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.

LTW Payment plan update

News just in (As of 8th July 2016)- The DSA have not approved LTW for membership. They are no longer on the list of prospective members on the DSA website.

On the 11th July there is a petition in the Manchester courts for LTW to be wound up. This move has been brought forward by a perfume company who are owed money. https://www.thegazette.co.uk/notice/2565024

 

I have been informed by people from LTW that my last calculations were misleading and do not show how people actually earn money in their scheme. I have re-examined the payment plan and found that I was mistaken in the requirement to do three months shopping to be eligible for bonuses. Here is an updated version of how you are supposed to make money. Update to the update (27 May 2016), I have seen the official compensation plan for April 2016. I will write updates in red, to reflect this document.

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I cannot access the official information on the compensation plan because the official website has no reference to it at all. This is still the case. If you were about to sign up to this ‘business opportunity’ you would be doing it based on what bloggers and Facebook members told you it was like. This must be concerning and a red flag. I would not take up a job or business opportunity where the only financial information provided was what some random people promised me on the internet. Especially when these people would profit from me joining.

This clause still seems to be active.

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This is from this LTW website which looks official but has a different logo.

Relevant to any discussion on earnings is this statement from the ‘earnings and income disclosure statement’ from this website.

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The highlight from this bit is where you are warned that testimonials you hear about are not representative and will not apply to the average purchaser. The ‘average purchaser’ presumably being those people that think they can earn money just by shopping with this company.

Let’s have a look at some of these websites that don’t seem to be official to see what they think the compensation plan is. We will apply this to the Average Purchaser.

First of all there is the £35 joining fee. It has been described variably as a one off payment, but also, on more than one occasion, it has been described as an annual fee. Without official information, it is difficult to tell. It is referred to as an ‘application fee’ on the official document, so it sounds like it is a one off payment.

So you join up and spend £35.

Total spent £35

Then you need to do some shopping. You need to get 100 PV points really if you want to make any money. 100PV means you have made the company £100 in profit. To do this in the cheapest way you would buy a ‘hamper’ for £165. This contains all sorts of things that you probably would not normally buy. But hey, it is cheaper to do it this way and you are in it for the business aren’t you? Not for the shopping.

So this arrives.

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Great. Now you don’t need to buy any Yazoo for months. It was sent by Royal mail and took 3-5 days. You may well have had to go to the post office to collect it if you were at work when they tried to deliver it. You can’t take time off work to sit and wait for these deliveries. It will arrive in two heavy boxes. I hope you have a car to go and fetch it with.

Total spend-£200

You will be eligible for 2% commission on your shopping, congratulations! You will receive £3.30.

Total spend balance- £196.70

You would be eligible for team bonuses and a share of their money but you don’t have any downline yet. You have just started and wanted to see if it worked first.

Month 2.

You have managed to persuade your brother and a best friend to join LTW. You promised them a fantastic earning potential even though you do not know for sure that it will work out. You probably showed them pictures of people with big wipe clean cheques for £10,000 and told them that they could get that too. Did you tell them that the payment structure could change? Did you manage to find official details of what the payment plan actually is? Did you tell them that the average purchaser wouldn’t earn that?

You buy £165 of food again. So do your brother and best friend.

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This arrives again. But you’ve not finished it all from last time! Better get drinking the Yazoo then. And then go proper food shopping because there isn’t enough there for a single meal.

Apparently you will get £20 for each person you sign up. There is no mention of this bonus in the official LTW comp plan.

And 2% on your shopping. And 1% ‘residual income’ from the money your brother and best friend spent.

Month 2 you get back £3.30 ‘residual income’, £40 sign up fee and 2% from your own shopping. you get £46.60 in payment.

Your total spend balance is now £315.10

Month three you have managed to persuade your neighbour into joining the scheme. Have you been totally honest with them about the ‘opportunity”? Would your brother and friend tell them how great it is or would they be objective? What information are you showing them to persuade them to join?

You order your hamper again. You go for a different one this time because you are running out of storage space for the weetabix and Yazoo. This arrives via Royal Mail-

 

Still nothing there to make an actual meal out of, but never mind. Some LTW people have suggested just taking it to a food bank. It isn’t about the products/wampum after all, it is about the business opportunity. Although I’m not sure what you would do with the lipsticks, blue nail varnish and perfume. Save them for presents maybe?

