Behind the headlines- analysis of a pro-MLM news article

I have become aware of a newspaper article that detailed how a woman had risen from being a desperate, poor single mum to a successful, rich business woman thanks to her involvement in a Multi Level Marketing (MLM) scheme. Regular readers of this blog will be aware of how unsuccessful most people are in this type of scheme. Was this woman one of the few real life success stories or was the article just regurgitating the MLM fairy story that is so often fed to new recruits?

Let’s have a closer look at the article. The link to the Daily Mail article is here. One of the principles of this website is to not make personal attacks so I won’t be identifying the woman involved by name, and I won’t make any disparaging personal comments about her. This article will just analyse the truth behind the claims that are presented in the newspaper.

cash strapped

The above snippet is at the very beginning of the article and, already, the inconsistencies are there. It starts by saying she is ‘turning over £1 million’ and also ‘on track to make £1 million a year’. These statements have quite different meanings. How long has it taken her to ‘turnover £1 million’? What does ‘on track’ mean? We have seen MLMers make ‘on track’ claims before. It just means it is what they are aiming for, what they hope to achieve. It is this hope that keeps them clinging to their MLM long after everyone else can see it isn’t working.

This exact same story has been repeated in The Sun and this is their headline-

sun

How successful is she really and what is the truth behind the claims?

She doesn’t have ‘a staff of 400’ for a start. The 400 reps are tied to The Body Shop At Home to sell their products and are reliant on the company for brochures, advertising, products etc. They are sales reps with no employment rights. Officially they are considered self employed contractors for the company. They do not work for the rep in the story at all.

Something that jumps out at me, and also to other readers (see the comments at the end of the article) are the inconsistencies. She claims to be nearly a millionaire, or at least owning a million pound business, or maybe just being in charge of some people who have sold £1 million worth of product, either way, she is claiming to have a ‘rags-to-riches’ story. She is boasting about being really rich. If she is so rich, why is she hoping to get on the property ladder? And why is she planning on getting married in 2 years time? If she is so rich and successful, why doesn’t she just buy a house and get married whenever she likes? She sounds like she is still financially behaving like a non-rich person.

Perhaps houses are really expensive in Aghalee and it is impossible to get a deposit for such an expensive are? A quick search on Rightmove, however, will show you that you can buy a 4 bedroomed house for £125,00 or £220,000.

purple bricks.PNG

If she had a million pounds, she could buy that house outright. Obviously she doesn’t have even £220,000, so she would need a mortgage. A mortgage could be obtained for this house with a £20,000 deposit. The thing with mortgages though is that you need to be able to prove a steady income, and MLM schemes would not count. The woman in this article seems to have been given a paid position in the company- managing the reps in the Northern Ireland division. Perhaps she is waiting until she has 6 months of payslips to prove her income?

If my theory is correct, the woman hasn’t accrued a fortune and anything she is able to afford now will be due to her paid employment, nothing to do with being a success in the MLM business.

The reality is more likely this-

Woman finds herself struggling for money, and out of desperation joins an MLM.

She finds it hard to make any money but realises her chances are better if she can recruit a lot of people. These people then spend money on products and starter kits, making profit for the MLM and raising the profile of the woman.

She qualifies for numerous incentive holidays with the company. I have tried to find out how much product people have to buy/sell to get this incentive but there are no details available anywhere. It is impossible to access any terms and conditions for the company. You have to express an interest on the website for a rep to contact you and then you can start finding out more.

She was successful in recruiting a lot of people.

Her recruiting got the attention of the MLM bosses who offered her a paid position.

Now, with a steady income, she is able to start saving for a mortgage deposit and then apply for one.

She can now start saving for a wedding.

 

My version of the woman’s story isn’t so exciting. Why would a misleading article like this be written in two different newspapers? The cynical part of me thinks that the ‘story’ was provided by the rep to the papers in an attempt to recruit more reps. One of the papers even has a video embedded of the rep explaining how great her ‘opportunity’ is.

In conclusion, this rep’s story is a non story and could result in more people joining an MLM scheme where 99.7% of people lose money.

If anyone wants to refute what I have said here, please comment below. Perhaps there is proof that the rep is actually very successful and has earned £1 million. If so, I would be very happy to look at it and issue a correction here.

