Learn more about the dangerous practices of Multi-Level Marketing in the following sections:
Further Reading About MLMs
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. 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.”
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.
MLM-the-Truth has an extensive collection of documents, articles, and research about the dangerous tactics used by Multi-Level Marketing companies.
The Economist wrote a piece about China’s crackdown on MLMs. Chinese official 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
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.
Business Insider article “5 Signs that MLM “Opportunity” Might Be a Scam”
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.
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 Art of Manliness published an awesome post, So You (Or Your Wife) Wants to Join a Multi-Level Marketing Company
Pyramid Scheme Alert founded by deception and fraud expert and anti-MLM advocate Robert FitzPatrick
Pink Truth (facts and opinions about Mary Kay Cosmetics) 99% of Distributors Lose Money in Multi-Level Marketing
Elle Beau, an Anti-MLM Coalition blogger and Former Younique (#Poonique) rep, shared a 15-chapter story about her MLM experience
The Atlantic published an article by Darlena Cunha called “Beware of Selling Yoga Pants on Facebook” (subtitled Is the social-media gig economy a form of entrepreneurship, fraud—or something else entirely?)
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
PBS’s American Experience has a great segment on the history of Direct Sales.
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.
Videos and Films
Want to watch some great videos that explain why MLMs are so dangerous?
Multilevel Marketing: Last Week Tonight with John Oliver (HBO)
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
An excellent overview of the damage and destruction caused by MLMs in the United Kingdom.
David Ortiz interviews Robert FitzPatrick in this really interesting video. Multi-Level Marketing: American Dream or Deception? Watchdog, Robert FitzPatrick
This 2004 cult classic portrays a dysfunctional yet hilarious family including Uncle Rico, who gets into some sticky situations with his direct-sales Tupperware venture.
LuLaRoe is a Waste of Money
In this video, GlitterandLazers (aka plus-size fashion & lifestyle blogger and author Anna O’Brien) provides a super-honest review of LuLaRoe. 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.
Betting on Zero: The Ultimate Shakedown
I learned so much about the crafty behind-the-scenes planning of MLMs from this movie. It is 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
This true-crime series narrated by Stacy Keach 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
MLMs operate with the same fundamental beliefs and ideologies as cults. Scientology (or the “Church” of Scientology) is one of the biggest and most controversial cults in history. In this incredible documentary series, actor and activist Leah Remini exposes the deceptions, intimidation tactics, and abuse done at the hands of Scientology’s leaders.
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)
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.