Self-Policing

[BruceShuell]

"Tom, I've never had a problem with anyone holding anti MLM views, I'd be stupid to think that everyone would be pro MLM. If someone says to me ''I realise there are good, legal and ethical MLMs, and there are scams masquerading as MLMs, but I just dont like the business'', then I can fully respect that. "


I'll never understand why the MLM community does nothing to eradicate or censure the obviously bad elements in their industry. You look the other way, say how YOUR MLM is ethical and legal and ignore the ones that are not.You allow the bad apples to define the industry as a whole. Until MLM addresses this issue most will yell SCAM whether it is or not.

[ChrisDoyle]

"Tom, I've never had a problem with anyone holding anti MLM views, I'd be stupid to think that everyone would be pro MLM. If someone says to me ''I realise there are good, legal and ethical MLMs, and there are scams masquerading as MLMs, but I just dont like the business'', then I can fully respect that. "


I'll never understand why the MLM community does nothing to eradicate or censure the obviously bad elements in their industry. You look the other way, say how YOUR MLM is ethical and legal and ignore the ones that are not.You allow the bad apples to define the industry as a whole. Until MLM addresses this issue most will yell SCAM whether it is or not.

I presume this is aimed at me..... I dont have the time to spend it ''scambusting'', though I will back up anyone who does. There are people in MLM who do though, Len Clements is one such person.

[Thule]

I'll never understand why the MLM community does nothing to eradicate or censure the obviously bad elements in their industry. You look the other way, say how YOUR MLM is ethical and legal and ignore the ones that are not.You allow the bad apples to define the industry as a whole. Until MLM addresses this issue most will yell SCAM whether it is or not.

Probably because there are few, if any, MLMs that can stand up to scrutiny. The basic model is flawed, having good products might correct some, but not all the fundamental weaknesses.

[MWave]

I'll never understand why the MLM community does nothing to eradicate or censure the obviously bad elements in their industry. You look the other way, say how YOUR MLM is ethical and legal and ignore the ones that are not.You allow the bad apples to define the industry as a whole. Until MLM addresses this issue most will yell SCAM whether it is or not.

Bruce,

There are many factions within the MLM community that are trying to do this. My company MarketWave has been doing this for almost 20 years. So has MLMWatchdog.com, and MLMHelpDesk.com among others. The DSA is suppose to be doing this but don't. However, a smaller trade organization called the Association of Network Marketing Professionals (TheANMP.org) is actively working on a formal certification program that will be introduced at their convention in August. A panel of experts and legal authorities will evaluate, among other things, the ethics and legality of the opportunity (i.e. product and income claims, P&Ps, compensation plan, etc.). Unlike the DSA, which essentially accepts anyone who pays their dues, we will be looking for companies to NOT certify. The more programs we don't certify the more credibility, thus value, ANMP certification will have.

Although I do agree with your overall premise that there's a stigma to this profession and we have an uphill battle in resolving it, I wouldn't say we "allow" the bad apples to create it. Even if MLM were only made up of 1% bad apples, the MEDIA will only expose that 1%. Besides the fact that "bad new sells", most media lives and dies on advertising revenue, and MLM is an industry that rarely advertises in the mainstream media. We are a word-of-mouth business. Most media have a vested interest in tamping down the awareness and popularity of MLM.

I've always said it's not the SEC, FDA or FTC that we should worry about the most. It's ABC, CBS and NBC.

Len

P.S. BTW, kudos Bruce for openly identifying yourself. Whether we ever agree or not, I respect that you chose to be accountable for what you write. It's rare on this board.

[MWave]

Probably because there are few, if any, MLMs that can stand up to scrutiny. The basic model is flawed, having good products might correct some, but not all the fundamental weaknesses.

Then how do you explain the fact that there are over 2,500 such companies in the U.S., which is one of 100+ countries where MLM is recognized as legal, and MLM has existed for 74 years, includes Shaklee, Avon, Mary Kay, Discovery Toys, Watkins, Tupperware, and Pampered Chef (owned by Warren Buffett), and many other good corporate citizens. Or, that there are currently nine MLM companies who've operated as such for over 40 years, and several dozen over ten years old and many are still growing in the United States. Yes, often times illegal pyramids do try to disguise themselves as MLM programs -- because they want to appear legitimate -- thus we do suffer a guilt by association.

Len

[Doc Bunkum]

Len

P.S. BTW, kudos Bruce for openly identifying yourself. Whether we ever agree or not, I respect that you chose to be accountable for what you write. It's rare on this board.

Just for the record, Clements, would you explain to the members of this board about your fixation with people identifying their real names when they post something?

I like skyvoyager's take on whether a person chooses to remain anonymous or not...

People come to (this forum) and make a choice. They can decide to protect their privacy and remain anonymous --or-- they can (as many pro-MLMers do) let the world know exactly who they are and how to contact them. The latter, I believe, willingly reveal themselves because they feel that doing so will somehow benefit them.

Exactly why you choose to identify yourself and provide contact information. You hope that doing so will benefit you - financially. And don't deny it.

Others choose not to do so. Take the case of Soapboxmom when her private information was leaked...

Lenny,

Your MLM scammer friends love to get folks names. Just filing a frivolous suit will silence many because they can't afford to spend tens of thousands to fight totally groundless, harassment suits. Amway has silenced a number of honest legitimate critics with their dirty tactics.

