MLM Absurdities: The "Big Placebo" industry that markets nutritional supplement woo

Dietary supplements Do they actually improve your health?
(Photo credit: Andrei Z)

In studying the network marketing industry, MLM Skeptic had come to a conclusion that most network marketing companies deal with nutritional supplements and skin care, or as the somewhat pejorative slang goes: "lotions and potions".

The "potions and lotions" often promise some very vague and generalized health effects, with weasel descriptions such as:

• Support your "stem cell physiology" (Huh? What does that mean?)
• Leading expert on importance of brain health (a chiropractor)

Recently I came upon a quote by Richard Dawkins, and found it very applicable here:

If any remedy is tested under controlled scientific conditions and proved to be effective, it will cease to be alternative and will simply become medicine. So-called alternative medicine either hasn't been tested or it has failed its tests. 

The same applies to any sort of nutritional supplement, really. If any nutritional supplement is properly scientifically tested and proved to be effective, it will be adopted as national or even global nutritional standard. And it's clear that except for a few select examples, most nutritional supplements on the market are just woo, as they have not been tested properly, or have failed its tests to be effective in something.

So why do these nutritional supplements proliferate, and can be found in supermarkets and pharmacies and more?

The reason is quite troubling, as this has to do with growing scientific IGNORANCE and science denial.

Bad Propaganda: Found and Lost on Oprah's Website

Given the amount of woo that had been pushed by Oprah and her various spawns like Dr. Oz, it's very ironic that her own quiz of what's a scam and what's a cure, is no longer available.

Wonder if it hit a bit close to home?

Bad Propaganda: Avon was NOT a sterling example of MLM success

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Avon logo  (Photo credit: Wikipedia)

When trolling for new members, the recruiters for MLM often cite Avon, Amway, and until recently, Herbalife as sterling examples of network marketing. But are they really?

Since Amway is a private company, I have no stock data to show you, and Herbalife prices are crazy because some hedge fund managers are having an ego trip by playing with HLF stock. That's not a good indicator of the confidence in the company.

But Avon, that company had been around for over 100 years. How did it do?

If you enter AVP into Google, you'd find that Avon had been in STEADY DECLINE for the last ten years... since it adopted MLM. That's right, Avon did NOT adopt multi-level marketing until 2005. And it had been FAILING every year.

Avon Products, as of 18-FEB-2014

The stock chart is clear: for the last 10 years, S&P 500 had gone up 71%, while Avon stock price had gone DOWN 52%.

And one of the MAJOR change during that decade is Avon adopting MLM in 2005.

Please recall that MLM was started in 1979 when Amway survived an FTC challenge in court.

It took 25 years for Avon to go MLM, after MLM was created, and 100+ years AFTER the company was founded.

And it had done steadily WORSE every year, ever since.

Think about that. What do the stockholders know that we don't?

(And why would MLM defenders cite Herbalife's stock price rise since Ackman's challenge as proof that MLM is thriving, while ignoring Avon's price drop?)

Scam Psychology: Why Bad Arguers Often Retreat to Conspiracies As Final Defense

Conspiracy Theory with Jesse Ventura
Making a living through selling nothing... like a lot
of scams that call themselves network marketing
(Photo credit: Wikipedia)

In studying the financial scams and its victims, as well as the common arguments the brainwashed sheeple use to 'defend' the scam they're in, one of the most common "final arguments" is accuse any 'opponents' as a part of the conspiracy against something. While most often found among the "lotion and potion" defenders, they can be found among all sorts of scams, esp. one that had gone viral across the world (and thus must be eradicated).

There seem to be 3 general types of conspiracies when it comes to network marketing, which is grouped by size: personal conspiracy (it's just some hidden reason why the "opponent" is against the scheme), industry conspiracy (some sort of nebulous attack by competitors, though sometimes it's the government), or global conspiracy (often involving some nebulous mention of Bilderbergs, etc.)

All the conspiracy boils down to is "motivation denial of evidence (of scam)". Such conspiracy accusations can take the following forms (but obviously is not limited to such)

• You must have failed at ____ to be so bitter
• You must work for our competitor
• You're just out to get hits for your blog
• You are a part of medical establishment against the "wellness industry"
• You're a part of conspiracy of the rich to keep the rest of us poor

Problem with such conspiracy accusations is conspiracies often rely on circular logic.

Q:Is there any signs of a conspiracy? 
A:No. 
Q:So why is there a conspiracy? 
A:Because conspiracy suppressed the signs! 

