Category Archives: scams

MLM and crank magnetism

Screenshot from 2019-10-06 14-58-41

Have you ever wondered how it is that some people end up falling deep into the rabbit hole of multi-level marketing? And no matter what, they can’t get out, and seem to accumulate more bad ideas the longer they stay in?

They’re not just doing this as a side gig, or even as a business ⁠— their entire life is devoted to their chosen MLM or MLMs. It’s all they talk about and all they live for. Everything they say is either a slogan or mantra about their MLM, or about success, or having the right mindset to achieve success.

Anything perceived as “negative” or interfering with their pathway to success is something or someone they are at war with. They will end friendships or cut off family if they aren’t supportive of their “journey” into the abyss of unreason.

Because of how MLMs are structured, and the extreme and outrageous behavior of many MLM representatives, the MLM business structure has been described as a cult by many experts. The absolutist thinking, the infallible charismatic leader, being told to not trust outsiders, the mindset coaching, the mantras ⁠— these are all telltale signs of a cult.

But cults and cult-like thinking do not occur in a vacuum. MLM is both a cult as well as a sub-culture that celebrates wishful thinking and a plethora of bad ideas that will leave you broke, friendless, sick, and possibly a conspiracy theorizing nut-job.

MLM so often leads a baggage train of false, dangerous ideas that I believe MLM as a phenomenon is the ultimate crank magnet sub-culture. What is crank magnetism? According to Rational Wiki:

Crank magnetism is the condition where people become attracted to multiple crank ideas at the same time. Crank magnetism also denotes the tendency — even for otherwise “lone issue” cranks — to accumulate more crank beliefs over time.

This describes many MLM representatives perfectly. The original crank idea that gets them hooked on MLM is usually the idea of easy money, even though statistics show they are extremely unlikely to succeed at MLM long-term.

But this is just the beginning. MLM lies at the center of a veritable theme park of bad ideas. Bad ideas have a way of leading to and reinforcing other bad ideas, which is what crank magnetism is all about. In other words, a person infected with the mind virus of MLM is more susceptible to other bad ideas.

Here are three major ways in which MLM is a crank magnet:

MLM and self-help

One of the most important aspects of MLM training is mindset coaching. Mindset coaching usually entails eliminating all doubt that your MLM is an amazing opportunity (in other words becoming a true believer), as well as how to effectively recruit friends and family into the scam. Those at the top of the pyramid know that skepticism and push-back are inevitable, and have at their disposal a variety of tools for dealing with doubt and to keep recruits motivated.

While many MLM schemes have in-house materials for mindset coaching, they are also quick to recommend the books or talks from self-help authors. The self-help industry and MLM are so closely intertwined that self-help is practically a subsidiary of MLM.

It’s not a coincidence that many prominent self-help/motivational gurus are usually big fans of MLM, often calling it a “great idea” whenever the subject comes up. The social media accounts of people doing MLM are often an endless stream of inane self-help quotes. The MLM/self-help relationship is highly mutualistic.

Most self-help books are short on substance while encouraging wishful and magical thinking, something MLM schemes are always seeking to reinforce in their recruits. Wishful thinking, which they prefer to call “thinking big”, is the very thing that keeps MLM schemes running smoothly so people at the top of the pyramid can quickly pocket money from recruits.

Self-help gurus are masters at using psychobabble and inspiring slogans to impress their readers. At its most extreme, this leads to the dangerous pseudo-scientific ideas in “The Secret” by Rhonda Byrne. The idea that you can create your own reality by thinking positively is sadly common in the MLM world — extreme credulousness and wishful thinking are essential features, not bugs of the MLM/self-help milieu.

A more nuts and bolts approach to applied wishful thinking, promoted by many self-help gurus, but no less pseudo-scientific, is neuro-linguistic programming (NLP). So much self-help fluff concerns itself with the overly-simplistic “all successful people do X, therefore do X to become successful”.

NLP practitioners claim the way successful people think and use language is radically different and superior from those who aren’t successful. Therefore, if you want to be successful, you have to reprogram your thoughts and language by modeling those who are successful. In other words, you have to adopt a “success mindset”.

There may be a grain of truth to the idea that positive thinking is better overall than negative thinking, but this doesn’t mean NLP has been consistently proven to work. NLP is closely related to “fake it till you make it”.

