True Neutrals Get Hit on Both Sides

When one encounters a polarizing issue, it is difficult to stay neutral, as you are viewed as an enemy both BOTH sides of the issue.

Such as MLM.

My opinion on MLM is quite simple: it is an extremely DANGEROUS form of business that is just one step removed from outright pyramid scheme. (I'll link to the article later)  I will not dismiss it as an outright scam, as it *is* currently legal in the US and abroad (in most countries).

To the opponents of MLM, I don't go far enough. They want me to say ALL MLMS ARE SCAMS. Thus, I am the enemy as I somehow "validate" existence of MLM, even when I agree that most MLMs are scams.

To proponents of MLM, I am out to bad mouth MLMs. Thus, I am the enemy of MLM.

See what I mean by getting it from both sides?

Related articles

• MLM and Pyramid Scheme are outlawed by Islam (kschang.blogspot.com)
• What separates a legitimate MLM from an illegal pseudo-MLM scam? (kschang.blogspot.com)
• The American Federal Trade Commission has advice for real people looking for real opportunities (kschang.blogspot.com)

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.

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...

This is what happens when I get baited into a debate I should have never been in....

A while back, I got into a debate on which I am ill-prepared for about that very big company known as Alticor. Let's call my "opponent" DB.

DB believes all companies like Alticor are evil, and want them all to be outlawed. In fact, he considers all of them pyramid schemes, and the US FTC made a big mistake in legalizing a certain form of it, known today is multi-level marketing, or network marketing, back in 1970's.

I tried to point out that there are something even MORE evil, such as a pyramid scheme, esp. pyramid schemes that disguised itself as MLM. I've studied such a scam for a while on my other blog. For a week, things are rather cordial.

Then things start to turn sour when DB realized I won't join him in condemning Alticor. So he started calling me names. And we digressed into discussion on something I have NO experience on.

My MLM knowledge is on a scam which PRETENDS to be a legal MLM. A scam that pretends to be legitimate must be even MORE EVIL than a legal MLM, right? Despite several attempts to explain to DB that I won't pass judgment on Alticor because I have not studied it, DB had labelled me "opponent" and proceed to eviscerate me on his blog. Actually, it's not even his blog, though he blogs on it more than the owner.

(BTW, that blog is not a bad source for info, if you can get past DB's grandiose writing style)

I never claimed Alticor to be good business. I only recalled proclaiming it to be LEGAL. One of my defenses was citing an anti-MLM expert (who have indeed studied the subject extensively) who stated in one of his missives that most MLMs are pyramid schemes, but there are some legal and ethical ones out there.

So DB's response? He claimed to know the guy personally and thus he knew that this expert had yet to find a single ethical and profitable MLM company, and thus I had misrepresented this expert's position. Then he, in his typical gradiose verbal style, demands an apology from me to all the readers of that blog for my "intellectual dishonesty".

How was I supposed to know that the missive itself was not accurate, DB?

In any case, DB, if you want an apology, the apology you'll get is... I admit to being stupid enough to be sucked into a debate from which I am ill-prepared for, and should have never participated, though I still consider you a "friend" in the sense that we are both anti-scam.

You stick to your crusade, and I'll stick with mine.

Does Massive Vulnerability to Pyramid Scheme Hint at Deeper Problems in India?

Recently India had been rocked by a massive financial fraud known as "SpeakAsia". The company started almost two years ago and claim to be a "survey company" where participants just need to join, get monthly e-zine, and then take surveys to make money. However, casual examination of its compensation package revealed to be a thinly disguised pyramid scheme that relies on recruiting new members, who also subscribe to the program. The more you recruit, the more you "earn".

What is interesting about the phenomenon is the fervent defense by the "believers" of SpeakAsia, who shows all signs of being a brainwashed cult member, who can only recite "SpeakAsia is Great, death of all enemies of SpeakAsia" or its variants. Some even called upon death of the government as it is the only thing standing between them and prosperity under SpeakAsia.

Is there some thing to learn from this mess? Is there some deep-seated vulnerability of Indians to scams?


The Cult of SpeakAsia

In April and May 2011 TV Station did a massive expose on the scam, and lid started to came off the scam, which by then claimed two million members in and around India, even though the company is supposedly based in Singapore. Multiple agencies in India started investigating, and accounts were frozen, then unfrozen, then frozen again. COO was then arrested for financial irregularities and forgery. (See details )

What remains constant is massive amount of "popular support" by SpeakAsia members, who sprouted statements such as

india poor. Do u know why. coz some people like this word. Who r they. Who fight against saol to get down. They are bad man of india. Die badman of india. if u die than we can earn. We can rich we want to hear india is rich.

