YPR Pariah, the blogger who has writing about the dark side of the MLM company Vemma, wrote a nice post entitled Why Edification Sucks. Edification is used throughout the MLM industry as a means to make the lowest-level member believe that his uplines (and their uplines and their uplines and so on) are people worth following. YBR Pariah calls this practice a “loan of credibility” which makes the top MLM leaders appear almost infallible in the eyes of their followers — even when confronted with facts to the contrary.
The best way for someone in an MLM to take his blinders off is to go and look at how leaders from other MLM companies are edified by their membership. Is it in any way similar (or nearly identical) to how edification is being conducted within his organization? Why is that? What is the true purpose behind edification?
The path to truth starts with asking the right questions.
This news came in earlier in the month. Akira Tamai, an Imperial Black Diamond in MonaVie based in Japan, neglected to report and pay taxes on his earnings from the purple juice company between the years 2010 and 2012. The Tokyo Regional Taxation Bureau reported that about ¥100 million, or nearly one million US dollars, of taxes were owed from the ¥280 million in income he received from MonaVie.
Tamai’s lawyer had this to say about his client:
“His knowledge of tax matters was lacking. He intends to properly pay his taxes in the future.”
The article notes that Tamai has since declared his income and paid his taxes.
The MLM Petition exposed me to other individuals who are combating MLM companies of dubious repute. Here are a few that you should check out.
A MLM Skeptic encourages people to take a critical and skeptical approach with MLM or income opportunities. The Bad Arguments section is an especially good section to see how to combat the tactics by MLM scammers. His recent story “17 Signs that You’re In a Sales Cult, or How a Sales Cult is like the Borg” is very apropos.
Behind MLM is a good site to get news about MLM companies from around the world. Oz, the person who runs the site, also reviews MLM companies. If you don’t see your MLM on his list, send him a note to review it.
YPR Pariah focuses on the Vemma MLM. Go here if you want to get a deeper insight into how a specific MLM operates. You’ll find many similarities in how Vemma works compared with the MLM that you might have been involved in.
I’m proud to support the MLM Petition, an international coalition of consumer advocates that recently filed a petition to the Federal Trade Commission. We’re asking the FTC to “investigate the multi-level marketing industry and protect consumers from fraudulent and deceptive practices.”
Many critics of MLMs run their sites independently from one another. I see MLM Petition as a great resource for bringing these voices together in the effort to prevent consumers from falling prey to dubious multi-level marketing schemes.
The Securities and Exchange Commission recently shut down a pyramid scheme that “purportedly sold Internet-based children’s educational courses.” Promoters of “CKB” and “CKB168″ snookered 400 investors in the US to pony up $20 million, with millions of dollars more raised in countries with significant Asian populations. The majority of the money, the SEC claims, went to the executives of CKB and promoters of the pyramid scheme; there was little to no evidence that real-world consumer sales were being made.
From the SEC press release:
“CKB’s operators and promoters profited by abusing relationships of trust within the Asian-American community and promising investors they can earn more money by recruiting other investors instead of selling actual products,” said Antonia Chion, an associate director in the SEC’s Division of Enforcement. “What CKB really sells is the false promise of easy wealth.”
The SEC also released an investor alert with more information on how consumers can educate themselves on pyramid schemes that masquerade themselves as multi-level marketing companies.
Darrin Moret’s story about his brief venture into a pyramid scheme was first published a month and a half ago and was also mentioned on this site. His tale just got a whole lot more attention after his appearance on National Public Radio two days ago.
Also on the program was consumer affairs columnist Sheryl Harris of The Plain Dealer in Cleveland. Harris clears the confusion regarding multi-level marketing companies and pyramid schemes. In legitimate MLMs, the majority of sales are to outside customers — i.e. the general public. In a pyramid scheme, it’s the participants within the scheme who are the primary purchasers of the product. Harris says that people in pyramid schemes are recruiting all the time.
Here are two articles from around the web that readers of this site may find interesting:
First, actress Leah Remini talks about her split from Scientology with Ellen DeGeneres.
“We’ve lost friends that can no longer talk to us and are still in the organization”
“These are friends that we’ve had for dozens of years.”
It’s common within cults and multi-level marketing companies for ex-members to be shunned by those still within these organizations. Those who quit are often called names like losers and traitors.
Fortunately for Remini, she had a support group outside of Scientology that she was able to lean on following her departure. She is planning to write a memoir of her time in the organization. Talking to People Magazine, she hints at some of her reasons for leaving:
“I believe that people should be able to question things. I believe that people should value family, and value friendships, and hold those things sacrosanct. That for me, that’s what I’m about. It wouldn’t matter what it was, simply because no one is going to tell me how I need to think, no one is going to tell me who I can, and cannot, talk to.”
Does your current or former MLM organization allow for free-thinking and questioning?
Second, college student, Darrin Moret, shares his story of how a college student got recruited into a multi-level marketing scheme. Moret’s description of the opportunity meeting sounds very similar to the ones described here on this site. I would be interested in seeing a demographic breakdown of MLM companies. Are most of the new recruits in the college or just-out-of-college age range?
Moret describes the typical scene at many MLM conferences:
I was completely unaware of all this when, on my first weekend as an associate, I was pressured into attending a full-day, unpaid sales conference in Orange County. Company associates from all over Southern California converged on the convention center in Anaheim to hear from some of the top names in the company. The vibe was more cultish than corporate. As if on cue, those in the congregation would rise, clap, and sit back down before and after every speech, and would listen intently to every word being said as if it contained the key to their success.
Go read Moret’s testimony and share what similarities you see with your former MLM.