Ethics
This Is Not a Pyramid Scheme!
01/27/2012 06:33 PM
I have a fantastic opportunity for you. It’s like a job but a lot better. It’s an opportunity to make unlimited income.
Pay only $399 for a starter kit, and then you can work as an independent salesperson for our company, selling the company’s great products on a commission basis.
Why should you pay for this job, you ask? Okay, I realize paying for a job might seem unusual. But, you see, this opportunity is unique. By paying your $399 you gain not only the right to sell our products to the general public but also the right to recruit other salespeople to sell for the company. When you sign up new salespeople and they buy some of our products, you’ll get a commission on all their purchases, month in, month out. It’s like becoming CEO of your own sales company.
Best of all, you can make money right away by enrolling people that you already know and who already trust you. Everybody is a candidate for this job. Who doesn’t want to make unlimited money?
Too many salespeople? No, there could never be too many. The market of people wanting extra income is always growing and our products fit everyone’s needs. But no matter how many more join, you would be making money on all of them, so you would want as many more as possible. Doesn’t that make sense? Read More...
Pay only $399 for a starter kit, and then you can work as an independent salesperson for our company, selling the company’s great products on a commission basis.
Why should you pay for this job, you ask? Okay, I realize paying for a job might seem unusual. But, you see, this opportunity is unique. By paying your $399 you gain not only the right to sell our products to the general public but also the right to recruit other salespeople to sell for the company. When you sign up new salespeople and they buy some of our products, you’ll get a commission on all their purchases, month in, month out. It’s like becoming CEO of your own sales company.
Best of all, you can make money right away by enrolling people that you already know and who already trust you. Everybody is a candidate for this job. Who doesn’t want to make unlimited money?
Too many salespeople? No, there could never be too many. The market of people wanting extra income is always growing and our products fit everyone’s needs. But no matter how many more join, you would be making money on all of them, so you would want as many more as possible. Doesn’t that make sense? Read More...
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Amway's Deceptions
11/25/2010 08:13 AM
The settlement of the consumer class action suit in which, responding to criminal fraud charges, Amway has agreed to pay $150 million in restitution raises, again, the unavoidable questions: What, if anything, is true and legitimate about Amway? How deep is its deception?
As early as the 1980s, a CBS 60 Minutes exposé concluded that Amway “sells hope, not soap.” On that show, the Asst. Attorney General of Wisconsin explained that a review of tax records of Amway salespeople in that state revealed that 99% had lost money. The “income opportunity,” Amway’s most famous claim to legitimacy, was a cruel hoax.
For many people, including seasoned journalists and veteran government regulators, the concept that Amway’s business could be a total sham and that it might be ravaging, not helping, Main Street America, cannot be comprehended. If true, Amway’s fraud would be too intrinsic, too extensive and too outrageous to be believed. The official version of Amway as a company offering financial opportunity to millions with a “direct selling” business based on honesty and integrity just cannot be squared with a criminal and fraudulent reality. And so the contradiction is usually ignored and the question is seldom raised.
The facts about Amway, as claimed in the recent lawsuit and which Amway paid $150 million to settle, would indict a wide web of political, business, religious, and civic leaders and organizations that take money or in other ways provide Amway cover and support.
Amway’s website, under the “values” tab, states, “Integrity is essential to our business success. We do what is right, not just whatever "works." Amway’s success is measured not only in economic terms, but by the respect, trust and credibility we earn.”
Such a statement is contradicted with Amway’s actual record that includes tax evasion in Canada, resulting in a fine that was the largest in Canadian history at that time. It is challenged by the actions of the government of England to shut down Amway “in the public interest.” England, like the state of Wisconsin 25 years before, examined tax records and discovered that 99% of all English consumers who invested in Amway as salespeople never earned a profit. This massive loss rate had gone on for 30 years. To these examples, many other cases of fraud accusations, law suits, and book-length revelations of deception can be added. The Amway/Quixtar Hall of Shame list compiled on the Amquix.info website is a shocking rap sheet of Amway and some of its top distributors. But the true record remains behind the high wall of silence maintained by millions of disillusioned, shamed and fearful victims in countries worldwide.
