1/6/2015 – Michelle Celarier blocked me a few months ago on twitter after I corrected her about Robert FitzPatrick not ever being in an MLM (he never has) and exposing her being a flaming liberal after I said I like Trump, then says this:
What I’m reading in 2016: “Merchants of Deception” about Amway and the tool scam that Tex is always ranting about. Shocking stuff
12:08 PM – 1 Jan 2016
This comes after I defended her repeatedly when she was personally attacked. Oh well, at least she is educating others about the ATS.
1/5/2015 – My favorite three words in this court document can be found on page 12: Internal Revenue Service: https://www.truthinadvertising.org/wp-content/uploads/2015/12/Vemma-Defendants-Quarterly-Report1.pdf A close second is on page 11, where, in order to hide, or perhaps an attempt to make it look bigger, Vemma paid out bonsuses to only 119 (one hundred nineteen) distributors. I have ZERO doubt Vemma is crashing and burning before our eyes, the end is near, and hopefully there will soon be similar actions taken against other large MLM scams, such as Amway and Herbalife.
It’s hard to believe another year is about to come to a close. –> I agree, one would think we could have put MLM scams out of their misery by now, Joe.
When I think back on what we’ve been able to accomplish together in 2015, it’s clear that our progress is possible because of the strong partnership between the Direct Selling Association (DSA), the Direct Selling Education Foundation (DSEF) and, of course, our members, who work across dozens of industries for the benefit of the retail sales channel we believe in so deeply, and that we know benefits so many Americans in numerous ways. –> Why does the DSEF support retail sales to customers but the DSA doesn’t, Joe?
Perhaps our biggest collective achievement in the past 12 months was putting in place a structure that yielded, through months of hard work and consensus building, some of the most substantial revisions to our Code of Ethics in the history of the Association. –> In other words, add more words to make it look better, but keep doing what you’ve done for decades – don’t enforce them.
As I mentioned in this column earlier this year, the Code has always been a living document, changing from time to time as the marketplace and stakeholders’ expectations have evolved. –> A living document for a dying industry….
That’s one of the advantages of a robust system of self-regulation—the ability to act quickly. –> Self regulation? How is that working out with Vemma? Why did Tupperware and Avon, a founding member, both recently quit the DSA?
Our actions give greater clarity and guidance regarding earning and product claims, and provide the DSA Code Administrator with greater authority to resolve disputes, making DSA and the direct selling channel even stronger. –>If you didn’t address the tool scams, you didn’t do squat.
Additionally, the creation of a public registry of complaints and resolutions will enhance the credibility of the Code. –> That assumes you post them, which is extremely doubtful.
Since these notable changes to DSA’s Code of Ethics were announced, the Communications Committee has begun to implement a comprehensive stakeholder education and engagement campaign for member company executives and members of the salesforce.–>
Working together, we organized two educational webinars and a series of fact sheets that discuss Code modifications and why they matter so that members understand what it will take to comply with the new provisions when they take effect on January 1, 2016. Also in the works is a compendium of best practices for member companies to consult for guidance in various areas, such as earning and product claims, and a toolkit of materials that, utilized by member companies, will speak directly to members of the salesforce about these important issues.
Earlier this year, DSEF set the stage for these important initiatives at an event that examined different approaches to responsible, consumer-centric self-regulation around the Federal Trade Commission’s National Consumer Protection Week.
DSA also scored some notable victories in the states in 2015, including helping prevent damaging legislative proposals in Illinois and Rhode Island and keep in place a law in Montana, which DSA helped pass, that exempts our member companies from having to register with the state as multi-level marketers due to their strong commitment on ethics and compliance with the Code.
At the federal level, more than 30 members of Congress from both sides of the aisle joined a new Direct Selling Caucus co-chaired by Representatives Marsha Blackburn (R-TN) and Marc Veasey (D-TX). Direct Selling Day on Capitol Hill was a resounding success, with more than 500 distributors from nearly 20 companies and 32 states participating in meetings with members of Congress and their staffs, a bipartisan speakers program and a new Direct Selling Marketplace offering a glimpse of our business to the policymakers whose support we must constantly continue to cultivate. The Association and members of our Government Relations Committee also met with dozens of federal policymakers to begin to educate them on the challenges in the direct selling marketplace around what makes a pyramid scheme a fraud. Following up on that important effort, we also released new research from independent experts at NERA Economic Consulting that offers new insight into this issue.
DSA members also participated in a series of two events this year with the respected Washington D.C. think-tank American Action Forum. These events help educate policymakers about the value of direct selling through enlightened policy dialogue on the importance of independent work and its benefits in a constantly changing economy. The public affairs team will continue to pursue opportunities that elevate our channel with policymakers by injecting our issues into relevant conversations at relevant times.
Globally, DSA engaged in high-level trade negotiations with officials representing 51 countries involved in the Trade-In Services Agreement (TISA). DSA and its member companies are actively pursuing a direct selling addition to the agreement that would open trade between participating nations and facilitate the continued growth and success of direct selling globally. The adoption of the direct selling addition would ensure that millions of independent entrepreneurial opportunities in both new and existing markets are not inadvertently prohibited.
As I look back at 2015, proud of our accomplishments, I am also realistic about the challenges that lie ahead. On many occasions in our more than 100-year history we have faced—and overcome—adversity because we stuck together. As we navigate what is to come, it is this same spirit of partnership and solutions-driven thinking that will make the future bright.
Joseph N. Mariano is President of the U.S. Direct Selling Association.
cpublic registry of complaints and resolutions will enhance the credibility of the Code.
Since these notable changes to DSA’s Code of Ethics were announced, the Communications Committee has begun to implement a comprehensive stakeholder education and engagement campaign for member company executives and members of the salesforce. Working together, we organized two educational webinars and a series of fact sheets that discuss Code modifications and why they matter so that members understand what it will take to comply with the new provisions when they take effect on January 1, 2016. Also in the works is a compendium of best practices for member companies to consult for guidance in various areas, such as earning and product claims, and a toolkit of materials that, utilized by member companies, will speak directly to members of the salesforce about these important issues.
12/23/2015 – I heard about this program while listening to Peter Mingils’ radio show: https://en.wikipedia.org/wiki/Operation_Choke_Point The listed items that apply to Amway are in bold, and illegal categories are shown in italics (although miscreants populate all of the categories, as well as most other unlisted categories), below:
Cable Box De-scramblers
Credit Card Schemes
Credit Repair Services
Debt Consolidation Scams
Get Rich Products
Mailing Lists/Personal Info
Money Transfer Networks
Looks to me that Amway is a target-rich environment.
Also, this story has been out for a while, and I initially ignored it, because part of the subtitle was so insanely stupid, “Do short-sellers make good regulators?” but I took a second look, and it is a pretty good summary of the Herbalife saga, and it even has some very interesting tidbits about the early days of the investigation from Christine Richard and the company she worked for back then, although it suffers from a few errors, such as:
Ackman campaigned against MBIA for about 5 years until he was proven right, and made about $1 billion,
There was no mention of the 1986 California permanent injunction, a key part of the Herbalife saga,
Michael Johnson also rejected the notion most Herbalife distributors join for the discounts, he said so himself in the 2005 video Herbalife keeps trying to take down off of the internet,
It should be pointed out the lead generation names cost $130 EACH, at least by one of these scam companies,
It’s not just “sleaze” to make the money from the lead generation and other tools, by showing the lifestyle and not explaining it came from the tools is also called RICO fraud,
The nutrition clubs are populated by distributors visiting various locations ostensibly for training purposes and are told not to talk to others, not exactly customers nor encouraging each other,
$5/day is about $150/month, quite a bit more than the $39.90 cannister for the monthly supply of shakes, not exactly a good deal for the “customer,” (I know, I know, there’s also an aloe and tea drink, but it’s STILL $150/month, and these people are supposed to be poor, so $150/month is a good chunk of change, and $150/month buys a LOT of beans and rice) but needed by the club owner to pay the rent, utilities, insurance, etc.,
The assumption that pyramid schemes collapse because of saturation is flawed, the real problem is they don’t saturate and continue for decades,
There are numerous reasons why people don’t return MLM products, including embarrassment, shame, lying about having customers, impacting their uplines’ bonuses, which are often their relatives and/or friends, the hassle of boxing everything up and shipping it, laziness, are illegal aliens, etc., and
It should be noted that in the days prior to Herbalife gaining 25%, it lost about 25%, making the net effect a nothing-burger,
THE best part of the story is this, which confirms what was reported by the New York Post reporter in June, “At a videotaped global management retreat in June 2005, viewed by Fortune, Johnson appeared to walk a tightrope, discussing the need for these changes while trying not to alienate powerful distributors. “Those of you who have been around,” he said at the meeting, “know that lead generation is a source of many evils as well as a source of many opportunities. It puts distributors in debt up to their ears.”
Ackman was also [slightly] wrong, when he said that Herbalife is the “best-managed pyramid scheme in the history of the world.” Amway is over twice Herbalife’s size and still has a massive tool scam, which means Herbalife has been schlonged by Amway.
12/22/2015 – I never knew this guy, and that’s the problem: http://patrickpretty.com/2015/12/21/memory-paul-schlegel-1963-2015/ What’s the problem? The “critics” don’t work together, so our ability to brainstorm, cooperate, and coordinate our efforts mean the MLM scams continue to scam people, second after minute after hour after day after month after year after decade, and will continue for a century or more if we don’t get our act together and start to work together. Those with the big egos and entrenched positions also don’t have the extensive experience I have, so it would be more appropriate for them to approach me for my expertise, research, and analysis, not the other way around. Rant over, have a Merry Christmas!
12/17/2015 – Herbalife’s CEO Mikey Johnson admits what we already knew, in the first 10 seconds of this 2005 video: https://vid.me/AmCl and NOT what Herbalife has been claiming since David Einhorn asked about retail sales in May 2012, not the mention Ackman’s research.
12/12/2015 – This isn’t news, but I wanted to get the issue of the “endless chain/saturation” documented in this section. The first and best example of the silliness of this theory was the Ger-Ro-Mar case: http://openjurist.org/518/f2d/33/ger-ro-mar-inc-v-federal-trade-commission and I highly recommend reading the entire decision; the two paragraphs of particular note, and note particularly the judge not just rejecting the FTC’s “endless chain/saturation” theory, but he mocks it, pokes fun of it, and ridicules it, unlike many of the other MLM critics who continue to support it:
18 The sole evidence to support the Commission’s holding that the plan is inherently unfair and deceptive is a mathematical formula,3 which shows that if each participant in the plan recruited only five new recruits each month and each of those in turn recruited five additional recruits in the following month, and this process were allowed to continue, at the end of only 12 months the number of participants would exceed 244 million, including presumably the entire staff of the FTC. The Commission concludes that this, in effect, is the impossible dream and that the siren song of Symbra’Ette must be stilled. We find no flaw in the mathematics or the extrapolation and agree that the prospect of a quarter of a billion brassiere and girdle hawkers is not only impossible but frightening to contemplate, particularly since it is in excess of the present population of the Nation, only about half of whom hopefully are prospective lingerie consumers. However, we live in a real world and not fantasyland.
20 The cases relied upon by the Commission to establish that potential injury is sufficient to constitute a section 5 violation involve false advertising claims where the Commission has established by evidence that the claims made in the material are false and hence the courts have not required proof of actual deception.5 Even then the courts have often not talked about a theoretical possibility but rather, as Judge Kaufman noted in FTC v. Sterling Drug, Inc., 317 F.2d 669, 674 (2d Cir. 1963), the situation where “the representations made have a capacity or tendency to deceive, i. e., when there is a likelihood or fair probability that the reader will be misled” (emphasis added). Here there is no showing at all that even the most credulous prospective distributor was likely or probably gulled by the plan discussed. The validity of the rule of mathematical progression must, in our view, not be considered in vacuo but must be put in the context of actual competitive conditions, see Columbia Broadcasting System, Inc. v. FTC, 414 F.2d 974, 978 (7th Cir. 1969), cert. denied, 397 U.S. 907, 90 S.Ct. 903, 25 L.Ed.2d 88 (1970); Korber Hats, Inc. v. FTC, 311 F.2d 358, 360-61 (1st Cir. 1962); Ford Motor Co. v. FTC, 120 F.2d 175, 181 (6th Cir.), cert. denied,314 U.S. 668, 62 S.Ct. 130, 86 L.Ed. 535 (1941), where whatever expertise the Commission may have in determining possible adverse competitive injury or consumer deception will weigh heavily with us. However, here it has relied solely upon an abstract mathematical theorem without any attempt to relate the theory to the marketplace. The Commission has made no study, offered no analysis and has no greater familiarity with the law of geometric progression than the court. It is for the courts eventually and not the Commission to determine what unfair competition is. FTC v. Beech-Nut Packing Co., 257 U.S. 441, 453, 42 S.Ct. 150, 66 L.Ed. 307 (1922).
Another landmark case from the past is the 1979 Amway lawsuit: http://www.mlmlegal.com/amway.html#FINAL%20ORDER which states
“SaturationThe complaint alleges that distributors are not long likely to recruit other distributors because ‘recruitment of additional participants must of necessity ultimately collapse when the number of persons theretofore recruited has so saturated the area with distributors or dealers as to render it virtually impossible to recruit others.’ (Complaint, p. 9)The term ‘saturation’ as used in the complaint and by complaint counsel is one of the legitimate proofs in a case involving a pyramid distribution scheme. Koscot, 86 F.T.C. at 1135; Holiday Magic, 84 F.T.C. at 979; GerRoMar, 84 F.T.C. at 119. Since Amway is not such a pyramid, the concept is immaterial here. Irrespective of the materiality of the concept, the facts in this record do not show that Amway distributors in any market were unable to recruit new distributors or to sell Amway products because of any inherent defect in the Amway Sales and Marketing Plan. [FN28] Products are consumed or wear out. (Patty, Tr. 3110) The population of the country continues to grow and to move about. Only one in four Amway distributors engage in recruiting, and there has been no decline in that percentage in recent years. The sales trend for Amway has shown almost uninterrupted growth. (Finding 151) The markets for Amway products and distributors, in short, are not static.The preponderence of the evidence in the record does not support the allegation of ‘saturation.’ (Findings (Findings 14852) From my observation of the demeanor, inconsistencies and uncertainties in the testimony of the witnesses called in support of the complaint in this regard, I believe the reason for their failure was more accurately described by a marketing expert who testified about this subject (Patty, Tr. 3109): ‘I think generally speaking when a saleman tells you that a market is saturated, he has become discouraged for some reason, usually he is simply not making the sale effort that is required.’ ”12/11/2015 – While I’m glad this mini-series is coming out, and it’s a great opportunity to educate people about Ponzi schemes and their first cousins the illegal pyramid/RICO fraud MLM scams, the connection to Zeek Rewards and TelexFREE is thin, at best. Madoff attracted the upper crust investors, as do most Ponzi scams. The combined Ponzi/pyramid MLM scam, or pure pyramid MLM scam victim, one the other hand, is usually a middle to lower class person, often an immigrant who won’t even watch this show, as they don’t speak/understand the English language: http://patrickpretty.com/2015/12/11/watch-the-trailer-for-madoff/
There were two other actual Zeek Rewards stories that came out today:
I spoke with one of these dirtbag lawyers (Nehra, a former Amway lawyer dirtbag) a few years ago, and he merely shrugged his shoulders via the telephone when I brought up the issue of not speaking up against the ATS RICO fraud and illegal pyramid, and now they are reaping what they sowed: http://behindmlm.com/companies/zeek-rewards/nehra-settles-for-100000-acknowledges-zeek-a-ponzi/ In fact, I think they got off very lightly, and the receiver should have insisted they be disbarred, but TelexFree awaits….
When governments take down MLMs, it’s similar to taking a pellet gun to a field of locusts devouring a crop, or shooting fish in a barrel, in fact, in the case of Banners Broker, it’s like shooting dead fish in a barrel. Come on, man: https://www.youtube.com/watch?v=N1NwW3GCn7k
In the biggest MLM nothing-burger of the year: http://www.foxbusiness.com/investing/2015/12/08/herbalife-attorney-warns-ackman-team-to-steer-clear-employees/ Charles (Chucky) Gasparino, reporter extraordinaire from Fox Business, breathlessly reports his “scoop” about an Hebalife letter, which isn’t even an Herbalife letter, as it came from an outside lawyer, and not one of the myriad of inside lawyers. Nor did it come from anybody with BSF (Boise, Schiller & Flexner), a high-powered firm that represented Al Gore during the infamous Florida “hanging chad” presidential election controversy in 2000, was one of 2-3 firms who sued Amway (Pokorny v. Quixtar) before jumping over the fence and representing Herbalife. In the Amway/Quixtar case, BSF cashed out for $15 million instead of taking the contingency case to court and taking the chance of making nothing, therby leaving the real Amway financial and time scam victims, like me, with almost nothing, not to mention no justice by not putting Amway out of business once and for all. My theory is the inside and BSF lawyers already knew too much about Herbalife’s scam and they would get in trouble for signing such a ridiculous letter, so they brought in another legal “hit-man” to do their dirty work for them: 2015.12.08 Letter.gasparino The best part of the story is that Chucky got his usual “no comment” from Aaron Smith-Levin and Bill Ackman. Something most people don’t know about Aaron is he is a former Scientologist, Scientology has a very strong program to spy on members who they think are “going astray,” and Aaron was involved in that program prior to quitting Scientology, so he not only knows what he’s doing, he knows his legal limitations. The letter also made Bill Ackman salivated profusely, hoping Herbalife would start a formal legal action that he could then attack, especially pursuing discovery that would make Herbalife’s head spin, which is why only this weak letter was published.
Letter from DSA President Joseph N. Mariano to Direct Selling Caucus
October 30, 2015
Members of the Direct Selling Caucus:
The night before last, a single mother of two, who got divorced and went bankrupt eight years ago, tearfully told me direct selling had changed her life, pulling her and her family back from the brink of disaster. [This is the typical, heart-string tugging opening we expect from the DSA’s “leader.”] Her story isn’t so unique among members of our community. [FAR more typical are the stories of people losing valuable time and money, but let’s look at the rare exceptions, pay no attention to the man behind the curtain, right Joey?] In fact, more than 500 direct selling consultants representing 20 companies, 32 states and the District of Columbia were here in Washington, D.C. this week to share with you and other members of Congress compelling, personal stories about how direct selling has improved their lives. [We don’t need anecdotal, rare sob stories, we need facts It is a given there are a handful of people making money, that’s the nature of scams. That’s how scams attract the victims.]
