Pyramid Schemes and Multi Level Marketing Explained

I have just done a radio interview about pyramid schemes and why they are a bad idea. I only had ten minutes so I struggled to get in all the information. Click on the image below to listen to it. I am at 1.32.

 

 

Here, I cover the information I gave, with references and further information that I couldn’t cram in.

What is a pyramid scheme?

It is useful to think of pyramid schemes on a spectrum. Just before you get to pyramid schemes, there is Direct Selling. This is where people sell things and get a commission from the sales. Like a double glazing salesperson who goes door to door and gets a cut of the sales. That is perfectly legal, although it can be hard on the salesperson to earn money if they don’t sell much.

On the other extreme, after pyramid schemes, there are Ponzis. These are schemes where people pay a fee to join. They have to recruit to people and they recruit two people, and they recruit two people. When the pyramid is a certain size, all the joining fees from the people on the bottom rung go to the person at the top. They then retire with a large amount of money and everyone moves up a rung. To be successful and leave with money, 64 people would have to pay the fee. Quite often, not al the spaces can be filled and the whole thing collapses. An example of a Ponzi is the Airplane game.

Ponzi schemes are illegal in the UK. In Albania in 1997, there was a civil war due to a Ponzi scheme collapsing. Two thousand people died and a government was toppled.

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Between Ponzi schemes and direct selling, you have pyramid schemes. These are defined by the Fair Trading Act 1973, under the section called ‘Part IX Pyramid selling and similar trading schemes’. The law calls these schemes ‘Trading schemes’ that have to comply with the pyramid selling regulations. It talks about the pyramid structure of the schemes. In 1996, when the Trading schemes laws were being updated, there was an attempt by Amway ( a large multilevel marketing scheme) to have the term ‘pyramid scheme’ defined as an illegal scheme. The Government stated that they saw the terms ‘pyramid selling’ and ‘multi level marketing’ as interchangeable.

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It doesn’t sound very good though, to say that you are in a pyramid scheme. It would be very hard to recruit people if you said you were in a pyramid scheme. The Direct Selling Association (DSA) are a trade association and promote these schemes, trying t make them appear respectable. Of course, they wouldn’t want to put off people joining their schemes so they say this on their website.

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I challenge them to show me where in law it says pyramid schemes are illegal. I believe in fact checking and looking at the evidence and I will be happy to change my statements if they are wrong.

So what is a pyramid/multi level marketing scheme? The 1997 consultation document makes this clear-

what is

More simply, this means that people are in a trading scheme if they sell products, usually in their home, and recruit others to do the same. They can earn commissions from the sales of the people they recruit, and also get bonus payments. The structure is pyramid in shape. To be considered legitimate, they must adhere to a set of rules. These are The Trading Schemes Act 1996. The Pyramid Selling Schemes Regulations 1973 , and later The Trading Schemes Regulations 1997  lay out the conditions that a scheme must follow to be considered legal. If any of the conditions are broken, the scheme is illegal. Importantly, the law says that the definition of a ‘trading scheme’ remains the same as in previous legislation.

“trading scheme” has the same meaning as in Part XI of the Fair Trading Act 1973.”

These are the conditions-

Part 3. Adverts for the scheme must say the name of the company, describe what is being sold, and give the statutory warning.

Part 4. A written contract has to be given to anyone joining up.

Part 5. The contract can be cancelled within 14 days. People must be told of their financial obligations for the first year. Further minor contract details.

Part 6. When someone leaves a scheme, they are entitled to a refund for the products bought in the previous 90 days.

Part 7. Some technical rule about refunds.

Part 8. People in these schemes must be given receipts from the company for every transaction.

Part 9. Rules about commission payments once someone leaves a scheme.

Part 10. People cannot pay more than £200 in the first week of joining a scheme.

Part 11. People who join up are under no obligation to buy anything unless it was clearly stated in their initial join up agreement. They should not be tricked into buying anything.