Many consumers and some lawsuits focus on what some consider the most egregious trickery associated with Amway. This is the “secret” business connected to Amway in which its top recruiters essentially shake down new recruits for payments that many recruits are led to believe are “necessary” for success in the Amway business. The payments are for “tools,” books, CDs and seminars for “motivation” and training. Lawsuits contend that these payments from recruits constitute the main source of the top level recruiters’ income, not commissions from the sales of Amway products. Many consumers believed that their payments for the tools generated no profits at all to their leaders, but were provided “at cost.” In fact, the leaders were gaining large profits. Moreover, their high pressure sale of these goods to vulnerable and dependent recruits is a clear conflict of interest, since they are supposedly responsible for training and managing those recruits. The sales of tools by the top distributors also provide Amway with greater income from higher inventory purchases. As it turns out, the “tools” are largely worthless. 99% of all recruits lose money, year after year, regardless of how many buy the costly tools or attend the “motivation” seminars.
And then there are the charges and evidence that Amway operates as a destructive cult, employing mind control techniques in order to achieve its financial fleecing of new recruits. This charge has been made in mainstream media, and countless anecdotal reports of ex-Amway salespeople. The nation’s top expert on cult practices, Steve Hassan, offers analyses of the charges. His “BITE” model offers the tools for evaluating tactics employed in Amway’s persuasion program and its inducements to get consumers to invest and recruit. Including Behavior, Information, Thought and Emotional control.
Yet, perhaps the most fundamental of all charges regarding Amway deception is that of false identity as a “direct selling” business. The claim to be a channel of sales to end-user customers is the cornerstone of Amway’s legal defense and the foundation of the “business opportunity” that it sells to millions of people worldwide.
Lawsuits brought by top recruiters, tax records gained by regulators, and mountains of anecdotal evidence from recruits at the bottom indicate that Amway is not a sales company. Rather, its business is based upon inducing inventory purchases and fee payments from consumers who are signed up as its salespeople, and then offering them rewards to draw in others to make similar purchases and fee payments. Few “salespeople” ever sell Amway goods to retail customers, the charges state. There is no hard data showing any sustainable retail income earned by Amway salespeople. Amway’s own “income disclosure” does not include retail profits.
An admission that retail profit is non-existent may be inferred in the settlement of the recent class action lawsuit and in the settlement Amway reached with regulators in England. Amway agreed to substantially lower pricing in both cases. Uncompetitive pricing of many Amway goods speaks to lack of retailing. It also serves as evidence of an “endless chain” recruitment scheme. The higher the price paid by the recruits,, the more the commission to the “upline” and profit to Amway. No need to be price competitive in the open market when the scheme operates as a “closed market” (salespeople selling only or mainly to salespeople). Under the plan that the lawsuit charged Amway perpetrated, each new recruit’s income depends, not on selling products to customers, but on a hopeless quest of “endlessly” expanding the sales organization. The “unlimited” income promise makes price comparisons irrelevant.
As early as the 1980s, a CBS 60 Minutes exposé concluded that Amway “sells hope, not soap.” On that show, the Asst. Attorney General of Wisconsin explained that a review of tax records of Amway salespeople in that state revealed that 99% had lost money. The “income opportunity,” Amway’s most famous claim to legitimacy, was a cruel hoax.
For many people, including seasoned journalists and veteran government regulators, the concept that Amway’s business could be a total sham and that it might be ravaging, not helping, Main Street America, cannot be comprehended. If true, Amway’s fraud would be too intrinsic, too extensive and too outrageous to be believed. The official version of Amway as a company offering financial opportunity to millions with a “direct selling” business based on honesty and integrity just cannot be squared with a criminal and fraudulent reality. And so the contradiction is usually ignored and the question is seldom raised.
The facts about Amway, as claimed in the recent lawsuit and which Amway paid $150 million to settle, would indict a wide web of political, business, religious, and civic leaders and organizations that take money or in other ways provide Amway cover and support.
Amway’s website, under the “values” tab, states, “Integrity is essential to our business success. We do what is right, not just whatever "works." Amway’s success is measured not only in economic terms, but by the respect, trust and credibility we earn.”
