Published on February 12, 2019 by the FairShake Team
The appeal is obvious:
Run your own business, earn some spare cash, take control of your financial future
They may be called “Direct Selling,” “Multi-Level Marketing,” or (according to some) “Pyramid Schemes.”
The common pattern of these types of sales networks is that you purchase goods from the corporation at the center, try to sell them yourself, and try to recruit new “downlinks” so that you can get credit for their sales as well.
At FairShake, we help individuals take on big companies, and we want to hear your complaints about MLMs.
Some of the largest Direct Selling network companies in the US sell:
Cosmetics (Amway, Avon, Mary Kay)
Skin care (Nu Skin, Rodan + Fields)
Essential oils (doTerra, Young Living)
Other “wellness” products (Herbalife, Melaleuca, USANA)
Even financial products (Primerica) and electricity (Ambit)
If you’re curious whether a particular company is considered an MLM, you might try looking it up here.
Individuals who find themselves entangled with MLM’s can end up with all sorts of complaints about the companies:
One type of complaint is if the company gives a false impression of the typical financial outcomes for sellers. A company may try to make it seem like everyone else is succeeding and you’re the one doing it wrong, when in fact the system’s design means most sellers make little or nothing.
Another complaint is around incentive set-ups that encourage sellers to always order more inventory, whether or not it’s needed. This may include penalties for sellers who want to wait until they’ve actually sold their current stock.
An additional reason for complaints about MLMs—and a fundamental one—is if the central organization makes its money mainly by recruiting new members to the network, not by selling anything. This is a recipe for leaving a mass of members at the bottom of the organization who feel scammed and misled.
So if you feel victimized by an MLM scheme, what can you do? This resource from the Consumer Awareness Institute and hosted by the Federal Trade Commission contains a helpful list of suggestions. This includes the various government agencies you can file complaints against MLMs with (FTC, SEC, FDA, etc.)
At FairShake, we encourage people to take power into your own hands. While our service doesn’t cover MLMs yet, you can learn about your power to independently take action through consumer arbitration or small claims court.
And we want to hear your complaints! Have you been misled by an MLM or Direct Selling organization? Looking for justice? We (and our network of attorneys) want to hear your complaints…
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