You make another £20 for persuading someone to invest in a scheme on the promise of future rewards. Nice one!

Meanwhile your brother and best friend have diligently spent another £165 on their wampum. Also they have persuaded a person each to invest money in the scheme, promising them future rewards for doing so. They get money for doing this and earn money from their shopping.

Luckily for you, your neighbour has immediately signed up her sister into the scheme. She promised future rewards in return for a payment. The neighbour and her sister pay their £200 each into the scheme.

You get paid more money. You get £20 for signing up your neighbour.

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This chart is reproduced in the official document. It goes upto ‘infinity’ apparently. WOW!

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You get 2% on your shopping (£3.30). You get 1% on your neighbour, brother and best friend’s shopping (£4.95). You also get 1% on the shopping from the people that they signed up. (£4.95). This totals £13.20 in commission.

Because you have now been the catalyst in persuading 6 people to part with £165 on wampum and you are at the top of a little pyramid you are eligible for a team leading bonus! Yay! This is for £200. Finally, this is what you have been waiting for.

This month you get paid a £20 sign up fee, £13.20 commission and a ‘senior star’ bonus of £200. Total income this month- £233.20. But you spent £165 on wampum.

Your total spend balance is now £246.90

This is you-

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Ooh, hang on! You have been active now for three months! This makes you eligible for the pool!

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If you don’t get 100 points one month, you get no pool money until you have spent 100 points for three consecutive months again. LTW illustrate the 2% pool as a pie chart. It’s just a small point, but that is not 2%.

                                              LTW’s 2%                                          Everyone else’s 2%

What does this actually mean? Do you get points so you don’t have to spend as much money? Is it actual money? Let’s assume it is actual money that you get paid.

You would have to know how many points were purchased and how many people were active.

Hmm, well, we know that there were 6650 people in LTW in Dec. Let’s pretend it is March.

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Over that period of time there will have been a churn rate which means that 90% of those 6550 people will leave over the course of a year. This will equate to 1,474 people leaving over three months. They will be replaced of course so the overall figure will increase. How many of these will have spent 100 points ? Let’s be generous and say 80% have spent their required amount.

This means 4060 people are in the pool. We are told in March there are about 9000 people in LTW. Let’s be generous again and say 80% spent 100 points this month on £165 hampers. This means that £1,188,000 (and 720,000 points) is given to LTW. 2% of these points are added to the pool. This is 14,400 points. Presumably these are converted to £14,400 for sharing purposes. £14,400 divided by 4060 is £3.55.

By month three then, your Total spend balance is  £243.35.

By month 4 you really need some different types of food. The only other available hamper for purchase that doesn’t involve trips to Saudi Arabia or drinking strange juices is this one-

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I suppose you could have a tin of Heinz spaghetti for tea? Or rice with tinned tomatoes? It might be interesting to try different food from round the world. After all, it isn’t about the product / wampum is it? By now the people at the local food bank will be wondering what delights you have for them next.

Month 4

You spend your usual £165. Your neighbour and best friend have spent their £165, as have their downlines. They haven’t recruited anyone else. Unfortunately though, your brother has packed it in. His wife was getting sick of all the false promises and is angry he has become involved in another ‘get rich quick scheme’. His best friend and downline has backed out as well.

Never fear though, you can get the residual income from your two downlines and their downlines. This will equate to £6.60. Don’t forget the 2% for your own shopping! Your ‘cashback’! Thats another £3.30. In total these payments add up to £9.90. And you are still eligible for the pool. That’s another £4.43 coming your way. You are not a senior star distributor anymore though so you won’t be getting your £200 bonus. I hope that doesn’t cause any friction between you and your brother.

By month four your total spend balance is £403.92

To get back up to the dizzying heights of senior star distributor you will need to recruit another person and persuade them to recruit a person under them. In the meantime you will need to be persuading your two downlines to get on with recruiting another two people and getting those people to recruit as well otherwise they won’t be senior stars. They haven’t had any £200 bonuses yet and might be leaving soon if you don’t keep on at them.

Does any of this sound like the adverts for this company?

No sales? No team building? No pressure?