 

Further Reading

Timeless Vie article on a real life experience of a Body Shop At Home rep.

Anti-MLM Coalition have a real life story of an ex-rep.

Bot Watch article on why conventional companies turn to the MLM model. Mentions Body Shop At Home.

A Reddit post on someone’s bad experience with Body Shop At Home.

 

Advertisements

What is happening to Forever Living?

In this post I will present some facts and evidence to you but I will leave it for you to make your own conclusions.

People have been wondering what is happening to Forever Living for a while now. Timeless Vie speculated about its future two years ago. See what they had to say here and here.

Timeless Vie said that Forever Living were reaching saturation point. They said that a company approaching saturation point would either introduce new products, or new markets. At the time of their article, FLP were trying to sell aloe vera products to horses. Since then they have brought out a new beauty range and this year they have rebranded their most popular drinks. Also, members seem to be increasingly chasing foreign markets.

Timeless Vie described some new rule changes that had been made to make it easier to achieve ranks. This has continued to be the case.

Lifecycles

The lifecycle of any living organism always follows roughly the same trajectory, whether it is a colony of bacteria or a species of animals. MLMs have often used this trajectory to show how well their company is doing, and they encourage people to join based on where their company is right now.

Have a look at some examples.

Here is someone trying to recruit people into Pink Zebra

pink zebra

Let’s have a look at that chart

graph.PNG

They are suggesting that all you have to do to be in the top 2-3% of earners, you just have to join at the right time. Research shows it is incredibly difficult to earn any money in an MLM, so reps will be doing all they can to get themselves any advantage they can.

The chart above stops at stabilisation. Let’s see what science has to say about population survival charts that this chart is based on. Here is a chart documenting the rise and fall of a colony of bacteria.

bacteria.PNG

Here is what is happening to the human population in industrialised countries.

humans

In MLM terms, this means that initially there is a lot of excitement about a new company, loads of people join in pre-launch. They get more people to join and spend their money, they spam their friends and family and everyone gets bored of it. After a while the people who joined leave faster than the rate of people joining. This is the start of the death/ declining phase, or oversaturation.

I wonder where Forever Living Products are on this chart? Let’s look at some evidence. How has the UK company being doing financially over the last few years? Companies House has all the details we need on this. The money brought into the company is documented every year.

The 2017 report that looked at the company for  2016 has this to say

panic

This bit tells you how much profit they made in 2016.

profit

For a detailed breakdown of where the money came from, have a look at this

This shows the company earned a lot of money from things like success days and details

This shows that the company made a lot of money from success days, training materials and ‘delivery revenue’. The sales of goods has declined from 2015.

Let’s lay out the total turnover from over the past few years.

2011-£23,878,750

2012- £27,167,812

2013- £34,726,349

2014- £58,993,590

2015- £106,489,238

2016- £80,066,133

2017- we will find out in October this year.

That just looks like a load of numbers. I prefer charts and pictures to show what is happening. Here is a graph showing the above figures.

chart

I wonder what this chart will look like at the end of this year when the 2017 figures are shown? We can look for clues. One of the things that Forever Living do each year is share some of their profits with the top people who brought in the most money and recruits to the company. If the cheques are smaller this year, that would indicate a decline in profits.

What did those cheques look like in 2016? The evidence for them is everywhere, as it is a good way to lure in new recruits. It makes it look like people are successful and it is possible to earn loads of money.

2015 Global Rally in Singapore

There were 97 cheque earners from the UK in 2015.

This was on the cover of FLP’s magazine. This is the highest earner in the UK. We’ll call her number 1.

jayne.PNG

The following images are accessible from the FLP website and have been widely shared by a lot of reps in order to make their company look successful and to make it look profitable for people.

Another top earner, we’ll call her number 2.

uber.PNG

 

This one of the mid earners. She’ll be referred to as number 3.

gemma4.PNG

Number 4 is also a mid earner.

