New evidence reveals the same old 'Amway' cultic racket.

The latest witness evidence revealing the ugly truth lurking behind the pretty façade labelled,  'Multi-Level-Marketing,' is being gathered and broadcast by a courageous Texan, Alanda Carter.

This evidence again confirms that the 'Amway' racket continues to be operated behind parallel labyrinths of privately-controlled, apparently independent corporate structures. This criminogenic Mafia-style system has been designed to divert, and/or obstruct, investigation and isolate the billionaire bosses of 'Amway,' and their criminal associates, from liability.

I can publish this shocking analysis without any fear of being challenged, because the first person in any sort of official position whom I ever complained to about 'Amway' (and my family's delusional belief in 'MLM') was a senior UK Trading Standards officer (in my family's region, Yorkshire). This was way back in the mid-1990s.

I actually met with this person and spent several hours with her. She gave me all this time, because she could immediately understand why 'Amway/MLM' was a pyramid scheme. 

At that time, even 'Amway's' own printed literature contained absurd income projections based on the number of recruits a participant acquired (and maintained) and on the number of further recruits these recruits acquired (and maintained), etc., ad infinitum.

My Ambot brother had even boasted to me that selling cleaning products to customers for 30% profit might be alright for some, but in the end it was a complete waste of time. In 'Amway' the really big money in 'MLM' came from exactly duplicating the Network leader's plan to achieve total financial freedom - buying about £100 worth of products each month and recruiting others to duplicate the same plan.

A light was switched on in the Trading Standards official's mind when she saw that the only real sales in 'Amway UK Ltd.' were to deluded people under contract to the company (like my brother) and who falsely believed that they could buy/recruit their way to wealth and freedom. 

Even at this early stage, I saw how pyramids can be identified, but I had wrongly assumed that law enforcement agents were taught that pyramids were rigged markets with little (or no) sources of revenue other than their own participants.

The same official later confessed that, because 'Amway' was so big, it was beyond her pay-grade to become directly involved. She passed my complaint to central government trade regulators in London. It then took them about 12 years, and literally dozens of informed communications, and finally a visit, from me before any investigation was launched

However, the UK investigation revealed that 'Amway UK Ltd.' had never once declared a net-trading profit in 34 years, and that more than $20 millions had been declared in net- losses in the last 10 years of the company's existence. On paper, cash from other 'Amway' corporate structures ('Amway Europe' which held shares in 'Amway Korea') was being secretly pumped into the British front company to keep it afloat.

So the obvious questions to ask were:

• Why had the bosses of 'Amway' kept pouring cash down what appeared to be a bottomless hole?
  

• Why did the same bosses now want to pour more cash (in the form of attorney fees) down the same bottomless hole in order to preserve it?

The answer being that 'Amway UK Ltd.' had been the slightly unprofitable bait in a very profitable trap.

Privately, UK trade regulators agreed with my estimate that up to one billion $ had been generated via the peddling of a fraudulent step-by-step plan to achieve success to a never-ending chain of non-salaried contractees of 'Amway UK Ltd.' This related advance fee fraud had been conducted behind a parallel labyrinth of corporate structures which appeared to be independent of 'Amway'.

Predictably, these parallel structures were immediately closed when the UK investigation of 'Amway' was launched, and their owners were excommunicated from 'Amway' for breaking the rules.

No investigation was pursued into the 'Amway' racket in the UK after the front-company's officers lied to a High court judge about their long-time knowledge of this privately-controlled corporate structure's unlawful purpose and, thus, the permanently-insolvent UK 'Amway' front-company survived a public interest bankruptcy petition and it still exists to this day.

As a direct result of the ongoing failure of UK regulators, and law enforcement agents, to protect their employers (the public), currently, 200 000 - 300 000 UK citizens are being churned through 'Amway' copy-cat  'MLM' cultic rackets annually.

David Brear (copyright 2019)

________________________________________________________________________________


'Multi-Level Marketing' Warning.



