How do you tell your friends the truth about MLM schemes?

Every couple of years a friend of mine asks me to an event to share some fabulous new opportunity or product with me that they are now “in business” with. Every time, without exception, I have ended up having a very unpleasant discussion with them about how Multi-Level Marketing really works, and what it implies about their judgment, financial acumen and lack of respect for their real friends and family.

The truth is that joining an MLM does make you a bad person, or at least reveals that deep down you already were one.

How dare I say this? Because it is true. Let me explain the key points quickly then develop them in more detail:

  1. You are vulnerable, and foolish enough to reveal this to predators
  2. You are lazy
  3. You are unable to do even basic web research on financial or scientific matters
  4. You are willing to lie to make money
  5. You are willing to steal from your friends to gain wealth
  6. You are dumb enough to spend every hour of your life on something that has a 1% chance of being profitable for you.

It is unfashionable to blame the victims, and that is exactly what I’m not doing. Anyone who participates in an MLM does so knowing, on one level or other, what they are doing is wrong. They are not victims. They are willing participants in a fraudulent scheme. They just hope that the fraud will benefit them.

Vulnerability

My personal experience of people who take to multilevel marketing schemes is that either they are massively dissatisfied with the current employment or they are not currently in employment. In either case they are extremely financially vulnerable. That in itself is not a significant character weakness, because we’ve all been in that situation.

It only becomes a weakness when one is foolish enough to reveal to somebody that you know is already in a multilevel marketing scheme your situation. Because you had to know, before you spoke to them, that they were likely to take advantage of this fact. It is simply a very bad idea as an adult to approach something that you know to be a predator without a defence of your own.

Laziness

All the experience of life in the modern world should teach somebody who is an adult the simple fact that nothing worth having is going to come easily. Which makes it all the more incredible, therefore, that any adult believes, even for a second, that there are such things as successful get rich quick schemes. The idea flies in the face of everything that life teaches us.

The conclusion that I draw from this,  if you are in employment, is that you find it all far too much effort and would rather somebody simply handed you money. And the conclusion I draw of you are out of work, is that you would rather not put in the effort to get a proper job or start your own proper business, but you still want people to hand you money. Both cases lead to the conclusion that laziness is a fundamental driver in joining an MLM.

Close mindedness

The psychology of MLM is absolutely fascinating, and worthy of some of your time to research how it actually works. That would be a good use of the time of anybody thinking of going into one. Sadly, the only research the people who do go into them do is to work out ways of exploiting their friends (see more later) through the use of unsubtle psychological trickery and pressure.

Had potential candidates done their homework they would be very rapidly immunised to the tricks MLM recruiters play upon them, and have the sense to walk away.

But it goes deeper than this: no matter how hard the scammers try to obscure what they are really trying to do, it is always possible with a simple Google search to pull up the scientific and financial information required to reveal how the scam works and how much you are likely to lose by engaging in it.

It is true that scammers obfuscate the real nature of their MLM schemes. They do not offer you a free website because they think it will help your business, they offer you a free website because it generates clutter or chaff in Google searches that stops people finding out the truth. They ask you to write anecdotal material about your experiences and mention their products so that valid scientific research, and financial exposes, or buried in a wash of fact-free garbage.

Despite this: simply adding a few key phrases to your searches will quickly get you to the facts. It has amused me recently to find one particular MLM scheme encourages all of its members to include the word scam in their own pages, so that people searching for information on the scam are drawn to these fact free clutter pages. However other searches, such as “statistical scientific evidence”, “Cochrane review”, “filed accounts”, “litigation”, “peer-reviewed”, “independent”, are all rather valuable additions to your search engine enquiry list. Each of them will reveal just how fact free the hype surrounding the current scheme is.

Liars

The most devastating effect of MLM schemes is that they make their participants into liars. Liars to themselves: and liars to their friends. We don’t need to say that they also lie to any potential customer, of course.

They lie to themselves in order to protect themselves from the stupidity of their own decision to join the scheme. They create immense fabrications post-justifying the decision. They become, just like cultists, utterly incapable of accepting factual evidence that goes against the dogma they have been taught. We really have to take our hats off to the people that design the schemes in ways that turned the vulnerable and ill-informed into aggressive selling drones, who, just like drones, deliver all their work to the Queen and then die, alone, poor and hungry

They lie to others because they know inside, deep, deep inside, that what they are selling is of no value whatsoever, probably does not work, and is certainly massively overpriced. And they continue to try to sell this despite knowing all of these things even when their friends are sick or in distress and are being sold snake oil.

Thieves

A simple check against Amazon or Google will quickly reveal that any of the products are being sold to you are being sold at a massive mark-up. The selling price is hugely inflated by the ridiculous costs of the fraudulent MLM chain and the amount of money which is passed to the ultimate owner of the chain. There is no intrinsic value, or very, very little intrinsic value, in the products themselves. All the products can be sourced for a tiny percentage from other sources.

The participants believe that they will benefit from these prices, and the moral hazard of being a beneficiary encourages them to sell garbage. They are, of course dupes in that they also have to pay these ridiculous prices for their own inventory. Thus the chain of thieves believes it will feed itself, when in reality, it is a gigantic pyramid that collapses under its own weight.

The very worst thing about this thievery is it is usually directed against your own friends and family, those who are immediately close to you, where you can use the psychological tricks that the MLM tutors teach you to start your so-called sales career.

Actively Stupid

And this is where all falls down, because even the simplest wiki search would have revealed that fewer than 1% of participants in the schemes ever makes a positive financial return. Participation in a scheme where you have less than a 1% chance of making a positive return, especially where the scheme itself requires you to invest hundreds of hours, your personal reputation, and money belonging to your friends and family, is really, seriously, foolish. I call it “actively stupid”.

———————————————–

So, there we have it, you really should not join in anything that even vaguely looks like a multilevel marketing scheme. And you should run away as fast as you can when such a scheme involves health claims and selling to your friends and family.

Right now the larger global horrors in terms of MLM schemes punting dubious claims for overpriced pseudo-cures are all listed on a convenient Wikipedia page for you to read and then run away from. Actually the colloidal silver scams don’t seem to be listed on this page, so I did a little bit of research below to help you find those as well.

So by now, you’ve probably realise that I really, really do not like MLM or the behaviour of the people that participate in them. I genuinely think less of anyone that I discover participate. It looks like it’s going to take the law quite a long time to get to grips with ways of isolating and closing the schemes down. Until then it is just down to common sense and a few people who are prepared to say a flat “no” to any offers of participation. Mathematically it only takes a small percentage to refuse to join to dramatically accelerate the rate at which the schemes collapse.

And that, at the end of the day, is the best thing that you can do: make the schemes collapse as fast as possible….

…. and start a proper business.

Schedule of useful links:

Psychology of MLM

MLM Structure

Health Claims – Forever Living (Aloe Vera)

Health Claims – Colloidal Silver

Protecting Yourself and Your Friends from these scams

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