Section 1, part 3 of The Trading Schemes Act 1996 says that trading schemes must provide products or services to external customers. The participants can’t just purchase products for themselves.

That is quite a list of rules that a company must adhere to be considered legitimate. You can see why it is difficult to determine if a scheme that is being presented to you is ok or not.

These schemes cause problems for people, regardless of whether they are legitimate or not.

These problems are-

  1. Dr Jon M Taylor analysed the statistics of MLMs and found that participants typically lost money in 99.9% of cases. He concluded that gambling on roulette gives 286 times more chance of winning money than earning anything in Amway. These statistics were presented to the Federal Trade Commission.

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Image from MLM-The Truth Website.

2. People lose money through paying for training, going to conferences, buying their own marketing products, petrol costs from driving everywhere, buying nibbles and drinks for in-house parties, buying samples, buying prizes for raffles, buying products for themselves, paying for stalls at fairs.

3. People in these schemes follow the Law Of Attraction where they are taught to believe that bad things happen if you have bad or negative thoughts. They also believe that good things happen if you exclusively concentrate on positive things. The Law teaches that if you want something, you can have it if you want it hard enough and visualise it enough, sending out the correct ‘vibrations’. You are encouraged to act rich if you want to be rich. The theory is that you acting all successful will attract success and will attract recruits who want to be like you.

Hence you see memes like this

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People in these schemes become afraid to think of their failure and will not allow themselves to focus on the money they are losing. This type of dangerous thinking could be called a mind control technique. People stop themselves from being critical and lose the ability to be rational. This is a very dangerous state to be in. It keeps people in these schemes longer than they would otherwise stay.

Another side effect of this way of thinking is that people are encouraged to cut contact with people who are being critical. I know people who have lost brothers, sisters and children through these schemes. They were taught that the negative vibrations from these people would bring failure. This further isolates people and they surround themselves by other scheme members who are all believing the same thing.

A further problem with this type of thinking is that when people inevitably fail, they will blame themselves. They will have attracted the failure to themselves. This makes them feel ashamed and they will often try to forget about the whole thing, and not come forward to speak about their experiences. So the deception continues. When people leave a scheme, they often find themselves ostracised from the group, who now see the person as a failure who could bring them down. They are now left feeling like a failure, lost friends/ family and no support group. This can make people feel terribly isolated.

4. People in these schemes are often seen making false health claims for the products they sell. This is because the products are expensive due to the added amounts that are needed to be fed up the pyramid. The sellers become desperate to make sales so that they cam achieve their monthly targets and to earn money themselves. The products are nothing special so people will lie about how good they are, breaking advertising laws and encouraging people to ditch their medications in favour of their snake oil.

Truth in Advertising (TINA) have documented some false health claims they came across with MLM products. They found that of the DSA member companies in the USA“( 97%) have made or are making — either directly or through their distributors — claims that the companies’ products (which include supplements, as well as devices, clothing, and skin care products) can treat, cure, prevent, alleviate the symptoms of, or reduce the risk of developing diseases or disorders, in violation of the law.”

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Who joins these schemes?

Anyone can be vulnerable to joining one of these loss making schemes. People who need money and are not getting what they need from their current situation could join. They are vulnerable because often it is a trusted person who approaches them to join and people don’t think their loved ones would lie to them. Often, people are promised that it is easy to earn money, just follow the system, recruit people and you will be successful. Examples are held up of the few people that earn large amounts of money.

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Image from TINA.org

It is easy to see why people would want to try pyramid schemes when their current situation is less than ideal.

Intelligent people and professionals are sometimes targeted because they can lend credibility to the company. I have seen adverts on Facebook aimed at NHS staff, trying to recruit them to sell MLM products and the opportunity.

It is important to realise that anyone is vulnerable to being recruited. The best protection is to educate yourself. Stay one step ahead and be as aware as you can. If you are on Twitter or Facebook, follow me or the MLMtruth coalition. There are a few campaigners you can add to the people you follow. Keep these scams at the forefront of your mind and you may be better able to resist.