Such a statement is contradicted with Amway’s actual record that includes tax evasion in Canada, resulting in a fine that was the largest in Canadian history at that time. It is challenged by the actions of the government of England to shut down Amway “in the public interest.” England, like the state of Wisconsin 25 years before, examined tax records and discovered that 99% of all English consumers who invested in Amway as salespeople never earned a profit. This massive loss rate had gone on for 30 years. To these examples, many other cases of fraud accusations, law suits, and book-length revelations of deception can be added. The Amway/Quixtar Hall of Shame list compiled on the Amquix.info website is a shocking rap sheet of Amway and some of its top distributors. But the true record remains behind the high wall of silence maintained by millions of disillusioned, shamed and fearful victims in countries worldwide.
Many consumers and some lawsuits focus on what some consider the most egregious trickery associated with Amway. This is the “secret” business connected to Amway in which its top recruiters essentially shake down new recruits for payments that many recruits are led to believe are “necessary” for success in the Amway business. The payments are for “tools,” books, CDs and seminars for “motivation” and training. Lawsuits contend that these payments from recruits constitute the main source of the top level recruiters’ income, not commissions from the sales of Amway products. Many consumers believed that their payments for the tools generated no profits at all to their leaders, but were provided “at cost.” In fact, the leaders were gaining large profits. Moreover, their high pressure sale of these goods to vulnerable and dependent recruits is a clear conflict of interest, since they are supposedly responsible for training and managing those recruits. The sales of tools by the top distributors also provide Amway with greater income from higher inventory purchases. As it turns out, the “tools” are largely worthless. 99% of all recruits lose money, year after year, regardless of how many buy the costly tools or attend the “motivation” seminars.
And then there are the charges and evidence that Amway operates as a destructive cult, employing mind control techniques in order to achieve its financial fleecing of new recruits. This charge has been made in mainstream media, and countless anecdotal reports of ex-Amway salespeople. The nation’s top expert on cult practices, Steve Hassan, offers analyses of the charges. His “BITE” model offers the tools for evaluating tactics employed in Amway’s persuasion program and its inducements to get consumers to invest and recruit. Including Behavior, Information, Thought and Emotional control.
Yet, perhaps the most fundamental of all charges regarding Amway deception is that of false identity as a “direct selling” business. The claim to be a channel of sales to end-user customers is the cornerstone of Amway’s legal defense and the foundation of the “business opportunity” that it sells to millions of people worldwide.
Lawsuits brought by top recruiters, tax records gained by regulators, and mountains of anecdotal evidence from recruits at the bottom indicate that Amway is not a sales company. Rather, its business is based upon inducing inventory purchases and fee payments from consumers who are signed up as its salespeople, and then offering them rewards to draw in others to make similar purchases and fee payments. Few “salespeople” ever sell Amway goods to retail customers, the charges state. There is no hard data showing any sustainable retail income earned by Amway salespeople. Amway’s own “income disclosure” does not include retail profits.
An admission that retail profit is non-existent may be inferred in the settlement of the recent class action lawsuit and in the settlement Amway reached with regulators in England. Amway agreed to substantially lower pricing in both cases. Uncompetitive pricing of many Amway goods speaks to lack of retailing. It also serves as evidence of an “endless chain” recruitment scheme. The higher the price paid by the recruits,, the more the commission to the “upline” and profit to Amway. No need to be price competitive in the open market when the scheme operates as a “closed market” (salespeople selling only or mainly to salespeople). Under the plan that the lawsuit charged Amway perpetrated, each new recruit’s income depends, not on selling products to customers, but on a hopeless quest of “endlessly” expanding the sales organization. The “unlimited” income promise makes price comparisons irrelevant.
Ethical ByPasses
07/25/2008 03:35 PM
Even if you could not figure out whether an MLM is a fraud or a legitimate business, some typical behavior that the MLMs expect from you might tip you off that you have stepped into a scam, a place where ethics are “bypassed” on the way to the “dream.”
1. Asking others to join the scheme and telling them it’s a “great opportunity”, even when you have not made any money from it yourself or maybe are even suffering significant losses.
2. Leveraging your friendship or family relationship to recruit someone -- “Hey we’re family; you can’t say no.”
3. Looking up old friends and pretending you called them because you were interested in them, even though you haven’t been in touch for years, and in fact are just contacting them to recruit them. All MLM recruits are told to draw up a “warm list” composed of almost everyone you know or are related to.