According to Rational Wiki:

Self-help books have through time and by design consistently stood against social change by blaming the individual, rather than (for example) institutionalized racism or sexism, for not having enough will power to advance in society. This was exemplified in 2018 by Tony Robbins’ public shaming of a sexual-abuse survivor and of the #MeToo movement in general.

These crank ideas aren’t merely compatible with MLM mindset coaching or just some supplementary materials, they are the heart and soul of MLM training. They’re also highly compatible with right-wing thinking, which we’ll cover next.

MLM and far right-wing ideology

Most of the time MLM isn’t overtly political. It would be bad for business to be hyper-partisan since it could drive away potential recruits. However, some MLMs may be more political than others.

That said, peek behind the curtain and it’s obvious whom the MLM industry is generally allied with politically.

Since MLM, like all financial fraud, operates best in a laissez-faire economic environment, they will tend to support the party that prefers less government regulation. In the U.S, this means the Republican Party. It makes perfect sense then that the DeVos family which founded Amway is a big contributor to the Republican party and far right-wing causes.

Betsy DeVos, currently the Secretary of Education in the Trump administration, is a huge advocate of privatization of public education among other conservative causes. It’s not a coincidence that people who profit from ignorance will do all they can to undermine public education.

The Direct Sellers Association (DSA), which represents the interests of the multi-billion dollar MLM industry in a manner similar to how the NRA represents the interests of gun manufacturers, is also a big contributor to both major parties, but generally favors the Republicans. If you’ve ever wanted to know why the government does almost nothing to rein in MLM fraud, this is why.

The ideological underpinnings of the MLM sub-culture are mainstays of right-wing politics and free-market fundamentalism. The ideas of becoming successful through hard-work and rugged individualism, and smaller government, particularly the idea that the government is the enemy, fit in perfectly with the hyper-entrepreneurial MLM milieu.

After all, everyone who is involved in MLM, both the winners, as well as the far more numerous losers, does so with capitalist intent.

In the MLM world you often encounter a cult-like worship of all things capitalism. The endless glowing testimonials they feature on their sites and at events from IBOs (meaning “Independent Business Owner” — though they are nothing of the sort), are the ultimate rags-to-riches capitalist success stories.

Their MLM opportunity is presented as the ultimate pathway to achieve the American dream. The fancy cars, tropical vacations and big houses are all powerful symbols for showing someone has made it. As tacky as it is, this “attraction marketing” often works brilliantly for exploiting new recruits, even in the Bible Belt. 

This brings us to the prosperity gospel, which posits that devotion to God and living by the Bible is the best way to get rich. This crank idea is quite popular with some Christian conservatives — which makes sense since it’s a revival of the ancient notion that God favors the rich and powerful.

Prosperity gospel literature and talks are usually nothing but biblically inspired self-help chicanery and religious gobbledygook. Right-wing Christian televangelists are often big-time promoters of this idea. Depending on the audience, an MLM rep may appeal to the prosperity gospel to sell the opportunity. Since MLM often does well in conservative Christian areas of the U.S, they probably use it pretty often.

There’s no denying the high degree of cross-pollination between MLM and right-wing think tanks.

Victim-blaming is rampant in MLM-land, similar to the many conservatives who blame the poor for their misfortune. The people at the top of the pyramid can never admit that the system is flawed, so those who don’t make it are either “lazy” or had the wrong mindset.

Considering the failure rate of the average MLM (around 99%), that’s a lot of lazy people! Conversely, the very few who succeed at MLM are portrayed as hard-working, patriotic Americans. There’s often little to no sympathy for the victims of these scams, and often no legal recourse due to the political protection of MLM.

It’s very telling that back in 2012, Texas Republicans enshrined opposition to critical thinking in their official platform. Of course, that’s just one of many troubling ideas today’s Republicans espouse, and their issues with science run deep.

Some of these problematic ideas may not necessarily be “right-wing” (like victim-blaming), but right-wingers are more likely to promote them, even if they’re more or less ingrained in the American psyche. Just about all these ideas are very helpful for the high priests at the top of the MLM pyramid, since they help reinforce both the loyalty and worldview they’re trying to inculcate in recruits.

MLM and anti-science

It should go without saying that MLM is not on friendly terms with science, reason or critical thinking. Naturally, it’s allied with just about any other community that thinks similarly. Distrust of science and scientists is one of the hallmarks of MLM and cults in general. MLM is a sub-culture of maximum irrationality — it’s very difficult thinking of crank ideas that aren’t compatible with MLM.