The following deconstructed analysis has been formulated to sharpen the critical and evaluative faculties of all unwary persons approaching so-called 'Multi-Level Marketing' from the dangerous (subjective) point of view that it must be a business/industry, rather than from the safe (purely-objective) point of view that they don't really know what it is.

_________________________________________________________________________

More than half a century of quantifiable evidence proves beyond all reasonable doubt that:

• the widely-misunderstood phenomenon that has become popularly-known as 'Multi-Level Marketing' (a.k.a. 'Network Marketing') is nothing more than an absurd, non-rational,  cultic, economic pseudo-science maliciously-designed to lure unwary persons into de facto servitude, dissociate them from external reality and not only steal their money, but also deceive them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 

• the impressive-sounding made-up jargon term, 'MLM,' is therefore, the misleading title for an enticing structured-scenario of control which has been developed, and constantly acted out as  reality, 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 'Long Cons*'  - comprising self-perpetuating rigged-market swindles**, a.k.a. 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 shills (whose leading-role in the 'Long Con' has been to pretend that anyone can achieve financial freedom simply by following their unquestioning example and exactly-duplicating a step-by-step-plan of recruitment and self-consumption), the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.

________________________________________________________________________

*A 'Long Con' is a form of fraud maliciously designed to exploit victims' existing beliefs and instinctual desires and make them falsely-believe that they are exercising a completely free-choice. 'Long Cons' comprise an enticing structured-scenario of control acted out as reality over an extended period. Like theatrical plays, 'Long Cons' are written, directed and produced. They involve leading players and supporting players as well as props, sets, extras, costumes, script, etc. The hidden objective of 'Long Cons' is to convince unwary persons that fiction is fact and fact is fiction, progressively cutting them off from external reality. In this way, victims begin unconsciously to play along with the controlling-scenario and (in the false-expectation of future reward) large sums of money or valuables can be stolen from them. Classically, the victims of 'Long Cons' can become deluded to such an extent that they will abandon their education, jobs, careers, etc., empty their bank accounts, and/or beg, steal, borrow from friends, family members, etc.

_________________________________________________________________________

** The enticing structured-scenario of control fundamental to all 'rigged-market swindles' is that people can earn income by first contributing their own money to participate in a profitable commercial opportunity, but 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 rigged-market swindles by offering endless-chains of victims various banal, but over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products/services can then be regularly re-sold for a profit in significant quantities via expanding networks of distributors. However, since 'MLM' products/services cannot be regularly re-sold to the general public for a 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). 

Thus, in 'MLM' rackets, the innocent looking products/sevices' function has been 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 sustain the enticing illusion of stability and viability.

Meanwhile an insignificant (permanent) minority direct the 'Long Con' - raking 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.

Although cure-all pills potions and vitamin/dietary supplements, household and beauty, products have been most-prevalent, it is possible to use any product, and/or service, to dissimulate a rigged-market swindle. There are even some 'MLM' rackets that have been hidden behind well-known traditional brands (albeit offered at fixed high prices). Some 'MLM' rackets have included 'cash-back/discount shopping cards, travel products, insurance, energy/communications services' and 'crypto-currencies' in their controlling scenarios.

No matter what bedazzling product/service has been dangled as bait, 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 for anyone prepared to put in some effort, the products/services can be sold on for a profit via expanding networks of distributors based on value and demand. In reality, the underlying reason why it has mainly only been (transient) 'MLM' contractees who have bought the various products /services (and not the general public) is because they have been tricked into unconsciously playing along with the controlling scenario which constantly says that via regular self-consumption and the recruitment of others to do the same, etc. ad infinitum, anyone can 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 that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

Part of the key-information that 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 penny of net-profit, let alone a living, in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Although a significant number of 'MLM' front-companies (like 'Vemma', 'Fortune Hi-Tech Marketing', 'Wake Up Now') have been shut-down by commercial regulators, some of the biggest 'MLM' rackets (like 'Amway' ,'Herbalife', Forever Living Products' ) have continued to hide in plain sight whilst secretly churning tens of millions of losing participants over décades.