Recently, you received a letter and may have also noticed an op-ed in The Hill newspaper from Robert FitzPatrick representing a group calling itself the International Coalition of Consumer Advocates (ICCA). [For the record, I’ve asked FitzPatrick to remove me from the ICCA roles, as he’s a nutcase, but not everything he says is 100% wrong.] These communications contained a substantial amount of misinformation about direct selling. [Care to list the misinformation and rebut it, Joe?] I am writing on behalf of the DSA, our nearly 200 member companies and the more than 18 million Americans who are involved in and benefit from the direct selling channel to set the record straight. [No, you’re going to continue to lie, such as your recent declaration that zero selling of products to customers is okay, even though “Selling” is literally your organization’s middle name, see the 11/16/2015 story below for additional information.]
To our knowledge, ICCA is an extremely loose affiliation of long-time direct selling opponents with FitzPatrick at the helm. [That is a direct reflection of FitzPatrick’s absolute lack of a coherent theory and leadership skills.] His well-documented agenda of fear mongering and lack of credibility on direct selling issues has remained constant for years. [While FitzPatrick’s theories are bunk, particularly the “saturation/endless chain” BS, he nevertheless has kept people away from MLM, and that’s a good thing.] Ironically, FitzPatrick claims that ICCA does not lobby or profit financially from its work, even though its members routinely attack direct selling in forums designed to aide investors, such as Seeking Alpha. [It’s called being a non-profit, have you ever heard of that, Joey?] If consumer protection was truly at the heart of ICCA, it would attempt to reach the general public where it actually resides, not where investment pros go for insight into billion-dollar decisions. [Do you mean places like Twitter and Facebook, where I am a constant presence?] Furthermore, FitzPatrick is critical of short sellers, which he says harm the public interest, yet it is he and his ICCA cohorts who are partially responsible for aiding the irresponsible tactics of Pershing Square. [When you make sweeping points like that, it would be nice to reference your source, Joey.]
At the heart of FitzPatrick’s other claims is a belief that direct selling is illegitimate and does not provide a broad-based income opportunity. [The evidence of that statement is plentiful, and you have offered only a denial rebuttal not based on facts.] ICCA members may not like companies that compensate participants for their sales and the sales of others within their organization, but that does not make the entire direct selling channel illegitimate. [You’re right, just most of it. YOU make similar sweeping claims based on very few data points, hardly a rigorous analysis.] On the contrary, those involved in direct selling benefit by being able to purchase products at a discount, supplement their income, work when they want to, or, with substantial effort, build a bigger business. [A discount off from a very overpriced product is merely overpriced instead of very overpriced, most lose money, so they are in a negative “supplement” scenario, people must also work when told and when they have spare time, a far cry from “when they want to,” and a bigger business means a bigger scam.]
Average earnings are routinely blown out of proportion by critics like ICCA members who fail to appreciate these many different motivations for becoming involved in direct selling. [I’ll give you that one Joey, but that’s a minor issue, not a major one.] It’s a part-time pursuit for many; a smaller number put in the effort that is required to build a business and a sales organization that is capable of generating a sizable income. [Of course it’s part time, the upline wants your job money to fund their tool scam and illegal pyramid.]
FitzPatrick also fails to mention that everyone – DSA included – benefits when pyramid schemes are prosecuted to the fullest extent of the law. [I’m surer you’re delighted that DSA member Vemma is imploding.] DSA and the Direct Selling Education Foundation (DSEF) enjoy a productive working relationship with regulators and law enforcement at the federal and state levels and set best-in class self-regulatory standards that challenge the entire channel to improve when it comes to ethics and consumer protection. [Does that include giving out Ethos awards to Vemma?] In fact, DSA turns away a sizeable number of applicant companies each year because they do not meet the high standards set forth by our Code of Ethics, which has been in force since 1970 and was recently strengthened. [No, that means you have lots of even worse players trying to join your scam organization.]
In the past 20 years, merely a handful of direct selling enterprises have been the subjects of government investigations, and the schemes cited by ICCA were not members of the DSA. [I think you’re “forgetting Herbalife and Vemma, Joe.] The current investigation raised by ICCA is only starting to make its way through the courts. [Which one, Vemma or Herbalife? You are REALLY short on specifics, why is that, Joey?] If it is determined that the company violated our Code of Ethics, we will not hesitate to take enforcement action that could include termination from the Association, in addition to any remedies prescribed by the courts. [Why did you have to wait for outsiders to inform you of the scams that are DSA members, I thought you were self-regulating? Not very effective, are you, Joe?]
It is unfortunate that a group of individuals professing to act in the public interest continues to confuse consumers by blindly associating a high-performing retail channel benefiting millions with illegitimate behavior. [Why did you bring up retail? You’re on record as saying retail sales don’t matter. So pick one a side Joe, don’t try to pick both, it destroys your credibility.] Plenty of government and non-profit consumer advocate organizations, such as the Better Business Bureau, offer resources that help people make prudent decisions about direct selling companies. [Those resources are woefully inadequate, especially when the MLMs lie about their business models.] Dismissing all of direct selling as illegitimate is not only irresponsible, it also fails to protect consumers. [Actually, I dismiss most of them, not all of them, while you support all of the DSA members like Herbalife and Vemma.]
In an economy that increasingly values opportunities for meaningful, independent work, this latest round of tirades against direct selling appear dated and out of touch. [It’s called a lousy economy, with MLMs preying on people desperate to find other ways to make money. The MLM scam techniques haven’t changed much, so being dated is not the issue, although as I’ve described above, FitzPatrick is out of touch.] Please do not hesitate to contact me directly at 202-416-6419 or email@example.com if I can answer questions or address concerns raised by FitzPatrick this week. [I’ve called and emailed you, the ball is in your court, Joey.]
Thank you again for your support of direct selling in the United States. [If these politicians knew the truth, they would be telling the regulators/law enforcement agencies to not only shut down most MLMs, but also the DSA, which is obviously an MLM industry puppet on the MLM company strings.]
11/15/2015 – An update on various cases: http://asdupdates.com/wordpress/archives/6810 It’s unfortunate people like to chatter and report about scams, but are not willing to take action.
An update to the 10/25/2015 ACN story, below, the site has been taken down, but is still available here: http://web.archive.org/web/*/www.acnpyramidscheme.com This type of corporate bullying is similar to what I experienced with Amway, except this person was unwilling to stand up to them. In the event the link goes away, I’ve already saved all of the pages and will post them on this website, as well as the new website being developed: www.allmlmfacts.org
11/12/2015 – It appears some former Vemma folks are learning the lesson Amway has been preaching for years, stay off of social media: http://mlmblog.net/site/2015/11/vemma-top-earners-tom-and-brad-alkazin-move-to-xango.html Now that they are in Xango, and apparently overseas to try escape the long arm of the law, they are trying to teach their people, most of whom are young people, and many of whom live on social media as if it were oxygen, to stay off of it. That is not only a recipe for failure, but telling them to stay off of social media will cause them to be even MORE curious what is being said about Xango and other MLMs even more. The online beatdown continues….
10/31/2015 – During last week’s Republican debate, Dr. Carson was asked about his involvement with Mannatech, another MLM scam. Then, the internet and particularly social media, blew up with each side exaggerating and misstating the facts. But here’s the facts for all to see. First, a link to a 2004 speech, and the Mannatech portion comes in the first few minutes of the video: https://youtu.be/ekSvMpbPsUI Also note later in the video that Carson “encouraged” Mannatech to do real medical/scientific studies to back up their claims, including using the standard random, double-blind placebo peer reviewed methodologies. That’s a nice way of saying that he warned Mannatech about their illegal medical claims, but since Carson wanted to be invited back and didn’t want to develop a negative reputation from the organization that set him up with speeches to a number of companies/organizations, and lose out on the speaking fees, he stated it in a “friendly” manner, WHICH DOESN’T HELP PEOPLE GETTING RIPPED OFF BY MLM SCAMS! Of course, Mannatech ignored his suggestion, and was soon thereafter hit with class-action and Tex AG lawsuits: https://en.wikipedia.org/wiki/Mannatech
So the question becomes, why was the question about Carson’s Mannatech involvement so controversial, but not Costco? Obviously, it’s because Mannatech is viewed as an at least a shady MLM, if not illegal, yet the only thing being done about it by the government was from a single state and a paltry fine almost a decade ago. Why is all of the attention being put on Carson, when it should really be on Mannatech?
What about the FTC’s position about endorsing a product and the need to disclose monetary benefits? In this case, the MLM company would be an ACTIVE participant in such apparent illegal behavior. Also, the .org extension is supposed to be for non-profit organizations, so the website name itself is very misleading.
I know you monitor the behindmlm.com website, and just wanted to point out the vast majority of the links Jeunesse used during their phone call with the online visual presentation were from businessforhome.com, so the usual “follow the money” approach applies here. There’s little doubt in my mind Jeunesse and many other MLMs pay this website $36,000-$48,000/year to keep the “negative” stories off his website and the “positive” ones on it. Even the non-paying MLMs benefit, because he doesn’t want to create doubt that the MLM industry is a sham, as that would undercut his paying customers.
10/26/2015 – We know why this is a problem: http://economictimes.indiatimes.com/industry/services/retail/direct-selling-companies-hit-by-ecommerce-hul-eureka-forbes-embrace-change/articleshow/49531489.cms People try to sell products at retail markup or even their own cost, and they’re too expensive, so they quit and try to get some return on their money by selling at deep discount prices online. Then, even more distributors can’t sell, because customers and even distributors can save money by buying online. Amway’s lame excuse of “An Amway spokesperson said the company does not sell its products through ecommerce sites or retail stores. “People purchasing Amway products from these channels run the risk of receiving products that could be, among other things, out of date, spoiled, altered or even an imitation,” the Amway spokesperson said.” is pure bunk. I’ve purchased plenty of Amway products online and NEVER had a problem.
10/25/2015 – The rumor is going around that the owner of this ACN informational blog has been sued by ACN and told to take down his website: http://www.acnpyramidscheme.com/ This type of legal intimidation is nothing more than a SLAPP/frivolous maneuver, and one that allows MLM scams to continue.
10/23/2015 – Ever since the DSA got squished by Bill Keep and yours truly, see the 10/2/2015 story below for the details, the DSA apparently took to the warpath to take down Bill, Peter Vander Nat, and tried to throw Stacie Boswell under the bus for good measure: NERA DSA Report 2015
While the NERA “gunman” made some good points about Peter and Bill’s positions that I agreed with a long time ago, namely that internal consumption should be eligible for compensation within the compensation plan, I diverge from the NERA report and agree with various court rulings (not to mention common sense) that internal compensation should be paid ONLY if there are adequate retail sales to non-distributor customers, as this is the only way to ensure free market demand for the products that is not encumbered by what the BurnLounge judge stated was a “conjoined opportunity” for the distributors purchases.
The term “adequate” has not been defined by the law or the courts, but the minimum in my opinion should be at least half of the gross profit for the company and distributors should come from the sales to customers. This includes profit from tool programs, sign up fees, renewal fees, etc. I can think of no other business where only half the gross profit comes from those not compensated by the business, be it a convenience store, a major retailer, a service provider such as a law firm, insurance agency, etc. Therefore, the 50% criteria is an extremely low bar that most MLMs would fail, and could be compared to running a track and field hurdles event with 3″, instead of 3′, hurdles. Just picture all of the other athletes (all non-MLM businesses) clearing the 3′ hurdles while the 3″ hurdle runner (MLM businesses) trips over the 3″ hurdles!
However, just like Bill, Peter, and Stacie, it is obvious the people writing the NERA report have never been in an MLM, or they would know the tool scam must be addressed first, and retail sales are a distant second place issue in the presence of a tool scam, which fundamentally changes the business model and introduces RICO fraud to the analysis and legal considerations. There are many other issues that all of the above have gotten wrong, but these are the major points. Perhaps I will do a more in-depth write-up of all of their positions at a later time, to point out what they got right and wrong in their uninformed claims.
As always, I am open to discussing these and any other MLM issues with ANYBODY (except, of course, current Amway IBOs), but it takes 2 to tango. You can start by emailing me here: firstname.lastname@example.org
The DSA claims about 17 million people in the U.S.: Frequently Asked Questions | Direct Selling Facts – quite a few more than the FTC’s estimate of 1 million. Amway alone has 300,000 in the U.S. If the FTC can’t get this simple fact correct, it doesn’t appear they have a clue how big this problem is, and that should be the first thing they get calibrated on.
What is a pyramid scheme?2,3,4,5,6,7,8
Recruits obtain the right to sell an “opportunity,” often in conjunction with selling a product*. –> Pyramid schemes and legitimate MLMs have this feature, so this is confusing.
The right to sell includes the right to earn rewards by recruiting others. –> Ditto.
Fees and/or product purchases sustain eligibility and are required for the prospect of any significant rewards. –> Not just required, but also if highly promoted or otherwise incentivized.
Rewards derived primarily from recruiting others, who typically buy products and/or pay fees for the sake of pursuing the opportunity, and not primarily from selling products to the public. –> Bingo, that is a key differentiation. Also, the BurnLounge judge agreed with the 1979 Amway judge, that there is a “conjoined opportunity” (buying products for the value AND to make more money) that makes the question of motivation impossible to answer, which is why customers, which buy products ONLY for the value the only way to measure legitimate free market demand.
Pyramid schemes have company policies, marketing material, and compensation plans that reinforce recruiting new participants into the opportunity rather than selling products to the public. –> Not just policies, but product prices, which make products nearly impossible to sell to customers, so virtually all of the purchases are made by distributors having the above conjoined opportunity. Company policies include allowing tool scams, and no legislator’s guide should leave out this issue. If companies had lots of retail sales, the MLMs with tool scams would merely adjust their tool costs to take the retail profit from the distributors and return the lack of net profit situation for the vast majority of the distributors to square one.
Product-based pyramid scheme symptoms necessarily [I would use the term typically] include: deceptive earnings claims, a compensation plan that rewards recruitment [as the FTC website states, this also includes ongoing distributor self consumption purchases] unrelated to sales to the public, a convoluted set of policies and procedures, an inability to demonstrate consumer demand independent of recruitment, and ineffective anti-pyramid scheme safeguards [such as rules against inventory loading and a generous return policy]. Unsupported product claims (i.e., product efficacy) may or may not be [are often an issue, because the overpriced products have to be differentiated from other comparable market choices] an issue and product margins considerably higher than competing products in the market are commonplace [owing to higher production costs caused by lower production quantities compared to major brands, high company profit, and high distributor compensation costs].
10/10/2015 – Vemma is on “sale,” and so is their compensation plan! Vemma reduced their prices, and guess where they took a hit? Answer: the distributor bonus payout. Here’s a Variety Pack from shortly before the FTC court ordered shutdown: VemmaVariety Pack Pricing August 2015 and after the recent reopening: Vemma Variety Pack Pricing October 2015. Note the price went from $36.95/$40.50, with and without auto-ship, respectively, and 30 QV, a measure of volume and how people get paid, to $29.95/$37.95, with only 12.50 QV, a QV decrease of almost 60%, while the price is being reduced about 25% for auto-ship and only 7% if not on auto-ship. The least expensive shipping is $10 for 3-5 day ground shipping, and up to $32 for overnight shipping, which would result in more for shipping if shipped via auto-ship! Assuming the least expensive shipping charge, and pre-shutdown shipping was the same as the recently reopened shipping, the price reduction is 15% for auto-ship and 5% for a regular order. How would you like to give up almost 60% of your bonus for a 5-15% reduction in your produt plus shipping cost?
10/8/2015 – Want to hear some audio clips from Dexter Yager, the biggest MLM scam artist on the planet? Here ya go:
10/3/2015 – My, how times have changed (but not really), as “expert” MLM lawyer Babener:
1. Admits Amway doesn’t comply with the 1979 ruling regarding the 10 customer rule, as most volume would not be internal if the rule was actually being complied with: https://youtu.be/04Jw5Y7VqZ8?t=774,
3. The FTC doesn’t arrest anybody, as this and the Vemma case is a civil case, and they don’t have that authority, but the FTC did shut down Vemma, via a court order without contacting any company officials: https://youtu.be/TDV4PvLrl84?t=1208 and
4. Here Babener admits Amway, Shaklee, etc., are scams, because they charge so much more than similar products and already stated above that most of the purchases are internal, the very definition of an illegal pyramid: https://youtu.be/NrGaMOOYAc8?t=144
1. Implies that Vemma received a DSA award for ethics, when it fact no such accolade was ever bestowed upon the company.
In fact, DSA does not give an ETHOS Award to members for ethics.
Yes, how could anybody confuse ethics, the DSA, and the Ethos award? Perhaps naming an award that is so close to the word “ethics” and saying, YOUR words, “Receiving a DSA ETHOS Award is a testament to the commitment a company has made to being a model for the highest standards in business practices and ethics,” said DSA President Joseph Mariano, according to http://finance.yahoo.com/news/vemma-r-receives-2013-direct-204933519.html Was that story telling a lie, Joe?
Of course the DSA doesn’t give an award to DSA members for ethics, that would require the members to have at least a smidgen of ethics, wouldn’t it, Joe?
2. States that DSA tried to ‘distance’ itself from Fortune Hi-Tech Marketing and BurnLounge, because they were pyramid schemes. DSA did not need to do so, because neither company was ever a DSA member. Fortune Hi-Tech Marketing applied for membership and was never accepted; BurnLouge never attempted to apply for membership.
Fortune Hi-Tech Marketing withdrew in 2011, because it did not meet DSA’s high standards for membership. DSA embraces the U.S. Appellate Court’s decision in the BurnLounge case, because it provides useful guidance on what constitutes a pyramid scheme: an emphasis on rewarding salespeople for recruiting additional salespeople instead of for selling products. This and other court decisions, as well as legislation at the state level, could help policymakers and regulators gain more clarity on what constitutes a pyramid scheme under federal law.
The question isn’t “selling products,” it’s WHO the products are being sold TO, right Joe? The Vemma judge made that clear and agreed with the FTC website, by requiring the majority of the profit to be generated by external, non-distributor customers. Why can’t the DSA support that, Joe? Because Amway reported a paltry 3.4% of their products are sold to customers, and people like me know even that minute percentage is inflated? Instead, the DSA tried to muddle the discussion (muddling is the opposite of “more clarity”) by focusing exclusively on distributor volume. We know the DSA paychecks literally come from MLM scams like Amway, Herbalife, and Vemma, who are ALL DSA members. When should we expect the DSA to boot Vemma out of your “ethical” organization, Joe? Or would that result in a pay cut for you and your fellow non-profit employees, Joe?