This one was number 8 in the UK in 2014. In 2015 she qualified for a cheque at the rally as the 11th biggest cheque earner.

yawn

There were loads more cheques presented, I have only put three here as examples. Another indicator of success of the reps is the amount of people being promoted up the ranks. In FLP’s magazine for April 2015 they have listed the people being promoted to Managers in March.

soaring.PNG

Here are the names that were promoted to Assistant manager-

ass

And these are most of the supervisors. There are about 250 supervisor promotions.

supervisors.PNG

Let’s see what their success day looked like when everyone got back from their cheque sharing extravaganza. They call the trip abroad, the Global Rally.

 

2016 Global Rally in Johannesburg, South Africa

We would expect the cheques to be bigger for the three reps whose cheques we have seen. This is because the company’s revenue was much higher this year than the previous year. Let’s see what they were in 2016. The cheque details for all the money awarded can be found on this slide share website. There were 176 cheque earners from the UK at the 2016 event.

Here is number 1’s cheque. It is about $12,000 less than the previous year. Proportionately, it is about the same as 2015.

blood sucker.PNG

Here is number 2’s cheque. It is an increase of $325,054.54. That’s a massive increase of 48%.

heeley.PNG

Number 3’s image was taken from a website of an FBO trying to entice people to join based on the large cheques.

difficult.PNG

 

This cheque is a huge 1061.63% increase! Ten times her previous cheque!

 

 

 

 

 

Number 4.

yawn2

Number 4’s cheque has increased by a whopping $92,387 and she’s gone up a place in the cheque leader board. She must have been feeling pretty successful at this point.

These are the promotions for that month.

2016 promotions

supervisors1

supers

Again, there are about 250 supervisor promotions, the same as the previous year.

 

2017 Global Rally in Dubai

You can access the British cheque earners and their amounts at Forever Living’s own site. There were 108 cheques awarded.

 

Number 1’s cheque reduced.

891.PNG

 

 

 

Number 2’s cheque reduced

nat

Number 3’s cheque also reduced.

brit

Number 4’s cheque has also reduced and she has dropped down to number 18 in the cheque league table.

claire3

Let’s have a look at the promotions this year.

2017 promotions

sparce

Notice the massive drop in supervisor promotions. 2015 and 2016 both had about 250 promotions at this level. Now there are only 28! A massive drop.

2018 Global Rally in Dallas, USA

To see the cheques that were awarded this year, go to Forever Living’s website.

Number 1 must be very disappointed with her cheque of $756,687.82.

curtis.PNG

Number 2 got this

nheeley

Number 3’scheque is much lower than last year.

gemma2017.PNG

Number 4 qualified to go to the rally but she didn’t qualify for a cheque this year. She must have been pretty devastated at that because all her team will have been expecting her to get one. I think the expectation is that the ‘business’ should grow year on year and once you start earning cheques, it should really take off. The cheques and recognition process is so public that their decline is out there for all to see.

I tried to find a list of promotions but it seems Forever Living don’t publish them anymore. Have a look at one of their online magazines.

A Bot Watcher has told me that Bob parker, the UK and Ireland boss of Forever living publishes the reps’ names for their promotions. The most up to date ones are here-

bob

march ass managers.PNG

managers.PNG

Some graphs

There is a lot of information to digest above. I’ll put it in some graphs to make it clearer.

Here is an illustration of the three people’s cheques from above.

global

Here are the number of promotions awarded in May of each year.

proms

 

‘Supervisor’ is the first promotion that a rep in Forever Living gets. The numbers have gone from a steady 250 a month, down to 28, and now 17. These are the bottom rung of the pyramid structure. Without enough of them, the whole structure won’t be able to support itself and could topple.

All of these bottom FBOs will be looking to the people at the top and will be watching them get their cheques. We know that the cheques are becoming smaller each year, but new joiners won’t necessarily be doing much research into the situation. They could well be being blinded by the cheques and aspiring to earn one themselves.

Let’s dig a little deeper into the cheque earners I have shown you above. FBO number 3 is actually number 10 in the UK. She is the tenth highest earner in Forever Living in the UK and as such, is considered successful. Her Facebook page has some inspirational posts. In the following images, she shares her thoughts on Forever Living’s future and her experience of it so far.

lies

lies2

Do we think things are getting better and better for Forever Living? How are things going for our person number 3? The tenth highest earner? She has registered her business activities with Companies House so we can go over and have a look at how successful she is.

