MLM Scams

mlm-scams

by Matt Weik

These days it seems there’s always someone around the corner who is trying to rip you off. They are waiting for an uneducated person to prey on and to put it bluntly, steal their money. Some companies are lying to their consumers willfully and have no remorse for their actions or business practices. I’m not going to name any names but if you follow industry news you will know that there are a few Multi-Level Marketing companies out there who are currently being sued for illegal practices—pyramid schemes. If you’re like me, you probably get emails and messages from distributors and people associated with these terrible businesses regularly. It seems as if I get at least one every day and that’s no joke. Frankly, I find it annoying—on many levels.

9 times out of 10 when I get a message from someone who is part of a MLM company, they have absolutely no idea what they are talking about other than the fact that they whole-heartedly believe that their products are the best on the market and can “change your life.” Well it can change your life, by draining your bank account and getting zero results from the products. These are impressionable individuals who can easily be convinced that something is great without knowing anything about it or even asking any questions. Rarely do they ever have any type of background or education that would validate they know what they are talking about. Some of the people selling MLM products look like they never worked out a day in their life or know how to stop putting a fork in their mouth. MLM as a whole is not only terrible for the industry, but it’s terrible for business in general.

How does this scam work?

It’s actually quite easy. The company sets up a few distributors (people out in the community who they consider “leaders”) for their MLM business. They then have those people go out and recruit more cronies to work under them and their umbrella. So when those individuals go out and sell, not only does the initial distributor get money, but so does the MLM company. Then the people who were under the first “distributor” start to bring people on under them. And so on and so on. The pyramid scheme is then built. The people at the top make the most money while the others under them make a little less. This isn’t necessarily about selling products to a consumer as it is building a “network”.

Many MLM companies seem to be more worried about this “network” than anything else—including making sales and moving product. Some of these MLM businesses pay out bonuses to distributors who recruit the most people to join under their individual network as well as paying for leads on new recruits. The Federal Trade Commission (FTC) has been investigating many of these MLM business and digging deep into their business practices to see if legally they are following all laws.

The FTC has shut down businesses in the past for pyramid schemes. It seems like more are on their way of getting shut down as well while others will simply get slapped on the wrist and have to pay a fine. Some MLM’s will even lie about their business practices just to make the FTC go bother someone else. Everything about MLM is shady and should be avoided at all costs. Joining a MLM business is like making a deal with the devil. There’s no positive outcome in sight.

Why are MLM businesses bad for the industry?

This is actually a no-brainer if you ever sat down and asked the individuals selling these products how they work. What are the ingredients? What do those ingredients do in order to yield the results they claim? MAJORITY of these individuals have zero knowledge other than the fact they are told they can make a nice commission each month for selling the products. All they need to do is go out and tell all their friends that they are a rep for this company and selling their snake oil, I mean nutritional products. Their friends trust what they are being told and buy into this terrible business model. Not to worry though, they will quickly find out that the products they are using are not doing anything for them and will eventually stop purchasing them.

Many of the MLM companies out there on the market today will hold meetings or conferences in a luxurious location and invite all of their distributors and networks to come to the presentations to learn all about the new programs launching, new products, and sales techniques. They make it look all glamorous to ooh and aah people into thinking they are a profitable and legit business. Some even go as far as allowing these people to bring friends in hope that they will come on board and start selling their products as well. They tout all the positives going on with the company and the network that they have built across the US. They pull up to the meeting/conference in a fancy car and dressed to impress. The distributors and their henchmen hear about all the commission checks that are being sent out every month and how people are making upwards of six-figures a year by only having to work part-time. Honestly, I’m sitting here shaking my head as I type this, that’s how disgusted I am with these MLM businesses and their unlawful business practices and blatant lies.

I know quite a few people who have bought into the BS that MLM businesses feed into the minds of the gullible. And to be completely honest, these people are some of the dumbest individuals I have ever met in my life. When they tell me what they are doing these days and tell me they are with a MLM business, I think to myself “I should have seen that coming.” Most of them jump from job to job and don’t hold any real skills. Then along comes an opportunity with a great MLM company (sarcasm) who says they hold the power to make a difference in the world and make a living from selling their amazing nutritional products (sarcasm again). They easily buy into the lies and jump on board to make more money than they could have ever imagined each month (sigh). Then, they start spamming everyone they know in order to get their feelers out there on who they should try and sell to. I would say that 99% of the people reading this are people that would never buy into this scam and purchase from these individuals.

Athletes

Oh my gosh! Did you hear the new athletes these MLM companies hired! It’s amazing! The products have to be legit if a pro athlete is endorsing it! How exciting! Or better yet, how laughable. If you think for one minute that these professional athletes are using their products, I have some swamp land I can sell you for cheap. The only thing they are using from the MLM business is the paper and ink their checks are printed with. These athletes are laughing all the way to the bank.

Pro athletes don’t give a rat’s ass about the brand or the products—all they see are dollar signs for throwing their signature on a contract. Snap a few pictures holding the product with a smile for social media or print advertising, maybe a commercial, possibly a contest to win a trip to hang out with this athlete, etc. They’ll even go as far as to say that their success in their respective sport is due to them using these products. It’s total BS. The MLM business will use and abuse this athlete and drain every last drop of energy out of all their athletes to get their money’s worth from using their name and image. It’s a total sham.

So what’s the outcome?

The outcome is one of two things. Either the business is considered legit even though the peddlers out selling the products on the streets have no clue what they are talking about and are some of the most uneducated individuals in the industry, OR the FTC will investigate their business, make their life a living hell and fine the pants off of them or get them shut down.

In my opinion, the best thing you can do is stay as far away from MLM businesses and their sales mongrels as you can. Run, hide, turn off the lights in your house, do whatever you can to avoid them like the plague. Nothing good will come from these types of businesses and those selling their products. If you work for one of these companies, you are literally the laughing stock of the industry and any credibility that you once had, is gone with the wind.  


www.ironmaglabs.com


www.ironmaglabs.com

CLOSE
CLOSE