What to do if a friend is involved

This can often be a very difficult situation. Your friend may be asking for your support and may be desperate to make a success of it. They may not know of the full facts around MLMs and may not be willing to hear it.

I wrote a blog post full of tips that you can look at for ideas on how to deal with your situation. Have a read of it here.

If you have a friend who goes from one scheme to another, get them to read this article on how to choose their next one. You may not be able to help them leave just yet, but you might be able to stop them joining one of the more ridiculous ones.

If your friend is maybe open to the idea of listening to reason and they want to hear what you have to say, get them to read this or this.

If you would like more of an insight into what is going on with your friend, you would do well to read up on cults. Pyramid schemes have been described as commercial cults or greed cults. Once you read up on why they are cults and how they work, it can be quite concerning. However, it will give you a good understanding of the behaviours you might be witnessing. Have a read of Steve Hassan’s work. He has written two really good books on the subject called Combatting Mind Control and Freedom of Mind. Margaret Singer has a good book on the subject too, called ‘Cults in our Midst: The continuing fight against their hidden menace’.

Cultwatch explain how cults work, and they delve into commercial/greed cults.

Steve Hassan has a website about cults that you may find useful.

I have written a piece on MLM and cults with John Evans from Juice Plus Lies website.

How to fight MLM

Become a Bot Watcher and join the team. You might be able to help us or the coalition if you have any skills or experience that might be useful in our cause. Perhaps you could help with some research or advise us.

If you have had an MLM experience, consider telling us about it and we can get your story out there to warn others.

Write emails to complain if you see something dodgy going on. Complain to fairs that allow MLM stalls. Complain to schools if they allow MLMs anywhere on the premises. Write to your MP if you feel things need changing. I have some letter templates here to help you guide your writing.

Report dodgy health claims to the ASA and get the advert pulled. Blog post on understanding about health claims.

Order something from the coalition’s little shop to help our cause and help spread awareness.

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Take the cup to work to spread the message. Keep cards in your pocket to slip to people that you might hear being prospected. Someone we know has been slipping the cards in library books aimed at MLM reps!

Please contact us if you need any advice with any of the issues discussed in this article.

If you come across a Ponzi scheme or a pyramid scheme that you suspect is an illegal one, complain to Trading Standards via their Consumer Line. You can also report illegal schemes and fraud to Action Fraud. They are part of the police.

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The stages of leaving

From helping many people through their journey away from Multi Level Marketing, I have noticed common themes. I have attempted to describe them here. Have you been through these stages? Would you add any others?

Trigger

There is often a single event that unsettles people. This trigger goes against their personal ethics or crosses a line that is important to the person. For example, someone finds out that Younique is not as animal friendly as they were led to believe or they witness an upline encourage lying. Perhaps they find out the CEO is a homophobic tax evader or the charity the company supports is a sham.

Whatever the trigger is, it is enough to upset the person on a level where they cannot deny the wrongness of it.

Dawning realisation

Once someone has been awoken to the trigger they are more easily able to see other troubling things around them. They start questioning like never before. Niggling doubts become real concerns. The nagging upline can now be seen as the bully they are. The little lies they have been encouraged to make are now seen for the deceptive recruiting tactics that they are.  The rep becomes more and more horrified at what they have become involved in.

Fear

The fear at this stage is real. Timeless Vie looked into the fear that is instilled into MLM members. The fear is probably worse the longer someone has been involved in the company. They will have been faking it to make it. This would have involved presenting the image of success to their friends and family, telling them they are making money. They will have had conversations with friends and tried to persuade them to join them in this successful venture.  If they then decide to leave, they will lose face.

The worst fear will come from the realisation that friends will have been lost due to the MLM. Often people are encouraged to ditch their friends and family if they are less than totally supportive. They could have unfriended people and upset long standing friendships. Slowly their friend groups will have been replaced with their MLM family, their Senesisters, Y-sisters, other family/group name of belonging.