SAOL = Speak Asia Online

Basically, the only thing standing between them and prosperity through this scam is the government, so the government must go.

The calmer ones blame the government for freezing the assets of SpeakAsia so they lose their money:

But what about the people who have already put in thousands of rupees into this, because of the govt. taking action, the current investors are also not getting their money back!! is that not wrong ? shouldn’t the govt protect the investors’ interest ? 

SpeakAsia definitely did not help the situation by releasing a video portraying all challengers as the devil(s) incarnate (red cape and devil face).

(See screen caps of videos and the actual comments at
http://behindmlm.com/companies/speak-asia-online/speak-asia-lose-the-plot-bollywood-meets-mlm/
and
http://behindmlm.com/companies/speak-asia-online/speak-asia-online-coo-tarak-bajpai-arrested-in-mumbai/comment-page-1/#comment-28420 )

Did all these people (let's say, HALF of the panelists, or 1 million) got brainwashed into trusting this SpeakAsia scam more than the government? Or is there some deep sense of distrust of the government that remained untapped until this fraud exposed it and exploited it?


Pyramid Scheme and Power of Reality Inversion

Pyramid schemes, when gotten large enough, can actually topple governments. Government of Albania was destroyed in 1997-98 by pyramid schemes and over 2000 people died in the chaotic aftermath. A series of pyramid schemes ensnared 2/3rd of population, according to IMF report, and it took several years for Albania's economy to recover.

In Colombia, a major Ponzi scheme ran by DMG Group (which also was used to launder money from drug trafficking) collapsed in 2008, and in a rare cooperation between nations, the head of the scheme, David Murcia Guzman, was extradited to the US, convicted of money laundering, and will serve 8-year sentence here, THEN remanded back to Colombia to serve ANOTHER 30 years sentence. The scam involved up to two BILLION dollars, and severely damaged the credibility of the Uribe government when it was revealed that two of President Uribe's sons were good friends of the head perp. Riots broke out in several cities and mobs appeared to ransack (or try to) DMG offices. Police had to use riot gas to disperse the crowds.

What's interesting is some of these people claim that David Murcia Guzman was doing the country a favor... by passing on some of the wealth to the poor.

But there was a twist to this Icarus-like story: many of the small investors in D.M.G. saw Mr. Murcia not as a swindler but as their savior and protested his capture in almost a dozen cities. They claim the government’s intervention in D.M.G., not the nature of its activities, caused the loss of their savings. A hunger strike by his most die-hard supporters, who want his release and the reopening of D.M.G., persisted well into January in the colonial heart of Bogotá.

... Supporters chanted “Crea en Dios y en David Murcia” (“Believe in God and in David Murcia”).

          ( link to NY Times Article here )

What is it about pyramid schemes that can lead people to see evil as good, and see villain as hero? The only thing to compare it to is a cult, and not merely a cult, but a DESTRUCTIVE CULT.


Pyramid Scheme as a Cult

Virtually every nation have laws against operating pyramid schemes, because the losers vastly outnumber the winners. European Union has laws under "consumer protection directive", and is a common set of laws across all European Union Members. In the US, the laws are slightly fragmented, as some is regulated by SEC, some by FTC, and some by individual states.

Indeed, such a problem is in India, where multiple agencies realized they don't seem to have laws to enforce on a company which is not physically present in India. While India does have a "Prize Chits and Money Circulation Fraud Law (anti-)" there is no National Agency to enforce this law. Instead, enforcement must be initiated by individual province. The National Reserve Bank of India, as well as Criminal Investigative Division (CID) and Economic Offenses Wing (EOW), of various provincial governments finally responded recently with arrests and freezing of accounts, but it is estimated that over 100 million dollars have already left India for accounts in Singapore.

And it is amazing how much support this scheme still has among the "Speak Asians", as they refer to themselves (actually, that's a company term, as one of its marketing campaigns is "I am a Speak Asian"). Do they exhibit any OTHER signs of cult membership? These are the signs from CultClinic.com

• Thinking in black and white terms  -- YES
  
• Using a new language/cultic jargon  -- YES
  
• Saying goodbye to all old friends and only seeing people affiliated with, or not critical of the cult -- PROBABLY YES
  
• Creating distance from family, especially during holidays and family events -- UNKNOWN
  
• Euphoric, yet simultaneously tired and worn -- PROBABLY YES
  
• Humorless -- UNKNOWN
  
• A change in diet and sleep patterns -- UNKNOWN
  
• Low on money -- YES
  
• Poor grades -- UNKNOWN
  
• A dismissal of their life prior to involvement with the group as "all bad" -- UNKNOWN, PROBABLY YES
  
• A change in goals, priorities, and life plan -- YES
  
• Return to child-like behavior -- UNKNOWN
  
• Dogmatic adherence to new beliefs/ideas, with the inability, or lack of interest to logically assess these new beliefs -- YES
  
• Secrecy -- UNKNOWN

Wow, that's a lot of yes signs for something that wasn't supposed to be a cult at all.

Vulnerability to a Cult (of Money)


It is interesting that such a cult of money is often formed in the poorer areas of the world. Colombia, Albania, Indonesia, India... all have seen bouts of pyramid schemes where many are cheated of money, because they see the "potential" of such schemes, but not its illegality.

What do pyramid schemes offer? "Instant riches", enough to change the life of a typical family in those areas.

They don't care if it's illegal or not. They just want the chance, if they don't have to directly cheat, hurt, kill, or steal to get it. If you just TELL these people it's illegal pyramid scheme, they won't believe it. They can self-justify themselves into seeing it as "it's okay, it's not THAT illegal." Esp. if they are taught to see it as "introduce that other party to the opportunity so THAT person can also be rich like you."

It is also worth noting that these countries have rather low opinion of their governments in general. So words of the government are not always trusted by the people. After the DMG fiasco, 77% of the people in the area thinks things are going badly, and they blame the government more than DMG.

Add some mind-control techniques, and you got yourself something that acts like a cult, but is not a cult per se. There is no "leader" and there is no "dogma" (other than "_____ is great, join us.")

Conclusion

Pyramid schemes are illegal, as it leaves damage both financial and psychic. Members are basically brainwashed into believing in money and the scheme, and the conversion is subtle yet unmistakable.

It is important for all to be aware of such schemes, and alert authorities at first sign of trouble. The earlier you can get to the scheme, the less victims it will have.

Did you ever read the "fine print" in those MLM 'contracts'?

In any sort of business, there is always a contract or agreement: you agree to do this, in exchange, I agree to do that. In a job, you agree to work for me, I agree to pay you. It is no different in a MLM.

If there is contract, just "recruit!" then it's obviously a pyramid scheme.

But even if there is a contract, there are hidden clauses with which the company can just discard you like rag doll after it no longer needs you.

Here are some such hidden time bombs hidden in "independent distributor agreements". 

Related articles

• Commentary: MLM Law In the US (and the rest of the world) (kschang.blogspot.com)
• Editor's Commentary: So many serial MLM'ers! (kschang.blogspot.com)

Two more comments about MLM stupidity

"Extraordinary claims require extraordinary evidence."

-- Carl Sagan, as quoted in Cosmos, PBS TV

When some people claim extraordinary things, they expect people to just believe them with simple claims (with NO evidence) or just a few bits of so-called evidence. This is especially true for MLM / Network Marketing. It seems every other MLM out there claim to make you immensely rich with virtually no effort. 


Such claims of get-rich-quick is obviously an extraordinary claim, and thus, require extraordinary evidence. And such evidence is NEVER forthcoming. Most evidence falls into following categories:


* it's so easy!  (i.e. I can do it, and so can you!)


It looks so easy on TV or in person, but did the speaker actually succeed? 


* just look at all this money and goodies I got here! 


Doesn't prove it's actually a success. Most luxuries can be rented. 


* it's new and therefore it's good!


New isn't always good. New disease is bad.


* just believe me and I will make you rich!


So is the guy a cult leader or a businessman? 


Here's some surprising (to some) statistics on a MLM company that will tell you who made money... and who did not.

Any one heard of YTB? aka Your Travel Biz? aka Zamzuu?

Here is the published figures on YTB, BY YTB, about who made money in their business in 2007, and who didn't.

http://www.ytb.com/downloads/YTB_IncomeDisclosure_2-8-08.pdf

For those of you who are challenged at math, or can't read charts, here's the simple and honest truth:

97% of reps made LESS THAN $2000 USD IN the ENTIRE 2007 under YTB, from the company's own numbers.

LESS THAN TWO THOUSAND DOLLARS IN THE ENTIRE ****ING YEAR.

The top 3 guys on top (obviously the founders) averaged 3 million EACH that year.

Yet every single one of these "reps" paid THOUSANDS into the system "buying" a travel franchise, so they thought.

YTB later changed its name to Zamzuu, was sued and forced out of Illinois and California and paid millions in damages, and is believed to be going bankrupt. (See below)

Related articles

• RELATED: YTB / Zamzuu about to go under, settled lawsuit (kschang.blogspot.com)
• Editor's Commentary: So many serial MLM'ers! (kschang.blogspot.com)
• Commentary: MLM Law In the US (and the rest of the world) (kschang.blogspot.com)

Baloney Detection Kit used on pseudo-MLM scams

The Baloney Detection Kit by Michael Shermer I highlighted earlier can be applied to other types of baloney as well, not just pseudo-science. Here's its application go pseudo-MLM or pseudo-economics (i.e. financial fraud and claims).

http://hubpages.com/hub/How-to-apply-the-Baloney-Test-as-test-of-legitimacy-to-any-MLM-Opportunity

Related articles

• 5 Differences Between a Legitimate MLM and a Pseudo-MLM Scam (richdadobservations.blogspot.com)
• PowerBalance Admits Their Wristbands Are a Scam [Snake Oil] (gizmodo.com)

Hey, we're on the SAME SIDE! (Part 2)

Interesting development. Someone using OpenID of ibofightback (or as Mr. Brear said, IBOFB) posted a comment that claimed he had been "debating" Mr. Brear for a long time. (I checked the blog linked and it had not been updated since 2007!)

The existence of that comment lead Mr. Brear somehow to think IBOFB is in league with me in support of Amway. Another false dilemma: you're either with me or against me.

It is almost as if I'm stuck between two factions while trying to maintain my neutrality: because I truly do NOT know which way to rule on Amway.

On one side, you have Mr. Brear, who is very obviously against Amway, repeating at various times that Amway is a cult and pyramid scheme that should have NEVER been legalized.

On the other hand, you have various Amway defenders (okay, actually, just one, who didn't even bother posting ON Shyam's blog) trying "debunk" the amount of hate directed against Amway.

And somehow I am caught in the middle. It is a very strange experience.

Mr. Brear and Shyam clearly wants me to join them, and when I stated I have not studied Amway to pass judgement, they turned hostile. To quote Mr. Brear:

"Thus, when someone like Mr. Chang confidently announces on this Blog that there is nothing inherently fraudulent in, or cultic about, 'Multi-Level Marketing' and then goes on to repeat 'Amway's' reality-inverting propaganda that the problem with the 'Amway' system has been a minority of rogue leaders acting against the organization's own code of ethics, and teaching some 'distributors' to recruit and consume and not to sell the products and, then selling 'tools', my reaction to his ignorance and naivety is hardly surprising."

To translate Mr. Brear:

a) Chang said: "Multi-level marketing is not inherently fraudulent or cultish"
b) Amway said the same thing
thus
c) Chang must be a supporter of Amway

Is that a logical conclusion, leading from a) + b) to c)?

The answer is no: because 1) it could be a coincidence 2) experts said it too

One of MLM's most ardent critics, Robert L. Fitzpatrick, wrote on his website: "My own evaluation has led me to see that, with rare exceptions, the MLM industry is mostly composed of pyramid operations."   (http://www.falseprofits.com/IsMLMLegal.html)


Note the words "with rare exceptions", so the system itself is NOT inherently broken. It's the compensation package details that pushes the thing into 'scam'. However, it seem to be right on the edge, and needs very little tipping to send it over the abyss, and most MLMs, according to this critic, are pyramid schemes.

Is MLM inherently flawed? In my opinion, yes. It relies too much on "leadership" and "person to person" connections, resulting in almost cultish behavior (in fact, Mannatech, a MLM, is classified as a cult in New Zealand).

If MLM beyond salvation? No. Like Mr. Fitzpatrick, I believe there are some MLMs that are operating legally and ethically. And no, I don't know which ones. My specialty is on TVI Express, a scam that pretends to be a MLM, by borrowing all the WORST practices of a MLM, and making it a truly evil scam.

So, Mr. Brear, we really *are* on the same side. If only you will see that...

Hey, we're on the SAME SIDE!

Image via WikipediaRecently, I seem to have gone into some sort of a "debate" on the merits of Amway with a guy called David Brear on another blog called CorporateFraudWatch.blogspot.com


The comments started calmly enough... I was thanked for bringing attention to the scam known as TVI Express. However, here Mr. Brear calls TVI Express "Amway Copy Cat". 


So I posted a few comments thanking them. 


Then David Brear goes on claiming I am some sort of expert, then ascribe some sort of a conspiracy group behind TVI Express. Quote: "Kasey Chang is undoubtedly a world authority on 'business opportunity' fraud in general, and the 'TVI Express' racket in particular"


So I posted what I have on the "mastermind" behind TVI Express, Tarun Trikha. 


David Brear, however, is completely fixated on Amway, as he immediately starts pointing out how Tarun Trikha seem to be using Amway cult tactics. 


I pointed out that TVI Express is far more of a scam than Amway ever could be. Amway at least HAVE some products, while TVI Express have no products AT ALL. Thus, Amway *could* be operated legally and ethically if one chooses to do so. 


Then the blog owner, Shyam pointed out that an Indian court had recently ruled that Amway India violated the Indian version of the anti-pyramid laws. 


So I replied that I am not familiar with Indian law, and one should be concentrating on the true scams such as TVI Express, instead of something that *may* still yet operate legitimately, such as Amway. 


That comment was not well received by Mr. David Brear. Apparently, my failure to join him in the wholesale condemnation of Amway (and probably the entire MLM industry) had made me his enemy, as his tone turned downright hostile. In not so many words, he called me an Amway apologist, claimed that I was trying to defend Amway cult and all that. 


So I repeated my comment, that compared to TVI Express, Amway is quite benign. I even pointed him to Robert L. Fitzpatrick's "False Profits" blog. That's a real anti-pyramid crusader. 


That's not enough to appease David Brear though. He claims I was being condescending, that I assumed they don't know about Mr. Fitzpatrick, then goes into some conspiracy about how the US government condones MLM to scam people around the world. Then he links up religious right to the MLM industry. 


Frankly, I have NO position on Amway. It has been operating legally in the US (and elsewhere) for DECADES. What Amway does in INDIA, frankly, is none of my business. I have not studied Amway in any way, shape, or form, except peripherally as part of studying up on TVI Express, and how TVI Express scam CANNOT be multi-level marketing. As Amway basically defined what is legal MLM in the US, I know it "somewhat", nowhere well enough to defend against Mr. Brear's tirade that essentially said "you're either with us (i.e. against Amway) or against us."


So why can't Mr. Brear see that we're on the SAME SIDE, AGAINST FRAUD AND ABUSE? What's with the "you're with us or against us" attitude? 


What Mr. Brear have... is a reading comprehension problem. 


I wrote that Amway *can* be operated ethically, by selling stuff, and ignore the cultish ways like buying all those training packages and recruiting people. (You can recruit a few who are good marketers / sellers) and I meant that. 


However, it appears that Mr. Brear didn't read that. What he actually read was "Amway IS ethical", which is clearly NOT what I wrote. I am well aware of some of the accusations regarding Amway "cult" and related companies,like Quixtar, as one cannot help to read some when searching for MLM abuse examples. Confession: I *have* been recruited for Quixtar and I refused. They are horribly annoying. 


Thus, please drop that "you're with me or against me" attitude. It makes you sound like a fanatic. 

Related articles

• Amway, Fortune High-Tech, and Pyramid Schemes (lordsetar.wordpress.com)
• Amway settles suit, to replace $20M in gift cards (seattletimes.nwsource.com)

Helium -- where junk content is valued and real content is rejected for "lack of quality"

Image via CrunchBaseFollowing is my personal experience on Helium  ( http://www.helium.com/ ) Your experience can and will vary.


A long while back (several years ago) I joined a variety of places where you supposedly write things to make money (sort of freelancing). At the time, I thought Helium was interesting as it has a mutual rating community. Multiple people write articles about a single topic, then you are randomly asked to rate the articles (which is better of the two given).

So I wrote a few.

Then I realized the raters are all bigots.

They don't actually rate the articles based on quality. They just rate that they "like".

I wrote an article on "abandoneware". Legally, there is no such thing. Morally there is no such thing either. There is no such thing as "squatter's rights" to intellectual property. The #1 article claims "unsupported software" is considered "abandoneware". Others actually claimed a moral right to abandoneware as long as no harm can be proven. As predicted, my article ended at the bottom of the heap, even though I believe it is the most technically accurate of the 6 articles on that topic. That was in 2007.

So I abandoned the place.

In 2010, I was busted a scam called TVI Express, and I found a lot of writers were singing praises about TVI Express on Helium. So I gathered up all the facts I got, put in proper citations to actual news articles, and explained it's a scam, by citing all the inconsistencies, all the lies the distributors told, compared the structures to all the laws, and so on, and declared it a scam.  (I'll reproduce the article below)

The article was rejected for "LOW QUALITY" that does not meet Helium's standards.

WTF?!


At least the #1 article is a "scam busting" one from Shawn Cornett of ExpertMLMReview. #2 and others are singing praises of TVI Express, and that's just bull****.

So there you go: I think Helium is a community of bigots, based on my experience. Its raters are not rating for quality. Of course, I may be bigoted as well. That's why this is a RANT.