Litigation

Penn & Teller on multi-level marketing and pyramid schemes

By Tracy Coenen

Last month, Penn & Teller’s Showtime show Bullshit! featured multi-level marketing. They did an excellent job of hitting the high points on why MLMs almost guarantee failure for all the participants. Sure, there will be a couple of people at the top of the pyramid that make money, but that’s only because hundreds or thousands below them have lost money.

Lost money? Yes, MLM is all about losing money. They use a product as a “front” to hide this money transfer and make the scheme appear to comply with the law. But the products are of dubious quality, and significantly overpriced. MLMs aren’t really selling a product, they’re selling an “opportunity,” one in which almost everyone loses.

Here are some highlights from the episode:

They talked about Pure Romance, a sex toy company.

Then there was ManCave, a company selling meat and grilling products, with inflated prices and little profit to be had by the guys selling it.

Zrii is another magic juice company, with a pathetic representative who has been working more than full-time for it and has only financial losses and no real future to show for it.

My colleague, Robert FitzPatrick, provided the expert commentary for this show, and did a marvelous job!

The MLM game is all about recruitment, and here’ a look into a recruiting attempt.

So whose fault is it when someone fails at MLM? Is it the fault of the person, or the system?

Full post as published by The FRAUDfiles Blog on August 10, 2010 (boomark / email).