The quantifiable results of the self-perpetuating global 'Long Con' known as 'Multi Level Marketing,' have been fiendishly hidden by convincing victims that they are 'Independent Business Owners' and that any losses they incurred, must have been entirely their own fault. 

Blog readers should observe how (in the above linked-videos) chronic victims of 'MLM' cults are incapable of describing what they were subjected to in accurate terms. Even though they are no longer physically playing along with the 'Long Con's' controlling-scenario, they unconsciously continue to think, and speak, using the jargon-laced 'MLM' script - illogically describing themselves as 'Distributors.' 

Chronic victims of blame-the-victim cultic rackets who have managed to escape and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For years afterwards, recovering cult victims can suffer from psychological problems (which are also generally indicative of the victims of abuse):

depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness, fear of forming intimate relationships; inability to trust; etc.  

David Brear (copyright 2019)

Robert FitzPatrick's latest analysis of the pernicious 'MLM' fairy story.

Multi-Level Marketing Brands Are Taking A Terrible Beating

By: Robert FitzPatrick

Summary

Stock market drops and flat or declining revenues for the multi-level marketing, MLM, sector, e.g., Herbalife, Nuskin, Tupperware, Avon, indicate a downward shift in fortune. The cause is being debated.

Wall Street may choose to overlook MLM ethics, tactics and its negative social and financial consequences, but cannot ignore the decline in the MLM "brand" on Main Street.

In particular a popular new series on Showtime depicting MLM as a "scammy pyramid scheme" indicates the "brand" of MLM is being discredited, ridiculed and widely viewed as socially harmful.

The MLM industry is publicly reacting to the Showtime series, urging MLM companies not to "overreact" for fear of "creating a perception that the show has hit a nerve or hit too close to home – that it’s revealing a ‘hidden truth”.

On August 4, Seeking Alpha published my analysis, “Wall Street: Still Confused About 'Multi-Level Marketing' But Starting To Hedge Bets” in which I presented the supporting statistics and analyzed the recent, drop in aggregate value of a dozen companies identified as “multi-level marketing.” These include Herbalife (HLF), Nuskin (NUS), Avon (AVP) and Tupperware (TUPP), among others.

The aggregate equity of 10 of 12 of the MLMs had lost over a third of its value since the beginning of 2019. Iconic companies of this sector, Avon and Tupperware, showed morbid value drops. Flagship Herbalife was down 31% from the start of the year. The twelve companies together were down over 20% for the year at that point.

Since the article’s publication the root cause for this drop has been discussed among commenters. Some pointed to the conventional issues of threatening regulation in China and Herbalife’s revenue miss as cause for an industrywide equity meltdown. Others contested my premise that Wall Street is beginning to better understand and is growing uncomfortable with MLM’s pyramid model, deceptive practices and associated consumer losses. They argued that these nasty realities have been fully known by Wall Street for years and dismissed as irrelevant by portfolio managers. My own consultations with analysts and managers verify that many privately hold that MLM is pyramid fraud causing near total losses for new recruits, but they do not regard that fact pertinent to their investments decisions, so long as the public buys the promises, the enterprises are profitable and the government stays under the thumb of the MLM lobby.

For my part, with a month of further reflection, I have come to see that another factor, not measured or reported in SEC filings and separate from any considerations of legality or regulation, is the primary factor for this silent Wall Street pullback from the MLM sector. It is a realization on Wall Street of a new and growing awareness on Main Street of the negative realities of the MLM. Big Lie deception, illegality and negative social costs aside, astute analysts are observing what may be called the decline of the MLM “brand.”

With Donald Trump, the most famous MLM promoter, in the Presidency and overseeing the FTC, Amway’s Betsy Devos in the Cabinet and Carl Icahn, the savior of Herbalife, having the President’s ear on regulations, this would seem to be MLM’s golden era. Yet, overall revenue in the USA has declined and MLM’s image is unraveling. MLM's “brand” is starting to smell bad even from the distance of Wall Street, and even without a full understanding of the model.

