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Thread: ICCA's MLM Petition

  1. #1
    GlimDropper's Avatar
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    ICCA's MLM Petition

    Where to begin, perhaps with the link.

    Summary of Petition


    The signers of this Petition ask the Federal Trade Commission and other federal and state governmental agencies to investigate the Multi-Level Marketing (MLM) industry and take action to protect people. The MLM industry has proven incapable of regulating itself, is rife with fraudulent and deceptive earnings claims and has caused – and will continue to cause – untold financial harm and social disruption to people who are seeking a legitimate business opportunity. It is not enough to prosecute a few MLM companies after they have had years to deceive hundreds of thousands of participants out of hundreds of millions of dollars, most of which will never be recovered. There should be laws and regulations that require full disclosure of material facts by MLM companies and their high level distributors, and which prohibit MLM compensation plans that reward unlimited recruiting of new distributors over personally retailing products to non-participants.
    I found that site through Rod Cook, a man who has done much work that I respect, he seems to have included it in his "MLM Lies and Myths" category under the heading of Good MLM's Under Attack by Anti-MLM Coalition. I can see his point, after all the International Coalition of Consumer Advocates (ICCA) do themselves refer to this as a Global Anti-MLM Petition. I believe that phrasing to be unfortunate for more than one reason. Rod Cook holds himself out as the MLM Watch Dog and the fact that I don't agree with everything he says will never subtract from his many good efforts to reform the industry from within.

    I have never been an affiliate of any multilevel marketing company nor do I ever expect to be one, it quite simply is something outside of my interests or skill set. But I do believe that honest and ethical people can and do earn a respectable livings in MLM. I also believe that some dishonest and unethical people earn hand over fist money in it. For this reason (and others) I don't attack the business model itself but rather the abuses of that model, however I admit there are weaknesses in my approach.

    The "MLM Industry" as it functions in the United States is not only unable to regulate itself, it's unwilling to do so. Worse than that it seems from an organizational standpoint the industry is willing and able to counter efforts to have regulation imposed on it from outside. I can't tell you how many times I have seen people who presume to be leaders in the industry speak of ethics and integrity, of holding the best interests of the low level affiliate base as a prime directive only to see those same leaders ignore those principles when they in any way become inconvenient or when profits are at stake. There simply is not, nor is there ever likely to be a well funded political lobbying effort to advocate for needed consumer protection laws pertaining to MLM while there are well funded interests who can pay for political influence to avoid such legislation.

    I have strange reading habits, this much is sure but if you have an hour or so to kill take a look at this counterclaim. It is (yet another) internecine MLM legal battle that I wish were less common than they are, just another MLM Leader, someone who can swing a downline from one company to another and does so just as often as a sufficiently lucrative offer can be made, breaking contracts and promises and none of it is new or in any way news. My thoughts are these, the court has not yet settled the facts in this case and no matter how those facts are disposed, there are hundreds or thousands of low level downline members here who are the real victims and the complaint doesn't even make mention of that fact.

    I honestly wish the ICCA had not framed this petition as "Anti-MLM." The overwhelming majority of the people this petition hopes to protect are themselves Pro-MLM or MLM professionals, this is to me a very important point to make. I am stridently anti-scam and while I despair from the flagrant, frequent and seemingly omnipresent abuses of multilevel marketing but the business model isn't per say the problem. The problem is that the overwhelming majority of people who have been victimized by fraudulent MLM are silent and therefore see themselves as isolated. The problem is that no matter how good the product is or how equitable a comp plan may be, the people who can recruit (and recruit, and recruit) will always make the most money. The problem is that MLM companies have and always will sell products only as a distant second to selling a income opportunity dream. When enough of the income from that opportunity comes from one time or short time sign up fees and associated expenses paid by people buying into a dream, how realistic that dream is for them will always be a distant second to their ability to pay for that dream. Not to the people paying for it but to the people (and industry) profiting from selling it.