Well LTW people, have I got it right this time? Has anyone been able to find me official confirmation of the payment structure? Are there any bonuses I have missed? I am not interested in hearing from the people who transferred over from another MLM with their 30 downlines and their instant qualification for all the bonuses because that is just not realistic. I have tried to portray here what would probably happen to an average purchaser who got involved in this scheme thinking all they had to do was buy their shopping and get a few others to do the same.

It would be great if some average purchasers could comment below on their experiences. Including any problems experienced. I think it is important to show the realities of this scheme so that people considering joining can make a considered judgement.

One more picture to end on. This graphic nicely shows where all this amazing money and £3.30 commissions come from.

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LifeTree World Compensation plan

So you’ve read my previous blog post on LTW and decided you will still go ahead and ‘invest’ in this ‘opportunity’. How much will it cost and how much will you get back?

I have looked at what information there is online for the payment plan and it is proving difficult. Already, over the last few months there have been big changes in how it works. Whole parts have disappeared.

When you make it to the position of ‘president’ you now only get a house worth £500,000.  A few months ago it was £1 million. And the automatic tree seems to have gone. The LTW official page currently has no details on the compensation plan at all. I wonder what it will be updated to?

But that’s ok, because people are told in their contract that the plan can be changed at any time.Screenshot 2016-05-03 13.33.18

I am assuming the current plan is as explained by current LTW members and is displayed on their web pages.

First, you have to join the company and pay £35.

Then you have to start purchasing products. In true MLM style, this is described in PV points. You need 100 points. The cheapest way to do this is to buy a ‘hamper’ for £165. If you chose to buy items individually, it costs over £200. So people buy stuff. This is the sort of haul they end up with.

Screenshot 2016-05-03 14.00.53

No fresh food, no frozen food, no fridge items. No bread, eggs, meat, milk, cheese. Not enough there to make many meals at all. This stuff wouldn’t make much of a dent in your shopping list but would significantly add to the bill. Never mind though, it’s not real shopping is it? It’s an investment.

So now we’ve spent £35 on joining and £165 on a hamper and got cupboards groaning with Yazoo and Weetabix and some things you’ve never heard of. You don’t get anything back at this point though. You need to be active for three months. So you buy two more of these hampers over the next two months.

You have now spent £35 and £165 and £165 and £165. You may be leaking Yazoo out of every orifice at this point. The total is £530. You still don’t get anything back though because you don’t have a team. This is MLM. You need a team.

To get a team leading bonus you need to have recruited three people and those people need to have recruited a person each as well. Let’s assume you have managed to recruit these people and they have too. All those 6 people need to earn 100 points in the month that you pay for your third hamper. If one of them drops out or they don’t buy enough, you get nothing.

These 6 people all pay their £35 and each buy a hamper for £165. Between you and these 6 people, £1730 has been spent. From all this, £200 will be given to you. These 6 people won’t get anything until they have been in it for three months and persuaded their downline to buy stuff they don’t need.

If you keep doing this though, you will earn money eventually, right?

Month 3- total spends £530 and £200 back. You are -£330 now.

Month 4-  spends £695 and £400 back. Balance  -£295

Month 5- spends £860 and £600 back. Balance  -£260

Month 6- spends £1025 and £800 back. Balance  -£225

Month 7- spends £1190 and £1000 back. Balance -£190

Month 12- spends £2015 and £2000 back. Balance -£15

Month 13- spends £2180 and £2200 back. Balance £20.

It takes 13 months to make £20. And you have 13 tables of this-

Screenshot 2016-05-03 14.00.53

And that is only if no one dropped out or forgot to make a payment that month. Just to make sure that doesn’t happen, you had better recruit a whole lot of people to keep it all going.

Yazoo anyone?

 

 

 

The Importance of Being Mormon: Younique

Interesting article on the significance of MLMs being Mormon in origin.

Timeless Vie

In this series of posts we explore the religious backgrounds of many of our favourite MLMs’ founders.  We think this is important to talk about for reasons we’ll get to later in the post.  But first, we want to make one thing clear: we don’t really care what religious beliefs someone has, but we do think when you are selling your MLM as a good, honest, ethical enterprise you should fully disclose your agenda.

For now, read on.

  1.  Younique.

According to Younique’s website, Younique was founded by a brother-sister team of Derek Maxfield and Melanie Huscroft.  Derek is Founder and CEO, Melanie is “CoFounder” and “Chief Visionary Officer”.    Younique’s tagline is to “Ulift, Empower, and Validate” women.   Younique.