My family spent tens of thousands and have had our lives turned upside down by the scammers from hell that you know full well were never able to provide a false statement of fact by me. They took a risk and it back fired. The truth has a funny way of rearing its ugly head. No one should have to go through the hell we went through.

I do in fact have an agenda. I want to see that folks have the facts before they get ripped off by seedy MLM scams. I pursue that noble calling by presenting the facts, truth and my opinion. I will continue to fight the good fight as long as I live. There are some nasty battles coming up and I am fully prepared for the fight.

Soapboxmom

Or a little closer to home, how about your colleague on scam.com, Lady Mod, who had this experience to share...

If you will recall, my address was posted on that thread I kept open for you and your friends while you were exposing the art scam in Dallas. That less than 12 hour exposure on this site led to some nut case stalking me half way across the country threatening me with physical harm. I did not find it amusing one bit.


Lady Mod

Does any of this make sense to you, Lenny?

And while you're handing out kudos for "openly identifying yourself and being accountable for what you write", let me ask you, do you know who Lady Mod (sojustask) over at scam.com is?

Maybe you should suggest to her that she openly identify herself so we know who she is and where she lives.

You really wouldn't expect any less of such an important person as her to do so, would you?

[BruceShuell]

Stay on the subject Doc, please.

I went over and had a look at MLMWatchdog. Most of the MLMs they deem to be scams seem to be doing just fine in spite of lights being focused on them. Companys like YTB and TVI (my personal fave scams) keep scamming along promising millions, luxury travel, cars...you name it.
Granted YTB is barely holding on but that's not because of watchdog groups but AGs, a poor rep in the travel industry and greedy management. To listen to some of their 'leaders' the MLM world loves them and admires the fact that 75% of their income is from recruiting.

[wserra]

Stay on the subject Doc, please.

I second that.

Welcome to Quatloos, Bruce.

[Cathulhu]

MWave said:

"I've always said it's not the SEC, FDA or FTC that we should worry about the most. It's ABC, CBS and NBC.

Len

P.S. BTW, kudos Bruce for openly identifying yourself. Whether we ever agree or not, I respect that you chose to be accountable for what you write. It's rare on this board."


Lucky you, Len. I would presume you aren't familiar with being stalked. Being married to a member of said media is why my numbers are unlisted. There's a difference between standing by your opinions and hanging yourself out as a target.

[wserra]

I'll never understand why the MLM community does nothing to eradicate or censure the obviously bad elements in their industry.

Sure you will.

I don't know of any industry that effectively polices itself. My "industry" - the legal profession - doesn't. There are a lot of bad lawyers out there. But unless you either steal from or sleep with a client, nothing much is likely to happen to you. It's the same everywhere. If some bad actor rises to the surface, too many others feel "there but for the grace of God" and generally little happens. The only thing that will get an industry to rise from self-policing lethargy is the credible threat of enforcement action. For all the rap we take, medical malpractice lawyers are far more effective in policing the practices of physicians than is the AMA.

The MLM "industry" faces its own particular problem, though. In the way it matters most - the ability for distributors to make money - they're all bad actors. I keep coming back to the findings of the British court as to Amway, of course the granddaddy of all. Yes, it's legal. But:

the reality of the Amway business is that the nature and rewards of becoming an IBO and participating in that business are such that only a very small number of IBOs make any significant money from their participation. In fact, the substantial majority of IBOs make no money and indeed by reason of their payment of the registration fee [£28] and the annual renewal fees [£18], lose money from their participation…For the period from 2001 to 2006 (a) 95% of all bonus income was earned by just 6% of the IBOs; and (b) 75% of all bonus income was earned by less than 1.5% of IBOs. In 2005-2006 there were 39,316 IBOs who shared a bonus pot of £3.427 million. But of this total, 27, 906 IBO (71%) earned no bonus at all, and 101 IBOs (0.25%) shared £1.954 million between them. That leaves a group of 11,309 IBOs to share a bonus pot of £1.473 million. Within that category there was a group of 7,492 IBOs…who between them shared £101,400. This gave them an average annual bonus of just over £13.50, a sum less than the annual renewal fee of £18.

The picture can be presented in a variety of ways: but it is consistent. Between 2001 and 2006 the proportion of IBOs not earning any bonus income varied between 69% and 78%. In year 2004/5 only 74 out of 24,342 IBOs earned over £10,000 by way of bonus. In that year only 4,076 IBOs earned enough bonus to cover the annual renewal fee: 21,266 did not even cover their most basic running cost from bonus payments (though there may be retail margin).2 If very modest business expenses are factored in (say £100 on petrol or the purchase of BSM) the picture is even starker with only 1,820 IBOs making sufficient from bonus payments to cover those expenses and 23,521 IBOs failing to do so. In the period from 2000 to 2005 Chris and Sharon Farrier’s bonus income ranged from £21,495 to £7,971 and averaged £12,850. Over the same period Dr Anup Biswas ranged from £137 to £433 abd averaged £306. These are the people whose testimonials said respectively that they were earning “the equivalent of good executive size income”, or was deriving an income that “continue[d] to climb to replace my full professional salary”.

That's the nature of the "opportunity" (and I won't even start on the "tools" business). So "self-policing" in the MLM "industry" can't mean putting the rip-offs out of business, since then all those on top of the pyramids would have to find real work.