Here, you’ll learn about why Multi-Level Marketing methods are dangerous.
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First of all, check out my articles about the dangers of Multi-Level Marketing.
- 7 Reasons MLMs are So Attractive to Established Business Owners [Video]
- Why I Hate MLMs: My Story [Video]
- 11 Ways Multi-Level Marketing is Like a Cult
- What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?
- 199 (Potentially Dangerous) Titles Used by MLM and Direct Sales Reps
- Which Titles to Use if You’re an MLM or Direct Sales Rep
- Examples of the Sneaky Promises MLMs Use to Attract New Reps
- What to Do if Your Doctor Promotes Multi-Level Marketing
- The MLM Persuasion Tricks That Convinced Me to Join
- What Happened After I Looked at 403 Health and Wellness MLM Companies
- Analysis of the Disclaimer from a Direct Sales Company
- What’s the Difference Between an Employee and an Independent Contractor?
- Weathering the COVID-19 Storm as a Business Owner
- What Happened After I Looked at 403 Health and Wellness MLM Companies
- Which Business Models are Predatory [Podcast]
- 12 False Promises MLM Companies Often Make
You can also listen to the What’s Wrong with Your Business? Podcast, where we discuss topics relating to business models, identifying threats, and creating a plan for your business.
Videos and Films
Want to watch some great videos that explain why MLMs are not great?
Vice interviewed several LuLaRoe contractors about why the company is predatory in Why Women Are Quitting Their Side Hustle: Leaving LuLaRoe
The Financial Diet created a great video called I Joined An MLM To Earn Extra Money — Here’s What Actually Happened
Secrets of the Multi-Level Millionaires is an in-depth look at MLMs in the United States, produced by by BBC reporter Ellie Flynn (“Ellie Undercover”)
Multilevel Marketing: Last Week Tonight with John Oliver (HBO) is a fact-based expose about the dangers of MLMs, including clips from promotional videos and celebrity endorsements.
BBC Stories: Multi-level marketing (MLM): Supporters Vs Critics gives an excellent overview of the damage and destruction caused by MLMs in the United Kingdom.
Multi-Level Marketing: American Dream or Deception? Watchdog, Robert FitzPatrick is an interview by David Ortiz of deception expert Robert FitzPatrick.
Napoleon Dynamite is a 2004 classic movie that portrays a dysfunctional yet hilarious family including Uncle Rico, who gets has a direct-sales venture.
GlitterandLazers (aka plus-size fashion & lifestyle blogger and author Anna O’Brien) provides a super-honest review of LuLaRoe in LuLaRoe is a Waste of Money. She describes the flaws in construction, design, and quality of LuLaRoe’s products, as well as their lack of accountability in apologizing for their mistakes.
Teen Titans Go! Pyramid Scheme video clip
Betting on Zero: The Ultimate Shakedown was written and directed by Ted Braun as he investigates controversial hedge fund titan Bill Ackman’s journey to expose the massive MLM giant Herbalife.
American Greed on CNBC is a true-crime series narrated by Stacy Keach which provides an in-depth look at Ponzi Schemes, White Collar Crimes, Sweetheart Swindles, Religious Fraud, greed, deception, and even murder.
Leah Remini: Scientology and the Aftermath explains why cults are so successful, especially how Scientology (or the “Church of Scientology”) has become one of the biggest and most controversial cults in history. This incredible documentary series features actor and activist Leah Remini as she exposes deceptions, intimidation tactics, and abuse used by Scientology’s leaders.
A 12-part series about the history of MLMs, the dangers, and what it’s like to join one.
Radio New Zealand (RNZ) reporters talked about MLMs in two segments:
- How multi-level marketing schemes don’t work (on The Detail) and
- Multi-level marketing schemes: rip-off or opportunity? (on The Panel)
The Perils of Multi-Level Marketing Programs
This is a fantastic 46-minute podcast interview on WBUR’s OnPoint featuring:
- Alden Wicker, freelance journalist covering sustainability and personal finance. (@AldenWicker)
- Bonnie Patten, attorney and executive director of Truth in Advertising, educating the public about deceptive marketing, who has testified before Congress and assisted the Federal Trade Commission (FTC) in bringing class action lawsuits against multilevel-marketing companies. (@bonniepatten)
- Christina Hinks, former LuLaRoe distributor who blogs at MommyGyver. (@MommyGyver)
The Art of Charm podcast interview with Robert FitzPatrick
This is a really intelligent, logical explanation of why MLMs have “hijacked the American Dream.”
Sounds Like MLM But OK Podcast
Although a bit irreverant and crass, this awesome show is hosted by quirky consumer advocates Sasha Zazzi (a licensed funeral director) and Katie Young (a licensed esthetician).
That’s a Cult? Podcast Ep. 2: MLM Schemes
This podcast by British journalist Helen McCarthy sheds light on a variety of schemes and scams. In episode 2, she interviews MLM truth-seekers Elle Beau, John Evans of Juice Plus / MLM Lies Exposed, and Jerome from The Finance Guy.