Sounds great, right?  Hitting all the YEAH THE WOMANZ POWER notes right there.

Let’s dig a little deeper.

Derek and Melanie are both from Utah, a state where the majority (source: wikipedia)…

View original post 801 more words

Lifetree World

Note, any changes to this article since it was written have been added in red.

You may have heard of Lifetree World. Maybe you’ve been sent a message from a friend-

Screenshot 2016-04-13 13.40.24

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Maybe you’ve seen adverts like this on Instagram or Facebook?

 

Maybe you’ve been browsing Netmums or Money Saving Expert and read about people in an amazing scheme?

From Netmums’ board-

Screenshot 2016-04-14 22.44.36

As of July 2016, this Netmums thread no longer exists. Hopefully, it is because they are clamping down on the promotion of schemes like these.

This all sounds very intriguing. So you go to the Lifetree website and see things like this-

Screenshot 2016-04-13 14.08.05

Screenshot 2016-04-13 14.08.46

 

‘Daily use products’? They want everyone in the world to be a member? This is starting to sound a bit odd!

Reading about the scheme, you learn that LTW aim to buy products with long shelf lives direct from the manufacturer and sell them to you (now known as the IBO- Independent  Business Owner) within 3-5 days. The profit made by cutting out the middlemen is shared between the IBOs. Ok, that sounds interesting.

As of July 2016, the website has been stripped of most of the information. There appears to just be the address and the most basic information on some products they sell. No description of how the business works, no policies, just an address and pictures of smiley people in fields.

But then you learn that you have to spend 100 points (which is roughly £160) a month and so do the three people  beneath you and at least one person beneath each of them. Hang on? This sounds a bit  Pyramidy!!!! No, not at all, you are told. LTW are in the DSA so it must be legitimate! Pyramids are illegal, don’t you know?

The DSA has this to say about their membership.

Screenshot 2016-04-13 14.26.06

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So they are not full members yet. They are being watched to check they are compliant with their rules. They are not being compliant. The recruitment adverts break their rules.

As of July 2016 LTW are no longer prospective members of the DSA.

Here is a great explanation on how these types of schemes work. Much thanks to Chuckingstones on Mumsnet for this-

Screenshot 2016-04-14 21.04.04

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Let’s see if it is a pyramid scheme. A basic test for pyramid schemes is the Fair Trading Act 1973 section 120 (3)- This act makes it a criminal offence to persuade someone to make a payment to a scheme by promising benefits from getting other people to join a trading scheme.

You have to make an payment of £35 to join.

You have to recruit others.

You tell the people you are recruiting that if they pay £35 they can join your scheme but they will only earn money if they recruit others.

Hmmm, I wonder if this is a pyramid scheme, you decide for yourself.

 

What about the company finances and business plans? What do the records from Company House have to say about that? Much thanks to Tiimeless Vie for providing this information ( Blog, Facebook). Here is a little summary of what they say-

Screenshot 2016-04-14 23.30.23

What have LTW members been saying? For now, let’s not listen to the successful people just in case they are exaggerating to recruit new people.

This was on Netmums-

Screenshot 2016-04-14 22.36.14

And from a different person-

Screenshot 2016-04-13 20.02.33

This is what people have been saying to Bot Watch on Facebook in messages-

Screenshot 2016-04-13 19.36.45

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Screenshot 2016-04-13 12.33.43

Screenshot 2016-04-13 12.43.45

 

Bot Watch was also told that an LTW seller was seeking recruits on Money Saving Expert where people go for debt advice and who can ill afford to get involved in this sort of scheme.

Money Saving Expert delete any thread promoting this scheme as a way to save money.

Screenshot 2016-04-14 20.53.11

Screenshot 2016-04-14 22.32.40

(name deleted by me to maintain confidentiality)

Screenshot 2016-04-14 22.33.03

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If you decide you think it might not be a pyramid scheme and maybe those people just had bad luck,let’s look at the products and see what you will be buying. Oh, you cannot see the prices for the items until you have joined up and paid your £35. That doesn’t sound fair. You don’t know what you are letting yourself in for! They said the products are all branded and that I use anyway so it must be ok.