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It’s a bit culty actually. People spend a lot of time with their MLM ‘family’ and feel a real connection with them due to the immense amount of time they spend with them. The slow backing away from friends and the encroaching influence of the MLM group creeps up on people and they can feel quite isolated when they realise how alone they really are.

This isolation can be worsened when people left their normal jobs (‘sacked the boss’) or if they have mental health issues.

There will also be fear from the thought of how the upline and team will react. They will have seen people leave the team before and heard how they were treated. They may have witnessed the blocking, isolation and character assassination that often occurs to the traitors that leave. They are blamed for their failure and lack of commitment to the group. Again, the cult vibes surface here. The excommunication and vilifying of outsiders is a feature of cults and MLMs.

Action

In this stage, the person decides that they can no longer continue in the MLM and they have to do something. They know it will be hard to take action but they know that they must. The question here is what they need to do. Do they stay members and let it fizzle out? Do they have a raging argument with their upline? Do they just delete and block everything and pretend it never happened? Do they tell an old friend and seek some perspective? Do they contact Bot Watch, Elle Beau or Timeless Vie for support and advice?

There is no simple answer here as each person’s situation will be different and their ability to cope will vary. I would strongly advise, whichever tactic people use, that they stop spending money on the products/ training/ any MLM activity. Take time to decide what to do, but stop trying to make it work. Once you have gone this far down the decision making process, you will not be happy in MLM any more. The visor has been lifted and you can no longer pretend it might be ok. The person will be OK, but not if they stay in MLM.  It can be harmful to keep trying to lie to yourself and knowingly lie to others to recruit.

 

Consequences

This is the part where people have to deal with the upline, contact head office, admit to friends what happened. Sometimes people need to admit to partners about the money that they borrowed or face their downline and try to make amends. They need to deal with friends who can no longer quite trust them due to previous attempts to recruit them and the perception from friends that they were seen as a way to make money. There must be the problem of coming across people who are thinking ‘I told you so’.

This part can be very isolating and can be difficult when you have been told repeatedly to just follow the plan and to reject the ‘normal’ way of working by having a J.O.B. So much hope and energy and money will have been invested in the dream of succeeding in the MLM. The actual process of leaving will be unchartered waters and can be very scary.

Healing

This is a very important part.  People need to be able to sit back and lick their wounds. Often a mental health problem such as anxiety or depression could be worsened. Previously strong people might be feeling fragile. Their belief systems have essentially been shaken to the core and everything they were working for has come crashing down.  Sometimes a reaction can be to start blogging and becoming an active voice against the MLM can become all-consuming. The anger and distress can be overwhelming and people seek to channel it.

If you have been through anything like this, it is very important that you slow down and take time to process what has happened. Please realise that you have been subjected to many techniques designed to keep you in the company, spending your money and working every spare minute to send money up the pyramid to the owner. You have been manipulated and it will take a lot of healing to overcome the damage.

If you have a friend who has been through this process, be gentle with them and allow them to talk about their feelings. You may have to occasionally step in and offer  a different perspective when their faulty logic shines through. They may blame themselves for things that happened that wasn’t their fault. They may have a negative view of themselves and their abilities. Be gentle with them and be patient.

Please contact Bot Watch if you need help, support or advice.

Some other articles you might find useful on this site are

How to help someone in an MLM,

How to leave an MLM,

How to be a Bot Watcher,

Why do people join MLMs?

Network Marketing is a cult.

MLM Expectation vs Reality

Network Marketing is a cult.

This article is a collaboration between Bot Watch and John Evans. John runs Juice Plus Lies Exposed on Facebook.

 

Let’s not tiptoe around the subject. Many people are afraid to stand up and say MLMs are cults because they are concerned they will be labelled ridiculous or over reacting and not be taken seriously. I will say it. MLMs are cults. Here is why.