    In short, the people with the most influence in any MLM company are the people who are master recruiters. It's been said that comp plans drive affiliate behavior and that is true, but it's more true that comp plan are written by the people who stand best to benefit from them. There are only two forces which could compel the people writing a comp plan to make it fair for the rank and file affiliate base, their ethics and the law. Multilevel Marketing as we see it today IS the product of the ethics of the people running the companies which is the only argument that needs to be made for much stronger and more sensible regulation of this industry. I do not agree 100% with this petition, but the direction it is a step to is far better than the industry's current trajectory.
    So your prophets of finance have fallen on their collective proverbial face, and you hear muffled voices calling: Welcome to the human race.
    You made a killing dealing real estate at NASA selling cemetery plots in outer space til some falling coffins crashed upon your doorstep: Welcome to the human race.

    Open up your heart...

    Welcome to RealScam.com.

  2. #2
    EagleOne's Avatar
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    Re: ICCA's MLM Petition

    Part of the reason why this action was taken is because the DSA, or whatever they are calling it now, has failed miserably to protect participants in MLM programs that pay dues to DSA. There have been many Ponzi/illegal pyramid scheme MLM's that DSA kept their mouths shut about them being illegal, showed them in good standing with the DSA all because they paid their dues. Several were still showing in good standing with the DSA after the FEDs had moved to shut them down.

    All the DSA is good for is lobbying to protect all MLMs, even the bad ones. As long as the company pays DSA dues, they are members in good standing no matter how bad they are, and this is wrong.

    MLM is the most inane business model to ever be conceived, and how they keep afloat almost defies credulity and logic. People are told if they join a MLM program they "own" their own business. They do not "Own" anything. They are given the right to sell the opportunity to others and now and then sell products. A person who "Owns" their own business has the ability to cancel any product they choose to stop selling and replace it with another product. Not true in MLM-land. Think you are your "own" boss? Think again. Try changing something or adding a new product to your mix that is not from the company and you are out. Heck burger flippers make more an hour than the average MLM person in their first 2-3 years of "owning" their own business; that is if they last that long.

    Next you tell everyone they can be in business for themselves, when they have no clue if they even have the ability to run a business. Then before they can learn how to run their own business successfully, they have to immediately get 10 people under them who also don't have a clue on how to run a business. A recipe for disaster and failure, which is what happens to 92% of the people who join a MLM in the first year; thus why the large fallout.

    You have to hide about what it is you do because you want people to come hear you explain an incredible opportunity hoping they will buy the sizzle and join under you. If you have to hide it is what you do to get people to listen to your spiel, you are not in a very moral business. Heck, I can tell by the pitch which MLM program it is by how they explain why they want to meet with me. If you are that "Proud" of your business, and it is that great of an opportunity, why do you have to hide what it is you do to get me to listen to your "pitch?"

    MLM programs like to tout how many businesses fail in the first year of business, and yet they have a failure rate of their members higher than companies going out of business in their first year. When you look at the sales results for all the MLM Programs, less than 3% actually make more than $24,000 per year. Of course in that 3% are the ones in the top 1% of the pyramid, but most of their money is made on the books, tapes, referral fees and percentage of their downline sales, not from retail customers.

    This leads to the vast majority of MLM programs do not generate 51% of their sales from retail sales, which is a requirement of the FTC. So by definition, 98% of all MLMs are probably an illegal pyramid due to lack of retail sales. Because there are so many, the FTC does not have the ability to go after the majority of them, which is why so many still are operational today that should be shut down.

    The biggest issue I have with MLM is that they sell sizzle and a dream, not reality. For if they didn't, they would never get off the ground and we all know it. OK, I've said enough for now so will get off my soap box. But MLM a great business model? Seriously?

    Last edited by EagleOne; 12-27-2013 at 04:09 AM.
    EagleOne
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  3. #3
    NikSam is offline AntiCon Artist
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    Re: ICCA's MLM Petition

    MLM is legitimized scam , note there is a big difference between legitimate and legitimized.