3. States that a former DSA General Counsel defended Fortune Hi-Tech Marketing and BurnLounge. This is entirely false. Unfounded accusations such as this unfairly damage DSA’s reputation by implying that the Association defends schemes.
DSA challenges every company using the direct selling channel to adopt the highest standards of business ethics and consumer protection. Our Code of Ethics explicitly bans pyramid schemes and sets standards for ethics and consumer protection that lead the industry.
If clarity on what constitutes pyramid schemes in federal law is really what Keep is after, then it is hard to see how irresponsible, ‘guilty-before-proven-innocent’ rhetoric that direct selling companies like Vemma and Herbalife are schemes helps his position.
On the contrary, such irresponsible mud-slinging only serves to confuse the issues – and Seeking Alpha readers – even more. It is ironic for someone who says he is acting in the name of consumer protection to try to destroy a retail sales channel that affords opportunity and a better life to millions.
Let me be clear, I don’t think there needs to be any implication your DSA (Don’t Sell Anything) defends “schemes,” namely illegal pyramids and RICO frauds, because Vemma, Herbalife, Amway, etc., are CLEARLY scams and paying members of the DSA, so the DSA CLEARLY supports MLM schemes/scams. Just ask Avon, a founding DSA member over a century ago, and Tupperware, another long-time DSA member, both of whom quit the DSA in recent years, what they think of the DSA and the “ethics” that are practiced. Your “code of ethics” amounts to putting glitter on a piece of feces, Joe.
Once you stop hiding behind your lawyers and sending out form letters to people like me who point out the problems, and instead ENGAGE with us, we have no choice but to point out the problems in the court of public opinion, which is NOT a court of law where innocence is presumed, but both sides are forced to engage in fact-based communications.
Your “retail sales channel” and “opportunity for millions” is a joke, which has been once again proven by Vemma, which hasn’t even reopened yet, nearly two weeks after being shut down, but already announcing a lowering of prices in order to have a chance of achieving the court-order retail sales to REAL retail customers. You better start looking for a new job job, because the end of the high-dollar MLM scams funding your paycheck for covering up their scams are going the way of Vemma, FHTM, BurnLounge, etc., soon. Perhaps you can join Amy Robinson’s new gig. Ask Adolfo about my interface with Amy and him in 2008, all I got back was a form letter, basically stating my complaint will be kept on file, and there hasn’t been any followup with me for the past 7 YEARS, despite multiple MLM companies being shut down for similar behaviors I described to them. I’m not expecting a response from you Joe, because I know that’s how you roll.
8/27/2015 – Scammed by Vemma? Either email your information, and/or go here and fill out the form as instructed and email it to: email@example.com, and I’ll ensure it gets into the hands of the FTC: http://www.businessforhome.org/2015/08/vemmas-defense-shields-up-asking-for-testimonials/ Be honest, and tell about everything you can think of regarding your disastrous experiences with Vemma, including how much time you lost, money you paid and lost for meetings, travel, meals, any “tools” such as books, CDs, website access, voice mail, etc., the lies you were told, how you were “pumped up” to keep trying, the “love-bombing” that was constant then stopped when you quit, and anything else you can think of. Be sure to direct everybody you knew was in Vemma to do the same thing, including contacting everybody THEY knew, and so on. If Thompson gets 1,000 affidavits, we should be able to come up with 10,000 or more. Be sure to get it notarized, this is usually a free service at a bank, church, etc.
7/25/2015 – Here’s some information sent to me today that is of interest, with minor editing to conform to my agreement with Amway: “…you should research how laughable their business model went in China. They claim large sales…which is true, they did achieve lots of sales, but the reality is that MANY of their purchases were later returned. I believe what was happening was that the Chinese would take advantage of certain policies and abuse them to the max, using entire products up before complaining and getting another product free. They got kicked out of China for lack of better terms (or at least changed up their business model) but I think they’re still in business there, as well as other similar companies (think Tupperware parties, sex toy parties etc)”
My response cleared up the situation with China booting Amway out for a few years, “All MLMs got kicked out of China, because there were a lot of bad actors, and Amway is back in now, about 40% of Amway’s total (apparently ghost) volume, but they aren’t supposed to be using MLM, only direct sales. However, they are probably cheating like Herbalife is: factsaboutherbalife.com/media/2014/03/HerbalifeInChina.pdf“
So how does Amway count all of the returns as far as reported volume? This is no small question, as China has been responsible for most of Amway’s growth over the past few years, and shrinkage in China contributed a major part of the $1 billion DECREASE last year. Since Amway is a private company, they can make up their own numbers, and probably do, given how they have supported the ATS for decades.
and this one: “Some stories about how evil this sh!t is, just read this articlehttp://news.kuwaittimes.net/multi-level-marketing-targets-filipino-community-kuwait/Filipinos make $350 a month here in most jobs, just so you can imagine. In the US you can earn at least $800 working full time for Burger King or something. My blood boils just reading this sh!t, so I think you can imagine why I have no interest discussing these businesses.
How can you write this and NOT comment on the bullsh!t it obviously is? This mother focker didn’t die of stage 3 cancer supposedly? If he gets a hammer in the skull I swear I’d dance on his grave. His people are escaping poverty to come work in a xenophobic country and he comes to rob them!
You want to battle this evil sh!t, get representatives from different poor communities to help spread the word about these schemes. These are Ponzi schemes and shouldn’t be dignified with the term MLM. I better stop now cuz of my blood pressure lol, I better blow off steam via gaming I’m too young for this!”
A: I am not sure if the business practice itself is haram or not. Of course they lie about every other thing in the business, which is a different issue. I built Amway for many years until I realized it is not for me. Let me tell you this; in their quarterly conferences, they have a separate session for all the religions, and for muslims, all they focus on how this is not haram. If you ask a muslim who is doing Amway, he is brainwashed pretty well and will be offended by it. They use this phrase every time “This business is very halal and very zabiha” My response: That’s interesting, it used to be that if you weren’t Christian, you were trash. I guess they’re getting desperate. LOL
Also, Amway is obviously targeting younger people who don’t know how to protect themselves as well against scam artists as older people, as they stated, “Five years ago, the age of Amway business owners started at about 35 years old but now it starts at 18.”
Also, Walmart is getting some heat about their expensive water during a CA drought: http://sacramento.cbslocal.com/2015/05/08/wal-mart-bottled-water-comes-from-sacramento-municipal-supply/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20quicksnailsfeed%20%28quicksnailsfeed%29, although imagine the shipping cost to bring water from another location! Also, it’s not as if people are using the water to shower and flush their toilets, the largest uses of residential water. Sacramento charges $0.00132/gallon (or 748 gallons/$0.99) for their tap water, Walmart has a supplier purify it (reverse osmosis, filtered, and ozonated, which should make it close to perfectly pure) and sells it for $0.88/gallon, and Amway’s Perfect Water” sells for “only” $16.06/gallon, plus it is sold in 16.9 oz bottles, increasing plastic waste. This makes Amway’s “Perfect Water” over 12,000 TIMES more expensive than Sacramento’s tap water, compared to about 665 times for Walmart’s purified water, which makes Amway’s water over 18 TIMES more expensive than Walmart’s water. Amway cracked down on the debunked “miracle” effects of their H2O, so why is it 66,500% more expensive than Walmart’s purified water? https://youtu.be/qQynGvjGUz0
4/26/2015 – Anybody who thinks Herbalife, Amway, and other MLM scams are going away without a LOT of effort is wrong. These scams are struggling for their survival, it’s going to take a LOT more than posting on a blog: http://www.forbes.com/forbes/1997/1020/6009043a.html Forbes obviously never heard of the term “pop-and-drop,” the phenomenen that when an MLM enters a new country, there is a lot of anticipation ahead of massive growth before reality sets in, then a fallback to a lower, more grinding scam. They also never heard about expensive lawyers, who can slow down the process to the extent the other side, particularly if they’ve been ripped off and don’t have much money, eventually gives in and gives up. The point of the story is that we are now 18 years after this Forbes story, and Herbalife is still grinding away, ripping off people around the world, and Mark Hughes checked out 15 years ago.
4/18/2015 – This is one of the most disgusting videos I’ve found in a long time: https://www.youtube.com/watch?t=192&v=4ICzrRqhDvc I don’t have an issue with the principles being taught, just the scammy company behind the teaching, Amway. The third principle discussed in the video makes any former Amway IBO feel like throwing up in their mouth a little bit.
It will be a good day for the world when the executives and high level distributors of Amway, Herbalife, and other MLM scams are escorted to jail, and they end up locking the prison doors and throwing away the key!
4/10/2015 – Not since Amway sued me (lost, and will forever regret that bonehead move) has an MLM company made such a stupid move: http://www.valuewalk.com/2015/04/herbalife-owns-web-domain-billackmanlies-com/ There’s no content on any of these sites, obviously because Bill Ackman does NOT lie, and if Herbalife lied by accusing Bill of lying, he would sue them pronto, and get deep into Herbalife’s inside records via the discovery process. What a disgusting company, exceeded only by Amway.
3/27/2015 – Wanna bet? Here’s a challenge from Bill Ackman against an antagonist of short sellers: http://www.vanityfair.com/news/2015/03/bill-ackman-herbalife-marty-lipton While I don’t have a million bucks jingling in my pocket like Bill, I’ll debate anybody on the other side of the MLM conversation. Record it and let the people listening live and later make up their minds who was right on the facts.
3/21/2015 – Well, this can’t be good news for Herbalife or Amway: http://www.naturalproductsinsider.com/blogs/supplement-law/2015/03/attorneys-general-met-with-private-lawyers-to-ens.aspx, as it confirms at least 2 state AGs are still investigating Herbalife, and possibly many more. Here’s a couple of quotes from the story, emphasis mine: “Lawyers for the parties conferred with attorneys general in several states to ensure the settlement will not interfere with ongoing investigations or “release claims which could be prosecuted by attorneys general,” Thomas G. Foley Jr., one of the lawyers representing the plaintiffs, wrote in a March 10 court filing.” and ““However, the interest of numerous state attorneys general in the terms of the proposed settlement is indicative of the high level of lawyering required by experienced Class Counsel to address those concerns,” Foley wrote in the March 10 filing.”
The staff also has recently seen what appears to be an increase in pyramid schemes under the guise of “multi-level marketing” and “network marketing” opportunities. These schemes often target the most vulnerable investors, and social media has expanded their reach. The Division is deploying resources to disrupt these schemes through a coordinated effort of timely, aggressive enforcement actions along with community outreach and investor education. We are also using new analytic techniques to identify patterns and common threads, thereby permitting earlier detection of potential fraudulent schemes.”
3/13/2015 – In the usual dribble of country-specific sales information, Amway discloses the South American overall and Colombian 2014 sales volume, but only because they went up. As stated in earlier stories, for every country increasing in sales volume, another country has to go down, and we don’t know which countries went down (except China) or by how much (including China): http://america-retail.com/industria-y-mercado/colombia-representa-46-de-los-us196-millones-que-amway-vende-en-la-region It appears the “increase” is mostly coming from the unusually favorable exchange rate the Colombian Peso had against the dollar during the 2014 fiscal year (Oct 1 2013 – Sep 30 2014) and so far in the current 2015 fiscal year, things aren’t quite so “peachy,” so I don’t expect a similar story next year: http://www.xe.com/currencycharts/?from=USD&to=COP&view=2Y Here’s some of the story content, the translation is a bit cumbersome:
“The American company Amway, number one in the direct selling industry on the globe, reported that in 2014 sold $ 91.4 million in Colombia. With this figure grew 2.4% compared to 2013, when it posted sales of $ 89.2 million.
With the new amount, the country enters represent almost half of sales that the company makes in the region, with 46%. The total figure [presumably South America] is $ 196 million.
Additionally, the company reported in its global operating a closure very encouraging year, which took place 80 years Nutrilite brand leader in sales of vitamins and nutritional supplements. He excelled at the Artistry line as one of the top five brands in sales of products for skin care. The corporation invested US $ 3,300 million in bonds for their employees.”
I don’t know how a nearly 10% decrease in global sales can be spun into a “very encouraging year,” but that’s par for the course for the Amway scam.
1. The home-business salesperson — they only have friended you to invite you to their jewelry parties or Amway groups. RUN FOR THE HILLS AND UNFOLLOW THIS LOW-RENT CAPITALIST.”
My recommendation is to not only unfollow them, but also ban them from viewing your Facebook page, AND most importantly, pass the word to all of your non-Amway facebook friends and relatives to do the same (including passing on the word, “networking” style), so they don’t get scammed.
ADA, MI — A joke about Amway in the popular Netflix political drama “House of Cards” didn’t get any laughs at the Ada-based direct sales giant. —> However, Amway is a joke (but not the funny kind) and also a house of cards. I’ll bet there are plenty of employees laughing behind their supervisors’ backs, and hoping to find a new job soon working for a legitimate company.
Todd Woodward, Amway’s vice president of marketing, says the problem with the reference is that it perpetuates the contention that the nearly $11 billion global company is an illegal racket. —> Any relation to one of our “favorite” former Amway/Quixtar LCKs, Orrin Woodward, who is described on this website? Also, it’s not a contention, Amway is a nearly $11 billion/year illegal pyramid AND RICO fraud, as thoroughly described on this website.
“We spend a lot of time trying to educate people what a pyramid scheme is, and why Amway is not one of those,” Woodward said. —> Amway spends a lot of time LYING to people, and Amway IS “one of those.” This website provides accurate education about Amway’s dual scams, not Amway marketing propaganda and lies.
Amway comes up in the first of episode of recently-released Season 3 when Kevin Spacey’s character, President Frank Underwood, is being interviewed by Stephen Colbert on his now defunct political satire show, as one of Underwood’s former employees watches the program. —> Yes, that show and Larry Wilmer’s more recent Amway reference are shown below.
Underwood is on the show to promote his ambitious agenda, America Works, which he has shortened to AmWorks. —> Yes, the similarity is thick with irony – both government and private scams.
Colbert mocks the moniker, responding: “Is that like Amway? Is it a pyramid scheme? Is that what you are selling the American people?” —> The answer is “yes.”
The line did generate some laughs at Amway’s expense, and sparked some snarky tweets. —> Amway should be laughed at, right before they are put out of business. Not only snarky tweets, but accurate ones as well. Like mine.
But so far, it hasn’t launched worried calls from distributors, or triggered any other fallout for the company, according to Woodward. —> Do you REALLY think Woodward is going to admit to this? I think Amway is worried because the “new blood” for any MLM scam is young people, and Colbert and Wilmer are both closely followed by young people and older people.
Amway is hoping to capitalize on the joke by using the attention as a springboard to again explain the difference between an illegal pyramid scheme and its business model that sells vitamins, cosmetics and household products through a network of independent distributors instead of in stores. —> Amway has no hope, only lies. Very few of those products are sold to external customers, which is the exact definition of an illegal pyramid.
“What makes a pyramid scheme is circulating money without ever selling any product,” said Woodward. —> That is a lie, see above. Woodward is a liar.
We have manufacturing all over the world. —> Immaterial. See above, LIAR.
Nobody makes any money in our business unless you sell an Amway-made product. —> Another lie. The retail rules are not enforced, and the proof the requirements were recently weakened can be found below, see the post dated 11/23/2014.
We are by definition not a pyramid scheme. —> By definition you ARE an illegal pyramid scheme. LIAR.
We hope people understand that but we have to be more on the offensive about explaining that.” —> I can’t wait for Amway to be more offensive about “explaining that,” it will give me more opportunity to tell people the TRUTH. However, I agree Amway is already offensive….
It can be difficult to quantify the value of a business’ reputation. —> And Amway’s value reputation is a HUGE negative.
But companies trusted by the general public tend to be more successful than those that are not trusted — which is why it is important to Amway to clarify misperceptions about the company, Woodward said. —> Oh please, do clarify, Woodward. LIAR.
Amway’s tie to the phrase “pyramid scheme” dates back decades to when the company was investigated by the U.S. Federal Trade Commission in the late 1970s. —> Yes, it’s too bad the FTC didn’t insist on seeing the retail sales records, or Amway and the thousands of other MLMs that have come and gone since, causing massive financial, mental, emotional, and other damage.
The federal agency ruled Amway was not an illegal pyramid scheme, but was guilty of price fixing and overstating income potential. —> And Amway uses the price fixing finding to pretend they don’t know how much retail sales are occurring, and unfortunately the FTC didn’t even TOUCH the tool scam, speaking of overstating income potential….
The direct selling giant has survived similar investigations in other countries in subsequent years. —> Survive is the right word, except Bahrain recently prohibited ALL MLM, the UK nearly kicked Amway out in 2008 and allow zero tool profits, although it is unknown whether these rules are enforced (the UK hasn’t reported the court ordered results from 2013 yet), other countries also control tool purchases, and China doesn’t even allow the MLM model to be used.
Amway operates in more than 100 countries and territories, including China, which is its biggest market. —> And China was down massively last year.
In 2010, Amway agreed to pay $56 million in cash and products to settle a class action lawsuit brought by distributors in California who alleged the company and high-level distributors committed fraud, racketeering and operated as an illegal pyramid scheme. —> It’s too bad the plaintiff lawyers chickened out. But you can’t blame them, Amway delayed the process so long they built up $15 million in fees, which was at risk had they gone to trial and lost the lawsuit.
While denying the allegations in the suit as “sensationalist claims that remain unproven,” Amway said that as part of its settlement the company would make changes to improve distributor education and expand its money-back guarantee. —> Neither of which addresses the two big problems, the ATS and lack of retail sales.
Naming real entities in fictitious drama happens a lot. —> What isn’t fictitious was the fact that Amway is an illegal pyramid and RICO fraud.
It can be problematic for companies when viewers can’t distinguish fiction from reality, or they think the fictitious portrayal is based on truth and not a point of view or exaggeration for dramatic effect, said Tim Penning, associate professor of advertising and public relations at Grand Valley State University. —> In this case, it’s good that viewers can’t distinguish fiction from reality, because Amway has been feeding everybody fiction for 56 years.
“Viewers of ‘House of Cards’ may have their mind made up about Amway, or never have heard of them,” Penning said. —> The good news is LOTS of both groups will know more about Amway, thanks to this story.
“Either way, it’s an opportunity to engage in social media and elsewhere to state what Amway’s business model really is.” —> Yes it is, as I smile like a Cheshire Cat (“old-timers” will recognize the reference to Jim Mainor’s “Oh Harry” tape).
Still, Amway is taking a departure from the path usually followed by companies after unflattering references in the media. —> This shows how nervous they are about the young folks being indoctrinated about the REAL Amway, if the walls inside the Ada offices could only talk….
The traditional response is to ignore the reference and move on unless the attention turns negative and explodes in social media. —> And how do we know this isn’t what is happening?
