Multi-Level Marketing (MLM) Examined by Cult Expert in Huffington Post Article 

A new HuffingtonPost.com article about multi-level marketing has been written by Steve Hassan, a well respected author and anti-cult expert. MLM victims are among those Steve Hassan helps to escape or exit from cults through his Freedom of Mind Center and work as a cult exit counselor. He classifies some MLMs as "economic cults." The article notes various techniques of deception and mind control used by some MLM schemes to keep consumers investing and working for the schemes, despite the victims' ongoing and mounting financial losses, social isolation and family disruption.

As one of the few comprehensive articles in the mainstream press about the MLM business, we urge reading this article and posting comments.   

The article also highlights the research and analysis report, The Main Street Bubble, referencing it in the title. This report details how the U.S. Federal Trade Commission has allowed MLM "business opportunity" schemes to operate without law enforcement over the last 10 years and continues to protect them even from requirements for normal disclosures during solicitations. Some key FTC staff now work on behalf of MLM companies as lobbyists.

Huffington Post is a respected and growing news source. The organization just announced that it is being acquired by AOL, which may give it an even larger audience. 

USA Today Article Highlights Amway Fraud Settlement Terms and the Role of "Business Support Materials" in Consumer Losses 

A feature article in USA Today, Feb. 7, 2011 by Jayne O'Donnell puts a  spotlight on the historic $150 million settlement in the Amway fraud case which affects millions of Americans. Amway was accused by former salespeople of criminal racketeering, mail fraud, wire fraud and operating a pyramid scheme in a class action lawsuit. After four years of delay and negotiation, Amway has agreed to expend $150 million for refunds and reforms.  

The USA Today article shows how  Amway and its top recruiters gain income by charging recruits for "training and motivation." Some consumers spend more for the MLM "tools" than in fees to join or even for products. Other variations on the "tools" scheme is to charge for "certification" or "sales leads." Another is to get the recruits to attend the annual meetings, where books, CDs, training, consulting,  etc. are also offered for sale.  

The article describes how top recruiters in Amway and the MLM scheme, Fortune High Tech Marketing, tell recruits that attending their expensive seminars and buying their books and DVDs will help them "succeed." In reality, only a tiny few in MLMs ever earn more than they spend.   

MLM, Fortune High Tech, Reportedly Investigated by NC Attorney General

The MLM scheme, Fortune High Tech Marketing (FHTM), is now the target of an investigation by the North Carolina Attorney General's Office, according to an article in the Wilmington, NC-based newspaper, Star News. The article notes that this company has already been prosecuted by state regulators in North Dakota and Montana and that it faces a class action lawsuit brought by consumers who accuse it of operating a pyramid scheme. Fortune claims to offer discounts from large retailers as well as other products. It has reduced its initial fees to join as salespeople, which some claim are the main source of its reward plan for recruiters.  Questions also focus on whether any of the salespeople actually sell the company's products or merely try to recruit others and gain a commission from the new investments, in an endless chain scheme.