Many observers have commented on how MLMs seem cultish. They notice how their friends seem to change their personalities and their lives are consumed by spreading their opportunity. Their social network feeds are full of inanely smiling people, untruths and details of conferences that look very culty. But what do the experts say on the subject? Is there any truth in the theory?

Steve Hassan is a cult expert. He was once in a cult called the Moonies and he now counsels people and families affected by cults. He has written books on the subject and runs a website that educates and supports people affected by cults. He calls Network Marketing a ‘commercial cult’.  His website is a mine of information. Here is an article from it that discusses Herbalife and the concept of the commercial cult.

Psychologist and author Michael Langone, created a 12 point checklist of what makes something a cult.

Here it is below with some observations under each point.

The Cult Checklist.

 

1) The group is focused on a living leader to whom members display excessively zealous, unquestioning commitment.

 

In every MLM there are those shill adherents who apparently earned millions in that particular MLM. Every MLM has at least one without exception.

They started the business just like any adherent at the bottom and worked their way up to superstardom. They move from company to company, taking their followers with them.

These guys are the role models for all the others and stand up on stage at the conferences and show pictures of their cars, houses and general lifestyle. Everyone worships these guys and come away thinking it’s possible for them too.

The overall leader of the company is often worshipped too. If they ever make an appearance or are mentioned somewhere, they are treated like royalty. There is often an amazing story behind them. They discovered a product that is so wonderful and will help humanity. The leader cares about all the adherents and wants them all to do well and they are very generous and kind.

Much is made of rewards like holidays that the wonderful leader bestows on them. The fact that they are often billionaires, made off the backs of hardworking people who are losing money is glossed over. It doesn’t matter that the ‘holidays’ are really just a work trip that they have to work incredibly hard to get sent on.

 

2) The group is preoccupied with bringing in new members and/or making money.

 

Adherents who are deep in MLM mindset will be obsessed with growing their ‘business’, often to the point when it overshadows every other aspect of their lives. MLM is not just a job, MLM is a mindset, a way of life.

The most committed MLM adherents do not switch off from their MLM, ever.

It’s all about the constant recruitment and money making. The only way they can make money is if they recruit people and if those people recruit. So, not only do they need to recruit, they need to make them recruit others and ‘train’ them. They then need to make those people sell products or buy stuff themselves. The money has to keep coming in and flowing up the pyramid.  Every waking minute is taken up with the obsession of recruiting more people. Talking to everyone about ‘the opportunity’, posting daily pictures and updates to try and entice people to ask about joining.

MLM adherents think nothing of posting their cheques or posing with piles of money to show everyone how much they are making. This seems quite tacky, greedy and outrageous to the casual observer but MLM adherents have no concept of how abnormally they are behaving.

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3) Questioning, doubt, and dissent are discouraged.

 

You’re not allowed to be doubtful or be negative in MLM because it will put people off joining the business or buying the product (see point 2).

This is true of all MLMs.

Adherents are told that having a doubting mindset will attract failure. They are forced to be positive all the time, so it attracts success. It’s the good old law of attraction.

Some MLMS take this way too far. Like Valentus who are currently trying to convince people that all their new reps are earning 4 figures a week and choosing new company cars and being promoted to diamond status, after only being in the business for a very short time.

But imagine if one of them spoke out, and was negative about the MLM in some way…imagine how she would be treated by the upline and other adherents.

I’ve heard stories from people within MLMs about what happens if you question things too much or come across too negative. Bullying is rife, contrary to the happy family image they put out.

Point 3 on the cult scale is absolutely true for MLM.

Some Law of Attraction memes that illustrate the kinds of things adherents are encouraged to believe.

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Much is made of people’s ‘why’. They are initially targeted by the group based on their ‘hot button’ such as the desire to make a future for their child, spend more time with family, earn money to support their family. They are reminded of this by their upline, their company and continuously at conferences and meetings. People are led to believe that their deepest desires and wishes are dependent on their success in the group. If they drop out, they are giving up on their ‘why’. This ensures a deep emotional link between the MLM and the person’s needs. This would be vey hard to break.