Jefferson Long, head of creative at Fairly Painless Advertising in Holland, recalls running into a similar scenario during his days at the Chicago office of Ogilvy & Mather. —> I’m sure the similarities to Amway are trivial.
At the time, the Manhattan-based international advertising, marketing and public relations agency represented retailer Sears. —> See what I mean?
Bob Vila, the retailer’s pitchman for Craftsman, became a punchline for David Letterman on his “Late Show.” —> Except Bob Vila wasn’t behaving illegally.
“Letterman used to make fun of Bob’s abilities as a carpenter and some in the agency wondered if it undermined Bob’s credibility,” said Long. —> I think Bob had a lot more abilities as a carpenter than Woodward and the rest of Amway has in telling the truth.
In the end, the agency concluded that Villa taking it on the chin and being a good sport equalled higher visibility and “a more likable Bob.” —> Just like we like to bring more visibility to the Amway scam.
John Truscott, co-owner of the Lansing-based public relations firm, Truscott Rossman, doesn’t think most of show’s estimated 13.4 million viewers noticed or even took the Amway joke seriously. —> I do, and I’m making sure of it, too.
“It was done by a comedian so that lessens it,” said Truscott, who readily admits he is a fan of both “House of Cards” and Colbert. —> Yeah, don’t worry about it, just go to press with it! LOL
“I think in this case most people laugh it up. —> Laughing at Amway’s dual scam is more like it.
It was such a fleeting moment.” —> The “fleeting moment” is guaranteed to last a very long time.
Truscott works with the family of Amway co-founder Rich DeVos. —> Figures, he’s a Amway sycophant.
He also served as communications director for Dick DeVos’ 2006 gubernatorial campaign. —> Oh boy, a two-fer.
Amway, short for the American Way, is based on the idea of owning a business that sells Amway products — and AmWorks is President Underwood’s plan to put 10 million unemployed Americans to work. —> No, it isn’t. Amway sells very few products to legitimate external customers. Both businesses are also fictitious.
Both are based on the idea of helping people find economic independence, Truscott said. —> No they aren’t, they are both scams.
“Amway does it in the private sector, and Frank Underwood does it with public money,” Truscott quipped. —> The “it” is scamming people.
Shandra Martinez covers business for MLive/The Grand Rapids Press. Email her or follow her on Twitter @shandramartinez. —> I did email her, as well as “Brian,” another MLive reporter who made a comment on the story. So far, no response. As usual.
Then there’s this ridiculous lie of a comment, from our “favorite” village idiot:
@Shandra Martinez | firstname.lastname@example.org@fred76 Yes, just the opposite – Amway doesn’t even sell much of that kind of material (known BSM – business support material), it’s from 3rd party suppliers. If you look at the court documents from the class action it pretty much proves that the company distributors *don’t* make much money that way. According to the findings of an independent expert consultant for the class action, fewer than 1 in 6 distributors even spends $100 on training materials from the 15 affiliated BSM companies, and for those that do they spend on average less than $1300 across the entire time they are registered with Amway. —> The “expert” doesn’t know what he’s talking about.
3/10/2015 – Although down over 8% overall for the year (see 2/4/2015 story below) and not disclosing country by country statistics, Amway has no problem “bragging” about Spain growing by 9.5%, a very small market: http://news.amway.es/amway-anuncia-unas-ventas-de-mas-de-11-millones-de-euros-en-espana/ Keep in mind for every country increasing in sales of this percentage, there other countries are shrinking by about twice the same volume.
3/7/2015 – In an odd lawsuit that Amway preemptively initiated, which is essentially a counter lawsuit against the record companies for again suing Amway and various IBOs for copyright violations, and a reprise to the record company lawsuit that led to me to discovering the ATS, Amway was slammed with twisted logic, over and over again: http://www.courthousenews.com/2015/03/06/conspiracy-claims-tossed-against-sony-universal.htm The only remaining charge involves “implied duty of good faith and fair dealing.” It looks like the judge is daring Amway to keep the lawsuit open. This lawsuit reminds me of Amway claiming the ATS should be considered “an enticement” rather than what it really is, LYING about the business model. LYING is the exact opposite of good faith and fair dealing. The real enticement is Amway and the LCKs saying what a great business Amway is while they BOTH clean up on the tool scam.
Doesn’t that make you feel all “warm and fuzzy” about the FTC’s investigation with Herbalife? It also makes me wonder how much money Amway is raking in with their shipping costs, and where the money is going? Of course, money is the most fungible thing on the planet, so the latter issue is moot.
Also, looky here, a fairy tale “story” from Orrin Woodward, former Amway/Quixtar/MonaVie/TEAM and now LIFE scam artist: LIFE Leadership Review _ Orrin Woodward Leadership Notice what Orrin DIDN’T say, such as he sued Amway the day after being terminated from Quixtar (Amway), disclosed a confidential Amway study that showed only 3.4% of sales go to external customers (as discussed elsewhere on this web site, even that paltry number is inflated – can you say illegal pyramid?), and claimed he tried to lower Quixtar prices while his Emeralds and above secretly made 4-5 times more from his tool scam than Quixtar, according to Orrin himself. He also didn’t try to sit out for 6 months, he continued his tool scam while waiting to join MonaVie, in order to produce profit and bring as many people with him as he could. The real problem with going back to Amway wasn’t that it wasn’t online, it was ONLY a name change, but that both Amway and Quixtar (which everybody was learning was really Amway) were scams, thanks to the internet. It’s been several hours, and still no response from my comment, #70.
To: DAVID DE JONG, PETER NEWCOMB, BRENDAN COFFEY
At: Feb 10, 2015 22:01:23
If you want to know more about Tim Ramey’s comment regarding the other MLMs he stated must be illegal pyramid schemes if Herbalife is an illegal pyramid scheme, the first concept to get straight is, what is an illegal pyramid scheme? The answer is on both the FTC and SEC websites and in previous court decisions. Namely, if the primary profit source is anything other than sales to external customers, the company is an illegal pyramid scheme. In other words, if most distributors have little to no sales to external customers, and therefore most of the sales are to people inside the pyramid, the business is an illegal pyramid scheme. This describes almost all MLMs, and probably all of the ones Ramey mentioned. Contact me for more insight, thanks.
123-456-7890 (actual phone number provided in email)
1/20/2015 – Okay, so now I’m “famous,” I made some points on the Michael Savage show: http://conservativestream.com/recorded-shows/Savage_01-20-2015_WCB_FULL.mp3 The MLM discussion starts at about 1:02:10, but if you start a couple of minutes early, you can also learn about Greek foods. I intentionally didn’t bring up any specific companies, such as the most scammy and runner up, Amway and Herbalife respectively, as that is often how people get cut off on radio shows, by getting too specific and opening the host to lawsuits. If more people call in and state they heard this story, and would like to agree with it and add to it, we could keep increasing awareness. Savage has moved to a new format, called, “unprotected radio,” there is no screener, only somebody who reminds you to state the radio station you are listening to, your first name, and topic, when your on-hold number comes up and you go live on the radio show, and don’t ask Michael how’s he doing, or say hello, just rip right into what point you want to make or question you have for Mike.
1/19/2015 – Here’s a video I tripped across while doing damage to Amway on Twitter tonight: https://www.youtube.com/watch?v=RjSMYIE7JtM If you’re football fans and old enough, Tim was an all-pro defensive back for the Miami Dolphins, and on the first and only undefeated NFL team in the 70s. I don’t know where in New York this was, but you can see it is mainly Hispanics, which is typical in Amway these days. Try to listen to it as if you haven’t read any of this website, and go back to before you were aware of Amway/MLM, etc., and try to imagine how good it sounds. However, since reading this website you know they are operating an illegal pyramid (little to no retail sales) and have a RICO fraud tool scam (hidden tool profit), you can see the layers upon layers of deception. Almost everything coming out of Tim’s mouth is a half-truth, which is actually a full lie.
1/12/2015 – Here’s an email I got from an idiot IBO today, and here’s my response (obviously directed towards the public at large, as are all posts and comments on this public forum), followed by the arrows (—>):
I’m interested in what exactly you’re trying to accomplish by an all out assault on Mlm in general. —> This idiot should have read the entire website to find out. Here’s a clue, the title is “Stop The Amway Tool Scam.” Duh.
Seriously interested, that is. —> He should have seriously read it, then.
I know of people outside the industry that support it (Kiyosaki, Buffet, Trump,etc). But they sell books to Ibo’s (or their equivalents). So they make money (not so differently from what you claim to be a scam). —> If he read my entire website, he would know I don’t have an issue with making money, I have an issue with lying about where the money comes from, which is what the LCKs do.
But what do you gain from injuring a thriving industry? —> Amway and/or MLM is NOT a a thriving industry, it is a scam, and if this idiot read my website for comprehension, he would know this and not ask such a stupid question.
Are you somehow bent on moral revenge? —> Moral, ethical, legal, financial revenge. And probably some others I haven’t thought about.
An econoterrorist? —> That is a great label for MLM in general and Amway in particular.
You have some valid points. —> I don’t have “some” valid points, I have hundreds to thousands of valid points and exactly ZERO invalid points.
However, I think you also have your own brand of kool-aid. —> This is a nonsense statement from a pure idiot who obviously hasn’t read my website, or can’t comprehend it.
I mean, you took a straight up legal “anti libel, pfa, restraining order”, and you can that a victory? —> So now the idiot is complaining about some minor restraints that are fully explained on this website as having close to zero benefit for Amway and he doesn’t think that is a victory. His entire email and this public at large directed response proves the agreement is a victory for me over Amway.
So what gives? —> I give people facts, so they don’t get ripped off. THAT’S what gives.
Is this like a twisted hobby? —> No, it’s a crazy like a fox destroy a scam project, as opposed to the dumber than a door nail Amway.
Or is there money to be made in spreading butt-hurt? —> There’s LOTS of money to be SAVED by people not getting ripped off by Amway. THAT’S worth a lot of butt-hurt.
Please inform. —> Everybody is now informed.
I’m seriously curious, after reading your whole blog, which you posted (unsolicited, directed at Ibo’s, in violation of your pfa), on the article about Steve Van Andel and the AGER study. —> This guy can’t even read for comprehension, assuming he isn’t lying about reading this whole blog. There have been NO violations to my agreement with Amway. There is no restriction on what I post from a solicited or unsolicited point of view, I direct the blog towards the general population, and even if I did direct a message towards IBOs as a post on this blog, this blog does not count as communicating with IBOs as described in paragraphs 5 and 6 of the agreement, as it is, by definition, directed towards the general public, by the nature of the posts being public, as well as this blog isn’t owned or operated by Amway or an IBO. It’s called layers of protection. Also, it is clear from the agreement that I, and people I work with, cannot communicate with Amway or IBOs in social media that they own or operate, and this blog is owned/operated by me. The remainder of the www universe is ours. I don’t even know what he means by a “pfa,” it doesn’t appear to fit any of these 92 candidates: http://www.acronymfinder.com/PFA.html
This guy’s name is Luke Walker, so if you get any emails from him, not only is he an Amway IBO scam artist, he’s extremely stupid. Don’t try to contact him or answer any email or other communication from him, he’s a piece of trash who is only worth ignoring, as thoroughly demonstrated above. However, if you do get an email or other message from this idiot, please forward it to me, I would be delighted to respond to it here, directed to the public at large, of course.
Couldn’t you have waited until April 1st to announce Grimes joining your law firm? It would have been more appropriate. I can’t imagine coming up with this development if I did the strongest drugs I could get my hands on.
He had his own Zeek tool scam going with the “training program,” which is the obvious reason you hired him and admire him so much, isn’t it? I can’t think of a more ridiculous hire, and would love to talk to both of you on the phone to answer the tool scam question, both with Grimes specifically and in MLM in general. Absolutely AMAZING!!!
Thompson responded, but he has a confidentiality disclaimer on his email, so it is not repeated here. However, much of the content can be determined by the nature of the below response. I’ve asked him if he is okay with me posting it here. [Update: He chickened out, as I expected]
Today [1/10] at 11:27 AM
You know the Amway lawsuit against me was frivolous and a SLAPP lawsuit, and the settlement agreement reflects that fact. We also both know lawyers protect each other/cover each other’s backs, and there is a VERY high bar for a lawyer to sue another one. Grimes made almost $1 MILLION from this “training” over a very short period of time, and either knew or should have known Zeek was a scam, so I’ll take your apples and oranges, mix them together, and enjoy the fruit salad. They would taste better if you sent me his “training” package, I would love to review it while enjoying the fruit salad.
Why would any of his client MLMs file a formal complaint about him? He’s in business to help MLMs try to stay technically legal, or at least cover up and protect the scam well enough to make lawsuits and prosecution difficult, while ripping off the participants. MLMs don’t want to bring any undue attention to themselves by complaining about these kinds of “services.” That would be stupid. Based on the lawsuit against him, the Zeek defendants should also sue him for giving them bad advice, then he could get his first client complaint!
If you like Grimes so much, your next hires should be Bundren and Nehra. You know the story about Bundren:
1. Found guilty (or whatever the legal term is for losing in civil court) of scamming a condo for about $100,000, and he took it all of the way to the Texas Supreme Court and lost, except for one minor issue,
2. Was a Platinum under Diamond Kelly Rogers, therefore he knows about the ATS, Rogers is now serving 20 years in state prison for being convicted of just one of the several Ponzi charges, the others were unfortunately dismissed, because Rogers was able to have the other charges dropped for agreeing not to appeal his conviction: Kelly G Rogers Report Bundren even practiced law with Rogers, in the infamous Plano, TX “candy cane” lawsuit, which he eventually lost, but cost the taxpayers, of which I am one, hundreds of thousands to millions of dollars in legal fees, defending the school district)
3. Represented TEAM crooks in a lawsuit against other crooks, Amway, so whatever knowledge he lacked about the ATS was wiped away, IF he did any sort of due diligence, before
4. Changing sides to represent Amway against me.That was one of the most amazing moments in my life when you recommended I hire Bundren, but his name was at the bottom of the Amway lawsuit – it doesn’t get any better than THAT!
And here’s Gerry’s “resume”: Search results I talked with him years ago, probably in the 2006-7 timeframe. I got really bad vibes when we were talking about Amway, because he wasn’t interested in helping me regarding the ATS, as it probably involved attorney-client privilege issues. I think he knows a LOT of dirt that would have helped millions of people not lose 10s to 100s of billions of dollars. There comes a point when right and wrong trumps attorney-client issues, and I think Gerry is clearly over that line.
Bernie Madoff gave a lot of money to philanthropic organizations, but he was still sentenced to 150 years. I guess somebody has to feed those 24 kids, why not the Zeek people? It makes sense to double dip into an existing scam, IF you’re a scam artist. I recognize the difference between being convicted vs. accused, but that doesn’t mean I’m not entitled to my opinion in the meantime, or even afterwards if Grimes somehow wiggles out of the Zeek accusations.
Other than that, I think you made a fine decision in hiring Grimes.
Today [1/10] at 11:43 AM
P.S., The former CEO of Legacy Business Group and TEAM “leader,” Ron Simmons, who Bundren represented in the lawsuit against Amway, is now a State of Texas representative and CEO of a new tool scam, Blue Ocean Business Group (BOBG). BOBG consists of the same players that scammed people in Amway and Monavie, and now scams people in Avisae, which is an MLM and therefore probably another illegal pyramid. I’ll be speaking to an Austin newspaper next week about Simmons’ past and present behavior, so if you want to put in your two cents about him, fire away.
1/4/2015 – There appears to be more than one way of getting Amway out of a country, just have Russia invade it: http://crimea24.info/2015/01/04/amerikanskaya-kompaniya-amway-tozhe-pokinula-krym/?_utl_t=tw I particularly enjoyed this line, “However, as a law-abiding company….” Hardly. Here’s the article, although the pdf did not provide the entire content: Amway leaves the Crimea To the best of my knowledge, this is the first time Amway has left a country (in this case, part of a country), with the exception of China, which shut down all MLMs temporarily a few years ago.
1/1/2015 – The new year rang in a great conversation with someone who just quit as a Platinum from BWW (Britt World Wide). ALL of the issues found on this website were confirmed to be “alive and well,” and then some, as I expected. A couple of examples include not telling the downline about the massive profits being made from the tools, the groups are now solidly minority in nature (in his case, Somali, someone from the U.S. can’t even understand the English of the open meeting speakers!), and selling XS Energy drinks to convenience stores to get the retail volume, if not done by doctoring the paperwork, whichever is easier. It’s not known who drinks the XS Energy drinks displayed in the convenience stores in clear violation of Amway’s rules, but it’s probably IBOs getting back late at night after “showing the plan.”
Also, I wonder why Russia hasn’t gone after Amway like they did Talk Fusion last year, AND it was upheld in court: http://rapsinews.com/judicial_news/20130605/267677089.html Hopefully, I’ll hear back from some of the executives at VK, I sent them this message: I understand you banned Talk Fusion last year and the courts agreed with you. Another illegal pyramid, very similar to Talk Fusion, is also operating in Russia. It is Amway. The products are so overpriced, most distributors sell little to no products to external customers. Also, the high level distributors make FAR more money from selling the “tools” (various meeting tickets, books, tapes/CDs, voice mail, web site access, etc.) to their downline than from Amway and lie (by omission) about this fact. Read more about Amway, which is how most other MLMs also operate, at Stop The Amway Tool Scam If you would like to discuss any issues, just email, I also have a Skype account.
12/27/2014 – I spoke with an “independent” Amway Emerald a few years ago, and he was at a meeting when these kinds of bonuses were first being discussed, and the higher pins were militantly against these kinds of “starter” bonuses. One of the women LCKs screamed, “But WE (the high level pins) do ALL the work!!!” It appears Amway is now getting desperate, offering these bonuses to longer term IBOs, not just those starting out. I’ll bet the veins in her neck and forehead popped!!! LOL: FastTrack
12/23/2014 – Happy Festivus! If you don’t know what Festivus is, here’s a link: https://www.youtube.com/watch?v=c8g4Ztf7hIM As you may know, this includes the airing of grievances, and here’s a conversation I recently shared with someone on Reddit, who provided additional information regarding accused sexual serial predator Dexter Yager:
Thanks for telling your story. My parents got in Amway when I was eight years old back in the 70’s. Were you by chance in Yager or Britt’s down line? They are super sketchy people. For me, as a child, all Amway did was make my parents absentee parents and at age eight on I cared for my little brother far too often. My older brother was in charge but he used the time to sexually abuse me for years. That was already happening when they got in, but Amway gave him much more access to me. I wish I had my dad around more when I was a teenager. They asked my brothers and Me if we wanted to inherit the business (yes, they are still in, not very active but they qualify as emeralds and usually get the free Amway trip each year) and my younger brother and I said we wanted nothing to do with it. My parents were also royally screwed on their books and tapes $.
