Saturday, February 8, 2014

Scam and MLM Absurdities: Why do Scams and MLMs do "Same Wine, New Bottle"?

Looking at history of network marketing, and scams and an interesting pattern emerged.

Most people who start network marketing companies were former grunts in network marketing... And sometimes, these alleged network marketing companies turned out to be outright scams.

First, let's get the more legitimate (compared to the scams) folks listed...
  • Cambridge Diet top distributor Sandra Tillotson went on to co-start NuSkin
  • Natural Health Trend's high-ranker Terry LaCore went on to start bHIP (and later, Rippln)
  • Herbalife member Roger Daley went on to start Omnitrition International
Given that NuSkin is in trouble in China, Mr. LaCore had a run-in with the SEC, and Roger Daley's Omnitrition was slapped down by 9th Circuit Court of Appeals... Well, let's just say they are NOT egregious scams (except maybe NuSkin in China)

Then there are the outright scams... Where participants of MLM or scams went on to start and/or continue to participate in scams.

Here are a few well-known scammers who started from network marketing or scams:
There are probably tons of other examples that implies once you got into network marketing or scam, you can't do anything else.

And they basically reinvent the business they were in. And often, it's not even a revamp, but just a rename.

Same wine, new bottle.

It's sad when a scam just change names, and hopes to keep operating.


  1. If the FTC would tighten up their definitions and enforce it, some scams coule be shut down. For example, they should say that "end user" cannot be the participant. It is this cloudy issue that many MLM supporters use to legitimize MLM, that the IBO's are "customers" and endusers when the reality is that it's BS unless non distributor customers are the majority. If not, the money is all made from people within the pyramid.

    1. yeah, this was covered in my "why has MLM lost its will to retail" post a few days back.

      IMHO, MLM is suffering from general malaise as they've gotten LAZY since 1979, and the official attitude they have is "we've been doing this for so long it's gotta be legal".

      It'll take a brave FTC to really fix MLM, as it sure wont' fix itself.