The MLM and alternative medicine movements are closely allied not just because they are both hostile to science, but because most MLMs are health product companies that regularly make pseudo-scientific claims. MLM allows quackery to flourish, since MLM provides an environment where evidence doesn’t matter and critical thinking is a sin — the perfect breeding ground for bad ideas and an often highly profitable one.

Whether they call their shakes, lotions, pills, or essential oils “detox”, or “anti-aging”, no one offers any good evidence to support these claims. All that’s ever offered are anecdotes or over-the-top testimonials. Even if they were useful for anything, they are usually very overpriced.

MLM and alternative medicine are like two peas in a pod. If a person is doing MLM, they’re more likely to be open to alternative medicine, and vice versa. There’s a lot of overlap between MLM and alternative medicine when it comes to worldview and tactics. Both present themselves as exciting “alternatives” to the dull, distrusted mainstream, both are hostile to science, both encourage conspiratorial thinking, and both prey on desperate people looking for answers.

Both are also fanatically opposed to government regulations. MLM supplement companies, and supplement companies in general, are big supporters of “health freedom”, which means the right to sell unproven or potentially harmful health products to consumers without government interference.

I don’t know about you, but to me, “health freedom” sounds like a euphemism for lawlessness. These predatory companies will tenaciously fight any effort to limit what they can sell; some quacks will even claim that it’s “un-American” to regulate health products.

All alternative sub-cultures require a bogeyman: In alternative medicine speak, it’s “Big Pharma” that is devilishly corrupt, and has brainwashed everyone into using toxic pharmaceuticals instead of natural cures. It is also behind efforts to regulate dietary supplements.

In “MLM speak”, everyone is brainwashed into having a “J.O.B” (Just Over Broke) and being hostile to MLM by the powers that be. It’s easy for either of these beliefs to hitch a ride on the other, or combine into one overarching anti-establishment message.

MLM health product purveyors often make populist diatribes against “elitist scientists” who call for more consumer protection, in a manner eerily similar to advocates of creationism. And eerily similar to evangelical preachers and fiery demagogues. It should be obvious by now that con-artists and demagogues are cut from the same cloth, and rely on the same deceptive bag of tricks (Trump’s evolution from MLM promoter to right-wing demagogue is covered below). 

These charlatans will boldly claim they have all the answers to opposing a corrupt elite, and scientific establishment that does all it can to keep ordinary people down or sick. What often follows is a screed that mentions all the evil things government, scientists or Big Pharma has done, and they are the lone voice in the wilderness speaking out against this.

Whether they are MLM purveyors or alternative medicine hucksters, or both, this is how they convince their audience they are one of the good guys and that science is evil. To appeal to religious people, an MLM rep may link their “natural” herbs and supplements with God, and link “chemicals” and drugs with scientific hubris that goes against God’s will. For a more general appeal, they’ll just use the common “natural is good, and unnatural is bad” fallacy, which is quite popular with users of alternative medicine.

You can get dizzy looking at the seemingly never-ending parade of pseudo-science and sketchy characters that inhabit the whole anti-science/MLM/far right memeplex. Because of their association with other fact-challenged communities, don’t be surprised if you encounter MLM reps who are anti-vax, climate change deniers, or 9/11 truthers. Or just a political extremist in general. Anti-science is the glue that binds them together.

The already mentioned Betsy DeVos and her family are promoters of creationism in schools, as well as conversion therapy and breaking down the separation of church and state. They, and Republicans generally, are at war with science on multiple fronts.

MLM exists at the intersection of a complex of related ideas, and movements that are inherently anti-scientific, irrational and cultic. “Alternative facts” are the lifeblood of these interrelated communities. The crank magnetism of pyramid scheming is particularly strong since it puts such a strong emphasis on irrational, magical, and wishful thinking. This is why MLM is far more than mere financial fraud — it also robs people of the ability to think straight.

*     *     *     *

The extent to which the current president of the U.S, Donald Trump, is the perfect embodiment of MLM and crank magnetism is difficult to overstate. He has expressed anti-vaccine views, was the de facto leader of the birther movement (the debunked idea that Obama was born in Kenya), is a climate change denier, a conspiracy-monger, among so many other false, dangerous and bigoted beliefs that tend to be popular with the American right.