Amway is evil. It steals your time for an almost impossible dream to achieve. My parents, and you, are in the lucky 1% that actually have some success in this business. The goal was to make enough money so they could spend more time with us. That didn’t happen until they had grandchildren. So much time lost, vacations lost so they could drag us to another hotel and leave us on our own for the weekend. My older brother raped me on one of those hotel stays. I did make some good friends with other Amway orphans. We traveled to some cool places but mainly saw only the hotel. I got to meet a lot of big names in the business and visiting guest speakers. I also had to sit on the lap of an unnamed crazy [later named as Dexter Yager, thanks to yours truly, below], yet extremely successful (I don’t want to say who) up line with another friend of mine when we were just 16. It was backstage and he was talking to a line of people but wouldn’t let us get off his lap. He had a hard on. Very creepy and disgusting.
I am so glad you are out of it. I have let friends know to stay far away from it. Funny, none of the other Amway orphans I hung around with went on to have their own Amway businesses. I would highly suggest seeking help with a therapist that is knowledgable about cults. Peace to you.
There is a good book by a guy who was in Amway that you can read free online. Check out the blog Ambot by an Ambot’s wife, or google Ambot and you will find the blog. She has a lot of hate but in there are some good pieces of info. I found the book through her blog and it was free. She has the link somewhere. Sorry, I can’t think of the title. I had my dad read it and a lot of it resonated with him.
Just like the Bill Cosby controversy, these people keep assaulting people sexually AND FINANCIALLY until/unless people speak up. If you don’t speak up, it’s also YOUR fault these creeps aren’t locked up. Google Jimmy Savile and then try to do nothing about Amway’s financial rapists and still get to sleep tonight.
Regarding “2. Education is key. What are the most crucial aspect of entrepreneurship education? Topping the list was “basic business skills,” according to 42 percent of respondents….” I agree, and business skills include digging into whether a business is legitimate, or like Amway, an illegal pyramid and RICO fraud. A few days ago, I emailed all of the “Academic Partners” I could find emails for from this site: http://www.amwayentrepreneurshipreport.com/home and guess how many responded? If you guessed zero, you’re right! Here’s the email:
In order for you to maintain a high level of academic credibility, I suggest you disassociate yourself and your university from any further dealings with Amway, and preferably conduct and publish research that backs up the above statement, that Amway is indeed a scam.
I am available via email and/or telephone to discuss this topic further with you. Thanks.
(Email, address and phone number provided to them, not here for obvious reasons)
12/14/2014 – You just can’t help some people, and this illustrates why I didn’t mind giving up the right to exercise my First Amendment right to contact IBOs, because they are too far “gone” to pay attention to the facts, as is “Shea,” below:
And here’s an example of why people don’t complain about losing money, and Amway IBOs are taught that if they don’t succeed, it is their fault, because the “system” is perfect: http://patrickpretty.com/2014/12/13/feds-liberty-reserve-figure-mark-marmilev-shilled-on-talkgold-ponzi-forum-and-also-hired-shills-to-do-so-memo-speaks-to-vast-wasteland-of-online-criminality/, which says in part,“Aftermath of Liberty Reserve Shutdown. Following the shutdown of Liberty Reserve in May 2013, law enforcement agents monitoring various online criminal forums (such as “hacking” or “carding” forums) observed numerous postings by users of these forums bemoaning Liberty Reserve’s closure and the resulting loss of funds that they had on Liberty Reserve’s system. Many users complained of losing tens of thousands of dollars or more that they had in their Liberty Reserve accounts. By contrast, very few Liberty Reserve users have contacted the Southern District of New York seeking to recoup their Liberty Reserve funds on the basis that they were conducting legitimate business on the site. When the Liberty Reserve takedown was announced to the public in May 2013, users were instructed to contact the Southern District of New York if they wished to recoup their funds. Notwithstanding that Liberty Reserve had more than 5 million registered user accounts, only 32 persons have contacted the Southern District of New York from May 2013 to September 2014. Similarly, notwithstanding that numerous Liberty Reserve accounts were doing a high volume of business as Liberty Reserve “exchangers,” only one Liberty Reserve exchanger has contacted the Southern District of New York about a potential claim since May 2013, and that claim was ultimately not pursued.”I hope the FTC is listening, because they told me a few years ago they need a significant volume of complaints to go after these perps.
12/12/2014 – An interesting review, but he doesn’t quite fully understand the ATS/RICO fraud and lack of retail sales/illegal pyramid: http://www.jasonleehq.com/amway-review/ This paragraph is particularly interesting, as I knew the stairstep breakaway has this weakness (which is more than overcome by the ATS, and was an incentive, along with greed, for the ATS being created), and here’s a specific story: “The compensation plan is called a “stairstep breakaway,” which requires the business rep to effectively rebuild a leg once it has reached what’s called Platinum status (7500 points). Basically, legs break off once they qualify and the commissions turn into 4% royalties instead of commissioned payouts. I asked a former Amway emerald once what it was like having his first leg break-off and his reply was: “it’s awful, you really know how to ask painful questions don’t you.” He went on to explain his commissions dropped by at least 80% when they turned into “royalties.” It should be noted that the royalties technically disappear if the volume in the leg drops below 7500 points, so it’s not really a “permanent” royalty unless you maintain your volume.”
12/4/2014 – Want to see what putting lipstick on a pig looks like? Here’s the pig with the lipstick: https://www.linkedin.com/in/stanleyvanetten and notice his bio is blank between 2006 and 2013. Here’s the pig without the lipstick, and tells what he was doing during that time-frame: http://www.wral.com/news/local/story/11157466/ Notice the law enforcement folks had a devil of a time putting him out of business by suing him civilly for running an illegal pyramid, but were ultimately successful with a criminal prosecution. This has lessons on a multiple of levels for Amway and most other MLM scams, including telling only part of the story, glossing over major negative issues, the difficulty and length of time it takes to serve some semblance of justice, using criminal activity as part of a resume, etc.
12/2/2014 – This has been in the news for the past couple of weeks, and the parallel is being drawn of being physically raped and not coming forward and being financially raped and not coming forward: https://celebrity.yahoo.com/news/janice-dickinson-says-bill-cosby-drugged-raped-her-143000218-us-weekly.html In both cases, the rape occurred, the problem is not reporting it allows it to continue. So, if you’ve been scammed by Amway or another MLM and don’t step forward, it’s YOUR fault these scams continue, just as it is Janice Dickenson’s fault Bill Cosby [allegedly] raped many other women. In the case of Amway and most other MLMs, there is no need to use the term “allegedly,” because this site is full of evidence to the contrary. Amway did NOT sue me for libel/slander in 2010, and they can’t win by suing me for libel/slander now, because I speak the truth and the facts.
William Pinckney, Managing Director & CEO, Amway India is very careful not to mention who the products are being sold to, and it is well known most of the overpriced products are sold to distributors, who have a future hope of making a net profit. Unfortunately, this will not be realized for most of them. Instead, they will lose money, drop out, only to be replaced by another victim. This is called an illegal pyramid. In addition, most of the profit for the high level distributors comes from the Amway Tool Scam. This is called RICO fraud. This is Amway’s formula. These issues are explained in detail on my website: www.StopTheAmwayToolScam.wordpress.com
I would gladly debate ANYBODY from Amway regarding this matter.
(Actual addrress/phone number sent, withheld here for obvious reasons)
11/28/2014 – The drumbeat against MLM scams continues around the world, as Norway declares World Ventures an illegal pyramid: http://www.nettavisen.no/na24/–dette-er-et-pyramidespill/8514999.html Key to this decision is the 50% criteria. In other words, if 50% or more of the profit does not come from external customers, the MLM is considered an illegal pyramid. As the SEC and FTC websites clearly state, this includes bonuses for signing up people AND their ongoing purchases. This should include ALL profit, including the ATS profit.
11/16/2014 – Ever notice how state AGs are quick to go after easy targets, such as these womens’ gifting programs, yet Amway remains untouched? –> http://www.jrn.com/kivitv/news/Idaho-Attorney-General-issues-pyramid-schemes-and-gifting-circles-warning-283988381.html It boils down to who has the lawyers, how simple or complex the issues are (state AGs like easy targets), and who has political influence (hint: it isn’t these housewives). Of course, once one understands the $10,000 pencil MLM illustration and ATS, Amway should be an easy target, their lawyers become meaningless, it is 2 simple scams, and political influence becomes a moot point.
11/23/2014 – Can’t get enough real retail customers? Just cheat, and Amway is glad to help you do it: John Bohman (@John_Bohman) _ Twitter All you need is somebody’s name (a phone book is good for that), how you contacted them (the usual, telephone, at work, at play, email, twitter, facebook, etc., etc., etc.) and then assign the desired PV, that you bought for self consumption, to them. Just like the old days, except it was the upline who taught us how to fake out the computer, which is no longer needed! Of course, this doesn’t mean they don’t keep claiming miracles (see in particular towards the top of page 3): SANJIV VERMA (BABLU) (@wwwpurenaturopa) _ Twitter By the way, it’s also illegal to advertise an Amway business online, but who cares, right Amway?
11/20/2014 – Think Herbalife is doing anything REMOTELY novel with their curing cancer claims? How else do you sell overpriced products? Nutrilite/Amway figured this out a LONG time ago, prior to May 21, 1951, to be exact: http://business.tcnj.edu/files/2014/11/1951-Nutrilite-FDA-extravagant-claims.pdf Once the government cracks down on the false medial claims, the next logical “opportunity” to scam is tool scams! Keep in mind Nutrilite is where Amway founders Van Andel and DeVos got their MLM start, before starting Amway in 1959. Once a scam artist, always a scam artist.
11/9/2014 – If anybody ever doubted, here’s another Twitter, for the proof that Amway is a scam. I wouldn’t doubt the picture is photo-shopped, but what is true is when I was invited by Amway to attend a PR conference in Prague, Czech Republic in the spring of 2008, 2 Amway female employees were gushing over Barry, that he was so “dreamy.” That’s one heck of a criteria to lead the free world, and the past 6 years are proof that the only bigger mistake than electing this clown was reelecting him:
Everyone is hugging each other because they hope the direct contact stops the financial bleeding most of them are experiencing. All of that “love” goes away once the bank accounts are empty and credit cards maxed out. So if anyone thinks that my agreement with Amway not to contact current IBOs, or encouraging, aiding, or abetting others to do so was a “win” for Amway, I can guarantee most IBOs are too far “gone” to pay attention to the ATS facts!
10/31/2014 – Let’s hope this doesn’t get final approval: http://finance.yahoo.com/news/herbalife-pay-15-mln-settle-005057261.html, but it unfortunately probably will, in order for the judge to get an item off of his/her docket, instead of resulting in justice. The $15 million is just the attorney’s fees for the Pokorny v Quixtar (Amway) lawsuit a couple of years ago. Why the courts allow major changes to be made and simultaneously allow Herbalife/Amway not to admit fault is beyond comprehension.
10/24/2014 – What a perfect description of an Amway LCK: http://www.edmontonsun.com/2014/10/24/ringleader-of-a-6-million-alberta-mortgage-fraud-handed-a-10-year-prison-term, which says, in part, “Several victims were crying in court and nodding along with the judge’s description of the “unscrupulous fraudster” who caused some to lose money and homes and caused failed marriages and despair. “Mr. MacMullin epitomizes the definition of a racketeer,” said Germain, calling the real estate businessman and Amway recruiter a “pathological, dishonourable, deceitful individual who didn’t care who he hurt.””
10/14/2014 – India slams Amway and the DSA, AGAIN! See http://indianexpress.com/article/india/india-others/govt-plans-to-catch-chit-funds-under-rs-100-cr-that-escape-sebi-net/, which states, in part, “…the Intelligence Bureau reported in 2012 that “fresh” illegal financial activities of chit fund companies were cheating lower middle class and poor people, especially in rural and semi urban areas. The proposed changes, prepared by Department of Financial Services (DFS), also drags in “pyramid marketing schemes” within the act with some safeguards to exclude selling of goods and services, but not those sales where there is no economic activity or addition of economic value save for creating a chain of new participants and distribution of economic benefits to the existing ones. The department has also turned down request of Indian Direct Selling Association (IDSA) – comprising biggies like Amway, Tupperware and Hindustan Unilever Network – to include direct selling schemes as an exempted category under Section 11 of the Act.”
10/9/2014 – Ever wonder why the FTC is so slow on the uptake when it comes to shutting down MLM scams like Amway and Herbalife? Here’s some evidence: http://www.bloomberg.com/news/2014-10-08/herbalife-s-new-compliance-chief-comfortable-risking-neck.html which says, in part, “Herbalife Ltd. (HLF)’s new compliance chief said her experience using the company’s shakes, as well as an informal look at its operations, made her willing to stick her neck out for a business that’s being probed by regulators.Pamela Jones Harbour, who spent seven years with the Federal Trade Commission, was introduced as Herbalife’s first senior vice president for global member compliance and privacy on Oct. 6. That experience with the same agency that’s now investigating allegations Herbalife runs a pyramid scheme boosted the shares 6 percent after her hiring was announced.”With “geniuses” like Pam as one of the 5 politically appointed commissioners, it’s no longer a mystery! It should also be noted all of the HLF stock gains, and then some, have disappeared.
10/8/2014 – The more things change, the more they stay the same. Here’s the latest on Brig Hart, former Amway and MonaVie tool scammer, and his new business scam: https://thelifesupportsystem.com/
9/28/2014 – I don’t think this is the XS Energy drink “Blast” that Amway sells: http://www.bignewsnetwork.com/index.php/sid/226142321 As any regular reader knows, I am not in favor of physical violence against Amway, but Amway shouldn’t be surprised by people exploding 3 hand grenades outside of India offices every third day for the past few days, given the long pattern of scamming others, threatening, and beating up those who get taken advantage of by Amway and their high level IBO LCK sycophant mafia bosses, all of which is thoroughly documented on this blog.
9/20/2014 – I went to the Amway traveling road show in Denton, TX similar to the one Amway did in 2008, except I was an IBO back then and went inside. What I noticed was this one was much less attended, and I thought the Hispanic session would have more attendees than the English session, but both had less than 50 people show up, I estimate about 30 for each, whereas the one in 2008 had several hundred attendees. Therefore, it is some combination of:
1. The location being less centrally located than in 2008,
2. Being for IBOs only (we were encouraged to bring customers in 2008, although there were probably very few there),
3. Not being as well promoted by Amway than in 2008,
4. Not being as well promoted by the upline, and/or my favorite,
5. There are much fewer IBOs around than in 2008.
What was similar was how few Anglos showed up to the one in both 2008 and 2014. Even the English session was composed of mostly Oriental/India area people, plus a small handful of older Caucasians. Hopefully the Amway employees also participated in 2008 and were very disappointed in this year’s attendance. In any event, it had to be considered a complete failure/flop.
9/12/2014 – Avon, one of the small handful of founding DSA companies, is so disgusted with the other companies in the DSA such as Amway, as well as the DSA itself, they followed in the footsteps of Tupperware, a company that quit a couple of years ago (see below January 9, 2013 story) As Tupperware did, Avon didn’t leave quietly, they kicked the walls and doors around on their way out: Avon Open_Letter_to_Direct_Selling_Companies The letter clearly identifies the two major issues that MLM scams have and are discussed in detail throughout this blog, namely, the tool scams, which are RICO fraud, and overpriced products, which results in little to sales to external customers and is an illegal pyramid.
8/11/2014 – Sometime during the day, this obscure blog went over the 100,000 page view mark, and this blog has only been around for about a year and a half! Thanks to each and every person who visited, and one of the best things you can do is forward the blog link to every single non-Amway IBO you know.
8/2/2014 – I wonder how many of these new distributors came over from Herbalife, ever since Herbalife shut down their tool scams: http://www.businessforhome.org/2014/07/usana-q2-revenue-188-million/ and http://news.vemma.com/2014/07/08/vemma-joins-100-million-growth-club/ Of course, none of the 3 companies are going to admit it; Herbalife because they don’t want to advertise people leaving after the tools scams were banned, and the other two MLMs, because they want their people to think the growth is organic. But we know MLM “leaders” often hop from MLM to MLM and take their groups with them, because the new MLM typically pays these “leaders” millions of dollars to create “growth” and increase the production, which decreases production costs/item and increases their profit by both margin and volume perspectives.
8/1/2014 – You just can’t make this stuff up! I’ll bet Amway is excited they named this MLM after dope (Cannabis) and Amway. Also, you have to be a dope on drugs (or an illegal alien) to be in either MLM: http://kannaway.com/
7/30/2014 – An update to the Herbalife price increase from 7/26/2014, is this price decrease story from USANA: http://www.businessforhome.org/2014/07/usana-q2-revenue-188-million/ Note the price decrease happened in 2013, when the Ackman/Herbalife controversy was heating up, and USANA took a hit to their financials in the short term, but now has 11% more distributors, and these distributors are probably able to sell more products to external customers as a result.
7/29/2014 – Amway CEO/scam artist out of jail on bond, unclear what his restrictions are, but it appears he is being confined to India: http://www.telegraphindia.com/1140729/jsp/business/story_18664372.jsp#.U9kJQPldWSo An earlier story (see 7/11/2014, below) reported Amway was trying to pressure the India government for his release, which would have included allowing him to leave the country, and counting on various financial, diplomatic, and other means of forcing this outcome. But when it became apparent India wasn’t going to allow him to leave India, they at least got him out of jail until the trial was finished. Of course, Amway denied everything back in the 1980s when similar charges with Canada popped up, but ended up pleading guilty both criminally and civilly, and ended up paying 10s of millions of dollars for both. These stories can be found elsewhere on this blog, such as here: http://stoptheamwaytoolscam.wordpress.com/amway-physical-attacksthreats/
1. From the headline, why does it take a “Prominent Expert Economist and Former FTC Advisor” who “Provides Analysis of the Herbalife Business Model?” Wouldn’t a lower level accountant be able to perform the simple math required in yesterday’s story? There are 2 major conclusions, listed at the top of the press release, and the problems are evident:
A. There are no definitions of terms. For example, when the so-called “expert” concludes “Estimates That 97% of Herbalife’s Products Are Purchased for End-Use Consumption,” does this mean 3% are given away? I am assuming an “end user” could be a distributor or a customer, who else could be purchasing the products? Herbalife has already said a much lower percent is returned, on the order of 0.2%, so what happens to the other 2.8%? Do they make YouTube videos with exploding coke bottles with the remainder? How does Herbalife know what happens to the 2.8%, since they have already stated they don’t even know how much is self consumed vs. sold to external customers, something they are under permanent court order to produce upon demand? What is the basis of the 97% estimate, and what compromises the remaining 2,8%?
