Multi-level marketing (scams)

You know that thing where you’re talking to someone about something, and it’s a thing you have a strong feeling about, and you express that strong opinion, strongly? And it turns out you probably expressed yourself more strongly than you should have? I did that recently.

Utah is home to many many multi-level marketing companies. Just in Utah County, I can think of several. NuSkin sells, like, dietary supplements. DōTERRA sells essential oils; I think they call their salespeople ‘wellness advocates.’  Morinda sells various products derived from a morinda citrafolia, a Tahitian tree that produces the noni plant, juice from which is supposed to be good for you. There’s also Neways; they also sell nutritional supplements. There’s Young Living–they sell essential oils–and Nature’s Sunshine–natural health supplements. There are many others.

And they all work the same way. Ordinary folks sign up for this stuff, and sell the product, but are also trying to get their friends involved in selling it too. You make your money via a pyramid. You get a cut out of your sales, but you also get a cut from the sales of the people beneath you on the pyramid. The basic model is Amway. Also Bernie Madoff.

Here’s the strong opinion I expressed that got me in trouble. I think multi-level marketing companies are all crooks. I think they should all be illegal. I think they’re scams, ripoffs, hoaxes, frauds. I think their CEOs should be in jail. I think the normalization of con artists is a bad idea, and that businesses built on a pyramid model are nothing but Ponzi schemes, pure and simple. And I tend to think their products are all, without exception, worthless crap.

I come by these views honestly. I have family members who have been ripped off in Ponzi schemes. I have seen how devastating they can be. I know people whose lives were ruined by Amway. I think the world would be a happier place if Amway was shut down, and its business leaders thrown in the slammer. And that would include Dick DeVos, former Amway CEO and husband of Betsy DeVos, Trump’s Secretary of Education. And that includes Jason Chaffetz, my Congressman, a former NuSkin exec.

In China, MLMs are illegal. Good for them. If you want to know why they’re not illegal in the US, check the previous paragraph: they’re well-connected. The Federal Trade Commission has been trying to shut down Herbalife for years. Herbalife has responded in the usual way; by buying Congressmen, and by spending hundreds of millions of dollars on high-powered legal representation. So does Amway; so does Mary Kay. These are rich, powerful companies. They aren’t going to be easy to stop.

And they’re big in Utah. And that bothers me. Why are Utah Mormons susceptible to these kinds of scams? Because we’re naive, gullible, trusting? That’s surely part of it. But it’s also Church connections. Our lives tend to center around wards. And our fellow ward members are also our friends. If a person you think of as a friend comes to you and says, ‘hey, I know about this great opportunity, a way for you to make a little extra money, and also enjoy better health. It’s worked for me, and it can work for you.’ Well, that’s a powerful inducement.

It’s also why these things are so insidious. A friendship shouldn’t be about some outside agenda. We’re friends because we genuinely like each other. We’re friends because we decided to make a commitment to someone, to maintain and nurture a relationship with another person, for its own sake, not because you can make something from it. MLMs take the idea of friendship, that personal connection we feel towards other people, and profane it. It’s fundamentally sociopathic. It’s like doing your home teaching solely to get good numbers, without making any effort to actually make friends.

Pyramid scams take basic, honest human feelings and turn them into sales opportunities. I want to believe that my friends like me because they like me. Not because they think they can sell me some kind of weirdo goop. Frankly, I think MLMs are worse than Bernie Madoff’s Ponzi scheme. Madoff ran an investment firm; his clients may have thought of him as a friend, but that friendship began as a business relationship.

I remember when my wife and I moved to Utah. I was a new BYU faculty member, and we hardly knew a soul. Some old friends of my parents, BYU veterans, invited us over for dinner, and we were thrilled. We knew these people a little, and it was nice to think that they wanted to be friends, maybe introduce us around to this new university subculture.

And then they pulled out their selling materials, and told us all about what a great deal Amway was.

We weren’t just offended. We were hurt. We were angry. We hid it pretty well, and are still able to greet these folks, when we run into them, with polite cordiality. But what an opportunity wasted! Of course, any possibility of actual friendship was completely gone. And that’s a shame.

So, sorry, but it’s time for these rip-offs to end. China got this one right. MLMs serve no legitimate role in any healthy economy. Or in any health-promoting friendship.

 

5 thoughts on “Multi-level marketing (scams)

  1. Alex Kazan

    Indeed MLMs are a form of fraud and it is a shame that a lot of Mormons are involved in these scams. 18 years ago, my wife and I moved to the US from England. As new immigrants we asked fellow church members for any employment possibilities and within hours we had a call from our fellow members. It was Amway and after their presentation I asked a simple question, “is this LEGAL?” It was obvious to me that we were not going to make money out of this, and only having to be selling more of the same scam to others. Funny thing is a few years ago when we moved and changed wards, we ran into the same family and when I reminded them of their Amway proposal, they denied the whole thing and said they’ve never done Amway!!!

    Utah is full of programs that take advantage of the naive, the poor, and the greedy who are looking to make some money, but end up losing most of it. Last year I fell for a program lead by Tarek and Christina. Due to their TV fame, I felt secure to invest, only to find out that I paid $2K for a program so they could sell me another seminar at $25K to $75K. It took me a year but after many threats I managed to get my money back, providing I removed all my negative comments from all the websites.

    Lesson learnt; find out if the company is based in Utah? if so, do NOT waste your money.

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  2. Spencer Christian

    Haha. Agree 100%. Still thankful for my mom warning me when I was about 21 of a MLM scheme. I have since distanced some relationships when invited to participate by openly and aggressively mocking the product and MLM writ large.

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  3. Chris Bigelow

    Amen, bro. I spent 14 years working on the corporate side of this “industry.” The most positive thing I can say about MLM is that it works as a form of entertainment for some people, although part of the entertainment is they hope and believe it could be more than entertainment. I stayed in the industry because the pay was good, workplaces were near my home, I had plenty of downtime to do my own stuff, and I made several good coworker friends.

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  4. Thom Duncan

    Years ago I was approached by my Home Teaching companion to join his downline in Amway. I attended a couple meetings but never joined once I understood that, after a couple years, regardless of how much money I might make, I would have none of my then current friends and my family would hate me.

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