If you really believed in the Law of attraction you might think that you must not question what you are doing. As soon as you express doubt, your business will fail. If you can really believe it will do well, you will try harder and harder to make it work. You will make yourself believe and block out all reasoned arguments and stop listening to your concerned friends. You lie to yourself as much as you lie to everyone else.


4) Mind-numbing techniques (for example: meditation, chanting, denunciation sessions, or debilitating work routines) are used to suppress members’ doubts.

 

Now, I want you to look in your mirror every morning, and say to yourself “I WILL BE A PMD” – “I WILL BE A PMD”, say that 100 times each morning.

Techniques like this would only ever be dished out in MLM.

Go to You Tube and type in an MLM’s name and ‘rally’ or ‘conference’. Most of them have rallies/ success days/ conferences. Watch one of them and see if you think it looks a bit like a cult. There are bright lights, music, chanting, repetitive stories. They wave flags and hear from their leaders with loud, exciting entrances. People come away enthused and ready to put more effort into their ‘business’.

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Adherents are encouraged to ‘work on themselves’. If they aren’t making loads of money, it is through their own fault. They have to change the way they think and just trust their uplines. They are actively encouraged to stop questioning themselves and do what their uplines and the company tells them to do.

After a long, hard day of cold calling, trying to infiltrate groups, driving for hours and lying on social media they are tired and quite possibly missing their young children that they have had to put in childcare for the day. At the end of the day they may have to speak to their upline and do some training or work on themselves. Right at the end of the day, when they are exhausted, they are encouraged to list the things they are thankful for.  They call this doing their ‘gratitudes’. This is to shut down any concerns they may have about what they are doing and to divert any critical thought.

Have a look at one of the company’s training manuals if you can. See what sort of behaviours they are advocating. Forever Living’s manual is full of lists to complete, reminders of the success you can achieve. People are advised to contact 5-10 people a day, write lists of everyone they ever knew, plan what they would do with more money. They are encouraged to ‘touch the business every day’.

 

5) The group’s leadership dictates how members should think, act, and feel

 

One of the first things you are told when joining an MLM company is this,

“You’re going to get negativity, people telling you it’s a pyramid scheme and that you’re wasting your time. But these people are just those idiots who want to live normal lives working for someone else. These people are not interested in fulfilling their dreams. They don’t understand things like we do. Don’t listen to them. JUST. GET. RID. OF. THEM”

MLM adherents spend an awful lot of their time getting rid of people from
their life, just because their MLM told them to.

So yeah. MLM qualifies for point 5 on the cult scale.

Some memes spotted on adherents’ social media are shown below. Shutting out people from their lives and embracing the group serves to isolate the adherent and further entrench them in the group. They lose perspective and support, becoming dependent on the group for everything. this is very dangerous.

Adherents have to think ‘positively’, follow the plan provided by the company (uplines and manuals), block out anyone who doesn’t support the business, spend their money on the company, turn their life over to the company and be grateful for the opportunity.

Pretty soon, the adherent finds themselves losing control of the situation and either need to immerse themselves in their new ‘family’ or risk ostracism from the group and the embarrassment of returning to their rejected friends with their dreams in tatters. People end up lying to themselves to protect themselves from the reality they find themselves in. It is a desperate situation.

 

6) The group is elitist, claiming a special, exalted status for itself, its leader(s), and members to save humanity.

 

MLM reps really do think they’re the shizz. Everyone else just doesn’t understand what they’re missing. In the worst cases of MLM-fever, normal people are looked down upon and the MLM rep will try to save them from their normal life.

The rep will never EVER admit anything negative about their MLM. They are 100% totally committed to the company and give it total admiration at all times.

So yeah, MLM can definitely make people elitist.

What’s funny is when people move from one MLM to another and their loyalty shifts from one company to another SO quickly. Suddenly they’re just as passionate about coffee as they were about skin cream.

