SEC Describes TelexFree as Having a “Disturbingly Cult-Like Quality”
Like many “multi-level marketing” companies, TelexFree has a disturbingly cult-like quality. Egged on by the company itself, promoters spoke of “reaching their dreams” and being “100% TelexFree.”
TelexFree’s promoter extravaganzas – in the United States, Brazil and Spain, among other places – were recorded and posted on YouTube. These events had a “boisterous . . . rock concert atmosphere,” at which crowds of promoters cheered James Merrill when he took the stage. Merrill would have the crowd “do the wave.”
As the “American face” of TelexFree, crowds of foreign promoters lined up to have their pictures taken with Merrill; his wife conceded that he was “treated like a minor celebrity.”
James Merrill is the co-founder of TelexFree. He’s currently in detention in the US, while his business partner, Wanzeler, has fled the country for his native Brazil.
If you’re reading this and are currently in an MLM, does any of this sound familiar? Do you feel like saying, “That might be the case with that company, but that’s not happening with mine?” Do you feel like defending your company with your last breath?
Ask yourself the question, “Why do I believe what I’m saying?”
As had been stated numerous times on this blog and others, the majority of MLM participants do not make much money each month after factoring in their expenses. Yet, they continue to attend seminars, prospect others, and purchase products — often just for self-consumption — month after month in the vain attempt to be one of the select few who make it big. At the same time, they persist in defending and deifying their leaders as paragons of virtue and business acumen.
Perhaps it’s because they’ve bought hook, line, and sinker, into the oft-quoted MLM phrase that “if the dream is big enough, the facts don’t matter.”
Unfortunately for TelexFree promoters, the facts are looming larger and larger, and it’s not looking good for the alleged pyramid and ponzi scheme. For Merrill, his “100% TelexFree” dream may be turning into a nightmare with the threat of a lengthy prison term.
My advice to MLM participants is to keep your dreams, but don’t ignore the facts. Your dreams can be independent of the business opportunity you’re currently enrolled in; despite what your leaders might say, they do not go hand in hand.