General comment about MLM and its supporters / critics

People who are involved with MLM generally comes in 6 types

• MLM Grunts
• MLM Stars
• MLM Coaches
• MLM Attorneys
• MLM Opponents
• MLM Critics

Each group have their own blindspots and strengths.

MLM grunts -- generally your "grunts", often addicted to MLMs, joining one after another always looking for the "big score", may even make some money, often believe in the MLM (no matter which one) with religious fervor. May or may not graduate to MLM upper level (see below).

Strengths: there are a lot of them, willingness to learn and earn
Weaknesses: often completely ignorant regarding the realities of MLM, such as what makes a MLM legal, easily lead astray by unscrupulous stars and coaches

MLM stars -- those with some recruiting skill and able to build a clique can take the clique from one MLM to another, probably spent decades in the business, and claims to make a comfortable living using his people skills, not sales skills.

Strengths: personal skills allows team building, knows most of the recruiting tricks and how to maximize profit in minimum time by leveraging his connections, have a bit of an ego
Weaknesses: often just as ignorant about the legalities as the grunts, often "raids" a MLM (move in, make a bundle, get out), ego often lets oneself get in big trouble with big mouth

MLM coaches -- "bottom feeders" of the industry... may be a direct participant, but often just use the "coaching" title to seek recruits for his or her current favorite MLM, teaches terribly obvious stuff, often advertise via Youtube and similar videos and generic capture pages. May also go by title of "marketing coach", "attraction coach", and so on.

Strengths: some may actually know something to teach, and some are honest about teaching
Weaknesses: most just want to get paid for "training" but don't want to get involved in MLM itself, too many of them impossible to check their bonafides, and most are just as ignorant as their students about MLM in general. Some "coaches" are just recruiters in sheep's clothing.

MLM attorneys -- they actually know the law that governs MLM, and advises MLMs on what is legal, and what is not. They sometimes also make observations about the industry and upcoming law changes.

Strengths: actually knows the laws involved: when they say it's illegal, it really is!
Weaknesses: has a pro-industry bias, as it is their livelihood, and can't really be considered neutral

MLM opponents -- i.e. "MLM is fundamentally fraudulent" critics, who believe MLM is just a pyramid scheme somehow legalized with minor differences. Examples include Robert Fitspatrick and Dr. John Taylor.

Strengths: have studied the issues at length, with sufficient documentation and such to back up a lot of their claims, hearts at the right place
Weaknesses: some are extremely inflexible in their views, and refused to even acknowledge the current legal state where MLM is legal, and pyramid scheme is not, and has a bit of tunnel vision

MLM critics -- those who consider MLM industry to be polluted by scams posing as MLMs, and are out there to  point out the "bad apples" before they tarnish the industry. Example would be Rod Cook, Troy Dooly, and so on.

Strengths: knows the difference between the legal, and the illegal, pretty close to genuine third-party as you will find
Weaknesses: has a SLIGHT pro-industry bias, as it must accept "MLM is legal" (which is fact) and use that as basis to root out pyramid schemes.

I consider myself a MLM critic, slipping toward MLM opponent, thus, I consider myself a true neutral in this mess. :D

This is my problem with DB, as DB is a MLM Opponent. In his world view, a "legal MLM" does not exist. Yet a MLM "critic"'s fundamental worldview is that MLM is legal, and pryamid scheme is not. Thus, somehow MLM critics and MLM opponents sometimes end up on opposite sides, even when both are out to bash pyramid schemes.

As for the rest, I consider the MLM Stars and Coaches to be... scum. Let me explain why:

MLM grunts don't know anything, and since they are always trained by coaches or stars, they will say whatever their upline (coach or star) say. And if the coach or star choose to tell them lies (or that was how s/he learned it: a lie) then the lie will be perpetuated. Most MLM coaches or Stars don't know much more than their downlines / recruits, esp. on the LEGAL issues. Some just use their skills to build a personality cult and get them to move from one MLM to another, thus enriching him- or herself at the expense of the members but blaming the members for their failures (I am doing great, why aren't you?)