Brands are elusive entities, often consisting of almost nothing beyond buzz, spin and hype. They connect intangible factors of fame, distinction, status, identity, even spirituality with lifeless goods or ordinary enterprises. But MLMs do not have brands in the same way that conventional companies do. Some MLMs have almost no "customers" at all other than their own “distributors” and most of them last less than a year. MLMs do not advertise. Few people even know of or have ever used the products of MLMs before being enrolled. What is Amway’s vitamin called? Tupperware reported that half its North American sales were “cosmetics, skin care and personal care products.” Have you tried “ Supreme Musk”, a fragrance for men, by Tupperware? And, what would make Avon’s lipstick better than a hundred others?

MLM’s “brand” is not based on products or on company culture, customer loyalty or on new technology or social or political values. The brands of all MLM companies are one and the same, "multi-level marketing" itself, the contradictory business model, involving recruiting your own competitors and “being your own customer.” Arguably, MLM can’t be understood by business analysts because it more closely resembles a cultic religion than a business. If it is a business, its real products are not just intangible; they don’t exist at all. Multi-level marketing, a meaningless term invented by its promoters, is a magical land of utopian promises involving infinite distribution channels, non-diminishing markets, wealth beyond imagination, total happiness. The roadmap to these heavenly rewards, after paying entry and monthly costs, is the hallmark MLM pay plan, which a math major could not decipher. Math aside, each and all require “endless chain” recruiting and they always produces the same outcome: the majority of all “commissions” wind up in the hands of the top 1% of recruiters, kind of like a pyramid scheme always does.

MLMs that try to rely on product preferences, as Avon and Tupperware have as holdovers from an earlier era when direct selling was a real thing, are punished in the MLM market by other MLMs that sell utopia for a price. MLM’s customers are not seekers of MLM goods. Indeed, MLM products are not distinctive and have no price, efficacy or quality advantages. MLM’s recruits are aspirants and believers in the American Dream. They are lured by MLM’s income promises. Many are desperate, at dead-ends financially. They are debt-laden students foreseeing only low paying jobs or undocumented immigrants seeking survival. They are struggling military spouses with partners in multiple deployments. Many are in stress and anguish or quiet despair. Some are seeking to alleviate loneliness, anomie and a sense of worthlessness, based on their dwindling economic status or mounting family debt. As the famous 60 Minutes exposé of Amway in the 1980’s showed, MLMs sell hope. Of course, as that news analysis and others have shown, the hope is false. 99% of all enrollees each year do not gain a profit and 50-80% are churned annually. This is not due to competition or chance but dictated by the recruiting model. Their losses become the "profits" for the “winners” at the top of the recruiting chains.

So, it is not MLM products or particular MLM companies that have lost brand luster. It is MLM’s promises of “income opportunity” and MLM's very identity as “direct selling” that are losing credibility. This is an existential disaster for the MLM “industry.”

The waning appeal of brands, of course, is a natural market phenomenon. From Apple Newtons, to Minolta, Oldsmobile, and Zayre, brands come and go. But, MLM faces a more profound brand decline, its very claim to existence. When the MLM promise of “unlimited income” becomes the joke that John Oliver famously made of it on his show in November 2016, all MLMs are vitally endangered. When, as comic Samantha Bee noted, the very mention of MLM makes people “cringe,” no amount of PR can repair the business.

The latest and most damaging cultural critique of MLM has come in a Showtime series, starring Kirsten Dunst, titled, “On Becoming a God in Central Florida,” which is getting rave reviews. Showtime, which is owned by CBS, is available to 29.7 million households in the U.S and more than 400 million globally. Here’s how Showtime advertised the series on the Daily Beast in a September ad presented to look like a news article, headlined, “ OMG MLM, Could You Rise To The Top Of A Pyramid Scheme?