In fact, one could reasonably argue that Trump’s MLM background helped pave the way for his successful presidential run. Robert Fitzpatrick, a writer who is a long-time critic of MLM, is currently writing a book about exactly that: Trump’s “MLM” Experience Laid Foundation for his Politics

I firmly believe that having a more in depth understanding of the wider sub-culture of MLM helps shed light on the Trump phenomenon a little better.

The purpose of this post wasn’t meant as a polemic against political conservatism, conservative Christians or capitalism, since I realize there are moderate conservatives who are opposed to MLM and the far right.

Rather, it was meant to show how MLM is part of an ecosystem of poisonous or bizarre ideas, and has a symbiotic relationship with political extremism (usually right-wing) and crank movements hostile to science. Pyramid schemes and the dark swamp of noxious ideas surrounding them, seek to undermine science, reason and enlightenment values generally, while profiting off of the harm they cause. 

With this in mind, I hope it is now easier to understand why some people get trapped in MLM, and why they seem to acquire more harmful beliefs the longer they stay in.

MLM is a well-connected, multi-billion dollar industry that funds a propaganda campaign to whitewash their exploitative nature, misleading millions of desperate people and filling them with false hope. It is also works in tandem with other powerful, exploitative, misinformation-pushing movements, and is deeply embedded in the fabric of America’s capitalistic culture. 

Understanding the wider cultural-political context in which MLM flourishes should help improve efforts at combating this particularly virulent and often misunderstood scam.

Related articles:

Multi-Level Marketing Is Still a Scam by Steven Novella

The Eye on the Pyramids, Part 3, MLMs and Conservative Republican Infrastructure by Rick Perlstein 

Have Three Million People in Taiwan Joined a Business Cult? by Dave Vaughan

 

 

 

My review of “Marauders of Hope” by Aruna Ravikumar

I just finished reading “Marauders of Hope” by Aruna Ravikumar(@aruna.writes on IG, @aruna_writes_ on Twitter). This book is an in depth look at the multi-level marketing industry and all the misery it causes around the world, particularly in India. She also offers guidance on what you can do to help stop this menace.

Aruna pulls no punches by describing these companies for what they truly are: pyramid schemes that exploit the desperate and ignorant to enrich the few at the top. They manage to get away with this through powerful lobbying arms and taking advantage of loopholes and ambiguities in the law. Many people are enticed into joining these schemes by promises of riches and cult-like brainwashing techniques to keep them in the club. They’re pyramid schemes but use products to camouflage what they’re really about.

Billions of dollars are looted from the gullible in this manner. Amway in the U.S contributes heavily to the Republican party; Betsy DeVos, secretary of education, belongs to the DeVos family which founded Amway. Trump himself has been involved in mlm and other scams. Politicians and government officials in India are similarly paid off or are in cahoots with the criminals.

But Aruna has not given up hope, and neither have I. As she shows in her book, there are many people around the world trying to spread awareness of these predatory schemes. I thought the chapter about the various scientists, government officials and consumer advocates fighting mlm in India, in spite of threats and legal setbacks, was particularly inspiring.

Besides corruption, misunderstandings and lack of political will have hindered prosecution, but every now and then the crooks are arrested and some companies do get shut down(at least temporarily).

I’d recommend this book to anyone who wants to know how this predatory industry works and how it’s able to achieve a veneer of legitimacy to far too many people(including vegans). If you’re tired of people trying to recruit you or seeing friends and family getting exploited, get involved and spread the word! Visit MLMtruth.org for more info.

Primerica and the long road to the anti-MLM movement

Screenshot from 2019-02-25 17:18:18

I am sometimes asked why I am so strongly opposed to the MLM
(multi-level marketing) industry. As they usually say, there’s a million problems in the world, why focus on MLM? Why devote space on your blog to MLM?

This often comes from well-meaning people who focus on what they consider to be far more pressing issues affecting our country and the world: racism, domestic violence, food insecurity, climate change, among other issues. Definitely all things worth fighting, and causes I support.

The reason I fight MLM, or network-marketing, is not just because it’s harmful, but because it’s also very misunderstood. Misunderstood to the point that many people mistakenly think of some MLM companies as philanthropic endeavors because they sometimes champion good causes. However, because these companies operate in a highly unethical fashion they make terrible allies.

By spreading awareness of the predatory nature of MLM companies, we in the anti-MLM movement can help strengthen good causes by helping them steer clear of these exploitative companies.