Coaches are even worse. Coaches are basically grunts who thought they can make money by being on the edges of MLM without getting their feet wet. They often have NO idea what makes a MLM profitable or not, or even whether it's legal or not. Yet they want to teach how to recruit, how to generate leads, and whatnot, and get paid for teaching such things.

No doubt SOME stars and coaches are ethical, but I doubt there are too many of them. Remember, there is no barrier to entry in this field. ANYBODY can claim to be a MLM coach. At least with MLM star there's a bit of reputation you can verify, but that doesn't prove the industry is viable, merely that the star has interpersonal skills to form a clique.

What about MLM critics? We are often guilty of a bit of bias ourselves. We tend to look at the status quo, that MLM is legal, without examining the deeper issues (such as the concerns that MLM opponents raised and their research). MLM itself has fatal flaws that needs to be addressed, as it is very prone to abuse, until laws are passed and modern enforcement for financial crime beefed up, MLM critics will be too busy bashing the various pyramid schemes out there disguised as MLMs to study MLM itself.

And that leaves the MLM grunts as the real victims. If they run into a ethical coach or star, great. But if they ran into a scam disguised as MLM, or an unethical coach or star, then either this grunt will quit MLM altogether, become addicted to serial MLM, without knowing what's legal and what's not (never got trained in the right issues and knowledge), often aspiring to clone their upline, and so on.

Why don't DMV or places with incredibly long lines have SMS notification?

Everybody in California knows about the lines at a DMV (Department of Motor Vehicles). If you line up at 7:30AM (it actually opens at 8), you may be out by 9AM. If you like up at 9:30 AM, you probably out by 12PM. If you line up any later, you may be out before closing, but just barely.

They have an automated system now that gives out numbers, and then automatically announce "F07 at Windows 14" but it's still dumb. You never know how fast the line moves, so there's no estimate, so you're pretty much forced to stick around FOREVER, and if you happen to miss your slot...

Pharmacies like Walgreen can send SMS to your number to let you know when your perscription is ready to pick up. Why can't DMV do something similar? Say you're F47, you'll get a SMS when the queue is like F42. Then you can reply with CANCEL if you want to abandon the place (like you won't make it back).  The system can even predict how fast the wait will be based on the last 10 people processed.

How much would such a system cost? Minimal, and actually fit within their existing system. Should cost less than $1000 per DMV branch, plus cost to send the SMS, even less if you don't want the "CANCEL feature.

I've been declared Persona-Non-Grata, but NOT by DB

Final update about DB and his friend who has a blog that does good stuff, but is a bit too... insular.

If you have read this blog, you'll find that I had been polite on DB and friend's blog even though they are determined to cast me as an enemy. I spent much of the time agreeing with them, even though I have problems with some of their logic.

They did not like that at all.

Then the "friend" who actually owns the blog put out an entry declaring that I am no longer welcome on his blog, because I have demonstrated my affinity to the Amway scam. What?!

Then I realized that this guy posted a few comments repeating DB's point that there is no such thing as a "legitimate fraud".

I thought DB had abandoned that thought?

But any way, this guy, again, hates the term "legitimate MLM". Apparently any one who claims MLM is legitimate is an enemy. These are his words:

" For the simple reason there were no complaints and the law did not catch up, an illegitimate business would not become legitimate. And this is an established law. You are sounding that it something is legal somewhere because the law did not catch it up. It is sending wrong signals to the gullible. That is why you are not welcome to spread canards."


Clearly, this guy is ignoring the fact that even DB had stated CLEARLY that "MLM has yet to be declared illegal (in the US)". Thus, he refused to acknowledge such a thing as a legitimate fraud. 


Or in other words, he's holding a view "MLM is illegal", even though it's not an absolute truth. And he's banning any one who dare suggest otherwise on his blog all in the name of saving the "gullible", even people who dare suggest a more accurate statement "MLM should be illegal, but has not been outlawed in some areas". 


Now who's being unreasonable? But it is his blog. So, that's it. 


And they claim to be "free-thinkers", *sigh*. 