Oh, she’s not doing so well. In August last year there was a meeting and a resolution was made.

special

Her company has been voluntarily liquidated. It went through the courts in May 2018 and a liquidator was appointed. Here are the last accounts that summarise what has been happening.

accounts.PNG

I’m no accountant (would love to hear from one), but it looks to me like a tax bill of £115,586.10 couldn’t be paid, resulting in the company being £63,078.10 in debt.

Whilst this person was in Dallas, holding a giant cheque and trying to recruit people off the back of her ‘success’, she was actually in quite a bit of debt. And this, remember, is the UK’s number ten in the list of earners.

I am not gloating at this poor person’s failure. I am sure it has been dreadful for her and extremely stressful. I feel more sorry for the unsuspecting people who might sign up under her, hoping to earn some money under her mentorship. What hope do they have of obtaining a promotion or earning any large cheques if one of the most successful people in the company is not earning anything?

Just one more photo before I leave you to ponder the direction this company are heading in.

A ‘success day’ from 2018, held in the London Paladium. Photos from this event show a less than half full room, or they just show the very front or corner, to make it look more full.

palladium.PNG

This would have been unthinkable in 2016 when there were events in 4 different major cities in larger arenas and better attended.

How do you think the company is doing? Are there another 40 years in it as they are promising?

USI Tech, what’s going on?

2017-12-24

Recently USI Tech have caught my attention. First, a relative of an USI Tech member contacted me to share her concerns. She said she was very worried about her relative’s involvement in the scheme as she seemed to have had a personality transplant and was now obsessed with the company. The concerned relative couldn’t find much about it so turned to me for help. As always, once something is on my radar, I start noticing it when it appears and my concern and curiosity are piqued.

I have decided to document anything USI Tech related here so that all the upto date information will be easy to find if you are concerned about this particular MLM. This is particularly important when you realises a Face Book group dedicated to exposing the company disappeared suddenly. The information needs to be preserved. Please send me any information you think should be included.

If you would like to see, join or follow the new face book group, go and have a look here.

Ethan Vanderbuilt has written about USI Tech in this blog post. Unsuprisingly, he considers it to be a scam (in his opinion). He has concluded it is a Ponzi scheme because people earn money when they get others to pay to join it. He looks into the people behind the scheme and where the company is actually located. It seems it may not be straightforward. The founders have a past of financial dodgyness, involving the authorities and people being arrested.

Here is USI Tech’s website.They are in the UK, regularly putting on seminars to try and recruit people. They claim to have a special programme (robot) that can trade in cryptocurrencies and magically make loads of money for investors easily.

2017-12-24 (1)

Here are some things that have been going on with the company.

December 15th 2017 British Columbia residents are warned not to invest in USI Tech as they do not have the necessary registrations.

IMG_2055

December 19th 2017 Ash, a crypto expert blogs about USI Tech and details the problems he sees with the company. He attended a recruitment event and analyses what is said there. The comments after this article are worth a read.

December 20th 2017. The Texas State Securities Board warn against investing in the company. They issued a cease and desist order because they are not properly registered in Texas and are breaking lots of rules. They state that USI Tech claim to be regulated by the FTC but this is blatantly untrue. Ethan Vanderbuilt examines this development. Here are the documents detailing the order.

2017-12-24 (2)

December 21st 2017  Nova Scotia’s securities commission warns people that it is illegal to run schemes in the way USI Tech are doing.

December 23rd 2017 The Financial and Consumer Services Commission of New Brunswick have warned against any involvement with the company. They call it an illegal investment scam and encourage people to report them. This is on their website

2017-12-24 (3).png

December 24th 2017 Manitoba Securities Commisssion in Canada warns against USI Tech and states that companies offering high returns at low risk are often signs of fraud. They ask for people who have been involved with USI-Tech to contact them.

Which country will warn against USI Tech next? Will anyone get in trouble over it? Will people start coming forward about money they lost in this scheme? Any information, please contact me.

Testimonial use in MLMs

We already know that MLM often sell products with absurd health claims. Health claims that are not allowed by law. See here, here, and here about the laws around what health claims are allowable.

People in MLM schemes end up with products that are usually overpriced and of little actual use. The only way they can sell these products is to exaggerate their uses and make it sound like it has magical qualities. Have a look at TINA’s findings of false health claims made by MLMs.