B. Another major conclusion is that this “expert” then “Determines That Herbalife’s Operations Are Consistent with Legitimate Multi-Level Marketing – i.e., Not a Pyramid,” but is silent on the recently prohibited tool scams. What about the previous decades of abuse, is everybody supposed to forget about these, as if they never happened? Also, what is the definition of a legitimate MLM vs. a pyramid? Enquiring minds want to know. I have proposed one in yesterday’s story, let’s see if Herbalife comes close.
2. The author’s bio doesn’t even mention MLM: HLF Expert Bio Walter Vandaele, Ph, and if he was doing consumer protection while at the FTC, he either wasn’t involved in MLM or did a VERY poor job. Either way, I’m not impressed.
3. The question isn’t whether “Herbalife’s U.S. business operations are consistent with the socially beneficial MLM model and inconsistent with the socially harmful pyramid scheme model,” the queston is whether the operations are consistent with being a legal MLM model, the term “socially beneficial” has no meaning in this context.
4. The claim that “The vast majority of Herbalife’s product volume (80%) is consumed by individuals outside the Member network (39%), or consumed by Members who join the Herbalife network primarily to receive product discounts for their own use or that of their family (41%),” the 39% external sales is not supported with the basis, yesterday’s news story shows the retail records are not legitimate, Herbalife doesn’t require them to be turned in, and rarely audits them. Also, there is no basis for the 41%, as many of these people tried to sponsor/sell to customers and failed, so they decided to eat/drink their stock. Also, there is nothing in the law that permits someone to “primarily” join for self consumption/saving money vs. making money. To accept this position is to muddy the waters so much that nothing can be defined, which is obviously one of the main goals of this press release.
5. There is no basis for the 62% or 46% of retail based sales to produce primary profit from retail. In any event, comparing this to the 97% consumed by “end users” is NOT retail sales. The “expert” is making fruit salad with apples and oranges.
6. Stating that only 20% of the products are purchased for distributor self use is not supported by any other source, and the basis for this value, as shown above, is not defined.
7. The statement that “Herbalife products have significant intrinsic value and market demand” is not supported by anyone except this expert, as shown above, did not provide basis for this statement.
8. The claim that “The investment required for Members to join Herbalife is not large and is mostly recoverable. Member starter pack purchases, unsellable inventory, and discretionary training material purchases can all be returned to Herbalife through a 100% money-back return policy” is not true, given the numerous other overhead costs, both legitimate and illegitimate, such as the lead generation and other tool scams that were only recently prohibited. Also, the many/most training materials come from the upline, not Herbalife.
9. The so-called expert also said, “For those who choose to participate, the Herbalife business opportunity offers a reasonable prospect of operating a financially successful business,” but does not define what he considers reasonable.
10. The statement that “Members have a reasonable prospect of being able to profit from reselling Herbalife products” is not supported by any evidence, price comparisons, or other methods of determining the accuracy of this claim.
11. The claim that “The low participation costs allow lower level Members to resell profitably” does not describe the participation costs, so the conclusion is not supported by facts, and if even the customers considered the recently raised prices that were already too high (see yesterday’s news story), then how could the distributors be expected to resell the products profitably?
12. What is the basis of “Many Members who choose to pursue the resale business opportunity do in fact earn performance payment incentives?” Specifically, what is the definition of “many?” And what is the size of the resale payments?
13. Why is the following statement not measure, and instead “estimated?” “An estimated 32% of those individuals eligible for performance payments with one or more Members in their downline earned at least $1,000, 7% earned at least $10,000, and 2% earned at least $50,000.” It is assumed the numbers given are annual amounts, and there is no mention of net profit, only gross profit. Other data shows the 91% who made less than $50,000/year operated at a net loss, and many of the 2% who made $50,000 or more also operated at a net loss. In other words, probably less than 1% operated at a net profit.
14. This is another unsupported and nebulous statement, “Members can earn significant performance payments in reasonable periods of time. Of the three highest level Members, 64% were only in this position 10 years or less and 26% were Members for 5 years or less.” What are the definitions of “significant” and “reasonable,” and the question isn’t whether someone “can” make money, the question is whether they DO make money. The statistic on the 3 highest levels probably includes those who quit after the lead generation systems were banned, which means scammers kicked out produced turnover that created that statistic. Also, normal “pop and drop (out)” accounted for some of the turnover as well. In other words, distributors attained a level, found out it couldn’t be maintained, so they either settled at a lower level or quit Herbalife altogether. These are not flattering facts about Herbalife.
15. The source of the information came from surveys that have already been discredited by others, I see no need to repeat these points. However, it should be noted all of the above expert claims are now known to be based on this highly questionable data.
16. The expert was admittedly involved “…in the design of the survey sample, the development of the survey instrument and the analysis of the survey responses.” Not exactly a detached, 3rd party view.
17. Also, the data from 2012 did not include ANY information regarding external customer retail sales, which is the heart of the debate.
18. The “expert” was only with the FTC for 5 years, and obviously as a junior member of the organization, which looks good on a resume, but only at first blush. The remainder of his career is as a paid consultant. Many consultants know to tell the story the customer wants to hear, that’s how many of them get hired in the first place.
19. I doubt VERY seriously this “expert” could be considered an expert in the MLM area, he has shown remarkable lack of knowledge and facts.
20. We know other MLMs lie about the level of retail sales, just visit section “O” of this blog.
21. Other than the above, I think it was a great press release.
7/27/2014 – When everything is boiled down to the fundamental issues, there are only 2, perhaps even 1.
The first is the tool scams, which Herbalife has supposedly ended. This assumes HLF actually enforces the rules, and it is unclear whether they have ended them only in the U.S. or worldwide. However, the previous 30+ years of tool scams should not be dismissed, just like a 30 year bank robber, when caught, and promises to never rob another bank, should not be let go without punishment.
Unfortunately, the tool profits were not even mentioned in the 1979 Amway case. I don’t know if this was because the FTC was not aware of them or considered them as not being a part of what Amway could be held responsible for, as the tool profits go to the upper level distributors, not Amway. However, more recently the UK and India have clamped down on tool profits, with no tool profits and very limited tool profits allowed, respectively.
The second, whether there is more than little to no retail sales to external customers. I don’t have an issue with the Nutrition Clubs (NCs) that offer workouts and other social benefits, but I believe most of the NCs have the forced consumption of 100 “practice” shakes to be “qualified” to make them. The FTC and SEC clearly state the “primary” source of profit should be from these retail sales, which implies greater than 50%.
However, so far the FTC has only pursued court cases that are obviously extremely illegal; companies with little to no retail sales, less than 5%. Therefore, the 50% concept has never been confirmed by the courts. The 1979 Amway case occurred prior to the above FTC/SEC positions, and the FTC erroneously didn’t challenge Amway’s statement that they enforced their retail rules. However, the courts are clear that significant retail sales must occur in order to not be an illegal pyramid, and the 10 customer/month rule was cited by the court in 1979 as a major element in letting Amway stay in business.
I was specifically taught, along with MANY others, how to manipulate the computer to show self consumed items as retailed items. Other tactics being used include shipping products to a nearby relative/friend, including using their credit card, then picking up the products, personal check in hand, to pay for them.
Here’s one of the tactics HLF distributors use – do a search for “receipt” Will Herbalife Earnings Be The Final Nail In The Coffin For Short Sellers? and you will find these comments, “Jasonm, I work with two former HLF Senior VPs and they have said exactly what you just wrote. In their opinion most retail receipts were date changed photocopies that distributors submitted every month. No audits were conducted by the company and, in their opinion, most of the receipts were for fictitious transactions.“
Assuming Bill doesn’t already have this information, these people should be contacted and investigated, to see if this is the exception or the rule. From my Amway experience, I suspect it is quite common.
If total profits, from the products and tools are included, a “unified theory” is reasonable. That is, total product and tool profits must consist of over 50% coming from retail sales to non-distributors. With Herbalife’s zero tool profit rule, this means 50% of profit must come from external customers, which is exactly the FTC/SEC stance.
7/26/2014 – Just like the overpriced Amway products, check out the last sentence in this comment: guest-ssiieslJul 25th, 15:51 at Shake, rattle ‘n’ roll HLF has the gall to raise prices during all of this, probably in an attempt to keep revenue up. It says, “Why target Herbalife, is it because Ackman want public support that it is a pyramid for his own gain? Is he threatened by Herbalife’s growth. What if the like of Amway and Tupperware and others all up there with Herbalife? He will be trying to pull all these companies down to make way for him. I use the product and because I love the product I joined to get the discount not for the business. My family enjoys the product as part of our daily food. But Im not happy that Herbalife raise their price up as it is already expensive“
To be fair, which the reader will find here like no other source, DeVos and Van Andel are involved in various philanthropic interests, mainly to look like Bernie Madoff, to make everyone think they are great guys, and out of the guilt of running a lifelong scam: http://learningtogive.org/papers/paper380.html
On July 17, 2014, you sent a letter to a Ms. Julie Contreras in which you took issue with the following statement recently made on Univision: “…according to LULAC’s Julie Contreras, there is fear in the community that Herbalife is spreading the rumor that those who make accusations against the company will be reported to immigration authorities.” Besides the fact that “Herbalife” could include Herbalife corporate, its employees, etc., as well as any Herbalife distributor, you have an extremely weak position. Also, I have reason to believe that you have many illegal aliens as distributors.
I strongly support MLMs not ripping off people regardless of their ethnicity or legal status. I have collected information for several years, mostly regarding Amway, one of your fellow MLM scam companies. I also noticed the striking similarities between Amway and Herbalife. You can view the Herbalife related information here, I suggest you do a page search for “Herbalife”: http://stoptheamwaytoolscam.wordpress.com/new-news-and-old-news/
Herbalife has strong support in the Latino community due to the widespread lying about your products and the business model. Herbalife cherishes those lies, and has/is deeply operating an illegal pyramid and tool scam RICO fraud.
It matters little that, “Herbalife can unequivocally state that it does not, nor has it ever, used immigration status as a conflict resolution tool.” As I have already advised Univision, as well as the FTC, FBI, DOJ, SEC, all 50 state AGs, that Amway and businesses similar to Amway are illegal pyramids and RICO fraud, and are therefore criminally and civilly responsible.
As an officer of the court, it is your legal responsibility to correctly and accurately portray Herbalife’s business model with the world, a relationship that has been consistently reconfirmed as unfair and deceptive. The integrity required of a corporate leader demands that you refrain from spreading these falsehoods and correct your misstatements. Other lawyers are currently being investigated by regulators and sued by victims for providing false information and advice regarding MLM behavior, such as TelexFree. For example, Herbalife is under permanent court order in California to maintain information that can be easily converted to retail volume upon demand, yet when David Einhorn asked a simple retail level question in May 2012 at the quarterly conference call, over 2 YEARS ago, there was no responsive answer. Over the next few months, the “answers” were extremely inconsistent. To this day there is no answer, yet Herbalife has made major changes regarding how distributors vs. members are counted. Also, only because of Bill Ackman’s pressure, Herbalife stopped the abusive lead generation systems last year, and the remainder of the Herbalife tool scam last month. However, the financial abuse these unfair and deceptive practices have wrought on millions of people over the past few decades is extreme, and Herbalife has been aware of these abusive systems for a VERY long time, as some of the distributors running them served/serve on the Herbalife Board of Directors. Merely stopping the unfair and deceptive behavior is not enough, the past decades of abuse have caused a LOT of damage to a LOT of people. Just as a 30 year bank robber being caught wouldn’t be let go if they promised to never rob a bank again, Herbalife is in a VERY serious legal position.
I suspect that your statement is the product of misinformation disseminated by Herbalife corporate’s paid employees. Nonetheless, these lies are illegal and will probably be prosecuted. By the way, you stated that repeating a false statement is defamatory, but it isn’t, unless the person repeating it knows it is false or is acting in an extremely reckless manner. I demand that you cease and desist from this conduct and that you submit a written retraction of your statement to Ms. Contreras immediately. I demand that you publicly retract in as conspicuous a manner as possible any statements you have made, orally or in writing, to the effect that Herbalife is a legitimate business. I also request that you meet with me so that I might correct your misunderstandings regarding Herbalife’s strained and remote relationship with the truth.
This letter is not intended as a full enumeration of my claims, rights, remedies or damages, or the factual and legal bases thereof, each of which is expressly reserved. Should you choose to sue Ms. Contreras or any other person speaking the truth about Herbalife, the discovery process will shine a very bright light on the dark and illegal underbelly of Herbalife.
(Phone number provided to HLF, but withheld from this blog – there’s a LOT of weirdos out there!)
7/18/2014 – Amway’s lawsuit with the recording companies (see 4/5/2014 story below for background information) is going down in flames. The judge already rejected huge chunks of Amway’s lawsuit against the record companies, even before the lawsuit gets out of the gate: https://www.law360.com/ip/articles/559137/sony-warner-get-amway-copyright-ambush-suit-trimmed, the free portion of which states, “A Florida federal judge on Friday threw out Amway Corp.’s claims that Sony Music Entertainment and Warner Music Group Corp. conspired to interfere with UMG Recordings Inc.’s agreement to notify Amway of any copyright violations by Amway distributors, finding Sony and Warner were part of that…. ” Here’s the entire document: Amway Sony 7-18-14 Essentially, the judge stated the conspiracy and tortuous interference charges are impossible, as there is an existing agreement, and therefore it is IMPOSSIBLE for the record companies to conspire or interfere, that would have to come from an entity not associated with the agreement. It’s amazing how much money Amway pays these goofball lawyers, just like they did for my settlement agreement with them, after they sued me and got virtually NOTHING out of it, with the exception of high lawyer and other costs, as well as my “green light” to pummel Amway into submission without the possibility of Amway being able to do anything about it.
7/11/2014 – This “news” is actually over a week old, but I just saw it: http://apthenewstate.in/2014/07/cops-tracking-diamonds-of-amway A couple of India states are now working together to round up Amway Diamonds (I assume this includes Emeralds and Platinums as well), and keeping Pinckney in jail, where he belongs. Apparently, Amway wanted him to get his passport back as a condition of being released on bail, and India refused. Guess he’ll be eating jail food for a while. Perhaps this is Amway’s new weight loss program, go to jail for a few months and come out much “trimmer” than you went in.
7/9/2014 – Amway gets publicly hammered again: http://www.telegram.com/article/20140709/NEWS/307089549, which states, in part, “Boston is 39-51, 12 games below .500 with 72 to play. The Red Sox’ current losing streak is four games, and they are 1-7 on the homestand. The first-place Orioles were rained out at Washington, so Boston is 10½ games behind them.Still, Sox manager John Farrell has been answering questions about his team as though he just got back from an Amway convention. “We’re not ready to turn the page on this season,” Farrell said before the game, but during this homestand, he has crossed the line from positive thinking to delusional.”
1. Faking religious beliefs in order to get people to trust them,
2. Doing the right thing is the first thing to go out the window when in a pinch,
3. Using unqualified people in positions of responsibility,
4. Cooking the books is standard operating procedure,
5. Faking shock and claiming authorities went overboard when caught red-handed,
6. Doing whatever it takes to make a buck,
7. Being an “imminent hazard to the public,” in Amway’s case, to their wallets.
6/23/2014 – DeVos, groveling at it’s finest. We’re working REALLY hard to get the India CEO out of jail, it was supposed to be a 2 week hold, but given the news from 6/21/2004 below, he may be there a VERY long time: https://www.youtube.com/watch?v=w596ezYrdng Why don’t YOU go over there and take his place, Doug? Come on, take one for the team! Or are you too busy sailing, taking vacations, etc., while your India CEO rots in jail? And where is the regional CEO, he wasn’t supposed to leave until the guy got out (see 6/2/2014 story)? Is he still there? How long can HE stay in India without getting arrested?
Why should the “government” release Pinckney? The “government” has Pinckney in jail!
Doug, why don’t you go over there and take Pinckney’s place, just like Barry traded a traitor for terrorists? Then they can throw away the key and save prison space over here. LOL
Just like former Diamond Kelly Rogers, who was recently sentenced to 20 years for various Ponzi schemes he honed the principles of while in Amway, and he’s got LOTS more charges against him to last him the remainder of his scammy life.
DeVos just came up with the lie of the year…Amway transparent?
Then what about the Amway Tool Scam, Doug? See www.stoptheamwaytoolscam.wordpress.com
There will be a LOT more confidence in India’s business potential, once scams like Amway are kicked out.
6/6/2014 – Happy D-Day everyone! Amway fails in India again, making it a great day for America for another reason:
6/5/2014 – STOP THE (ELECTRONIC) PRESS! BREAKING NEWS! HERBALIFE HAS BANNED ALL TOOL PROFITS! herbalife tool profit zero A REGULAR READER OF THIS BLOG WOULD ALREADY KNOW HERBALIFE BANNED THE MOST ABUSIVE PART OF THEIR TOOL SCAM, THE “LEAD GENERATION” SCAM LAST YEAR, WHICH LED TO VARIOUS PROBLEMS, INCLUDING LOSS OF SOME OF THEIR HIGH LEVEL DISTRIBUTORS, BANKRUPTCIES OF HIGH LEVEL DISTRIBUTORS, AND OTHER MAJOR, LIFE CHANGING EVENTS. NOW AMWAY IS HANGING OUT THERE LARGELY BY THEMSELVES! It is interesting how Herbalife is instructing the distributors to keep detailed records for at least 2 years to prove they are not making ANY tool profit, which is very similar to the permanent court order Herbalife is operating under from the state of CA for their retail sales levels – and Herbalife hasn’t answered David Einhorn’s retail sale question from OVER two years ago! COME ON AMWAY, STOP THE AMWAY TOOL SCAM!!!
6/2/2014 – Amway is sending the India CEO’s boss, they should lock him up, too:
5/29/2014 – Interestingly, there has been little news coverage of the Amway India CEO in the U.S., and I couldn’t find ANY in the Grand Rapids area. I think it’s related to the Herbalife stink in the air, Amway doesn’t want to attract any more attention to itself than they have to – I wonder what the jailed CEO thinks of this “dying on the vine” abandonment treatment? Looks like MLive, the local Grand Rapids rag, finally got around to covering the story. However, we are in a battle to post comments, I’ve had one of mine removed already and posted a couple more, then saved the page. If they remove the new comments, I’ll post the previous version with my scathing comments. Update: It happened, see the 5/29/2014 story here:
5/23/2014 – Amway dirtbag FINALLY sees justice: http://kellygrogers.blogspot.com/After an often delayed trial, former Amway Diamond Kelly Rogers finally got his due. Too bad it wasn’t with regard to Amway, then quite a few other LCKs would be sharing his cell.
