Multilevel Marketing Scam

Vitamins, Herbs, Cosmetics, Oh My!

Have you been cornered by a friend to get in on a sure-thing moneymaker? I have. Multilevel Marketing, or Network Marketing is a form of direct sales of products by independent distributors. Amway, Isagenix, Herbalife, Arbonne and Nu Skin represent a few of the companies named in the top 25 on Nexera e-News.

MLM or Networking Marketing ventures are also likened to Pyramid schemes. The origin of Pyramid schemes can be traced back to 1600 England.  According to the Federal Trade Commission:

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.

Amway or Quixtar has recently settled a lawsuit brought on by former IBO’s (Independent Business Owners), Jeff Pokorny, Larry Blenn and Kenneth Busiere. They argued that Amway violated several state and federal laws, including:

  • Recruiting IBOs in an illegal scheme
  • Misrepresenting the amounts of profits that IBOs could earn
  • Persuading IBOs to buy overpriced products and business support materials

According to Joecool44 on

The settlement exists to avoid the cost and risk of going to trial. If you were an IBO between January 1, 2003 and February 21, 2012, you have a right to a cash payment or free products. Agreeing to be part of the settlement class means that you cannot sue Quixtar nor tools companies regarding these claims in the future. You can also object to the settlement, but you would still be part of the Class — and as a result, cannot sue in the future.

The final option — the one that keeps retains your ability to sue Quixtar and BSMs in the future — is to exclude yourself from the settlement by writing a letter to:

Quixtar Settlement Exclusions/Objections
PO Box 8035
Faribault, MN 55021-9435

 MLM’s are not necessarily scams for everyone however.  In many cases people who actually enjoy a benefit from products not necessarily available on the open market can use the MLM to simply subsidize a product they would buy anyway.

But if you’re getting into it to attain massive wealth, either get in very early or have a ton of friends and family to bother.  Consider this:

Active 8 Products sells vitamins that help maintain weight, relieve pain, provide additional health and nutrition, and beautify skin.

Active 8 Products offers the following information regarding its distributor levels and sales kit costs:

Level 1.  Independent Business Owner Cost: $99 complete starter kit – Basic entry level with business cards, website, brochures and samples of a few of our products.

Level 2. Active Team Leader Cost: $249 – Includes everything in the basic starter kit, plus an additional increase in commission along with more product.

Level 3. Active Group Leader Cost: $499 – Includes additional product and additional commission. Also automatically includes the Automated Follow-up System ($100 sign up fee value).

Level 4. Active Associate Director Cost: $1000 – Includes all of the above and highest entry level of commissions on downline sales – PLUS, eligibility for non-sponsored customer assignments – a terrific way to start building your customer base much more quickly to achieve a higher level of commissionable income.  No other multi-level network marketing company does this!

We have only one requirement – Every IBO is asked to sign up for the monthly Auto Ship Program for approximately $15 a month – that’s it! We only ask this because we believe you need a testimonial of at least one product.  Each IBO may choose which product they would like to receive and can change the product at any time. There are no other fees – no annual dues, no website fees, no sharing fees – nothing!

That sounds kind of crazy to me. 

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