The whole belief in the Law of Attraction has a part to play here. People are taught that they bring bad or good things upon themselves with their thoughts. If they are negative, they will fail. If they are positive, they will succeed. MLM adherents really seem to believe this and are afraid of bringing bad vibrations upon themselves. If they shut out any negative influences from their lives, they stand a better chance of succeeding. This is pretty close to religious belief and it really drives people. Imagine believing that being negative could cause cancer, floods, plane crashes, obesity, illness, business failure. I can see why this idea is so rife and popular. It also means that any failure is down to failed adherent’s negative vibrations. They just didn’t believe enough or try hard enough. This is often enough for the escapee to keep quiet about it all and want to slink away in shame. This is why people are loathe to go to the authorities or the press. They think it is all their fault.

 

7) The group has a polarized we-they mentality that causes conflict with the wider society.

 

MLMs quite often go on about how dreadful the commute to work is, they call normal jobs J.O.B.s (Just Over Broke), they maintain that normal jobs are taken by people who are conned into spending their time for little reward. Normal jobs are worthless and cannot earn as much as their MLM. They cannot see that it is not this simple. That a lot of people love their jobs and have rewarding careers. They don’t believe that their earning potential is actually really low. They just think their way is better than the traditional way. They think that everyone should be in MLM and anyone who isn’t is a fool.

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“GET. RID. OF. THEM.”

The words from a mindset coach recently. But it sums up MLM mentality pretty well. What a destructive message. It’s simply toxic.

I’m imaging how I would feel if my daughter started a job and I didn’t agree with it (for valid reasons) and I tried to discuss it with her, but she was told by one of her advisors to GET. RID. OF. ME.

It really is WE-THEY. If people don’t like the adherent’s MLM life then they can fuck off. Simple as that.

MLM often causes intense conflict and has been known to destroy families when one person in the family throws themselves deep into MLM and it begins consuming their life. Here at Botwatch we have heard time and again about people who have lost contact with their loved ones because of the MLM they joined. It is very sad hearing these stories and we try to support them as best as we can. We are hoping to educate people to help prevent people in the future being lost.

Most adherents will admit that they’ve had to shut people out of their life after getting involved with MLM. Some are proud about it and post about it.

“Another snake gone from my life!”

Why is shutting people out your life so common in MLM?

It’s not normal to shut someone out of your life because they don’t like your job.

7 on the cult scale is another hit for MLM.

 

8) The group’s leader is not accountable to any authorities

 

This is another hit for MLM. Sadly. I trust point 8 will only be true for a little while longer until advertising authorities can introduce proper regulation.

At the moment MLMs can make claim after claim and are not accountable to any authorities.

Hundreds or even thousands of false medical claims, earning claims, lifestyle claims and product claims are posted daily and the worst that happens is the individual post gets removed.

All the blame and risk is taken by the individual adherents and they are dropped as soon as they break any rules. Even if these rules are broken with the knowledge of the company and its leader. The leader is able to get away with anything if they shift the blame onto their rogue members.

 

9) The group teaches or implies that its “superior” ends justify means that members would have considered unethical before joining the group.

 

I saw an MLM adherent recently who left one MLM company to join another. In the first company she didn’t really make ‘too’ many crazy claims. She seemed really quite genuine and down to earth.

It was interesting to see her suddenly change when she started the new MLM. MASSIVE earnings claims started almost immediately. After only a few weeks she was making “4 figures a week”. Her team were smashing the promotions, crying with happiness etc.

Before being part of this MLM she would not consider behaviour like this to be moral or good.

“Fake it till you make it” is basically lying yet most MLM reps do it, yet they know lying to be wrong. People pretend they live in huge houses that they are really renting. They pretend their new car is a result of MLM, not their proper job’s wages. They pretend their illnesses have been cured by the wampum they are selling. They pretend they have/ had illnesses to push their products or get into groups. They pretend they are getting large paycheques and will be millionaires soon.  They have to pretend to be achieving all this so that people will join them, hoping for the same. They tell themselves that soon, they really will be earning all that money and then it won’t be a lie anymore. This is the means to an end.