Or on a more personal level

Q: Why do you think I work for a competitor? 
A: Because you said we are a scam!
Q: Do you have evidence that I work for a competitor? 
A: No... but it made sense to me!
Q: Here's evidence why ____ is a scam. 
A: You are a liar and those evidence are fake.
Q: Why would I fake such? 
A: Because you work for a competitor.  
Q: But you said you have no evidence that I work for a competitor. 
A: Because you hid it really well! 

Basically, any sort of evidence can be dismissed by "it's part of a conspiracy (against us)".  You have to PRESUME the conspiracy to be true to make sense of the twisted circular logic. It's "self-sealing".

Conspiracy theories are often quite fascinating to study, as it's basically how the mind twists itself into a gordian knot. Psychologists have studied correlations of conspiracy theorists (PDF file), such as is there any correlation between beliefs of conspiracies (i.e. does believing free market make one more like to believe climate denial?)

The results are surprising, and a little troubling. And so was the reaction by the conspiratorial community.

Scam Absurdities: Kingdom 777 (i.e. WCM777) adopts Ponzi Speak and Pyramid Selling

A blatant ponzi scheme such as WCM777 (which changed its name to Kingdom 777) that was chased out of both North and South America by various jurisdictions, decided to go Orwellian by adopting "Newspeak", which seems to be copied from existing ponzi schemes, such as Ad Surf Daily.

BehindMLM made a copy of Kingdom777's official announcement:

Kingdom777 "word usage explanation" announced 13-FEB-2014

• Investment, purchase
• Investor, member
• Dividend or return , bonus

Hilarious, since this is exactly what "Andy" Bowdoin of Ad Surf Daily ponzi did. Quoting from the SEC press release:

To avoid regulatory scrutiny, Bowdoin referred to ASD’s investors as “members,” referred to the investor’s money, payment and investment principle as “ad packages,” and referred to the return on the member’s investment that ASD promised and paid as “rebates.” 

Let's compile the list...

• investor, member
• investment, ad packages
• return, rebates

Yep, same thing.

But there's something else... It seems Ming Xu is simply replaying the Vantone scam, which is the same trick that Interush tried in Hong Kong, and already busted.

Bad Propaganda: The Real Story Behind the "Dropout Lambo" Meme

A recent viral meme that was made popular by Vemma sheeple was the "Dropout" Lamborghini Aventador

Hyundai SantaFe with "Scholar" Vanity plate,
and Lamborghini Aventador LP700 (2012)  with "Dropout" vanity plate
via Flickr circa 2013

The intent from Vemma sheeple is to ridicule school, and how Vemma is going to change the lives of the young people participating in it.

But what's the *real* story about the DROPOUT Lambo?

The Lambo is real. Its owner "PK" (who asked not to be identified) contacted me to give me the real story. Yes, I've confirmed his identity.

MLM Absurdities: MLM may be a Cult... revisited. Why Do Herbalifers get Tattoos?

Previously, MLM Skeptic has discussed how often MLM resembles a cult (of money/greed), where members are to worship their upline and their company, any dissent is stamped out with shame, any defectors ridiculed and denounced, any critics ignored.

Today we will discuss a different part of cult behavior... identifying marks... such as tattoos.

Michael Burton
showing off his Herbalife
tattoo at an Herbalife event
in Serbia 2012

Tattoos used to belong to the realm of gangs and religious cults. It is only in recent years that the more elaborate tattoos have made the transition to "fine art".

Think about it. Tattoos are semi-permanent. It's on your body. It is intensely personal. It is extremely difficult to remove (often costs thousands of dollars), so you are REALLY showing your commitment if you choose to get one.

No wonder gangs often have gang tattoos, so much so, law enforcement have gang tattoo databases to readily identify gang affiliations.

And religious cults often have tattoos, special signs or greetings, and such.

But tattoos for a company? Really?

Back in 2013, a real estate company in New York offered 15% pay raise if its employees get a company tattoo. Owner said he was inspired by one employee who got a tattoo just for the heck of it, and the owner offered him a raise, and from there he decided to go for broke.

Putting a company tattoo on yourself just for the heck of it? That takes some dedication... Or mental illness.

Meet Michael Burton... member of (cult of) Herbalife.

Here's Michael Burton, showing off his Herbalife tattoo. He said he used to be a flabby used car salesman and went backrupt, so he went into Herbalife (at insistence of his in-laws) and became so fit, he competed in those fitness competitions.

Then he went bankrupt. And he owes tons of people money. And he has almost nothing left. Except his passion for Herbalife and his Herbalife tattoo.

But he's hardly the only one with Herbalife tattoos.