    Nothing will change while members of US congress are in fact upliners in many of those.


    If a product can generate real retail sales, there is no purpose for having this crazy distribution network around it.
    There are no honest MLMs, absolutely none, some just do not care about disclosing retail sales other just lie and fabricate data passing sales within network as retail.

    If America does not see a global MLM problem but just thinks there are few bad apples, nothing is gonna be fixed.
    Last edited by NikSam; 12-27-2013 at 02:21 AM.

  4. #4
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    Re: ICCA's MLM Petition

    As many of you here know, I have written the equivalent of Gone With the Wind on this subject many times. In the simplest terms MLM is inherent fraud. It is a math / numbers game. The compensation plans by design doom at least 97% of the participants to failure pure and simple. I intend to do everything possible to eradicate the scourge that is MLM is the USA.

  5. #5
    EagleOne's Avatar
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    Re: ICCA's MLM Petition

    Glim:

    I want to agree with your comments about Rod Cook and his fight to cleanup the MLM industry from the bad guys. Rod is a friend, and a great supporter of Eagle. While we disagree on the merits of MLM being a great business model for the masses, I applaud his efforts in exposing the bad apples in the MLM industry that are nothing more than sheer pyramid schemes. Too bad the DSA does not listen to him The MLM industry needs more Rod Cooks exposing the bad apples, and the MLM industry then doing something about it. Since they don't, this is why the petition was started.

    Rod believes that anyone who criticizes the MLM Industry is "anti-MLM." Yet by his exposing the bad apples of MLM and wanting them shut down, he is in effect "anti-MLM by his own definition. Ironic isn't it.
    EagleOne
    Founder/President Eagle Research Associates
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  6. #6
    Roger Willco is offline Junior Member
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    Re: ICCA's MLM Petition

    The contention that there’s such a thing as a good MLM opens the door to a number of relevant questions:

    Can you describe a theoretical MLM that doesn't rely on deception and predation to survive?
    If you can, is what you've described actually an MLM? Or is it something else?

    Can you name an existing MLM that doesn't rely to a great extent on deceptive and indirect methods of persuasion, logical fallacies and internal product sales?

    How can any MLM counter the effects of uncontrolled exponential distributor propagation--rapid market and distributor over-saturation and early-stage downline overlap without mandatory internal sales?

    Does an infinite market for any product or for distributorships exist in the real world?

    Why has the MLM industry at large vigorously opposed legally-mandated distributor income disclosure unless those disclosures would invalidate industry-wide claims of entrepreneurial playing-field leveling distributor profit potential?

    Why do MLMs and their recruiters disparage critical thinking—the only means by which an individual consumer can identify convoluted deceptions and logical fallacies—as “negativity”?

    Why does MLM discourage or disparage vigorous inquiry—including true scientific investigation, as inapplicable to their “miraculous, life-changing” products?

    Why does MLM so vigorously oppose FDA regulation . . . really?

    Why are MLM compensation plans so complicated and difficult to understand?

    How do they really sell their products at SRP when SRP so far exceeds their true retail value, as determined by their pricing in the open market—eBay and Craigslist, for example?
    And, if they actually sell them at wholesale, to whom?

    Shall I go on?

    The industry, its trade association—the DSA—and MLM proponents disparage as biased, every published, truly research-based statistical analysis—analyses that invariably expose the futility of MLM business opportunities. Yet their only counter-arguments are based on strawman fallacies and red herrings; and they’re usually coupled with ad hominem attacks on the analysts they oppose. An unintentional misstatement, typo or syntax error doesn’t equate to dishonesty any more than anecdotal distributor success stories negate real statistics (Are you paying attention Mr. C? . . . BTW I’d be honored if you’d include me on your list of “anti-MLM zealots”. Please, do consider this post my application to be added to your list.).