Hence, you see posts like this on Facebook-

2017-10-22 (1)2017-09-21 (10)health2

 

However, these sorts of claims are frowned upon by the law, advertising authorities and the companies themselves. The companies tell their reps, outwardly at least, that they must not make health claims. They have compliance departments that are supposed to be finding these claims and asking their reps to stop.

If these wildly inacurate and illegal claims are not allowed, how are people supposed to sell them?

Juice Plus have come up with a great idea. Share testimonials. Then people are not making claims, they are just sharing stories. Here is an email from their compliance department to a Bot Watcher.

2017-11-23

 

 

“If someone has seen that the product has helped them with a specific condition, then we encourage them to tell their story in the first person”.

 

“share this story with your readers or tag them in the post.”

 

 

From this belief sprung the Juice Plus Testimonials page on Face Book. Here, people tell stories about how they took Juice Plus and their health condition improved. Here is a selection of some of those testimonies-

2017-11-22 (2)

2017-11-23 (1)2017-11-23 (2)

You can find any medical condition there and use their stories to put on your own page if you are selling Juice Plus and want to make health claims without actually making health claims. Reps end up discussing their customers and working out which of their products to recommend. Totally not making any health claims though. Here’s an example of one such discussion.

2017-11-22 (1).png

Well there you  go, The shakes must be ok in pregnancy, the rep says so. Even though she has no training. I’ve looked up the ingredients to see if there is any vitamin A in the shakes. There isn’t. Vitamin A can be found in their capsules, but not the shakes. I did find something interesting though. There was a link to click that was labelled

“California residents: Click here for Proposition 65 WARNING.”

I don’t live in California but thought I’d click anyway. This is what I found

2017-11-23 (3)

The shakes can cause birth defects. This is pretty serious and it concerns me greatly that reps are telling other reps and customers that it is safe because they used it and they were ok.

It should be pretty obvious that sharing testimonials is a very bad idea. We don’t know the truthfulness of these claims and they could be very harmful. People may try and come off their medications, or have false hope for their condition. There are many, many conditions catered for on the Facebook page and shared widely.

The Law in the UK

Section 15 of the non-broadcast CAP advertising code states what sort of claims can be made for foods or food supplements.

 

2017-11-23 (4)

So claims that Juice plus capsules can replace anti depressants would not be allowed. The claims that can be made are very clearly set out I these registers. But what about personal testimonies? Is it ok for someone to say that a product has helped with a condition?

There are some general rules that marketers must comply with when sharing testimonials-

  1. The marketer cannot be the consumer and give their own testimonial.
  2. The marketer must have written permission from the person making the testimonial.
  3. The marketer mush hold evidence the claim is true- evidence of the ordering history, email records (not Hotmail, but a provable email address), address of the customer and be able to prove the testimonial is genuine.

 

This next bit is very interesting, found on this page on the CAP website.

“Marketers may not use testimonials to circumvent the Code by making claims in a consumer review that they would not otherwise be permitted to make. For example, if a marketer doesn’t hold the evidence to substantiate an efficacy claim, they cannot use a testimonial which makes that claim.

Testimonials alone do not constitute substantiation so marketers should not rely on testimonials as support for any direct or implied claims made in the marketing communication.”

What claims are Juice Plus allowed to make?

I asked the MHRA who regulate medicines and supplements in the UK if any health claims are allowed to be made by Juice Plus (and Ariix and Herbalife). This is their reply

2017-11-23 (5)

Essentially, this means no health claims can be made for products from Juice Plus.

I told them about the Juice Plus Testimonials page and one of their investigators joined and had a look. They were very concerned about the sort of posts there and wanted to inform Trading Standards about the group. Unfortunately though, they realised the page originated in America so they could not do anything about it.

2017-11-23 (6)

I never heard back about anything Facebook said. The page still exists so I am assuming they took no notice.

 

Conclusions

If you can’t make a claim for a product legally, you cannot get around it by using a testimony.

Making health claims that are not proven or allowed could lead people to believing it and ditching their medicines/ treatment. This could lead to significant harm.

If you sell a product, you cannot make your own testimonies when advertising it.