Here is an example of something you can buy

Screenshot 2016-04-14 23.43.08.png

Hmmm, not really a branded, every day product. And the claims here break the law for advertising rules. Aloe vera does not do any of these things. No one is allowed to say their products do this. This can be reported to the Advertising Standards Authority.

 

How much does it cost? You can’t find out until you join up and pay your £35.

That’s ok though, someone who is a member has sent me some images showing the prices of some items.

Screenshot 2016-04-14 22.39.02

It’s not too clear so here are the prices and how much these products cost according to Mysupermarket-

Tropical Sun Jamaican Callaloo 540g £1.29  ASDA-£1.28.

PG Tips tea bags 160s £2.99        Unavailable in supermarkets in this form. Newer packaging for the same product costs £4 in ASDA.

Nescafe Original 100g £2.80    Unavailable in supermarkets in this form. For the same product in different packaging, it costs £2.74 in ASDA.

Kellog’s Fruit and Fibre 375g £2.19   Unavailable in supermarkets anywhere in any packaging.

Kellog’s Co-Co Pops 350g £2.19  Unavailable in supermarkets anywhere in any packaging.

Kellog’s Cornflakes 500g £2.10 Available in ASDA for £1.75 but in newer packaging.

Weetabix family 24s £2.10- Unavailable in supermarkets anywhere.

I don’t think I need to go on. Look up the rest if you like, but I suspect I know the answer…

 

To conclude-

The company might be a pyramid scheme.

They recruit people who have debt problems.

People have complained about not getting their money back.

People have complained about not getting their orders.

The credit status of LTW is very poor.

The business sounds unrealistic.

They claim to buy products from the manufacturer. In reality they are buying up old, presumably very cheap stock from somewhere.

 

Do you still want to join up? If you do, you might want to jot down this number for if it all goes wrong-

Screenshot 2016-04-14 23.36.41

If you have joined this scheme and they are not delivering your products or giving you a refund or you are concerned about it, please call the above number. They will pass on the details to Trading Standards who will investigate.

To read more about this type of thing or to keep yourself informed about Multi Level Marketing schemes, visit Mumsnet for the ongoing discussion and support. Or Like Bot Watch and Timeless Vie on Facebook for people’s stories and information.

Just launched with Jamberry? Wanna know how much u will earn? READ THIS.

Some shocking number crunching done here by Timeless Vie. I hope this gets people thinking.

Timeless Vie

In honour of the UK launch of Jamberry today, we put together this little post showing how much a Bot is likely to earn in a year.

Did you know that in Canada, MLMs have to fess up about how much a “typical participant” i.e. your ordinary, average Bot – is likely to earn?

Unfortunately the UK doesn’t seem to have the same concern about it’s citizens, but here’s what we did to give you a rough idea.

We took the Jamberry Comp Plan for Canada – (hard to find, TBH.  We’re sure that’s not deliberate…)

Jamberry Comp Plan

Pulled out the “Typical Participant’s Earnings” statement:

typicalparticipantdetail1

Here’s the actual numbers in more detail:

typicalparticipantdetail2

Then we threw the numbers into a currency converter run by the Bank of Canada:

converstion1

So, the lowest typical earnings is £19.34 a year.   Wahoo!  we be rich huns.  Well, in the 15th century, maybe.

Let’s…

View original post 233 more words

Why Forever Living don’t sell Aloe Vera products for health purposes

I have established in previous posts that Forever Living do not hold the correct licences to sell products for health purposes. I detailed the laws covering the regulations for this in the UK and stated why it is important to follow these rules. Previous blog posts here and here.

But WHY don’t Forever Living hold the correct paperwork to sell their products for health purposes?  Surely, if the products are as good as they say they are, a licence should be easy to come by?

A possible explanation was put forward by a Forever Living rep on her team’s facebook page-

heeley

She thinks- “The reason we can’t make medical claims is because, we as a company would need to hold a pharmaceutical certificate…If you hold one of these- you cannot sell products outside of a pharmacy”.

I disagree. It is possible to obtain a licence called a Traditional Herbal Remedy (THR) from the MHRA (The government body responsible for licencing medicines, medical equipment and herbal remedies.) Website here. This is granted for herbal remedies that are used for minor ailments such as colds that don’t require medical input. Also available are licences for products that treat symptoms of more serious conditions. Theses licences are called a marketing authorisation.