“What do patterned leggings, woven baskets, essential oils, knives, and powdered smoothie greens have in common? They've all been hawked (probably to you, probably on Facebook, probably by a former babysitter or someone equally tertiary ) as part of a multi-level marketing company, commonly known as a pyramid scheme. These scammy companies are on full blast On Becoming A God in Central Florida, the new original dark comedy series from Showtime.”

Above the text of the faux news article is a real phone number – 833-585-3242 – inviting readers to call in to join Founders American Merchandise, FAM, the fictional MLM in the series. I called. The recorded message is a dead-ringer for the hype and rhetoric that make up the MLM “brand,” which the series is now demolishing. I believe astute investors in MLM stocks are watching this brutally accurate portrayal of MLM-world along with others that have preceded it in recent years on TV, the web, podcasts and film, and they are questioning how on earth MLM will cope.

The brainwashing recruiting and retention tactics that MLM is famous for and which close off critical thinking and reality itself – love-bombing new recruits, utopian dream sessions, thought-stopping slogans, pageantry, dramatic “testimonials”, assertions that MLM’s promises always come true for believers and only doubters lose, promises of happiness and fulfillment by self-anointed prophets with accompanying demands for unquestioning loyalty, belief and obedience – are on full display in the series. But, these methods only work when the recruits have no authoritative resource to pull back the curtain and reveal a little guy pulling levers and operating a smoke machine. If that is available to them, the razzle-dazzle, the lights, the music, the extravaganzas, all collapse into a heap of cheap props. This is now happening with this popular series and other developments, for the first time.

I can attest to this tectonic shift in perception, having myself sought to debunk MLMs with facts, analysis, court testimony, data and logic for more than two decades, to little effect. During those years, MLM was largely absent from the news media, unmentioned in films and TV series, ignored by journalists or even consumer protection groups. Though tens of millions of Americans were enrolled and invested and lost money, the publishing industry did not issue a single book examining the phenomenon. The business media took no interest. During the G.W. Bush administration there was virtually no mention of MLM at the FTC, led by Timothy Muris, a future MLM lobbyist. MLM was everywhere on Main Street, yet seemingly invisible – like the lives and values of people in “fly-over” states – to pop culture producers, mainstream news outlets, publishers and academia.

Not anymore. Today, among other blogs and websites the anti-MLM Reddit has unleashed a deluge of outrage, mockery, YouTube channels, real-life stories of loss and lying, bold truth telling and savvy analysis. Many of the bloggers are fearless. They are calling MLM "cults". They are saying it is engaged in "brainwashing." They are facing down the MLM “bots” and “hons” that inhabit social media in search of recruits and who disguise solicitations to join MLM pyramids as innocent social invitations. They defy MLM’s history of SLAPP suits and “non-disparagement” contract clauses. They are not lost in the labyrinth of "good" and "bad" MLMs, but attack the model entirely. They are not afraid to call MLMs "cults" and they use terms such as predator, lie, abuse, and theft. Anyone invested in a MLM stock who has not recently perused the "anti-MLM" cyberspace, does so at their own peril.

MLM Response

As if it never happened, MLM moved swiftly past Bill Ackman’s four-year campaign to expose Herbalife as a pyramid scheme, and Herbalife’s stock rose triumphantly, for a time. Since Herbalife gained such a sweet deal from the FTC after hiring the FTC’s previous Chairman, Jon Leibowitz, the FTC staff findings of consumer losses, fake income promises, lack of retail and phony “nutrition clubs” were swept under the rug. The documentary about that campaign, Betting on Zero, that won cinematic awards and is popular on Netflix was dismissed as biased. John Oliver’s hilarious take-down of the whole MLM industry as a pyramid scheme on HBO and later viewed by 20 million more on YouTube was ignored as just comedy and satire. A probing and disturbing podcast, The Dream, was similarly dismissed as marginal even with more than five million listeners. But the Showtime series, “On Becoming a God in Central Florida,” with its dramatic re-enactment of MLM and with actors looking just like characters millions of people have encountered in their own lives pitching and recruiting MLM, this could not be ignored.