That’s a Cult has a resource page that includes a TON of helpful links as well.
Further Reading About MLMs
Best Company writer Rochelle Burnside provides some great information in the article 80% of MLM Representatives Make $0 [Infographic]
Neurologica Blog contributor Steven Novella wrote Multi-Level Marketing Is Still a Scam
Forbes article by Tony Nitti: Beachbody Coach? Rodan & Fields Consultant? At Tax Time, Beware The Hobby Loss Rules
Men’s Health writer Markham Heid authored What Is the Isagenix Diet? Here’s What to Know Before You Try It for Weight Loss. It’s a mashup of outdated eating fads and failed nutrition science—and probably not worth your time.
The Conversation‘s Máire O Sullivan, Ph.D., wrote Multi-level marketing has been likened to a legal pyramid scheme – the backlash against it is growing
The New Yorker writer Rachel Monroe provided a deep-dive in How Essential Oils Became the Cure for Our Age of Anxiety: Aromatic oils have become big business. But are they medicine or marketing?
Australian Journal of Pharmacy discussed a GP who was reprimanded after signing a patient up to a multi-level marketing scheme: Doc Failed to Disclose Conflict of Interest, Tribunal Finds
NeuroLogica Blog published Multi-Level Marketing Is Still A Scam
Men’s Health wrote an article called What Is the Isagenix Diet? Here’s What to Know Before You Try It for Weight Loss.
The Philadelphia Inquirer reporter Anna Orso wrote Behind those before-and-after Instagram photos: Money, marketing and meal replacements
Parents writer Virginia Sole-Smith wrote Is Selling Products from Home All It’s Cracked Up to Be?
HuffPost article Casey Bond — How MLMs And Cults Use The Same Mind Control Techniques: A former Mary Kay consultant recounts how the multilevel marketing company kept her loyal, even though she wasn’t making any money.
HuffPost‘s Casey Bond also wrote 10 Horror Stories That Prove MLM Companies Are Complete Trash: Former reps and clients share tales of faulty products, predatory practices and money they’ll never make back.
Outside Online shared The Supplement Scams Aren’t Going Anywhere
Patheos writer Captain Cassidy wrote Yes, MLMs Are A Cult (LSP #71)
The Sydney Morning Herald writer Catherine Bouris shared It may look attractive, but beware the toll of ‘MLM’ on friendships
The Globe and Mail writer Ellie Flynn wrote Multilevel marketing sells a dream. Don’t buy it: MLMs’ promise to women is that they can stay at home and make all the money they dreamed of. While some people find success, for most the reality is much more bleak
The Wall Street Journal article by by Sharon Terlep and Patrick Thomas — Coty Ends Partnership With Younique: CoverGirl owner to sell 60% stake in social media-driven cosmetics startup, saying the businesses were too different
Ranzware article by Morgan Sung: Multi-level marketing schemes are scams. Here’s how to avoid them.
The Fashion Law has a great article called The Implosion of LuLaRoe Continues as Washington State Files Suit Against the “Pyramid Scheme” Company
An article on Stillpoint Aromatics was very interesting: Are MLM Companies Hurting the Aromatherapy Field?
Mona Bushnell of Business.com wrote the fantastic article MLMs Are Preying on the Dream of Entrepreneurship: Multilevel marketing companies target women, immigrants and low-income minorities.
Odyssey writer John Basilio shared Seven Ways To Spot A Pyramid Scheme Or MLM Scam
The New York Times writer Abigail Zuger wrote Doctors’ Offices Turn Into Salesrooms
The Washington Post article by Michelle Singletary is called Be careful. That multilevel marketing side hustle could be an illegal pyramid scheme.
Motherly article by Heather Marcoux, How MLMs fail mothers
The Globe and Mail opinion article Multilevel Marketing Sells a Dream. Don’t Buy It
Mario’s Blog (Mario De’Cristofano) wrote a great piece called Why MLM is a Disaster.
Career Contessa (Caileen Kehayas Holden) shared What is Multi-Level Marketing + Why Women Are Targets
HuffPost wrote an article about Moms, Mormons, and the Military called MLMs Are A Nightmare For Women And Everyone They Know. Multilevel marketing companies sell women on the dream of being their own boss, yet as many as 99% may end up losing money.
Vanity Fair wrote This Podcast Can’t Legally Tell You Amway Is a Pyramid Scheme. Get an exclusive early listen to The Dream, hosted by Jane Marie, which digs into the under-explored world of multi-level marketing schemes.
The Guardian shared an excellent article about the cultish grip of MLMs: “They have you in a cultish grip”: the women losing thousands to online beauty schemes
Dr. Jon Taylor is a strong MLM opponent who has written extensively about the flaws and deceptions used by predatory businesses. He wrote a very compelling article called The Case (for and) against Multi-level Marketing
The Economist wrote a piece about China’s crackdown on MLMs called Pyramid schemes cause huge social harm in China: A multi-level scourge. Chinese officials call these types of businesses “business cults.” Victims held a rally in Beijing in 2017, and hundreds of MLMs have been closed down.
