Why do people join MLMs?

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This is a question that is asked again and again. Once you can see it is a fraud, it can be difficult to understand how people can fall for it. Here, I will attempt to explain why people fall for it.

Is it a lack of intelligence or education?

No qualifications are needed and, quite often, posts are badly spelt and have poor language skills. The large number of emojis add to the effect. For example

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Many people assume that bots must be stupid because of this, but it is not necessarily true. Sometimes they copy and paste posts because they are lazy or are told to by their uplines. Sometimes they might just be trying to appear fun or they are appealing to the type of people who communicate like this. Of course, they might be stupid, but it is not a prerequisite.

Some bots are nurses, teachers, lawyers, doctors and vets. We cannot assume a lack of education is the reason for joining an MLM.

There has been some research into why intelligent people fall for scams.  It is thought that they might have a misplaced sense of confidence and, once tricked, might not question their judgement. This riskology blog post looks into some of the reasons why intelligent people get caught in scams and gives links to some interesting research.

Some are tricked

Some people could be tricked by deceiving adverts like these-

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It is made to look like a job advert. Primerica are a prime example of this tactic. They target jobseekers and offer ‘interviews’ to people so that it looks like a proper job opportunity. If you think you are applying for a job, you might not notice that you are actually being offered something else. A forensic accountant has written about how Primerica hides their recruiting as a job interview.

Fake it ’til you make it

This is one of the main reasons why people join MLMs I think. People post on their social media about their fantastic lifestyle and how it is achieved through their MLM. It looks to the casual observer that the bot is being successful and is earning money from their scheme.

People brag about how they have managed to buy the latest car, live in a big home, or just treat themselves to little things. They post pictures of nice things and imply that their MLM is the reason they can have these things.

In actuality, most of these claims are lies, designed to interest friends, family and colleagues into joining up so they can have nice things too.

 

The recruiter is often a trusted person

This is one of the main reasons for people falling into MLM I think. We automatically trust our friends and loved ones. If they tell us they are being successful we will believe them more than if a stranger told us. After all, why would someone who cares for us con us into a money losing scheme?

This begs the important question, why would our loved ones con us into a scam? It could be that they do not realise they are in a scam. It could be that they hope they will make money soon and they need you to join to help them be successful. Once you, and others, join them, they will be successful and then they will help you too so it will all be alright. I don’t think people join these schemes knowing they are scam and get their family involved in them maliciously.

I think that the fact your friend recruited you and you recruited friends will lead you to staying in the scam longer. You will feel an obligation to make it work for everyone.

 

Guilt

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Women are targeted this way. They may be feeling like they can’t afford childcare or don’t want to go back to work after maternity leave. They could be feeling desperate and willing to try anything during their maternity leave to try and earn enough money to resign. It might be worth the risk to them and might be enough for them to suspend their scepticism. They might not have fallen for it before their babies were born.

Timeless Vie wrote a good article on the phenomenon of guilting mums into MLMs.

 

False claims

False statistics are commonly bandied around that make MLMs look good, like this one-

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No one has been able to provide any proof for these statistics. John Milton Fogg, an advocate of MLM has examined the evidence for the 20% claim and says it is untrue.

It is easy to find out the truth about these facts when examined in isolation, but maybe it is more difficult if people are bombarded with ‘facts’ like these alongside other factors in this post. Maybe they would have no reason to disbelieve them due to who is telling them these ‘facts’.

Some people do earn money in MLMs, albeit a vary small number. Pictures of these people getting cheques are plastered all over the internet and prospects are told they could achieve this.

 

Prospects  might be shown earnings disclosures where it proves that some people earn good money. However, if you analyse these disclosures, you would see that statistically, you are likely to earn a tiny, tiny amount.

 

Love bombing

This is a tactic employed by cults as well as MLMs. The recruiters act as though they really care about you. They might call you and other people in their teams ‘hun’ and litter their social media with heart emojis and positive, uplifting messages aimed at raising your confidence and feeling part of a new ‘family’.

 

It is hard to dislike or mistrust someone if they seem like they like you and are helping you. This tactic especially works on lonely or vulnerable people who feel isolated. The effect is exacerbated when people ae isolated from their own friends and family. MLM people advocate unfriending and cutting out people from their lives if they question the new MLM family. A Them vs Us feeling is created. For each real life person cut off, the MLM bond is strengthened.

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The above FB post is from a ‘life coach’ that coaches MLM members.

Confusing terms

Have you ever seen an MLM compensation plan? They are really complicated and with lots of small detail and levels and hoops to jump through. I don’t think anyone really understands the complexities of the structure. As people climb the ladder, they find more obstacles and changes to the way their pay works. It is not obvious at all how it works. People are assured by their uplines when they join that it is simple really. They are persuaded to learn as they go along.

Here is a link to It Works’s compensation plan, all 20 pages of it.  Have a look and see if you think people understand what they are signing up to. It is more likely that people come away with the main message from MLMs like ‘8 ways to be paid’ or ‘paid every 3 hours’, than the actual details.

One of the things I have noticed that all MLMs have in common is their substitution of money for other terms, such as Case Credits or PV. I believe this is the same tactic used by casinos. Casinos use tokens instead of money so they forget they are gambling real money. People in MLMs might get fixated on just needing 4 more CCs, and not realise they are spending their own money. Targets given in CCs don’t look as threatening as real money would. The person becomes distanced from what they are doing.

Conclusion

There are many reasons people fall for the MLM scam, and it is not simple by any means. We should all be very careful because any of us could fall victim to one under the wrong circumstances.

 

 

 

 

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5 comments

  1. “Prospects might be shown earnings disclosures where it proves that some people earn good money.”

    What they don’t tell the reps is that these MLM celebrity reps (every MLM has 50-100 of these) make the majority of their income by selling training materials, hosting big regional conferences or from corporate appearance fees for speaking on the big stage or on social media. If your big earner’s charts show a heading of anything other than “commissions” (ie; cash flows, revenues, compensation) there’s a good chance their earnings has little to do with actual sales.

    Like

    1. When these charts are scrutinised it is easy to see they are deceptive. If someone is new to the industry or hopeful and willing to believe, they can be deceived. They just see that some people are earing a lot of money and maybe that could be them.

      Liked by 1 person

  2. I was tempted once. My driving instructor talked about LTW and how some of her “friends” were earning good money. I was tempted by it and went to one of their little conferences. As it went one, I started to become sceptical about the concept and it didn’t seem like an actual business where you promote and sell products domestically / internationally. Came home, did some research (including this blog). Decided it sounded like a scam. Glad I didnt join but feel sorry for my driving instructor who wasted time and money with this “company”

    Like

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