On Sept. 3, the editor and publisher of MLM’s main trade magazine, Direct Selling News, directly addressed the Showtime Series. Ironically, from an industry famous for teaching that reality is determined by perception, in the hallmark MLM aphorism, “Fake it till you make it,” he entitled his essay, “Perception Does Not Have to be Reality.” The subtitle revealed the cause for the reversal: "We need to be more proactive in dealing with our channel’s negative perception.”

He noted, “The first five minutes of the first episode is packed with cringe-worthy network marketing stereotypes,” and admitted the series “will provide naysayers enough network marketing meme clips to fill our social media channels for years to come."

Why the public’s perception is wrong, what the bases are for the “cringe-worthy stereotypes” and why only “naysayers” would find useful material in the series are not directly addressed, except with a blanket claim that MLM does not resemble its portrayal on the show. Yet, even that denial was qualified, noting:

The misunderstandings of our industry are sometimes rooted in truth. There are people who have behaved badly, and maybe we haven’t always corrected those bad behaviors quickly enough.

Which “people”? What “behaviors”?

Admitting the show, in his own view, is not entirely unreal, he moved toward proposing an industry reaction by quoting the head of Sunwest Communications, a Dallas-based PR firm that claims “years of extensive experience working with direct selling companies, and the industry as a whole… to help enhance and protect their reputation.”

The Sunwest official urged the industry not to “overreact”, due to a “risk that we create a perception that the show has hit a nerve or hit too close to home – that it’s revealing a ‘hidden truth,” adding “ that’s certainly not the case.”

To further tamp down any tendency to “overreact” the Direct Selling News’ publisher questioned whether many MLMers would ever even see the show since it is on a “premium” channel. The PR firm CEO went further to impugn the motives of the lead actor, Kirsten Dunst, for her previous roles “mocking both cheerleaders and (beauty) pageants.”

It is unknown to what degree this Showtime series will affect public perception that translates to an impact on recruiting. The FTC is in a state of ruin and regulatory capture after the Herbalife debacle so no government interference in the USA is on the horizon. The mainstream media still reflexively treats MLM as “legitimate” while calling out some companies for certain unexamined behaviors, exploring no deeper. Academia and the publishing world continue to ignore the entire phenomenon. Yet, civil society, on its own and without authoritative institutions, is finding the truth about the MLM business model, the cause of the consumer losses and the dangerous cultic methods employed by MLMs.

MLM can try to have it both ways with two parallel universes: in one it tells recruits that the perception carefully constructed by MLM promoters is reality, but in the other tells them what they see, hear and directly experience in the open, public marketplace should be ignored as not real. Like the Groucho Marx joke, MLM is saying, "Who are you going to believe, me or your own eyes?"

Wall Street managers, accountable to investors, live in the world where reality shapes perception. The reality of multi-level marketing as a massive scam is now on Showtime, YouTube, Netflix, HBO, the Comedy Channel, the web and radio.

Robert FitzPatrick (copyright 2019)

________________________________________________________________________________
'
Multi-Level Marketing' Warning.



The following deconstructed analysis has been formulated to sharpen the critical and evaluative faculties of all unwary persons approaching so-called 'Multi-Level Marketing' from the dangerous (subjective) point of view that it must be a business/industry, rather than from the safe (purely-objective) point of view that they don't really know what it is.

_________________________________________________________________________

More than half a century of quantifiable evidence proves beyond all reasonable doubt that:

• the widely-misunderstood phenomenon that has become popularly-known as 'Multi-Level Marketing' (a.k.a. 'Network Marketing') is nothing more than an absurd, non-rational,  cultic, economic pseudo-science maliciously-designed to lure unwary persons into de facto servitude, dissociate them from external reality and not only steal their money, but also deceive them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 

• the impressive-sounding made-up jargon term, 'MLM,' is therefore, the misleading title for an enticing structured-scenario of control which has been developed, and constantly acted out as  reality, 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 'Long Cons*'  - comprising self-perpetuating rigged-market swindles**, a.k.a. 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 shills (whose leading-role in the 'Long Con' has been to pretend that anyone can achieve financial freedom simply by following their unquestioning example and exactly-duplicating a step-by-step-plan of recruitment and self-consumption), the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.