    The undeniable reality is that MLM’s structure is based on the fiction that an unlimited pool of prospective distributors exists; and MLM and their minions must convince every downline distributor that fiction is a truth. This, along with every other deceptive behavior they exhibit, is essential to launch and sustain any MLM.

    Proponents point to the decades-long histories of some MLMs as evidence that the model is indeed sustainable. Those companies have sustained themselves by re-pyramiding with new product lines, entry into new geographical markets and the ever-present twenty-year generational turnover.

    MLM presents a great opportunity for anyone willing to pursue the almighty dollar by starting an MLM or transferring their loyal downline organizations from a dying MLM to the latest and greatest in violation of their IBO agreements. But they make their money on the backs of innocent prey who buy into the illusory dream they sell. At what price wealth?

    There’s such a thing as a good MLM? . . . I don’t think so; and that’s the only “opinion” I’ve expressed in this post.
    Last edited by Roger Willco; 01-25-2014 at 10:06 PM. Reason: Clarity

  7. #7
    littleroundman is offline Administrator
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    Re: ICCA's MLM Petition

    I've always wondered how it is that hundreds of thousands of otherwise sensible people come up with the idea that there's large amounts of money to be made selling everyday consumer products.

    Actually, I'm lying.

    There's no secret a great many of the recruiters behind a great many / most MLMs not so subtly reinforcing the idea that by choosing a product that "everyone uses every day" there are millions to be made.

    Imagine opening up a shop which only sold a single item i.e. toilet rolls or one brand of vitamin or one kind of coffee.

    How much or how many rolls of toilet paper or jars of coffee would you have to sell to make a living, much less a squillion bucks ??

    Yet here we are talking about hundreds of thousands of MLM recruits who have been mislead into believing it's possible to base a business on moving a single product or a handful of products in sufficient quantities to not only live, but build up a lifetime of "residual income"
    The only thing necessary for the triumph of evil is for good men to do nothing

  8. #8
    Soapboxmom's Avatar
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    Re: ICCA's MLM Petition

    Quote Originally Posted by Roger Willco View Post
    The contention that there’s such a thing as a good MLM opens the door to a number of relevant questions:

    Can you describe a theoretical MLM that doesn't rely on deception and predation to survive?
    If you can, is what you've described actually an MLM? Or is it something else?

    Can you name an existing MLM that doesn't rely to a great extent on deceptive and indirect methods of persuasion, logical fallacies and internal product sales?

    How can any MLM counter the effects of uncontrolled exponential distributor propagation--rapid market and distributor over-saturation and early-stage downline overlap without mandatory internal sales?

    Does an infinite market for any product or for distributorships exist in the real world?

    Why has the MLM industry at large vigorously opposed legally-mandated distributor income disclosure unless those disclosures would invalidate industry-wide claims of entrepreneurial playing-field leveling distributor profit potential?

    Why do MLMs and their recruiters disparage critical thinking—the only means by which an individual consumer can identify convoluted deceptions and logical fallacies—as “negativity”?

    Why does MLM discourage or disparage vigorous inquiry—including true scientific investigation, as inapplicable to their “miraculous, life-changing” products?

    Why does MLM so vigorously oppose FDA regulation . . . really?

    Why are MLM compensation plans so complicated and difficult to understand?

    How do they really sell their products at SRP when SRP so far exceeds their true retail value, as determined by their pricing in the open market—eBay and Craigslist, for example?
    And, if they actually sell them at wholesale, to whom?

    Shall I go on?

    The industry, its trade association—the DSA—and MLM proponents disparage as biased, every published, truly research-based statistical analysis—analyses that invariably expose the futility of MLM business opportunities. Yet their only counter-arguments are based on strawman fallacies and red herrings; and they’re usually coupled with ad hominem attacks on the analysts they oppose. An unintentional misstatement, typo or syntax error doesn’t equate to dishonesty any more than anecdotal distributor success stories negate real statistics (Are you paying attention Mr. C? . . . BTW I’d be honored if you’d include me on your list of “anti-MLM zealots”. Please, do consider this post my application to be added to your list.).