5/14/2014 – Good news and bad news. The FHTM saga is over, as they have settled out of court for $7.75 million: http://www.ftc.gov/enforcement/cases-proceedings/112-3069/fortune-hi-tech-marketing-inc-et-al That part is the good news. The bad news is the government apparently didn’t go after any “net winners,” which means these people not only profited, but those who lost money will get pennies on the dollar. There were 350,000 who were dooped in the past 4 years alone, which means they each get an average of about $22.
5/13/2014 – Check out the idiots on this supposed anti-scam blog: http://www.realscam.com/f22/textexs-amway-trunk-mlm-tree-lets-chop-down-thread-gone-wild-3101/index18.html Not a SINGLE one of them, except for EagleOne, is “brave” enough to make a simple and confidential phone call. As of this post, there are 18 pages, be sure to read them all. By the way, this is related to the 5/2/2014 story below, showing not only do people not report MLM abuses to the FTC, but they refuse to work together to take action. No wonder Amway is still around.
1. The distributors are convinced that if they fail, it is their own fault, as the MLM has a perfect system for attaining success, so why report the financial abuse, and
2. Most former distributors don’t know where to turn for help. In fact, the only Herbalife distributor in the above story who apparently notified the FTC was told to do so by her daughter, a lawyer. Imagine how much less the non-English speaking/reading minorities, many of whom are illegal aliens (see the November 16, 2010 story toward the bottom of this page), would report these abuses.
4/28/2014 – Although this has been out since February, I haven’t looked at the site for a while, so it was news to me, and my analysis below may be news to you. Simply substitute “Amway” and “Amway Tool Scam” for “Herbalife” and “Lead-generation” in this Ackman analysis, and you will find these programs are virtually identical, except Herbalife shut down their long-term scam after Ackman applied pressure: http://www.herbalifepyramidscheme.com/deceptive-practices-supporting-herbalife-pyramid-scheme-lead-generation/To be clear, the Amway LCKs don’t sell leads, but they DO sell various meetings, books, CDs, voice mail, web sites, etc.
4/17/2014 – What’s the big deal? It’s “just another state” AG office that has announced it is investigating Herbalife: http://www.businessinsider.com/illinois-attorney-general-herbalife-2014-4 Beside being one more nail in Herbalife’s corporate coffin, and focusing more attention to MLM in general, here’s the big deal: Illinois was one of 3 states that joined the FTC in shutting down FHTM last year, so they are fresh on the regulations, court precedents, and probably have good relationships with the other states and FTC. THAT’S why this is a BIG DEAL.
4/12/2014 – This is headline news ONLY because it’s so funny: https://www.youtube.com/watch?v=-asYSHPJWQU Notice how “Fast-Eddie” says you sign up for free, then you spend thousands of dollars to join. At least Amway charges $50 to join (except many of the upline don’t tell you that and only offer a “package” for multiple times that much that includes products and tools). Plus, with Amway you have the “opportunity” to save 30% off of a fictional and highly inflated, and therefore meaningless retail price (the average of 20% and 40% described in the video, which the “Dragons” didn’t believe from the first moment), then spend thousands of dollars on the uplines’ tools! They say imitation is the best form of flattery. Too bad all he had was a sign and not a white board. LOL
What the sycophant folks on the above blog haven’t discussed is WHY the change is being made. I think it’s obvious Amway is feeling direct and/or indirect heat regarding the Herbalife FTC Formal Inquiry. Besides the ATS, the next largest issue in MLMs is the lack of retail, and Amway’s own confidential study in 2006 showed it was 3.4%, and this was BEFORE the economy tanked and most IBOs were not Hispanic and other minorities. I think it’s a safe assumption to postulate there are less available customers for overpriced products now than there was in 2006. There is still a lot we don’t know, such as:
1. Are the folks below 300 PV going to be customers or IBOs? If customers, this is a sneaky way to increase the retail sales above the paltry 3.4% (which I’ve described elsewhere on this blog is an inflated number), and a major issue with Herbalife. Amway could even call these people IBOs or some other name (IBO in training?) and label their purchases as retail sales.
2. Will the first person above 300 PV, whether the below 300 PV folks are customers or IBOs, keep the full 9% differential, instead of sharing it with the “downline” customer product coupon payout?
3. If these folks are customers, will the upline be prohibited from selling them tools?
4. Will the coupon “customer/IBO” be able to get credit for the volume any new “customer/IBOs” they attract? If so, they are an IBO with another name, although I doubt there will be many sales from this angle.
5. Will there be a cost to join and/or renew as a “customer/IBO?”
6. If there is no cost, will these people be treated as they are in the UK, “once an IBO, always an IBO?” See http://amwayukblog.wordpress.com/, which says in part, “However, even an ABO who stops buying products for their own use, let alone selling to others, is counted as an RC. Even an IBO who is attacked and becomes a human vegetable in a coma is counted! Only those who notify Amway they quit aren’t counted, but since there is no longer a renewal fee, very few probably bother with officially quitting by submitting a resignation form/letter. In other words, RCs are mostly the ACCUMULATION of RCs, not the actual number of ACTIVE RCs.”
6. How dark are the stains in the Amway executives’ underwear? LOL
Here’s how the new coupons compare to the “old” payment, assuming 150 PV is 500 BV, which is the ratio being used currently (the BV/PV ratio increases over time to keep up with inflation/product price increases):
PV Old PV/BVPayment New Discount/Coupon Payment
(rises linearly) (rises in steps)
100 $10 $10
149 $14.90 $10
150 $15 $20
199 $19.90 $20
200 $20 $30
250 $25 $30
300 $30 ??? (see question 2, above)
For an example of an IBO having 2 personals, and each doing 100 PV, the 2 frontline “customer/IBO” folks get a $10 coupon that is good for a discount on next month’s purchases. It is assumed if one of these IBO quits, Amway gets to keep the $10 discount – a nice raise for them, as IBOs quit all the time! So the first IBO is in the organization would receive $90 (or $70, in the event the $20, $10 for each downline “customer/IBO” is subtracted), instead of the previous $40 ($60 minus the $20, or $10 for each downline IBO). The accumulation of $10 Amway “makes” when customers/IBOs quit or don’t use them in a given month will probably fund the $30-$50 difference.
Of course, the amounts being made are background noise in the environment of the ATS, as the best case, $90 (ignoring for now the fact that the Amway product prices are inflated, so the $90 is largely a myth, but it “feels” like $90 is being made, so all is good for Amway and the upline), is now available to get sucked up into the upline bank accounts. No wonder the IBOAI voted “up” for this plan! The IBOs who are giving their input on this change don’t have a clue regarding the above analysis, so I doubt there will be any significant pushback from them….
4/8/2014 – As reported on 4/2/2014, the cockroaches are scattering, and here’s another example, MonaVie (click on picture for full size view):
I checked the MonaVie website, and none of the products were being sold at significantly different prices than the others nor labeled as “new,” so either they aren’t there yet, or the lower pricing is a myth.
4/5/2014 – Amway pulls a “Woodward” and sues the 4 largest music recording companies on the planet: Amway Lawsuit Against Record Companies. The “Woodward” I am referring to is the lawsuit former Amway LCK Orrin Woodward filed in court against Amway the day after he was kicked out in 2007. Amway had their 3rd and final day of mediation with the “Record Companies” on April 3rd, couldn’t come to an agreement, and they sued them the next day, so Amway also obviously had this lawsuit prepared before the mediation, just as Orrin did, not expecting a good mediation outcome. After all, the “Record Companies” (technically, the RIAA) got about $9 million from Amway before: http://www.highbeam.com/doc/1P1-19783607.html and it’s quite probable there were additional, non-publicized amounts as well: http://www.amquix.info/amway_riaa.html
In addition to this lawsuit being a continuation of the mid-90s lawsuit the recording companies had against Amway and several high-level IBOs for including copyrighted music in VHF videos that were sold to downline, which included my upline and led to me researching and finding out about the ATS in 2005, there are several other oddities in this lawsuit, including these off the top of my head:
1. I wonder if some little birdy named “Tex” provided the links to the “Record Companies?” Tweet-tweet!!! No, that couldn’t be, Amway’s highly paid pro-scam lawyers wouldn’t have left a loophole THAT huge in our agreement, would they? LOL Plus, why would I, and how could I, possibly report this old news that is over 12 hours old? Plus, I would have to develop a method to find the videos in a huge database that Craigsl…I mean, YouTube and other online sites, represents. LOL
2. Alternatively, what may have happened is the “Record Companies” didn’t pay much attention to the violations until they noticed how numerous they were, and that they were related to Amway. Then, being rightfully concerned about their names/music being associated with an illegal pyramid scam and RICO fraudulent company, they took action. Amway thinks the entire world revolves around Ada, MI, but they are seriously mistaken. Yeah, that sounds much more believeable. LOL Yeah, that’s the ticket: http://www.youtube.com/watch?v=Mx3wrfhQaqk
3. Amway claims the “Record Companies” conspired, concealed, and ambushed Amway with bringing up the issue of violations several years after they occurred. Amway never claims the agreement included prohibition on the “Record Companies” changing their minds.
4. It was filed in the federal court of mid-Florida. Although Amway has a presence in every state from their now-mostly Hispanic IBOs, including Amway’s co-founder and pappa-bear scam artist Rich DeVos owning the Orlando Magic and having at least one of his houses in the area, there are no corporate headquarters of Amway or any of the record companies in Florida or anywhere near Florida. Therefore, Amway probably went forum shopping and thinks thinks this is where the sleaziest lawyers for this type of lawsuit and friendly courts exist, as well as it being a smaller media market, so they hope to draw less attention. Fat chance! Apparently, the previous RIAA lawsuit against Amway was in Orlando as well. Perhaps Amway thinks they’ll get Mickey Mouse on the jury and he will be on their side, instead of the “Record Companies” that compete with Disney. Talk about a Mickey Mouse lawsuit!
5. Have you noticed yet, that even though only one of the four companies Amway is suing use the word “Record” in their name, and the one is a subsidy of another, Amway keeps referring to them as “Record Companies,” but what should one expect from a scamming company stuck in an old, worn out scam?
6. The fact that it took the “Record Companies” 18 months to put together the list shows how numerous the violations were. The fact that Amway claims to have put in hundreds of hours to investigate the infractions and needing to double the normal 30 response time validates the numerous infractions.
7. Amway claims the “Record Companies” are making a mountain over a molehill, but Amway is the one that filed the lawsuit in federal court, literally and figuratively making a federal case out of it.
8. Amway claims 85% were uploaded to YouTube, but doesn’t mention where the other 15% reside. Just think how many are hiding behind LCK password protected sites that will be uncovered once the discovery process gets underway.
9. Amway claims the “Record Companies” profited from the videos for years, but later claim most of the YouTube videos were accessed very few times. So, which is it Amway?
10 Amway “forgets” to mention while describing how their business works, that according to their own study, a Mickey Mouse-like measly 3.4% of products are sold to non-IBOs (distributors), a figure that is inflated as explained elsewhere on this blog. This makes Amway, by definition, an illegal pyramid that has ZERO standing in a court of law. Also, Amway runs a RICO fraud with the ATS, giving them a LESS THAN ZERO standing in court.
11. Unlike the Mickey Mouse amount of profit the “Record Companies” made from YouTube, Amway admits that “substantial profit” (see page 8, paragraph 23 in Amway’s lawsuit) was made from the 1990s VHS recordings. This is only one of several sources of “substantial [ATS] profit” that is then misrepresented to Amway prospects and downline, a lie by omission, that most of the profit for the LCKs does NOT come from Amway, but from the ATS, as described elsewhere in this blog. How I love lawsuits for proving the ATS! THANKS, AMWAY!!!
12. Amway may not have made a DIRECT profit from the VHS tapes and the other tools, but does make substantial INDIRECT profit from the ATS, as explained elsewhere on this blog. It is similar to me giving you a dollar (direct profit) or me giving someone else a dollar and then they give it to you (indirect profit). Either way, you received a dollar from me.
13. What part of “…a report in writing regarding the charge of infringement” would be reasonably expected to include ONLY the IBO name and address, and would this information be expected to take 30 days to find and report?
14. Have I related how happy I am that Amway spent hundreds of hours finding the information?
15. I am also delighted that Amway failed to reach an agreement with the “Record Companies,” or this lawsuit wouldn’t exist, nor any other information regarding this topic. Thanks again Amway, especially for #11 above.
16. Amway claims the “Record Companies” are placing a cloud over their head. The truth is Amway’s own illegal pyramid and RICO fraud activities for the past several decades have placed a tornado over their own head.
17. Amway admits some of the people (1%) out of the hundreds of violators were involved with the 1990s lawsuit. I know many of the LCKs involved with the 1990s were later terminated, so this means the ones who stayed are repeat offenders. This doesn’t look good for Amway, which is a very good thing!
18. Amway claims many of the videos are in a foreign language and uploaded outside the U.S. However, the vast majority of U.S. violators are Hispanic, so this argument is weak, at best.
19. If 6 of the videos were made by or for Amway, how can Amway claim they didn’t create, authorize, or benefit from them?
20. If the “Record Companies” have copyright authority in other countries, they can sue Amway in these countries as well.
22. I very much doubt Amway has emphasized the copyright laws with their IBOs, as this would have a chilling effect, and Amway is cold-hearted enough already. This is particularly applicable given the huge turnover that has always been present and younger population of IBOs with more technological abilities than previous years.
23. Note the same dirtbag, pro-scam lawyer (Sobieraj) involved in the 1990s lawsuit is still involved. Gotta love those billable hours, the gift that keeps on giving. LOL
24. In conclusion, this lawsuit is a desperate, weak attempt by Amway to protect their deep pockets and already terrible reputation.
If you have any other points to make, feel free to leave comments.
4/2/2014 – The rest of them are running around like the cockroaches they are, now that the FTC is investigating Herbalife. Here’s an example: http://news.vemma.com/2014/03/24/new-vemma-affiliate-customer-perks/ This guy didn’t change ANYTHING, except change what he calls his business model from MLM to affiliate marketing, and you are a “customer” a split second before you sign up to be a distributor. Of course, the company still has an MLM payout system, and waving your hands around pretending to have customers that will not only buy overpriced products over the long term, but also find others who will buy them in order to get a discount. LOL
The truly amazing lie is that McEwen had one million people (or 1.6 million, take your pick!) in his downline when he was in Amway: https://www.youtube.com/watch?v=i_fYMoVA1ns and https://www.youtube.com/watch?v=SS4YXh2Yius While McEwen had a large business, note the total IBOs in North America is currently about 300,000, and was a bit higher when McEwen was around, but not more than double. The total IBOs on the planet is about 3 million, so McEwen is simply a liar to allow this lie to be told about him. This begs another question: IF he had one million in his downline, why in the world would he leave Amway? It’s possible he churned through one million IBOs during his time in Amway, but NEVER had anything close to one million in his downline, he was only an EDC: http://www.amquix.info/amway_exdiamonds.html . He didn’t approach 1/10th that amount, but that’s why liars do, lie.
I found out about this former Amway LCK when I came across a lawsuit that, as usual, shows the total lack of morals, ethics, and legal behavior in the MLM industry: Marty Hale Lawsuit Significantly, Marty promised to monetize the tool system for Sozo (see page 11), something that McEwen can DEFINITELY accomplish, because that’s the mark of an Amway LCK. Also note Hale is now with bHIP, the same company Amway sued (and not only lost, but Amway’s lead lawyer in the bHIP lawsuit was the same one that was the lead lawyer who went down in flames against me) because another former Amway LCK stole people from Amway and put them in bHIP: http://www.businessforhome.org/2012/12/amway-versus-bhip-global-lawsuit-bhip-wins/
1/26/2014 – As the focus on MLMs in China heats up, there are signs of massive fraud on the part of the big-4 accounting firms (so imagine what the rest of them are doing!), see item #6 here: http://www.valuewalk.com/2014/01/whitney-tilson-nq-mobile-vips-ibm-short. This should create a LOT of questions regarding what is REALLY going on with MLM in China, not to mention the illegal pyramid and RICO fraud in many other countries.
There’s only 3 problems (and probably more) with that:
1. Most people don”t buy high-end products,
2. The quality claims of Qnet’s products, especially the “magical” ones, are not verified, and
3. Most of his “customers” are probably distributors, so they are buying the products in order to provide the APPEARANCE the products are great with the hope of “hitting it big” in the future, and most of them end of losing money until they go broke and drop out.
And the above analysis doesn’t even include Qnet’s tool scam, which is probably FAR worse than the high product pricing! LOL
When considering joining an MLM program, beware of these hallmarks of a pyramid scheme:
No genuine product or service. MLM programs involve selling a genuine product or service to people who are not in the program. Exercise caution if there is no underlying product or service being sold to others, or if what is being sold is speculative or appears inappropriately priced. [Amway, and every other MLM I have looked at, has overpriced products. Amway and the others claim “top quality,” but this means customers outside the program are willing to pay that elevated price, not those involved wanting to buy $10,000 pencils so that they can get rich. For a more in-depth discussion of the $10,000 pencil illustration, see the Q&A section here: http://stoptheamwaytoolscam.wordpress.com/frequently-asked-questions/]
Promises of high returns in a short time period. Be leery of pitches for exponential returns and “get rich quick” claims. High returns and fast cash in an MLM program may suggest that commissions are being paid out of money from new recruits rather than revenue generated by product sales. [The commissions being paid out of money from new recruits includes money from tool scams, such as the ATS.]
Easy money or passive income. Be wary if you are offered compensation in exchange for little work such as making payments, recruiting others, and placing advertisements. [Amway and other MLMs have “gotten around” this issue by promising building the business is hard work, but much easier than the 40-40-40 plan (work 40 hours/week for 40 years in order to get 40% of your working income), and MLM is a “build it once” type of income (residual, although that particular work is prohibited). Of course, nothing could be further from the truth, virutally all IBOs have to lie to be “successful” at Amway.]
No demonstrated revenue from retail sales. Ask to see documents, such as financial statements audited by a certified public accountant (CPA), showing that the MLM company generates revenue from selling its products or services to people outside the program. [Amway already “furnished” these documents, a confidential study that was mentioned in the TEAM lawsuit in 2007, where 3.4% of product was retailed to people outside the program. As mentioned elsewhere, this paltry number is inflated, as I and many others were taught how to fake out the computer into recording self consumption as retail sales, and sycophants such as Steadson point to the 1979 ruling prohibiting Amway from know the sales price giving them cover from knowing the retail (PV/BV) volume, which are 2 different things.]