MLM mindset definitely makes people do things they wouldn’t normally do.

 

10) The group’s leadership induces guilt feelings in members in order to control them

 

MLMS will often accidently or deliberately use guilt to keep people from quitting and to influence people to join the company.

This guilt can be from either the upline to the downline, or the downline to the customer.

“Do you want to give your kids the best life?”

“Do you want to stay stuck with no money for the rest of your life?”

“Do you want to give up after all the time I’ve spent training you?”

“Do you want to give up and waste all the time you’ve put into this business?”

“Giving up is a sign of failure”

“Wanting to give up is just a sign that success is right around the corner, you can’t quit now”

Stuff like this.

Making someone feel shit about wanting to leave is about the best method MLM has in keeping people from quitting.

Another hit for the cult scale.

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11) Members’ subservience to the group causes them to give up previous personal goals and interests while devoting inordinate amounts of time to the groups.

 

MLM hammers the point home that the harder you work, the more you will earn. Often this causes adherents to go MLM crazy. It consumes their life and becomes part of their life-blood. At conferences they are told that to be successful they have to literally live and breathe the product.

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Uplines are trained to put pressure on their downline to put as much time as possible into the business in order to maximise on success.

I’ve seen adherents give up their full-time job under the guidance of their upline, only to be forgotten about and left on the scrap heap and slowly descend into failure.

Adherents are unable to enjoy their previous activities because every single social activity, every outing to the shops, every meeting of other people is just a recruiting exercise.  They are unable to shut off. People try to recruit their hairdresser, bank clerk, supermarket cashier, fellow mothers at soft play. One of the things that escapees say is that they are able to once again enjoy meeting people and having normal interactions once they have left. They didn’t realise how they had been behaving until they left.

People have left their university courses, believing MLM would be more lucrative.

‘Inordinate amounts of time’ are indeed spent by adherents. They are encouraged to wake really early every day and work as much as possible. They often have late night conference calls and training events and have to go miles away for ‘success days’ and company events. They were initially drawn into the company on the promise of ‘part time work for full time wages’ or being able to work and be with their children. Pretty soon every minute of every day is spent working for the MLM.

Point 11 is spot on for MLM.

 

12) Members are encouraged or required to live and/or socialize only with other group members.

 

I think being in MLM eventually goes this way. Especially when adherents are told to get rid of people so spontaneously.

After really getting into MLM, normal people aren’t going to understand their world-view anymore.

Adherents will be mostly be friends with others in MLMs. They treat these friendships as just as important as the friends they leave behind. They call them their family or sisters. They are working towards common goals and are in contact with each other constantly. They rely on each other for encouragement and validation. They want to please their leaders and are happy to receive recognition from them.

They even have ‘recognition’ events where adherents leave their children behind, drive for miles, pay for tickets and get to stand up in front of people in their group to receive a pat on their back. They have to pay for their own food and drink and possibly a hotel stay. They then drive home and post pictures of the event saying how great their group are for recognising them. They assert that this is better than a traditional job where they got no recognition.

 

It’s ridiculous. Every point on the 12 point cult scale is relatable to MLM mindset and behaviour.

For anyone wondering if MLMs are cults, here’s your answer.

 

What to do if you or someone you know is in a group like this.

Steve Hassan, a cult counsellor, says that everyone can be helped. No one is in so deep that they can’t be helped. His website called ‘Freedom of Mind’ has information you might find helpful.

His books are very informative.

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I have written some guidance on  how to help someone in an MLM.  There is a lot of information and some practical suggestions in that post.

TINA have written an article and guide on what to do if you are the parent of a college student who has been sucked into an MLM. The advice is relevant to anyone concerned about a family member.

Remember that the person you are worried about is the victim of a complex and well designed cult and they are being influenced without their knowledge. They are not themselves. Their personality is still there, it is just being supressed.