The strict rules around allowable claims are there for a reason, do not break them just so you can make a bit of money. Especially if you are taking advantage of ill people, this is despicable.

 

Vida Divina breaks the law

Vida Divina launched  on 23rd September 2017 in the UK.

Here is their website.

Here is a list of their products. (note the products for ‘diabetes and prostrate health’!)

This is one of their products

2017-09-17 (3)

Here is the supplement information

2017-09-17 (2)

Do you see the word ‘melatonin’ there?  Melatonin is found in the body and it helps to regulate sleep. Research has shown it has some slight benefits in helping people temporarily with their sleep problems due to jet lag or irregular shift patterns. It helps only a very small amount and is not recommended for long term use or for standard insomnia.

In America Melatonin is classed as a supplement, and as such, sellers are allowed to make claims about it. In the UK, however, it is a drug. The listing for it is in the British National Formulary.

This means that Melatonin cannot be sold as a supplement in the UK. It has to be prescribed by an authorised prescriber and come from a pharmacy. Vida Divina cannot sell it in their Sleep-N-Lose capsules. This would be breaking the law.

Which makes me wonder why it is for sale on Ebay in the UK.

2017-09-18 (2)

Ebay have been alerted to this breach of the law and they say that they will respond to each report of this item being sold as they get to it.

Come on EBay, it isn’t the public’s responsibility to report these incidences to you. You need to stop allowing these sales! And stop them now!

Vida Divina, you need to stop sending this product to the UK. You are being very irresponsible and need to ban this product immediately.

I will ask for Ebay and Vida Davina’s comments on this issue and report back their answers here. Don’t hold your breath for a swift resolution though.

 

Trading Standards

Someone has contacted Trading Standards about Vida Divina and their reply was very interesting.

2017-09-20 (15)

So to sell Vida Divina products in the UK, sellers need to –

+Register with local environmental health authority as a food business operator.

+Get special labels made up for putting on the products that comply with the law.

+Ensure that there is no mention of any health benefits to the products unless they are on the correct register.

+Ensure there are no new novel foods in the range.

Please note the bit that says ‘you could be prosecuted’.

I contacted the MHRA for clarification on melatonin sales in the U.K. This is what they said

IMG_1668.PNG

 

A bit more information to help you decide if you want anything to do with this company.

A bit on the background of the CEO, from Behind MLM. There are details on how he claimed the products in his last MLM cured him of his terminal cancer. And the problems previous MLM companies had that h was involved in.

This extract is from the above link.

2017-09-20 (19)

This video has come to light from Facebook. The man is working for Vida and is in America now at their conference. Look what he is advising his followers.

 

Is this how a company imports their products? He is advising they all stuff their suitcases with coffee and ‘blag customs’. How are 70 people going to explain suitcases full of improperly labelled coffee being brought into the UK to be sold illegally as weight loss products?

 

Other products they sell

Vida Divina sell tea as well. “Is that ordinary tea” I hear you ask, “or is it special tea?”

Have a look at this advert that has been brought to my attention

2017-09-26 (2)

There’s so much wrong with that advert, it’s difficult to know where to start! Needless to say, there is no such thing as ‘detoxing’ your body, tea won’t cure IBS, 95% of viruses aren’t from the bowel and this tea will not ‘have your insides back to healthy in no time’. It is certainly breaking advertising rules.

I have been shown this email where Vida Divina seem to be saying that the tea is not for resale in the UK, which would make the above advert even more dodgy.

2017-09-26 (3)

I have emailed Vida Divina today (26th Sep 2017) for a statement on whether their products are for resale in the UK and what their plans are for the products. I will keep you updated.

Let’s hope the reps aren’t buying too much of the stuff because then they’ll either have to sell it illegally, drink it all themselves or have it building up in their house.

22016469_10154269807599229_2059837406_n

Oh.

Do you know what the authorities call this type of business? The type where there are no customers and you can only earn money through recruiting?

 

22016469_10154269807599229_2059837406_n

 

 

Isagenix- cutting through the crap

Isagenix are coming to the UK soon. Cue lots of excitement from people joining the ‘opportunity’ and claiming you can earn money with this company.

There are a few problems though.

Financial

Maybe you are thinking of joining it yourself or maybe you have friends talking about it. Don’t take everything you hear at face value.