Truce with DB did not hold

As expected, DB and partner have decided to interpret my question on how applicable RICO act is to MLM in the most negatively light possible.

An observation about a large MLM had tried to settle the civil RICO suit was construed as I am somehow supporting this MLM, as the partner claiming that I showed my true colors, when I cited the case to prove that the case had not been resolved, therefore this "private prosecution" doesn't mean anything YET.

Again, my position was misinterpreted. I don't disagree with the opinion that MLM industry has organized and entrenched itself to mount a vigorous defense for its right to exist. I agree that MLM fundamentally is flawed and causes losses for most of its partcipants based on available historical data. I simply question whether it had risen to the point where it should be considered "organized crime" in the style of Mafia and need to be prosecuted with the RICO act, and furthermore whether RICO act even applies to a "business model", even a fundamentally flawed one such as MLM.

(BTW, you should read a report written by an organized crime specialist G. Robert Blakey, it's fascinating stuff, about how much similarity there is between Amway and Mafia. Just keep in mind this guy was retained by an opponent of Amway to write this report, so it ain't exactly one-sided third-party objective opinion, but rather, expert testimony presented by one side. )

Yet DB and partner chose to interpret my skepticism to the RICO act application as opposition to their view "MLM is fraud", when it is not.

This shows the exact same pattern as before. Previously, DB chose to interpret my statement "MLM is legal (under certain circumstance)" (NOT an exact quote) as conflicting with their dogma "MLM is fraud (and therefore illegal)" (NOT an exact quote). It doesn't matter how many qualifiers I add, he takes personal offense at that expression, even after he corrected it to say "MLM has not been declared illegal". He simply refuse to even CONSIDER the notion that a fraud is legal UNTIL specifically outlawed, esp. if it's a new form (and once entrenched, it will defend itself to the death).  He chose to interpret "MLM is legal, but fraud" as a DEFENSE of MLM, instead of a statement of fact as the way things are.  Though he eventually conceded the point (by lamenting how law makers failed the public).

Same here. I asked if RICO act even applies to MLM (and a certain MLM company), and DB chose to interpret that as a defense of this particular MLM company (and thus, to his viewpoint). He had simply again, refuse to consider the possibility that RICO Act may not apply to the situation he had envisioned. His view is that MLM is a racket, thus racketeering law automatically applies, even though RICO act specified 35 specific offenses as "racketeering activity" that warrants application of the RICO act. Of the 35 offenses listed, maybe two activities are the most likely to apply: wire fraud and mail fraud, but both are a bit of a stretch, as explained before.

So, is it an attack on the fundamental view "MLM is a racket"? Or just  skepticism on "Does RICO Law apply to MLM?" Again, a matter of degree. If one's mind is only black and white, then perhaps skepticism at a PART of the claim can be construed as opposition. But that's not much of "free-thinking", is it?

DB Update again... Except it ain't DB.

Just when I thought DB and I reached a truce, his partner decided to play censor.

Previously I've explained an incident where a comment about DB's writing style was censored by partner, and how DB is fond of claiming that MLM is a racket and ought to be treated like one by applying the RICO act on them.

So I took a look at the RICO act, at the actual text, mind you, NOT the wikipedia summary. It defined rackteering activity as a LOT of things, but none of them really applies to what MLM does.

So I posted the observation over, hoping for an honest discussion on the limitations of RICO act and its applicability on MLM. as DB claimed that other countries should adopt similar legislation to RICO.

The observation was DELETED by partner, with a comment about it's unsolicited, misinterpreted, and untrue.

Unsolicited is fine, but hardly irrelevant, as it was DB that kept mentioning RICO act  (3 times in past 5 blog posts).

Misinterpeted... Okay, except the partner claimed I misinterpreted WIKIPEDIA. I did NOT! I interpreted teh ACTUAL TEXT of the law, NOT Wikipedia! (I even included to link to the text)

Untrue, that people have inintiated "private prosecution" of Amway under RICO act... Okay... Google... yep, some former Amway reps sued Amway under RICO act, which is one of the provisions... private lawsuits. However, the case has NOT concluded, and Amway is prepared to settle the case back in April 2011, but the judge didn't like the settlement and told them to work it out some more.