________________________________________________________________________

*A 'Long Con' is a form of fraud maliciously designed to exploit victims' existing beliefs and instinctual desires and make them falsely-believe that they are exercising a completely free-choice. 'Long Cons' comprise an enticing structured-scenario of control acted out as reality over an extended period. Like theatrical plays, 'Long Cons' are written, directed and produced. They involve leading players and supporting players as well as props, sets, extras, costumes, script, etc. The hidden objective of 'Long Cons' is to convince unwary persons that fiction is fact and fact is fiction, progressively cutting them off from external reality. In this way, victims begin unconsciously to play along with the controlling-scenario and (in the false-expectation of future reward) large sums of money or valuables can be stolen from them. Classically, the victims of 'Long Cons' can become deluded to such an extent that they will abandon their education, jobs, careers, etc., empty their bank accounts, and/or beg, steal, borrow from friends, family members, etc.

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** The enticing structured-scenario of control fundamental to all 'rigged-market swindles' is that people can earn income by first contributing their own money to participate in a profitable commercial opportunity, but 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 rigged-market swindles by offering endless-chains of victims various banal, but over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products/services can then be regularly re-sold for a profit in significant quantities via expanding networks of distributors. However, since 'MLM' products/services cannot be regularly re-sold to the general public for a 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). 

Thus, in 'MLM' rackets, the innocent looking products/sevices' function has been 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 sustain the enticing illusion of stability and viability.

Meanwhile an insignificant (permanent) minority direct the 'Long Con' - raking 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.

Although cure-all pills potions and vitamin/dietary supplements, household and beauty, products have been most-prevalent, it is possible to use any product, and/or service, to dissimulate a rigged-market swindle. There are even some 'MLM' rackets that have been hidden behind well-known traditional brands (albeit offered at fixed high prices). Some 'MLM' rackets have included 'cash-back/discount shopping cards, travel products, insurance, energy/communications services' and 'crypto-currencies' in their controlling scenarios.

No matter what bedazzling product/service has been dangled as bait, 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 for anyone prepared to put in some effort, the products/services can be sold on for a profit via expanding networks of distributors based on value and demand. In reality, the underlying reason why it has mainly only been (transient) 'MLM' contractees who have bought the various products /services (and not the general public) is because they have been tricked into unconsciously playing along with the controlling scenario which constantly says that via regular self-consumption and the recruitment of others to do the same, etc. ad infinitum, anyone can 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 that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

Part of the key-information that 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 penny of net-profit, let alone a living, in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Although a significant number of 'MLM' front-companies (like 'Vemma', 'Fortune Hi-Tech Marketing', 'Wake Up Now') have been shut-down by commercial regulators, some of the biggest 'MLM' rackets (like 'Amway' ,'Herbalife', Forever Living Products' ) have continued to hide in plain sight whilst secretly churning tens of millions of losing participants over décades.

The quantifiable results of the self-perpetuating global 'Long Con' known as 'Multi Level Marketing,' have been fiendishly hidden by convincing victims that they are 'Independent Business Owners' and that any losses they incurred, must have been entirely their own fault. 

Blog readers should observe how (in the above linked-videos) chronic victims of 'MLM' cults are incapable of describing what they were subjected to in accurate terms. Even though they are no longer physically playing along with the 'Long Con's' controlling-scenario, they unconsciously continue to think, and speak, using the jargon-laced 'MLM' script - illogically describing themselves as 'Distributors.' 

Chronic victims of blame-the-victim cultic rackets who have managed to escape and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For years afterwards, recovering cult victims can suffer from psychological problems (which are also generally indicative of the victims of abuse):

depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness, fear of forming intimate relationships; inability to trust; etc.  

David Brear (copyright 2019)