I have spent a lot of time writing about MLMs, multi-level marketing companies, often called pyramid schemes. While all of these companies have an element of making money both through the sales of product and the recruiting of new members, the worst of the worst require their distributors to buy a set amount of product from them in order to be eligible for their paychecks. And those paychecks are based on both the amount of product you sell, … [Read more...]
Another MLM Gone – AdvoCare Changes Business Model
On May 17, AdvoCare, a well-known MLM (also known as a multi-level marketing company or pyramid scheme) announced that they were changing their business model. After "confidential talks" with the Federal Trade Commission, they are changing how they compensate their distributors. In other words, they were violating regulations, got caught, and were forced to ditch the illegal pyramid structure. Is AdvoCare Going Out of Business? No. AdvoCare … [Read more...]
Young Living Lawsuit – Illegal Pyramid Scheme?
This month, Young Living was served with a class action lawsuit alleging that they are an illegal pyramid scheme. From all I have heard about Young Living, I can't say I'm surprised. While I'm a big fan of essential oils, I don't like the high prices, predatory marketing, and completely false medical claims that I've seen coming out of Young Living. While you can argue that all MLMs are pyramid schemes, the FTC has a few rules that help … [Read more...]
LuLaRoe an Illegal Pyramid Scheme?
Last week, the Washington state attorney general sued LuLaRoe, accusing them of operating an illegal pyramid scheme, making misleading income claims, and encouraging their consultants to focus on recruiting rather than sales. What is a Pyramid Scheme? In general, the way that a pyramid scheme works is simple. People pay a set amount to join the group. Let's call the initial people level 1. The level 1 people recruit new people (level 2), and … [Read more...]
LuLaRoe Lawsuit – Company and Owners being sued for $49 Million
On November 29, Providence Industries, LLC (a company doing business under the name MyDyer), sued LuLaRoe and its owners for almost $49 Million. This is one of the biggest indications we've had that LuLaRoe, a known Multi-Level Marketing company with sketchy business practices, is on its way to failing. The Facts As set out in the complaint, MyDyer is the major supplier of both fabric and clothing for LuLaRoe. LuLaRoe has an agreement with … [Read more...]