That wasn't a conviction or even an admission or guilt.

Thus, the partner's behavior is extremely troubling. To be blunt, this person is censoring any comments that can be remotely construed as counter to their viewpoint, that they cannot debate or ridicule. if they think they can ridicule it, then they will publish it and ridicule it. If they can't, they'll delete it and claim "they don't allow untruths to be posted for the free-thinkers".

Clearly, there's a limit to their free-thinking.

Now let's go onto RICO, and MLM.

The lawsuit, which can be found here, claimed that Amway's business is fundamentally fraudulent, thus any attempt in mailing stuff out to members and communication over the Internet to promote such business model would constitute mail and wire fraud, which ARE two activities listed under racketeering activities under the RICO act.

As you can see, this gets messy very quickly, but then, lawyers are known to stretch the truth somewhat. :)

To make RICO law applicable to Amway, you must prove that wire fraud and mail fraud took place

You then have to prove that the magazine subscriptions are indeed, fraudulent, or contain material that are fraudulent, thus, constituting mail fraud.

You then have to prove that the internet communications are indeed, fraudulent, or contain material that are fraudulent thus constituting wire fraud.

If you can prove TWO of those acts are fraudulent, then you can have a RICO case, as two acts within 10 years constitutes racketeering.

You see the problem? What's in the Amway magazine? Have you read one? It's basically a bunch of self-help tips, profiles on 'successful' IBOs, announcement of new products, new markets, and other developments. In other words, a cheerleading magazine designed to make Amway look good. But is it fraudulent?

Or is Amway's website fraudulent? Because if it is, then it's wire fraud.

See the problem? How do you exactly prove that the magazine is fraudulent or promotes fraud? How about proving that the website is fraudulent or promotes fraud?

Hmmm...

Update on DB's situation

Getting DB to admit fault is like pulling teeth. What's worse, he has a partner what won't tolerate criticism of DB.

What's worse, DB's writing style is extremely annoying to readers, as he has a tendency to assume things that he had little evidence of, simply to denigrate his "opponent", such as... me.

As I've written on here before, I am NOT DB's opponent. We both hate frauds, albeit we have somewhat different scope.

Yet DB is so fixated on "MLM is a fraud" he refused to accept the fact that "MLM is legal (in the US)". And because I had stated so, he somehow decided I am his opponent. And he proceed to cast various aspersions on me for making such an OBVIOUS STATEMENT OF ACT.

So I ask him why does he not accept this fact, and his reply? MLM is fraud, fraud is illegal, therefore MLM is illegal.  (He then goes into how MLM is a racket that should be charged under the RICO Act and how all law enforcement have been deceived... blah blah blah, more on that later)  And he made a correction... Instead of "MLM is legal", it should be that "MLM has not been declared illegal."

At the time, I was quite tempted to reply, "what's the difference?" Though I decided to concede the point and argue about it later. You see, there is this "presumption of innocence" principle in US law... but later.

So I replied, okay, I'll change that, I agree. But you could have said that in ONE SENTENCE! You were extremely wordy!

Then his partner took offence of that observation and DELETED MY COMMENT, even the part where I AGREE WITH THE CHANGES!

More on that later.

I posted a FURTHER explanation. DB refused to accept that there is such a thing as "legal fraud". According to DB, fraud cannot be legal, even though it clearly does exist, such as when law failed to catch up with changing times. (EX: Stalking wasn't illegal until laws are passed specifically against it only after some stalker killed famous actress, if I recall correctly).

It's clear that DB's mind is made up, and refused to consider any facts I present. So I hauled out an expert who we BOTH admired, and a direct quote from him that clearly stated that there is such a thing as "legal fraud". He even named multiple examples.

To my surprise, DB's next blogpost made NO mention of me, no more personal attacks on me, my thought process, my nationality and so on.

A truce is perfectly acceptable.

We'll discuss possible application of RICO to MLM "racket" next time.