Thursday, July 28, 2005

Ten Plain Truths

Ten Plain Truths from Pyramid Scheme Alert by Robert FitzPatrick

1. 99.9% of all people who join Amway/Quixtar and other multi-level marketing schemes like it never earn a profit. The losses are so large that these schemes cannot be called a legitimate "business opportunity."

2. To get people to join a MLM scheme in which nearly all will lose requires deception. The promoters do not tell the truth.

3. The people at the top hide basic facts from recruits such as average income, actual costs of doing business, drop out rates, and how much of the total bonus money they receive. They also do not reveal the source of their money, most of which comes from selling "training" materials. Often, their income is from recruits in other countries.

4. Very little of the MLM products are ever actually sold to consumers. The people who buy these products do so as part of investing in a "business opportunity." The business is therefore not "direct selling." It is actually about promoting a bogus business opportunity.

5. More than 50% of all people who join these schemes quit in the first year. Trying to make money from recruiting is therefore a long and costly effort. When a person starts out to build a 'downline" they are already at the bottom of someone else's very large downline. Only a tiny few can ever be at the top.

6. Those few that start at the top of the scheme or who climb to the top make their money directly from the losses suffered by all the latest recruits.

7. The training and motivation seminars, books and tapes are a secret business run by the top promoters of the scheme. Buying tapes and books does not increase a person's chances for success. It only adds to the losses.

8. The people selling the books and tapes are not necessarily successful in the MLM business. Rather, they make most of their money selling the recruitment materials. Claims that they are successful and that the business is a "great opportunity" are false.

9. The schemes recruit more and more people every year, but also many quit. So the scheme can run for many years before it must find other areas with more people to recruit. The longer is operates, the more people it has harmed.

10. The main reason the government of the United States does not investigate these schemes for deception and unfair practices or for running pyramid schemes is that leaders of these schemes contribute huge amounts of money to the politicians' political campaigns. Consumers, therefore, must look out for themselves. Just because a particular MLM such as Amway/Quixtar is not prosecuted by the government does not mean it is legitimate or that you will ever make any money from it.

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3 Comments:

At 7/30/2005 02:59:00 AM, Blogger Kurosawa said...

Point 10 brings up a good rule on semantics in regard to Q/A. Just because the FTC found Q/A to be "not illegal" does not instantly make them "legitimate."

Not illegal, to me, sounds like the FTC is saying "we can't bust them for anything right now, but we certainly don't like them and will have our eyes on them."

If they were a legitimate business opportunity, as they claim, it would be my understanding that the FTC would find them thus and SAY so in their documentation.

 
At 3/16/2006 04:12:00 AM, Anonymous Anonymous said...

Quixtar has memberships with the Better Business Bureau, RSA, D&B, and works directly with the FTC to shut down illegal pyramids.
The sites to confirm these statements can be found at:
http://www.bbbonline.org/cks.asp?id=102102811384627218
http://www.rsasecurity.com/press_release.asp?doc_id=5285&id=1034
http://smallbusiness.dnb.com/company-information.asp?key=083416854&dunscountry=US&cmeid=EOR100305&bhcd2=1142499624

 
At 4/20/2007 08:07:00 AM, Anonymous Anonymous said...

I was in Quixtar, and decided to quit. Yes, I lost money, lost time, etc. There were a lot of false hopes propogated by the people I was working with, and I had a hard time working with people who had their heads in the clouds. However, I this this post is ridiculous. Many of the things you say here are absolutely not true. They are NOT an illegal pyramid scheme, and have been investigated many times. The "secret business" is not secret at all, except to those people who are two stupid to realize that if you buy a CD for $12, someone somewhere is making a profit. And the people who are making the CDs ARE actually successful in the business, although they are in the small minority. The "guys at the top" definitely divulge the information that the average anual income is about $118 per IBO. COnsidering there are people making millions and billions with this business, it doesn't take a rocket scientist to figure out that most people either quit, or remain inactive, not earning any income, in order to drive that average WAAAAAYYY down. THis information is posted everywhere, and most noticeably right above the line where you sign your name in order to join the party. You may have some serious problems with Quixtar, but it would serve you a lot better to actually present true and accurate claims or complaints, rather than making up stuff just to get unknowing on your side. Like anyone cares, anyway!

 

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