn income?
  •  to buy products and/or services at a discount price
20. Before you signed up, were your encouraged by the recruiter to seek independent legal/financial advice?

21. Did you ever seek independent legal/financial advice?

22.  What initially convinced you that 'MLM' was an authentic opportunity to earn income?

23. At the time you signed up, did you have any knowledge of pernicious groups that employ co-ordinated devious techniques of social, psychological and physical persuasion - designed to shut down the critical and evaluative faculties of ill-informed individuals in order to exploit them and prevent them from complaining?

24. Could you give a brief explanation of what you understand by the terms:
  • Neuro-Linguistic Programming?
  • brainwashing?
  • coercive behaviour modification?
  • group pressure?
  • covert hypnosis?
  • ego-destruction?
  • thought reform?
  • mental manipulation?
  • love bombing?
25. Were you given to believe that it is possible for anyone to replace their income by participating in 'MLM?'

26. Were you given to believe that after achieving a certain level of income in MLM you could cease all activity and receive the same residual income for the rest of your life?

27. Were you given to believe that this residual income could be passed on to your descendants after your death?

28. During you time in an 'MLM' group, were you taught that the 'exact duplication of a proven step-by-step plan' would bring you 'total financial freedom?'

29. As part of this 'proven plan,' were you taught:
  • to alter you habitual way of speaking (if yes, give a brief explanation)?
  • to alter your habitual way of dressing (if yes, give a brief explanation)?
  • to alter you habitual way of eating (if yes, give a brief explanation)?
  • to alter your habitual sleep pattern (if yes, give a brief explanation)?
  • to alter you habitual social contacts (if yes, give a brief explanation)?
  • that everyone above you in your 'MLM Network' was your 'Upline' and everyone beneath you was your 'Downline?'
  • that your 'Upline' was to be 'admired and respected?'
  • that your 'Upline's success in MLM depended on helping his/her Downline to succeed,'
  • to divide everyone, and everything, in your life into 'negative' vs 'positive?'
  • that 'MLM' products were to be deemed 'positive' and non-'MLM' products deemed 'negative?'
  • that you should buy a regular quota (by value) of 'positive' products?
  • that you should draw up a list of prospective 'MLM' recruits comprising everyone you had ever encountered in your life?
  • that you should progressively contact all these persons and attempt to recruit them using a precisely-worded 'positive' script?
  • that you should never say anything 'negative' about 'MLM?'
  • that you should never listen to, or look at, anything 'negative' about 'MLM?'
  • that all persons who refused to join you (particularly, those who said 'MLM' is a scam) were to be deemed 'negative' and a threat to your own success?
  • that all 'negative' persons were also to be deemed losers, whiners, etc., and should be excluded from your life?
  • that all persons with regular jobs were to be labelled 'Just Over Broke' losers?
  • that you should only have contact with 'positive winners?'
  • that you should regularly buy, and listen to, recordings of 'positive winners?'
  • that you should regularly buy tickets to, and attend, meetings conducted by 'positive winners'at which you took part in rythmic chanting and moving?
  • that you should regularly buy, and read, publications, written by 'positive winners?'
  • that you should exactly duplicate the 100% positive mental attitude and behaviour of the 'positive winners' in your 'Upline?'
  • that you should regularly visualize your 'dreams an goals' in life (luxury cars, expensive houses, exotic holiday destinations, etc.)
  • that you should fix images of your 'dreams and goals' in strategic places in your home? 
  • that 'all persons who develop a 100% positive mental attitude and never quit, ultimately achieve their dreams and goals in MLM?'
  • that you should borrow money to pursue your 'business?' 
  • that 'all persons who fail to achieve their dreams and goals in MLM, are negative losers, whiners, quitters etc., who always try to blame others, when they only have themselves to blame?'
30. As a result of duplicating the 'proven plan,' did you lose contact with anyone with whom you had previously been close (give brief details)?