    The undeniable reality is that MLM’s structure is based on the fiction that an unlimited pool of prospective distributors exists; and MLM and their minions must convince every downline distributor that fiction is a truth. This, along with every other deceptive behavior they exhibit, is essential to launch and sustain any MLM.

    Proponents point to the decades-long histories of some MLMs as evidence that the model is indeed sustainable. Those companies have sustained themselves by re-pyramiding with new product lines, entry into new geographical markets and the ever-present twenty-year generational turnover.

    MLM presents a great opportunity for anyone willing to pursue the almighty dollar by starting an MLM or transferring their loyal downline organizations from a dying MLM to the latest and greatest in violation of their IBO agreements. But they make their money on the backs of innocent prey who buy into the illusory dream they sell. At what price wealth?

    There’s such a thing as a good MLM? . . . I don’t think so; and that’s the only “opinion” I’ve expressed in this post.
    Welcome, Roger! That was so beautifully written. Posts like this that educate the public are the key to stopping the scourge that is MLM in its tracks!

  9. #9
    Textex is offline Senior Member
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    Re: ICCA's MLM Petition

    The ICCA is really made up of about 3 individuals who control everything (Robert FitzPatrick, Bruce Craig, and Douglas Brooks). I've tried talking sense into them with comments on the site, phone calls, and a few emails, to no avail. They even shut down new comments, see the "Scott Johnson" comments to read what I think about that site. Their site is totally dysfunctional, not to mention their ability to examine the facts and make logical conclusions. These "critics" are actually part of the problem, they make big bucks by testifying in lawsuits, and the worst thing for them would be to win, it would cut off their income stream.

    Rod Cook is also part of the problem. By only talking down only the worst of the worst, he leaves the worst untouched. That is akin to being covered by mud, falling off your skin and clothing, and when about to enter someone's house, taking off only one shoe before entering. You don't chop down a tree by clipping off some small twigs, you chop down the trunk of the tree. Click on my name and webpage for the details of THE largest MLM scam, which IS the trunk of the MLM scam tree.

    While not supporting any particular MLM, it is my understanding there are 2 (out of hundreds, if not thousands) that appear to have adequate retail sales and lack of tool scams, to my [limited] knowledge about them.

  10. #10
    Textex is offline Senior Member
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    Re: ICCA's MLM Petition

    I neglected to name them: Tupperware and Pampered Chef.

  11. #11
    Luzer is offline Senior Member
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    Re: ICCA's MLM Petition

    Quote Originally Posted by Textex View Post
    The ICCA is really made up of about 3 individuals who control everything (Robert FitzPatrick, Bruce Craig, and Douglas Brooks). I've tried talking sense into them with comments on the site, phone calls, and a few emails, to no avail. They even shut down new comments, see the "Scott Johnson" comments to read what I think about that site. Their site is totally dysfunctional, not to mention their ability to examine the facts and make logical conclusions. These "critics" are actually part of the problem, they make big bucks by testifying in lawsuits, and the worst thing for them would be to win, it would cut off their income stream.

    Rod Cook is also part of the problem. By only talking down only the worst of the worst, he leaves the worst untouched. That is akin to being covered by mud, falling off your skin and clothing, and when about to enter someone's house, taking off only one shoe before entering. You don't chop down a tree by clipping off some small twigs, you chop down the trunk of the tree. Click on my name and webpage for the details of THE largest MLM scam, which IS the trunk of the MLM scam tree.

    While not supporting any particular MLM, it is my understanding there are 2 (out of hundreds, if not thousands) that appear to have adequate retail sales and lack of tool scams, to my [limited] knowledge about them.
    Texie! Still trolling MLM forums?

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