David Brear is an author and anti-MLM campaigner who wrote a detailed article about the cult-like dangers of MLMs called Amway has Exhibited the Universal Identifying Characteristics of a Cult
One More Cup of Coffee by blogger Nathaniell Brenes has a fantastic overview of why the term “Home-Based Business” is so closely tied to MLMs, and the reasons it is an unsustainable structure — Why MLM, Network Marketing, And Direct Sales Are Terrible Home Based Businesses
The Art of Manliness published an awesome post, So You (Or Your Wife) Wants to Join a Multi-Level Marketing Company
Robert FitzPatrick, a Deception and fraud expert and anti-MLM advocate, shares his views on Pyramid Scheme Alert. His False Profits blog includes an article called The 10 Big Lies of Multi-Level Marketing.
Pink Truth (facts and opinions about Mary Kay Cosmetics) shares articles like 99% of Distributors Lose Money in Multi-Level Marketing and Magic Words to Recruit Consultants
Elle Beau, an Anti-MLM Coalition blogger and Former Younique (#Poonique) rep, shared a 15-chapter story about her MLM experience
Quartz Media journalist Alden Wicker (who founded Ethical Writers & Creatives) shared the powerful article Multilevel-Marketing Companies Like LuLaRoe are Forcing People Into Debt and Psychological Crisis
Talented Ladies Club has shared several helpful and well researched pieces including Thinking of joining an MLM? Read the truth behind the ‘income opportunity’ and The 10 ugly truths MLMs don’t want you to know
Bloomburg Businessweek wrote an in-depth article about fashion MLM LuLaRoe: Thousands of Women Say LuLaRoe’s Legging Empire Is a Scam. Listen to an interview about this at Here&Now.
Ways to Avoid Scams Online has a great article, I Confidently Can Say, MLM (Multi-Level Marketing) is a Scam
Business Insider article 5 Signs that MLM “Opportunity” Might Be a Scam
PBS’s American Experience has a great segment on the history of Direct Sales.
Dummies.com article about the Direct Sales Model through history
Also check out these anti-MLM websites and blogs:
Reddit has an awesome message board called “antiMLM.”
Finance Guy shared the details of why only a few people in the MLM pyramid make most of the money, while everyone else pays into the system.
The Anti-MLM Coalition is a group of individuals who are passionate about ending deceptive and predatory business practices of MLM companies.
MLM-the-Truth has an extensive collection of documents, articles, and research about the dangerous tactics used by Multi-Level Marketing companies.
Income Disclosure Statements—Tracy Coenen, CPA, CFF of Sequence Inc. has gathered the income disclosure statements of many MLMs, which clearly show that their promise of “unlimited income” is deceptive; most contractors earn minimum wage or less (not counting their overhead costs, which is often more than their annual earnings).
The Federal Trade Commission (FTC) has a whole section dedicated to its guidelines on Multi-Level Marketing.
The National Council Against Health Fraud (NCAHF) wrote a Position Paper on Multilevel Marketing of Health Products.
Dr. Taylor has presented the FTC with a list of 81 members of the Direct Selling Association who qualify as a Product-Based Pyramid Scheme per the FTC’s guidelines. For even more, check out Dr. Taylor’s in-depth study which has been shared by the FTC.
Forbes Magazine published a Corporate Scandal Sheet in 2002, which provides a wealth of knowledge about shady companies using the MLM and pyramid model.
Lists of MLMs (beyond Health & Wellness)
I’ve collected a compendium of MLM and Network Marketing companies in the Health & Wellness space. Read it here.
If you’re interested in MLM companies that focus on other industries (finance, vacations, foods, jewelry, fragrance, wine, appliances, household products, etc.), check out the awesome resources below:
MLM the Whole Truth has collected a massive list of Network Marketing Companies.
QuackWatch shares a list of Promoters of Questionable Methods and/or Advice
Financial Industry Scam has an extensive list of MLMs, including details on FTC cases and investigations.
The DSA (Direct Selling Association) list of members. (Side note: I do not believe the DSA is a reliable source of “trustworthy” direct sales and MLM companies, since many of their members are also on the FTC’s “Pyramid Scheme Watch List”)
Host a Party Online has a list of Direct Sales Companies specializing in the party/host sales technique.
DSA Members on the “Naughty List”
The Direct Sales Association (DSA) is a “national trade association for companies that manufacture and distribute goods and services sold directly to consumers.”
Several DSA members are engaging in potentially unethical and/or fraudulent practices, per a report on “Product-Based Pyramid Schemes” that go against FTC guidelines (Exhibit 2, on page 8).
The following companies are members of the DSA and also fit the FTC’s “Pyramid Scheme” guidelines:
- 4Life Research
- Arbonne International
- Avon Products, Inc
- Herbalife International
- Limu Company
- Mary Kay Cosmetics
- Nature’s Sunshine Products
- NeoLife International
- Noevir USA
- Nu Skin Enterprises
- Reliv International
- Sunrider International
- Synergy Worldwide
- USANA Health Sciences Inc.
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