Let’s look at some cold, hard facts supplied by Isagenix themselves. Then make up your mind about whether you think it is a good opportunity or not.

Some Multi Level Marketing companies publish statistics on how much their people earn. Isagenix published stats for 2014 on

You can see it here.

img_0355

94.8% of people earned less than US $500 which , according to Isogenix, means they weren’t serious about their business so they must have just been involved because they love the products so much.

Maybe that is possible. Let’s assume that the more serious people worked hard and earned more than $500. These people apparently ‘devoted considerable time and effort into introducing others to Isogenix products and helping them do the same’.

The last chart at the bottom shows the yearly pay of the 5.2% of people in the company who earned money. Of these,  85% earned $2101 on average or less. That’s not much.

BUT, I hear you say. Some people have earned loads, look at the chart! Yes, some of those numbers do look nice. Some people even earned above the American poverty line.

In 2014 people with an income of more than $11,670 were considered to be above the poverty line. Source.

img_0358

The successful people in Isagenix.

0.36% of Isagenix people earned above the poverty line. 0.36% is what 7% of 5.2% looks like. That’s not very many people. And their earnings are not amazing either- on average about $15,000- $34,000.

These income figures do not take into account taxes that need to be paid, travel costs, phone bills, training, and all the other associated costs.

Some people however, will ignore all this and just look at the big earners. ‘Look’ they say, ‘ some people earn a massive amount!’

People who earn a massive amount.

Less than 1% of 5.2% earn on avearage $331,956.

This is less than 0.052% of people in the whole of Isagenix. This is NOT achievable for everyone.

Other scandals

An article by a well qualified nutritionist explains why the ingredients in the products aren’t what they seem. The article is called “How Isagenix Lies To Its Distributors And Consumers About GMOs, Preservatives, And Artificial Ingredients”

A doctor who fights against health frauds has written about the absurd health and science claims that Isagenix claim. Some of them are bizarre. Here is one quote

The claims on the Isagenix website are a mishmash of pseudoscience, myth, misrepresentation, and outright lies. For example:”  She goes through quite a few of these silly assertions that Isagenix make.

Another article here about the products and  being in the ‘business’.

I’m sure I’ll be able to add more points to this article as Isagenix infiltrates the UK. Let me know of anything you come across.

MLM and the New Enterprise allowance

There is a UK government initiative to help unemployed people start up their own businesses. It is called the New Enterprise Allowance. This sounds like a great idea. People with ideas and skills are given the means to set up a business and start making their own success, allowing them to come off benefits.

But then this sort of thing crops up-

screenshot-2017-03-05-20-51-15

 

 

And this one from a Scentsy bot explaining the details of the NEA

screenshot-2017-03-06-00-31-37

A Younique bot is trying to persuade unemployed people to get an NEA so they can join her.

screenshot-2017-03-06-00-38-34

 

Here’s someone from Maelle spouting the same type of thing. She wanted unemployed people to join her by using this money. This was before Maelle started trading. And before they had to stop trading because of a court order.

screenshot-2017-03-06-00-46-24

Timeless Vie have more examples of these types of posts.

You get the idea.

I have some concerns about these claims.

 

 

  1. Would an MLM be deemed as an appropriate type of business for this scheme?

This official government website has all the rules and details about the scheme. Here is a snippet-

screenshot-2017-03-05-21-24-53

Most MLMs state that the reps are self employed and work for the company although they tend to go to great pains to explain they are not employers. There is no doubt though that MLMs are big companies and the reps work for them. It is not really their business that they are starting from scratch.

Would the DWP be brought into disrepute if it was discovered they were funding people to embark on a scheme where they were 99% likely to lose money? I would like to think so. The document states on page 9 that people will be refused if their proposal does not stand a “reasonable chance of success.” MLMs do not pass this test.

I found this promising reply on a business forum to someone asking if NEAs are a good thing.

screenshot-2017-03-05-22-47-14

 

2. What actually happens to someone embarking on this scheme?

They apply to the Job Centre.

Their business idea is assessed by a business mentor who assesses the viability of the plan. A business plan is made where income and outgoings are taken into consideration.

If accepted, the person has to stop claiming their normal out of work benefits.