If a product has these licences, they do not need to be sold in a pharmacy. Think of the products you can buy in health food shops, or even Tesco-

These products have been through the proper channels. Evidence was produced that they were not harmful, the strength had to be proved to be consistent and contain what it said it contained. There is monitoring and reporting systems and proper information is provided to users of the products.

 

Importantly, as part of this registering and licencing process, it has to be shown that the natural ingredient has traditionally been used for this purpose. There is a database for products used in Europe for this purpose. I looked for the part of the database for Aloe Vera on the European Medicines Agency, who hold all the data.

Aloe Vera is allowed to be used as a traditional herbal remedy for constipation. There is adequate evidence that it has been used for this purpose for many years. Scientific studies show that it is safe for this purpose. Link to the Aloe Vera information page here. Here are the conclusions-

V. Overall conclusion Well-established use: short term use of occasional constipation.

There are no clinical studies available, which evaluate the clinical efficacy of barbados aloes and cape aloes in patients with occasional constipation. The postulated laxative effect is mainly based on pharmacological data, experts’ opinions and clinical experiences. Clinical and pharmacological data obtained on other anthranoid-containing laxatives (primarily senna leaf preparations) support the efficacy of these anthranoid-containing herbal substances for short-term use in cases of occasional constipation. The current level of evidence1 of the available scientific data for “the short term use of occasional constipation” can be identified as level IV because well-designed studies with mono-preparations of aloe are missing. The conditions determined in the pharmacovigilance actions for anthranoid-containing laxatives have to be maintained for the moment because further investigations are needed to clarify the carcinogenic risk. The results of the most recent studies are inconsistent. However, a risk was also revealed for constipation itself and underlying dietary habits. 1 As referred to in the HMPC ‘Guideline on the assessment of clinical safety and efficacy in the preparation of Community herbal monographs for well-established and of Community herbal monographs/entries to the Community list for traditional herbal products/substances/preparations’ (EMEA/HMPC/104613/2005) @EMEA 2007 24/24 The use in children under 12 years of age is contraindicated and use during pregnancy and lactation is not recommended. Traditional use Besides the use as a laxative, the use as an emmenagogue and the external use for wounds and abscess are described in most references mentioned above. But as already mentioned in the Dispensatory of the United States of America 1918, it is extremely doubtful whether aloe exercises any action upon the pelvic organs which is not attributable to its cathartic effects. There are no plausible pharmacological data for this indication, nor for haemoptysis, jaundice or gout etc. Furthermore, the preparations used are not described exactly, even for the external use In view of existing possible risks, such traditional uses cannot be recommended and referred to in the ‘Community list of herbal substances, preparations and combinations thereof for use traditional herbal medicinal products’. This is in accordance with the German pharmacovigilance actions for anthranoidcontaining laxatives. 

To translate the above paragraph-

  • Aloe Vera can be used as a herbal remedy for occasional constipation.
  • Children under 12 must not use aloe vera.
  • Pregnant and breastfeeding women must not use it. It has affected unborn rats in studies, and their fertility. (this info is from the main body of the report).
  • There is insufficient evidence that aloe vera is useful as a remedy for anything other than constipation.

 

I have shown that it is not easy to simply obtain the relevant herbal remedy for aloe vera products for Forever Living. And that you do not need to be a pharmacist to sell it.

Maybe there is another way to obtain licencing? A company could start from scratch with clinical trials and prove that their product does what they say it does.  This would take years and a lot of money. Here is a chart showing how much it costs to do one clinical trial.

unspecified-1

This information is from this site.

So, for example, if Forever Living wanted to show that their aloe vera gel helps with asthma and pain (as has been widely reported by FL reps), it would cost $240 million to carry out the research. Then they would have to hope that the findings were in their favour. This would take years to do and there is the very real and probable risk that the product would not have the effect that is being claimed by some reps.

A lot of time and money could potentially be wasted on these studies.

Which begs the question, why bother with all the effort needed to properly test these products when your independent reps will make these claims illegally on your behalf? If they are called on it, they can be blamed as individuals and the company will be blameless because they keep telling their reps not to make false claims. Just like the above rep “our products work”. Do they? Where is your evidence?