4. Urging someone to join only because you need the “points”, while perhaps having already realized that most people never earn any money. (99% never earn a profit.)
5. Discovering that 60-80% of all recruits quit in less than a year, making the building of a “downline” almost impossible, but telling the recruits all they have to do is recruit five and the five recruit five each, and those 25 get five, etc.. (The “five get five” pitch falsely assumes everyone who joined stayed in the scheme. Most people never get even the first five to stay in, because the market is already saturated.)
6. Learning that 99% of MLM recruits receive less than $10 a week, far less than they spend, but omitting this fact while recruiting.
7. Realizing that the person “below” you is losing money and going into debt, but urging him/her to stay in anyway, (resulting in more debt and more losses) because you will have “chargebacks” if they quit and others in the downline may also desert you.
8. Berating people who had quit as “quitters and losers,” even though you know that 60-80% of all MLMers quit in the first year and 95% quit within several years. (MLMs are structured with “endless chain” recruiting. The scheme can keep going only if most people quit. If they actually stayed in, the market would totally saturate and there would be no one else to recruit! The scheme would then totally collapse. In fact, MLMs reach market saturation in each area, and but continue to lure new recruits anyway who cannot possibly find enough new recruits to be profitable. They inevitably lose their money, quit, and are then replaced by other hopefuls who repeat the process and suffer the losses. That’s how the MLM and its top upliners make their money.)
9. Telling recruits that the MLM products are “amazing”, even though you yourself stopped using them or did not experience any health improvement and knowing that similar products are on the market that cost as little as 1/3rd the price. Later you may try to unload your MLM inventory on ebay.
10. Claiming you are in the “direct selling” business, even though you haven’t sold the products to anyone at retail price because they are too expensive and other similar products are readily available. In fact, you are just “recruiting”, while pretending you are a retailer. (One hallmark of a MLM pyramid scheme is that the customers are the salespeople!)
1. Asking others to join the scheme and telling them it’s a “great opportunity”, even when you have not made any money from it yourself or maybe are even suffering significant losses.
2. Leveraging your friendship or family relationship to recruit someone -- “Hey we’re family; you can’t say no.”
3. Looking up old friends and pretending you called them because you were interested in them, even though you haven’t been in touch for years, and in fact are just contacting them to recruit them. All MLM recruits are told to draw up a “warm list” composed of almost everyone you know or are related to.
4. Urging someone to join only because you need the “points”, while perhaps having already realized that most people never earn any money. (99% never earn a profit.)
5. Discovering that 60-80% of all recruits quit in less than a year, making the building of a “downline” almost impossible, but telling the recruits all they have to do is recruit five and the five recruit five each, and those 25 get five, etc.. (The “five get five” pitch falsely assumes everyone who joined stayed in the scheme. Most people never get even the first five to stay in, because the market is already saturated.)
6. Learning that 99% of MLM recruits receive less than $10 a week, far less than they spend, but omitting this fact while recruiting.
7. Realizing that the person “below” you is losing money and going into debt, but urging him/her to stay in anyway, (resulting in more debt and more losses) because you will have “chargebacks” if they quit and others in the downline may also desert you.
8. Berating people who had quit as “quitters and losers,” even though you know that 60-80% of all MLMers quit in the first year and 95% quit within several years. (MLMs are structured with “endless chain” recruiting. The scheme can keep going only if most people quit. If they actually stayed in, the market would totally saturate and there would be no one else to recruit! The scheme would then totally collapse. In fact, MLMs reach market saturation in each area, and but continue to lure new recruits anyway who cannot possibly find enough new recruits to be profitable. They inevitably lose their money, quit, and are then replaced by other hopefuls who repeat the process and suffer the losses. That’s how the MLM and its top upliners make their money.)
9. Telling recruits that the MLM products are “amazing”, even though you yourself stopped using them or did not experience any health improvement and knowing that similar products are on the market that cost as little as 1/3rd the price. Later you may try to unload your MLM inventory on ebay.
10. Claiming you are in the “direct selling” business, even though you haven’t sold the products to anyone at retail price because they are too expensive and other similar products are readily available. In fact, you are just “recruiting”, while pretending you are a retailer. (One hallmark of a MLM pyramid scheme is that the customers are the salespeople!)