The person starts trading and registers with HMRC.

A weekly allowance of £65 is paid for the first 13 weeks. Remember this is in place of their usual benefits (Job seeker’s allowance is currently up to £57.90 for 19-24 year olds and up to £79.10 for 25 or over).

This then drops down to £33 a week for the next 13 weeks. This represents a drop in income of between £24.90- £46.10 a week. Their low income is roughly halved.

They can apply for a government loan for start up costs of £500- £25,000 for 1-5 years at an annual interest rate of 6%.

These payments are not counted towards housing benefit, income tax, tax credits or universal credit.

After this time, it is expected the person will be supported by their new business. Are people able to earn a living from MLM schemes? The short answer is NO. A longer answer has been given by Robert Fitzpatrick, Pink Truth, some ex-MLM victims and Lazyman and money.

So now, the person has no unemployment benefits and they are expected to be supported by their ‘business’. Which will not be earning them any money. They will be in a worse position than before they applied for the NEA. It is disgusting that people are being conned into falling for this trap.

3. How many people have joined an MLM with one of these grants? And how many have applied and been rejected?

I have asked the DWP for this information under the Freedom of Information Act on 6th March 2017. I’ll let you know what reply I get. I’ll be waiting with baited breath.

I should have a reply by 3rd April 2017.

If anyone in an MLM has had one of these grants, please let me know. I will be very interested to hear what happened. Someone on Twitter claims to know some who have. I have asked her for details but she has not replied.

 

4. Do the bots that are promoting the NEA know that it will likely put the applicant into a desperate situation?

We know that people considering MLM are usually desperate. If someone is on benefits and considering doing this, it can be assumed that they are desperate. Let’s assume they are over 25 and receiving £70.10 in JSA. If they apply and are accepted (doubtful they would be), their income would drop to £65 a week for 13 weeks and then £33 a week for the next 13 weeks.

They would need to take out a loan to cover the costs of setting up their ‘business’. They would need £200 for the start up kit and then a bit more to cover some costs- product parties, online advertising, business cards etc. Let’s assume a low £200 for the basics. They will probably have been told by their upline that the costs are low. The calculation below shows how much those payments would be if it was spread over 3 years. The smallest timeframe where it might seem affordable.

Screenshot 2017-03-06 20.57.42

Once they have been enrolled on this scheme and seen their benefits drop off to £0 they are then reliant on their non-existent MLM income. And they’ll have a government loan to pay off.

How do people sleep at night after potentially sending people down this path? There are a few explanations-

a. They truly believe somehow, against all the evidence, that someone can earn an income from the MLM. They presumably would vet people to make sure they understood what you have to do to succeed and that they understand how unlikely it is that they will earn money easily.

b. The upline does not understand the process and really thinks that it is just a case of ‘popping down to the job centre’ for a bit of extra money to cover the cost of the start up kit. If this is true, it is absolutely insane that they can suggest people do this if they don’t even have a clue what they are proposing. Even a brief internet search will show what is involved.

c. The upline knows what will be involved and know that the person will fail.  They don’t care because it means they will get a bonus/ more team members for a while and their own income is increased for a bit.  This fits in with the common practice of uplines advising people to take out bank loans.

This MLM website  (pointed out to me by David Brear from ‘MLM’ The American Dream Made Nightmare) tells people to borrow from friends or family or get a bank loan for the start up fees. It notes that Screenshot 2017-03-06 21.20.37

Best to borrow from family or risk everything through a New Enterprise Allowance then.

 

CONCLUSION

The people encouraging victims to apply for an NEA are either naive and do not know what they are doing or they know exactly what they are doing and do not care.

Hopefully no one is able to progress their application through to actually losing it all on this risk. I will keep you updated.

I welcome any comments or information, especially if anyone has any details on people successfully applying and doing well in the scheme. I would also like to hear from people who have been encouraging this applications and hear their explanations.

UPDATES

Someone on the Mumsnet BotWatch discussion thread (Mumsnet, money matters, bot watch) has already asked the DWP some questions about the NEA and MLMs in March last year.

Screenshot 2017-03-06 22.19.40

Unfortunately, the DWP replied, saying they didn’t hold that information. That was in March 2016. I will endeavor to find out the information somehow.