  1. Super clear explanation. Thanks!

  2. Don't you think by attacking the media you are damaging your own message?

    1. Anonymous - I am only interested in the evidence-based truth. Thus, I am not 'attacking the media,' I am merely pointing out that certain journalists have completely failed to apply common-sense in their reporting of the 'LuLaRoe' fairy story. I cannot understand why these journalists have not asked to see quantifiable evidence to support the absurd anecdotal statements of the 'LuLaRoe' shills who were obviously pointed in their direction by the bosses of the racket.

  3. David - If LuLaRoe really did take in 2 billion last year from "sales," how much did the company lay out for the products???

    Where's the record of the total paid out to members?

    1. Anonymous - Thanks - these are two more common-sense questions which journalists have apparently not yet asked and which are central to the broader inquiry of what is the evidence-based truth lying behind the unoriginal 'LuLaRoe' fairy story.

      If the true financial performance of 'LuLaRoe' was calculated by adding up all the accumulated losses of its tens of thousands of transient non-salaried agents, then the company would be revealed as massively-insolvent. But all these losses have been deliberately hidden by off-loading them onto the ill-informed victims of the racket, making the 'LuLaRoe' front-company appear to be not just solvent, but massively-profitable.

      As I'm sure you know, 'MLM' products are only a cheaply-procured diversion. Thus, it is an absolute certainty that whatever revenue the 'LuLaRoe' company has actually been generating from what its bosses define as 'wholesale,' and 'shipping,' transactions, will represent a disgustingly large net-profit for them.

      Furthermore, the bosses have retained absolute control over what % of their company's revenue has been paid back to its agents. Although a record must exist, for obvious reasons, this key-information has not been publicly-disclosed.

      One only has to look on the Net to discover how cheaply basic-clothing can be bought wholesale from manufacturers in countries like China and India. In the real world, items that are retailed online and in US supermarkets and discount stores for dollars, cost cents wholesale.

      Back in the 1950s, in the original 'MLM' racket known as 'Nutrilite,' US law enforcement agents estimated that the product was being peddled 'wholesale' to 'distributors' at a mark-up of at least 1000% on its manufacturing cost.

  4. I've again been asked to explain what I mean by 'rigged market swindle?'

    About 20 years ago, I coined the common-sense phrase: 'dissimulated closed/rigged-market swindle,' as a brief overall formulation of what are popularly known as: Ponzi schemes, pyramid scams, money circulation games, chain-letter scams, etc. Although a few commentators have adopted my term, legalistically there is still no such thing as a 'dissimulated closed/rigged-market swindle.' That said, it is universally accepted that lying to, or withholding key-information from, people in order to take their money, is fraud which is a form of theft. Common-sense also reveals that, by passing any law, but failing to enforce it, has the effect of authorising the very crime which you were apparently trying to prohibit.

    The lie which is fundamental to all 'closed/rigged-market swindles' is that people can earn income by contributing their own money to participate in an (alleged) profitable commercial opportunity which is secretly an economically-unviable fake, due to the fact that the (alleged) opportunity has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own ill-informed participants. For more than 50 years, 'Multi-Level Marketing' racketeers have been allowed to dissimulate closed/rigged-market swindles by offering endless-chains of victims various banal, but grossly-over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products and/or services, can then be regularly re-sold for a profit in significant quantities. However, since no gang of 'MLM' racketeers has ever proved that their products/services have actually been regularly re-sold to the general public for profit in significant quantities (based on value and demand), 'MLM' participants have, in fact, been peddled infinite shares of their own finite money (in the false expectation of future reward).

    In the final analysis, other than their ephemeral external presentations, internally there is no real difference between all closed/rigged-market swindles; for any (alleged) opportunity to make money, wherein (when challenged, and/or rigorously investigated) the promoters are unable immediately to provide independent quantifiable evidence to prove that their (alleged) viable commercial activity has had any significant, and sustainable, source of revenue other than its own losing participants, is a fraud.