Buy-in required. The goal of an MLM program is to sell products. Be careful if you are required to pay a buy-in to participate in the program, even if the buy-in is a nominal one-time or recurring fee (e.g., $10 or $10/month). [Amway charges about 5-6 times that amount, and most Amway LCKs charge 10-20 times that amount.]
Complex commission structure. Be concerned unless commissions are based on products or services that you or your recruits sell to people outside the program. If you do not understand how you will be compensated, be cautious. [Not only is the known Amway payout structure complex, the unknown ATS payout structure makes it a total scam.]
Emphasis on recruiting. If a program primarily focuses on recruiting others to join the program for a fee, it is likely a pyramid scheme. Be skeptical if you will receive more compensation for recruiting others than for product sales. [This is the “buy from yourself and teach others to do the same” mantra. Add in the ATS, and this issue applies to Amway in spades.]
12/5/2013 – I don’t know exactly when this article came out, but it does provide a good overview of the various MLM legal issues, particularly the history of illegal pyramids shut down over the years: http://mlmlegal.com/Herbalife_Article.pdf Keep in mind this lawyer’s incentive is to give MLM advice, so if he destroys the MLM industry, he loses consulting fees. He is also a lawyer, so he tends not to make logical arguments, rather arguments based on precedent, he takes things out of context to try to make his point, etc. Babener ignores the FTC and SEC guidance regarding legal MLM and illegal pyramids as well, as described in the 12/6.2013 story, above. For example, is it unfair and deceptive (the FTC criteria) for someone to “sell” $10,000 pencils in an MLM manner? Is it unfair and deceptive to make 2/3 to 9/10+ of your profit from a secret tool scam business? The courts haven’t answered these questions, so I would expect Babener to say it must be okay. Class dismissed.
11/29/2013 – Evidence that my theory most MLMs are now preying on minorities in the U.S. and third world countries because of lack of internet access, which would allow people to view this and other web sites to learn about MLM scams:
8/20/2013 – The Herbalife scam is again instructive to Amway.
Recent Herbalife Rule Changes
Prohibition of Lead Generation (announced in April, effective July 1st
“Prohibition on Lead Generation: Rule 1-O states…Distributors may not purchase(whether from other Distributors or third party lead providers) business opportunity leadsor product leads, leads-related advertising, advertising slots, or decision packs for their own use or the use of others.”
New Rules Discouraging the Use of Loans”1-C Incurring Debt, Obtaining a Loan, or Borrowing Money: Herbalife strongly discourages incurring debt to pursue the Herbalife business opportunity, or conduct theHerbalife business. Distributors may not encourage Distributors (or prospectiveDistributors) to obtain a loan or to borrow money for use in connection with their Herbalife business…Further, Distributors may not use in connection with their Herbalifeactivities money loaned or granted to them for educational or other specific purposes notrelated to the establishment of a business.”
Several top level Herbalife distributors have quit over these rule changes, preferring to take their tool scams to other companies, ones that will allow them to continue their scams and reap the rewards of more product volume/profit.
In stark contrast, Amway has no problem with the LCKs making as much money as they want from tools, and this allows Amway to inflate product prices and minimize bonus payouts, both of which increase Amway’s profit. The LCKs don’t want to rock the boat over these issues, or they would kill the Amway goose that laid the golden tool scam egg. Also, Amway is very clear an IBO should expect to have large losses the first few years of operation, further reinforcing the fine print fallacy that tools are optional.
China: $3.12 billion Japan: $1.01 billion Korea: $647 million Russia: $480 million Thailand: $454 million India: Rs $375 million
Using the 2012 volumes and estimating from the growth percentage, 2011 volumes were approximately:
United States: $820
2012 Sales (USD$m)
Growth (from 2011)
source: Amway Europe Leadership Training Seminar 2013 This means the U.S. volume in 2011 was about $820 million, down from a high of $1.118 billion, or about 73% of 2006: http://www.amwaywiki.com/Sales_Data, and about what the volume was in the 2001-2002 timeframe before the obvious free-fall in 2007, when the numbers stopped being reported – can you imagine WHY (hint: Orrin Woodward)? Note: The above figures from amwaywiki are for North America, as Quixtar never separated the U.S. and Canadian sales volumes. Since Canada is about 10% the population of the U.S., there is a minor error in the calculations. However, since Amway is based in the U.S., the error is probably less than 10%. We don’t know the lowest level, but it wouldn’t surprise me if it was $500-$600 million in the 2008 or 2009 timeframe, when the double hammer of Orrin and the UK occurred. Too bad North America is only about 7.5% of the total volume, or they would probably be out of business, which would be a GOOD thing. This is despite Amway being a contraction of “American Way” and North America having the largest market of people with an income that can support starting up a business and purchasing the overpriced products. LOL ibofb also does a “wonderful” job of not responding to a question today (http://www.thetruthaboutamway.com/welcome-to-the-truth-about-amway/#comments), notice how ibofb doesn’t write a single word directed towards the ATS, the central theme of Vincent’s comment:
7/25/2013 – I have information from a very reliable source the Amway Tool Scam is “alive and well” in China. There are 3-day sessions being held in China regarding how to lose weight using Amway products. Not 3 hours….3 DAYS! Plus, the customers being “taught” how to lose weight for 3 days using Amway products are encouraged to buy hundreds of dollars of Amway weight loss products. One thing is clear, their wallets are much lighter when they leave! LOL
I applaud the two new sub-objectives (1.1.3 and 1.1.4) that are obviously directed towards Section 5 rules that enforce deceptive and unfair business practices based on the size/impact of such activities:
Goal 1 – Protect Consumers
* Key Performance Goal
Objective 1.1 Identify and take actions to address deceptive or unfair practices that harm consumers.
1.1.1 Percentage of the FTC’s consumer protection law enforcement actions that targeted the subject of consumer complaints to the FTC.
1.1.2 Rate of customer satisfaction with the FTC’s Consumer Response Center.
*1.1.3 Total consumer savings compared to the amount of FTC resources allocated to consumer protection law enforcement. (New)
*1.1.4 Amount of money the FTC returned to consumers and forwarded to the U.S. Treasury. (New)
These new sub-objectives will not only target large violators and result in the “biggest bang for the buck,” but also sends a strong message to others with similar practices. However, it is unclear HOW the FTC will implement these new sub-objectives, and raises a few questions:
1. Is the comparison the delta between consumer savings compared to the amount of FTC resources allocated, or based on a percentage basis, and over what time period are the consumer savings calculated, such as past, current, and future savings?
2. Can the dollars of total consumer savings be added to the standard FTC complaint form, such that knowledgable consumers can provide insight into the magnitude of the issue and help the FTC with a starting point?
3. How will these two new rules interact with the first two sub-objectives, particularly the first one that relates to consumer complaints, AND given the two new sub-objectives are key performance goals? For example, a large unfair and deceptive company may receive few complaints because the victims aren’t aware they are being treated unfairly and deceptively, so these victims, by definition, can’t/don’t complain. A specific example of this issue is the Amway company, which runs what I refer to as the Amway Tool Scam, which can be examined in detail here: www.stoptheamwaytoolscam.wordpress.com. I have been told in the past (from Kathleen Benway) the number of complaints drives FTC focus, which makes sense given the third and fourth sub-objectives listed above are new. I would think the FTC would include the amount of information assisting the FTC to be a major factor in making these types of decisions, as more information means less time/effort/resources needed on the FTC’s part, and I believe you will find the information on the previously mentioned web site to be extremely extensive. I can be reached to answer any questions that come from review of the web site via this email address or the below phone number.
I look forward to working with you on the above issues in order to protect others from being scammed as I and millions of others have been scammed by Amway over the past four-plus decades for 100s of billions of dollars.
123-456-7890 (too many nuts out there to provide my real phone number on this blog)
6/9/13 – Although this isn’t technically news, is this a smoking gun? From the 1979 FTC decision: http://www.ftc.gov/os/decisions/docs/vol93/FTC_VOLUME_DECISION_93_(JANUARY_-_JUNE_1979)PAGES_618-738.pdfCrossGroup Selling RuleThe crossgroup selling rule requires Amway distributors to buy Amway products only through their sponsor. (Finding 81) The distributors, in effect, promise to buy their ‘requirements’ of Amway products from one supplier. There has been no showing on this record of any probable immediate or future market pre emption which might substantially lessen competition. Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 329 (1961).The crossgroup selling rule also provides that distributors shall sell at wholesale only to their sponsored distributors. This aspect of the rule has the same economic justification as the retail store rule. [FN25]The crossgroup selling rule is the basis for the Amway Sales and Marketing Plan. It provides the structure by which products, information and compensation flow from Amway to the Direct Distributors and down to the distributors engaged in making the retail sale. It provides lines of communication and responsibility insuring that distributors are properly trained and motivated and that consumers receive services provided under the Amway system of distribution. (Finding 82) Used in conjunction with the performance bonus system, the crossgroup selling rule gives sponsoring distributors an incentive to recruit, train, motivate and supply other distributors in order to gain a reward based on the sponsored distributors’ sales volume. If sponsored distributors could buy Amway products from someone other than their sponsor, that incentive would not exist. The crossgroup selling rule thus provides an alternative to payment of a ‘headhunting’ fee as an incentive for recruiting. (Patty, Tr. 311113) This implies the crossgroup selling rule is considered to be the same as an up front headhunting fee, which is a red light for an illegal pyramid, and consistent with the language on the FTC website: http://business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plans which states, “Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.” Also, “Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time-tested and traditional tip-off to a pyramid scheme.” And, “One sign of a pyramid scheme is if distributors sell more product to other distributors than to the public — or if they make more money from recruiting than they do from selling.” All of these statements make a head hunting fee and mostly internal sales equivalent evidence of an illegal pyramid scheme. Given the dismal 3.4% customer retail volume from the 2006 confidential report commissioned by Amway and leaked by Woodward, Amway is operating as an illegal pyramid. In fact, the 1979 FTC decision included taking Amway at its word that most of their volume was to customers, but there is no evidence this statement is true.
3/21/13 – Update to 2/7/13 story. According to this source: http://news.gnom.es/pr/harvard-business-review-article-highlights-how-amway-reinvented-its-china-business, introducing water filters to the China’s filthy water market in 2012 resulted in a $500 million increase in volume for Amway’s China business volume (Although the filters are normally changed out annually, I wouldn’t be surprised if this is going to be required much more often in China!). This exceeds the TOTAL annual growth from 2011 (went from $10.9 to $11.3 billion, a difference of only $400 million) by $100 million! Combined with a claim all top 10 markets grew for the first time in a long time, does something smell fishy to you, too?
2/7/13 – Alticor (Amway’s parent company) volume was up less sales up less than 4% (amazingly, almost exactly the amount of retail volume from a 2006 confidential study that Orrin Woodward used in his 2007 lawsuit, and got sued by Amway for using it!). The top 10 markets showed gains for first time in over 20 years. Sounds like a lot of inflation and non-Amway Alticor gains to me, although Amway isn’t required to report detailed information like publicly traded companies, so they could be lying, again: http://www.multivu.com/mnr/55865-amway-parent-company-alticor-reports-record-2012-sales
12/22/12 – Not only did we survive the end of the planet (Mayan “prediction”), but the FTC gave us an early Christmas present last month: http://business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plansNow what is needed is every MLM should be required to present this information with their signup form and answer the questions before the prospect joins. THAT would either put Amway out of business or force them to STOP THE AMWAY TOOL SCAM!!!
Herbalife, another MLM, has been bring a lot of attention to Amway, as the issues are very similar. See this presentation and informational web site on Herbalife, and you’ll find the similarities with Amway amazing: http://factsaboutherbalife.com/
11/30/12 – Judge accepts Pokorny settlement. All that remains is the former IBOs and lawyers getting paid. A huge disappointment, but now we know what needs to be done. I am also investigating some apparent “funny business” that went into the court decision.
4/16/12 – Amway sends out settlement emails to all qualifying former IBOs involved in the Pokorny lawsuit, the website can be viewed here: www.quixtarclass.com I recognize it is difficult to read the words “Quixtar” or “Amway” along with the word “class,” but that is the euphemistic name they chose for the class action lawsuit website. If you are a former Amway/Quixtar IBO, you should review my site protesting this proposed settlement: quixtarclass.wordpress.com/
12/8/11 – I win in a settlement with Amway on their ridiculous SLAPP lawsuit. Amway had absolutely no legal standing except the force of financial intimidation, as they didn’t produce a SINGLE IBO who complained about what I was doing after a year and a half after starting the lawsuit. Then, they signed a legal “bully beatdown” agreement that I was ecstatic to get their slimy, corrupt, and frankly not very bright and therefore highly overpaid lawyers to agree to: http://stoptheamwaytoolscam.files.wordpress.com/2011/12/agreed3-1.pdf
OTHER NEW AND OLD NEWS – Newest news first, oldest news at the bottom. This is an active section that will constantly have new entries, so visit often:
Of course, the recording never states retail sales are necessary for downline volume bonus, which is what the legal definition is. Keep in mind a much smaller percentage of people are interested in the concept of selling versus owning their own business, and the LCKs want to cast the net as big as they can. Also, the LCKs want folks to spend their valuable time and money on the tools, not selling products to customers, because this is MUCH more profitable for the LCKs. The recording talks a lot about integrity, but never mentions the source of most of the upline profit coming from the various tools not sold to customers.
You are in a profession that does not match “you”. With thousands of possible choices and the vast majority of people not having insightful guidance, it is highly likely you are not even close to being in one that is an excellent fit.
You are in a profession that has poor prospects for the future. Face it. Your entry level customer service job at the local bank branch is never going to get you very far.
Your profession doesn’t allow you to grow your career. Sitting in a call center answering customer complaints will isolate you from others who could help you in your career. It will also numb your mind.
You are in a profession that is associated with a depressed or dying industry. All of my corporate career was in the telecom industry and (other than mobile) that industry has been in trouble for over a decade, so becoming an expert could be career-limiting.
You are in a profession/industry that is not well respected. Even if you are the top producer in your state for Amway, I am still going to start itching if I have to sit and listen to your pitch about becoming one of your “down-lines.”
January 30, 2014 – I saw a Kevin Trudeau infomercial on NBC broadcast TV recently, and wondered what he was up to, as I thought he was in trouble again. I was right: http://abcnews.go.com/blogs/headlines/2014/01/despite-pleas-for-mercy-infomercial-king-kevin-trudeau-to-remain-behind-bars/ It’s incredible he’s been in jail since last August, but is still on TV selling his lies. The Amway employees and IBO LCKs should be sitting right next to him. Here’s an interesting video of him defending Amway, obviously better dressed than he is after being convicted: https://www.youtube.com/watch?v=7RN49KeN5HY I can’t say for sure Reagan spoke to an Amway crowd while he was president, but I doubt that he did, as Kevin maintained. In fact, the years he gave, 1979 or 1980, would have been BEFORE Reagan was president. But let’s not let the facts get in the way of a good story, shall we? LOL
September 13, 2013 – An interesting article primarily about MMA has similarities to MLM, some MLM syncophants would maintain: http://sports.yahoo.com/blogs/mma-cagewriter/matthew-riddle-announces-retirement-blasts-ufc-bellator-scumbags-175929029–mma.html. I can hear it now, “You don’t get your face bashed in with MLM,” or “see, it’s just like any other sport with independent contractors,” etc. However, “the rest of the story,” as Paul Harvey would say, is that Amway and the upline LIE about the business model. Plus, all of these sports at least pay SOMETHING, but with Amway and most other MLM is the net profit is negative until/unless you get to Platinum or above.
April 19, 2013 – Amway’s Doug DeVos opens his mouth again, and guess what? Out comes lies galore: http://www.thanhniennews.com/index/pages/20130419-vietnam-amway-targets-vietnam-sales-of-usd100-mil-within-3-years.aspx. Here’s part of the article, and the lies: “Herbalife is an honorable company that’s been part of our industry for many years,” said DeVos. “They’ll move through it.” —> Time will tell, but Herbalife has a LOT of questions to answer, and they are very similar the questions facing Amway. In a 1979 case, the US Federal Trade Commission found that Amway’s sales plan was not a pyramid scheme, according to a 1998 statement posted on the FTC website. —> But the FTC didn’t look at the ATS in 1979. “We’ve been reviewed up one side and down the other, and we’ve been very transparent with how our business works,” DeVos said. —> Then why does Amway lie about where most of the upline profit come from, the ATS? “The compensation structure is always based on the sale of a product.” —> The question is the sale of which product? Answer: the ATS. Also, sold to who? Answer: In the case of the ATS and most Amway products, to other IBOs, which is in direct violation of the FTC website: http://business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plans, which says, “Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
The Amway tour continued onto the Legacy of Clean store, which was intended to recreate the look of a kitchen. Another non-I.B.O. was on hand to prove the effectiveness of Legacy of Clean over a leading brand (obviously, from the white “Leading Brand Cleaner” piece of paper taped over the Tide logo … Tide), by washing a dollar bill that had been soaked in red wine. Actual money laundering. Was this for real? “Oh, that’s going in the piece for sure,” Anna said, laughing. Legacy of Clean performed admirably, both with the dollar bill and a Sharpie-produced X. I even cleaned the X myself.
February 24, 2013 – Amway storefront involving New York Mets agreement gets Bronx cheer:
February 16, 2013 – Amway’s reputation should soon take a nosedive in China, as they are selling air purifiers for two months pay to the Chinese, and I wouldn’t doubt the filters need to be replaced much more often than the usual recommended time frame, given the filthy air, which is pristine compared to the ATS: http://www.guardian.co.uk/world/2013/feb/16/chinese-struggle-through-airpocalypse-smog Oh well, at least China doesn’t have the ATS! LOL
February 7, 2013 – Alticor (Amway’s parent company) volume was up less sales up less than 4% (amazingly, almost exactly the amount of retail volume from a 2006 confidential study that Orrin Woodward used in his 2007 lawsuit, and got sued by Amway for using it!). The top 10 markets showed gains for first time in over 20 years. Sounds like a lot of non-Amway gains to me: http://www.multivu.com/mnr/55865-amway-parent-company-alticor-reports-record-2012-sales
August 13, 1982 – Here’s a collection of Rich DeVos articles related to the Republican National Committee, from how he brought worthless MLM concepts to the RNC, the widely reported firing as RNC Finance Chairman, for various reported reasons, plus the excuses afterwards, evens threatens to sue newspaper for reporting the facts: