TG-1 * Transgallaxys Forum 1

Advanced search  
Pages: [1]

Author Topic: Stench from the city dumps: MLM remains shredded  (Read 1954 times)

Omegafant

  • Boltbender
  • Jr. Member
  • *
  • Posts: 850
Stench from the city dumps: MLM remains shredded
« on: December 26, 2017, 10:28:57 AM »

Quoting

[*quote*]
Consumer Health Digest #17-47
December 24, 2017


Multilevel marketing shredded by TINA

An investigation by Truth in Advertising has concluded that nearly all of the Direct Selling Association's member companies are making unsubstantiated income claims to attract distributors. Most of the companies use a multilevel marketing (MLM) compensation plan in which independent distributors sell products, recruit more distributors, and theoretically profit from both their own sales and those of the people they recruit.
[Multilevel marketing: The job that doesn't pay
https://www.truthinadvertising.org/mlm-income-claims-investigation/
TINA.org, Dec 18, 2017]

TINA.org has posted more than 3,000 examples
http://email.robly.com/mpss/c/0wA/_xpUAA/t.2dg/Hl0wohc9T-yNQgAoFJnNCg/h6/R-2BMo2KV9CIeK4nLX46m3AKmHefLTtLiW9YEOjuZTFzIq4qiGsZJ7zSngdDR8TXye4k0c-2BM4z4r9xyamT-2FZPOkg-3D-3D
of claims that range from assurances of achieving financial freedom, to making unlimited income, to being able to quit your job and stay home with your children.

Use of such claims is widespread despite the fact that the vast majority of distributors will never achieve financial independence with an MLM business.​​​​​​​ At a DSA policy conference last year, FTC Chairwoman Edith Ramirez warned that MLM income misrepresentations have been widespread
http://www.mlmwatch.org/06FTC/ramirez_dsa_speech_10-25-16.pdf
, that companies "must take reasonable steps to monitor and ensure that participants are not misleading others about the business opportunity," and that the FTC will issue further guidance on how this can be done. In 2006, the FTC proposed a Business Opportunity Rule that could have forced companies to provide non-misleading information to prospective distributors. The proposal would have required all sellers of business opportunities to provide enough information to enable prospective buyers to make an informed decision about their probability of earning money
https://www.mlmwatch.org/06FTC/business_opportunity/comments.html

The most important provisions pertained to MLM companies.However, in 2008, the agency exempted MLMs from the proposed rule and said it would continue case-by-case enforcement. Meaningful disclosure, which could deter millions of people each year from wasting their time and money by signing up as distributors, would cost very little. Unfortunately, FTC has neither the willingness nor the resources to attack misleading claims by hundreds of companies on a case-by-case basis.

=================================

Stephen Barrett, M.D.
Consumer Advocate
287 Fearrington Post
Pittsboro, NC 27312

Telephone: (919) 533-6009

http://www.quackwatch.org (health fraud and quackery)
[*/quote*]
Logged
Steine kann man nicht essen!

Omegafant

  • Boltbender
  • Jr. Member
  • *
  • Posts: 850
Re: Stench from the city dumps: MLM remains shredded
« Reply #1 on: December 26, 2017, 10:38:56 AM »

We have to push this.

For all those uneducated people who still dream of big cash to rake in: IT DOES NOT WORK!


Do watch the video there!

This is an anchor page only! GO THERE!

https://www.truthinadvertising.org/mlm-income-claims-investigation/

[*quote*]
Multilevel Marketing: The Day Job that Doesn’t Pay

December 18th, 2017

When then FTC Chairwoman Edith Ramirez took the stage at the Direct Selling Association’s Business & Policy Conference in Washington, D.C. in October 2016, she did not mince words when it came to the widespread use of inappropriate earnings claims as a means of recruitment in the MLM industry.

    [M]ulti-level marketers should stop presenting business opportunities as a way for individuals to quit their jobs, earn thousands of dollars a month, make career-level income, or get rich because in reality, very few participants are likely to do that. Although it may be true that a very small percentage of participants do have success of this type, testimonials from these rare individuals are likely to be misleading because participants generally do not realize similar incomes.

More than a year later, it appears few if any of the DSA members in attendance that day took the warning to heart.

Story highlights

• TINA.org investigation

• Most Distributors Do Not Earn Substantial Incomes

• Link Between Income Claims and Pyramid Schemes

A TINA.org investigation found more than 97 percent of DSA member companies engaged in misleading marketing schemes that peddle false and unsubstantiated earnings claims trying to convince prospective distributors to join their MLM network. TINA.org’s probe examined the marketing of every DSA member company as of Nov. 29, 2017 and found that 137 out of 140 misrepresented the amount of money participants are likely to earn — misrepresentations that cause real and substantial harm to consumers.

TINA.org’s findings not only constitute violations of FTC law, they also breach the DSA’s own Code of Ethics and in doing so contradict DSA President Joe Mariano’s public statements on the supposed higher standards of the code:

    DSA enforces one of the most rigorous self-regulatory codes of ethics in business today, ensuring that direct selling companies not only follow the law, but in many cases exceed its requirements.

“All too often, consumers with limited capital are induced to part with their money by MLM promises of unlimited wealth that will never come to fruition,” said TINA.org’s Executive Director Bonnie Patten. “It’s time that the DSA and its membership were held accountable for these unsubstantiated income claims.”

As a result of these findings, TINA.org has notified the DSA, the DSA Code of Ethics Administrator, and each MLM company in TINA.org’s database of the problematic claims.

TINA.org investigation

Click to See Database

Using the Nov. 29, 2017 DSA membership list, TINA.org investigated every company on the roster and found that out of 140 member companies (which includes divisions of certain companies), 137 are making or have made misleading income representations. TINA.org has amassed more than 3,000 examples of companies and/or their distributors making inappropriate earnings claims on their websites and social media platforms. This, despite the fact that Mariano informed TINA.org just last year that:

    Beginning in 2017, 100 percent of DSA member companies will undergo a mandatory ethics review to ensure compliance with our Code of Ethics, including in the areas of income and product claims.

The claims that TINA.org has compiled range from assurances of achieving financial freedom, to making unlimited income, to being able to quit your job and stay home with your children. And these income representations are not hard to find. For the majority of companies, one need look no further than their websites and social media pages. Other assertions of wealth can be found simply by googling the name of an MLM company and “millionaire,” or “financial freedom,” or “free car,” resulting in a plethora of websites and social media posts making false and deceptive claims. Such was the strategy that led to a number of TINA.org’s findings.

While most of the MLM databases on TINA.org contain a sampling of around 20 inappropriate income claims, four companies (Kyani, Nerium International, Reliv International, and Team National) have more than 100, Jeunesse Global has more than 80, and 25 companies have less than 10 (Aerus, Become International, Boisset Collection, Carico International, Compelling Creations, Dudley Beauty, Energetix, Flavon USA, Harmony Green America, HTE USA, John Amico Haircare Products, The Kirby Company, New Earth, Orenda International, RBC Life, Regal Ware, Rena Ware International, Rexair, Sanki Global, SAS Spurilla, Simply Said, SimplyFun, Tealightful, Tristar Enterprises and Zinzino). TINA.org did not find inappropriate income claims for three companies: Red Rock Traditions, WBC Group (which is affiliated with Origami Owl), and World Book.

Time and again, the DSA has issued press releases congratulating itself on how it “continues to set the standard for industry behavior,” and promoting its “stringent commitment to the highest standards of ethical business practices in direct selling.” But TINA.org’s investigation documenting thousands of unsubstantiated earnings claims calls into question the organization’s true commitment to consumer protection. For example, TINA.org found:

    Every company that holds a seat on the DSA Board of Directors is making unsubstantiated income claims, including Amway, Herbalife, Mary Kay, New Avon, Nerium, and Team National.
    In the past five years, the DSA has handed out 22 awards to 15 current DSA member companies that market their business opportunity with inappropriate earnings representations. These companies include Damsel in Defense, Jeunesse, Pampered Chef, Princess House, and USANA.
    In 2017, the DSA presented awards to six member MLMs, all of which are recruiting distributors with false earnings claims, including Ruby Ribbon, Via One Hope, and Scentsy.
    And 100 percent of the DSA’s 20 top-selling members (based on 2016 net sales) are employing false and unsubstantiated income claims to market their companies, including ACN, AdvoCare, Arbonne International, Medifast-OPTAVIA, Melaleuca, Nu Skin, Stream and Thirty-One Gifts.

[To view a sample of inappropriate income claims made by 137 DSA member companies (and divisions of companies), click here.]

To learn about DSA member companies making illegal disease-treatment claims, click here.

Most distributors do not earn substantial incomes

It is well established that the vast majority of distributors will never achieve financial independence with their MLM business. As Mariano, the DSA president, wrote just last year:

    [W]e must increase our efforts to ensure prospective distributors are fully aware—clearly and unashamedly—that for most, direct selling can provide supplemental income. Most distributors will not realize a replacement income, let alone a lavish lifestyle.

And this fact, that most MLM participants do not earn substantial incomes, is not new. The DSA acknowledged more than a decade ago that the majority of distributors made less than $10,000 per year from direct selling, with a median annual gross income of about $2,400, or $200 per month, which means that half of all distributors made less than $200 per month before deducting expenses associated with their business.

Moreover, a review of 32 income disclosure statements that TINA.org was able to dig up for current DSA member companies revealed that more than 80 percent of distributors grossed less than $1,200 annually or less than $100 per month before expenses. And for about half of these companies, the disclosures indicate that the majority of distributors made no money at all.

For example, Team National, whose CEO holds a seat on the DSA Board of Directors and also chairs the DSA Education Committee, revealed in its 2016 income earnings disclosure statement that 93 percent of its active distributors (or about 45,000 people) averaged a gross income of less than $500 for the year, or less than $42 per month before deducting expenses. The disclosure goes on to state that about 86 percent of all active distributors “received no income at all,” which equates to almost 42,000 distributors losing money. At the same time, Team National has posted more than 120 distributor testimonials, including over 50 videos, making lavish lifestyle claims.

Given these statistics, it’s not surprising that last year former FTC chairwoman Ramirez stated:

    It is time that MLM income representations matched the income reality of the majority of multi-level marketing participants. This means both explicit statements about how much a participant is likely to earn, as well as implied claims and lifestyle claims.

Link between income claims and pyramid schemes

In the past 40 years, the FTC has filed 26 cases against MLMs alleging that they were operating illegal pyramid schemes. In all of these cases, the FTC also alleged that the defendants made false earnings representations. Undoubtedly one of the reasons for this link is that claims of life-changing income are generally tied to a distributor’s recruitment efforts (as opposed to selling the companies’ products or services). And one of the hallmarks of a pyramid scheme is its “recruitment focus.”

Moreover, TINA.org’s investigation found that claims of unlimited wealth were almost always tied to a recruitment focus. As top Jeunesse distributor Kim Hui explained:

    So first thing we’ve got to do is go out there and recruit. . . . We’re building a distribution channel if you would and so what we do – the first thing we do is recruit. What do we recruit? We recruit entrepreneurs. . . . And the second thing we do is that we teach other people how to recruit because this business is all about duplication. It’s not about one person selling all the time cause that’s linear income, you know, trading time for money. But this business model is about building distribution and about creating wealth.

In addition to recent FTC actions against Herbalife and Vemma Nutrition Company alleging deceptive income claims and pyramid scheme behavior, at least 12 federal class-action lawsuits have been filed this year making similar allegations. These lawsuits claim, among other things, pyramid scheme activities together with false earnings representations against MLM companies and their top distributors. For example, plaintiffs in a recent lawsuit against Nerium International allege:

    Nerium . . . represented to plaintiffs . . . that Nerium provides a business opportunity that can build ‘a dream lifestyle’ and that Plaintiffs could be financially independent by virtue of selling Nerium’s ‘age-defying’ creams. But in reality, these promises of riches, wealth, and gifts couldn’t be further from the truth. Characterized by some of its former employees as a scam and a cult, Nerium touts that it has generated one billion dollars in cumulative sales after just four years. These sales are based on the recruitment of new brand partners into the pyramid scheme that Nerium has amassed.

Such allegations show the risk that MLMs run in touting false and unsubstantiated income claims. For while MLMs making inappropriate earnings claims may not be pyramid schemes, all pyramid schemes boast of unlimited riches. As explained in the seminal case of Koscot Interplanetary, Inc., a pyramid scheme “thrives by enticing prospective investors to participate in its enterprise, holding out as a lure the expectation of galactic profits. All too often, the beguiled investors are disappointed by paltry returns.” And as Ramirez stated:

    False and unsubstantiated earnings claims are deceptive and unlawful under Section 5 of the FTC Act. Unfortunately, however, our law enforcement experience shows that many MLMs continue to misrepresent the amount of money participants are likely to earn. In fact, in all of our cases against multi-level marketers, the FTC has alleged that the defendants made false earnings representations. These misrepresentations cause real harm to consumers, and they need to stop.

In a statement to TINA.org, DSA President Joe Mariano said:

    DSA welcomes information about compliance with our Code of Ethics from any source.  Any credible information relating to possible non-compliance with our Code an [sic] or the law will be reviewed by the DSA Code Administrator and responded to appropriately.  TINA has not provided DSA any report or specific information and it is thus impossible to comment further upon the veracity of any claims, complaints, or allegations until such information is provided to the Association, the DSA Code Administrator, or individual member companies.

For more of TINA.org’s coverage of MLM companies, click here.
[*/quote*]
Logged
Steine kann man nicht essen!

Omegafant

  • Boltbender
  • Jr. Member
  • *
  • Posts: 850
Re: Stench from the city dumps: MLM remains shredded
« Reply #2 on: December 26, 2017, 10:46:41 AM »

"TINA.org has posted more than 3,000 examples
http://email.robly.com/mpss/c/0wA/_xpUAA/t.2dg/Hl0wohc9T-yNQgAoFJnNCg/h6/R-2BMo2KV9CIeK4nLX46m3AKmHefLTtLiW9YEOjuZTFzIq4qiGsZJ7zSngdDR8TXye4k0c-2BM4z4r9xyamT-2FZPOkg-3D-3D
of claims that range from assurances of achieving financial freedom, to making unlimited income, to being able to quit your job and stay home with your children."




The TINA web-page is shit. Instead of putting all the information in one readable page, they made more than 100 of it. But at least they have a collection of company names.

We do not support shit. Stay tuned.


[*quote*]
Stay Connected

Sign up for our newsletter and receive news, updates, and the latest ad alerts.

Join the conversation about false advertising and deceptive marketing.

Close
Stay Connected

Sign up for our newsletter and receive news, updates, and the latest ad alerts.

Join the conversation about false advertising and deceptive marketing.

Close
Truth In Advertising

    Login
    |
    Register

    ABOUT
    AD ALERTS
    LEGAL ACTION
    LEARN
    GET INVOLVED
    BLOG
    DONATE

DSA Companies’ Income Claims Database
Between June and November 2017, TINA.org investigated every company on the November 29, 2017 Direct Selling Association membership list and found that more than 97 percent have made or are making – either directly or through their distributors – false and unsubstantiated income claims to promote the companies’ business opportunities.

TINA.org catalogued more than 3,000 examples of such inappropriate income claims across 137 companies (and divisions of companies), which are all available below. Each database provides only a small sampling of inappropriate income claims being made. (Note: TINA.org shortened the length of some videos in the database and highlighted some images in order to pinpoint the income claim(s).)

Each of the companies below has been notified of TINA.org’s findings.

*The following companies appear on the DSA list multiple times because divisions of companies are also listed:

• Nu Skin Enterprises (with divisions Big Planet and Pharmanex) is listed three times. All income claims collected by TINA.org are listed under Nu Skin Enterprises.
• Regal Ware (with division Saladmaster) is listed twice. TINA.org collected income claims under Regal Ware brand names Saladmaster and Lifetime Cookware.

Moreover, some companies appear to own other companies on the list. For example, WBC Group (aka Willa), for which TINA.org did not find any inappropriate income claims, is part of the “Origami Owl family of brands.” TINA.org did find inappropriate incomes claims for Origami Owl.

Four of the companies (Jeunesse, Kyani, Nerium International and Youngevity International) were previously investigated by TINA.org, which means that some of the income claims for these companies were collected prior to June 2017.

    4Life

    ACN

    Advocare


    Aerus

    Ambit Energy

    Amway


    Arbonne

    Barefoot Books

    Team Beachbody


    Become International

    Belcorp

    Boisset Collection


    Carico

    Clever Container

    Color by Amber


    Compelling Creations

    Cutco/Vector Marketing

    Damsel in Defense


    Dudley Beauty Corp

    Enagic

    Energetix


    Enzacta

    Essential Bodyware

    Fifth Avenue Collection


    Flavon

    Forever Living

    Gano Excel


    Global Domains

    Gold Canyon

    H2O at Home


    Harmony Green America

    Health-Mor

    Herbalife


    HTE USA

    HyCite

    Immunotec


    India Hicks

    Initial Outfitters

    Initials, Inc.


    Isagenix

    Jafra Cosmetics

    Jamberry


    jBloom

    Jeunesse

    John Amico


    Jordan Essentials

    Juice Plus+

    Kirby


    Kyani

    L’Bri

    Lemongrass Spa


    Lifestyles USA

    LifeVantage

    LifeWave


    Limu

    Magnabilities

    Mannatech


    Mary and Martha

    Mary Kay

    Medifast-Optavia


    Melaleuca

    Modere

    Morinda


    Nature’s Sunshine

    Nefful

    NeoLife


    Nerium

    New Avon

    New Earth


    NHT Global

    Noevir

    Nu Skin


    NYR Organic

    viaONEHOPE

    Orenda


    Origami Owl

    Pampered Chef

    PartyLite


    pawTree

    PM International

    Premier Designs


    Primerica

    Princess House

    RBC Life


    Regal Ware

    Reliv

    Rena Ware


    Rexair

    Ruby Ribbon

    Sabika


    Saladmaster

    Sanki

    SAS SPURILLA


    Scentsy

    Send Out Cards

    SeneGence


    Shaklee

    Signature HomeStyles

    Simply Said


    Simply Fun

    Smart Circle

    Southwestern Advantage


    Stampin’ Up!

    Steeped Tea

    Stream


    Sunrider

    SwissJust

    Synergy


    Talk Fusion

    Tastefully Simple

    Tealightful


    Team National

    The Cocoa Exchange

    Thirty-One Gifts


    Touchstone Crystal

    Tracy Lynn Jewelry

    Trades of Hope


    Traveling Vineyard

    Trevo

    TriStar Enterprises


    Univera

    USANA

    Usborne Books


    Vantel Pearls

    Viridian

    Vollara


    Wildtree

    Wineshop at Home

    YOR Health


    Young Living

    Youngevity

    Younique


    Zinzino

    Zrii

    Zurvita


 

Share this:

    Click to share on Facebook (Opens in new window) Click to share on Twitter (Opens in new window) Click to share on Google+ (Opens in new window) Click to share on LinkedIn (Opens in new window) Click to share on Pinterest (Opens in new window)


Learn More

    About TINA.org
    Contact Us
    FAQs
    Glossary
    Policies
    Press
    Republish
    Sitemap

Truth Tags
ads we like | alcohol | auto | bait and switch | beverages | body building | brain | cellphone | children | clothing | cosmetics | e-cigarettes | education | energy | entertainment | fictitious pricing | food | free | glucosamine | hair | hidden and missing ingredients | home and garden | made in USA | medicine | MLM Health Databases | MLM income claims | MLM or pyramid scheme | natural | negative option offer | outlet stores | personal care | pricing | privacy and security | regulation and enforcement | skin care | slack-fill | smoking | snacks | sports | state-by-state resources | sugar | supplements | travel | vemma | weight loss
Tweets
Truth in Advertising
@TruthinAd

Moon Marketing: innovative new media channel or just a PR stunt?
thedrum.com/news/2017/12/2…
Truth in Advertising
@TruthinAd

Apple just forced developers to reveal the odds of you winning something in apps
huffingtonpost.co.uk/entry/apple-ju…
Truth in Advertising
@TruthinAd

Is Khloe Kardashian's Pregnancy Announcement #Sponsored?
buzzfeed.com/katienotopoulo…
Stay Connected

Receive news, updates and the latest ad alerts.
[*/quote*]
 
Logged
Steine kann man nicht essen!
Pages: [1]