I think it may help to know my backstory, to understand the road I’ve traveled that led me to the anti-MLM movement. Before the anti-MLM movement came along, there was little online information to warn people about this pernicious industry. Sure, a few anti-MLM sites(mostly focused on Amway) existed, but there was little cooperation, they didn’t update very often, and they seldom went into detail about the psychological manipulation these cult-like companies use. It was the Dark Ages, where MLM reigned supreme because there was little to oppose them.

It usually took getting victimized by an MLM company or witnessing a friend or relative getting victimized to learn what MLM was all about. Or at least attending one of their presentations. This is where Primerica comes in.

Over 15 years ago, an acquaintance tricked me into attending a Primerica presentation in this office building in my neighborhood. I really had little idea what Primerica was all about before going there; vaguely I thought it was financial services.

So as I sat through the presentation, about all the amazing money-making opportunities Primerica offers, my internal BS-meter started to go off. Recruit X number of people and you rise to this level and make all this money, and then those people you recruited recruit people, and those people recruit people, and it goes on and on, sounding too good to be true. I had already sat through presentations for both Amway and Cutco years before this and the spiel was very similar. I almost got up and left but my fascination was stronger than my desire to leave; I also struggled to remember what this kind of business strategy is called.

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I had a barely rudimentary understanding of multi-level marketing at the time, or whatever they call it, but it was obvious that’s what I was dealing with here. I understood that it was a scam or at least a very risky undertaking and was best avoided. I still vividly remember those big fake smiles from the representatives.

As soon as I got home, I went to my computer and in a frenzy started to do a lot of online research as well as research at the library. For a while there, I was obsessed. Very few anti-MLM or scam-buster sites existed at the time; blogging was in its infancy, and social media hardly existed(remember this was over 15 years ago). I found little information on Primerica, but just enough to have my suspicions confirmed. It seemed over 90% of anti-MLM information concerned Amway, the granddaddy of all MLMs. Again, this was the Dark Ages.

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At the time, by far the best place to get a thorough education on how MLMs operate were skeptical messages boards, which I was already a regular visitor of. These sites were also devoted to debunking UFO sightings, quackery, and 9/11 conspiracy theories. Some message boards on skeptic sites had very long, lively discussions going on between anti-MLMers and MLM defenders, often involving lots of juicy insults by both sides. I occasionally participated, and tried my best to behave. Usually discussions revolved around Amway but sometimes other MLMs were discussed.

I started to notice how MLM defenders refused to answer certain questions, and would frequently engage in extreme mental acrobatics and torturing of the English language to explain away the obvious problems with MLM and that pesky 99% failure rate.

The two most important things I learned from these early discussions was:

  1. The physical products of MLM companies are just a facade; the real product is the “amazing” opportunity.
  2. MLMs are pyramid schemes which lobby government at all levels to buy themselves protection, and use all sorts of other deceptive strategies to give the illusion of legality.

With this new knowledge I was never tricked into another MLM meeting again. I could smell an MLM from 20 miles away. As far as Primerica is concerned, I started to realize my old neighborhood was Primerica occupied territory. Everywhere I looked nothing but Primerica! Primerica stickers plastered on everything, Primerica fliers, and even tree-plantings would say “thanks to Primerica”.

So I did whatever I could to warn everyone in my circle about this company. Sometimes they tried to recruit my friends. A lot of people already knew it was a scam, but some other people either did not know or were on the fence. Because of the tree-plantings, and contributions to schools and anti-drug programs, many thought of Primerica as a very generous, charitable corporation. I sometimes heard horror stories from people who were victimized by this company or other MLMs. Like I said, information critical of MLM and Primerica in particular was scarce at the time. Nowadays it’s easy to find out what it’s all about. According to Wikipedia:

In 2012, Primerica was the target of multiple lawsuits alleging that the company’s representatives sought to profit by earning commissions after convincing Florida firefighters, teachers and other public workers to divest from safe government-secured retirement investments to inappropriate high-risk retirement products offered by Primerica. In January 2014, the company set aside $15.4 million to settle allegations involving 238 cases

Primerica, which made $350.26 million net income in 2017 is a spin-off of Citigroup, which was sued years ago for being connected to Madoff, the biggest ponzi schemer in history: Citi tried to hand off Madoff exposure: lawsuit

After getting my basic education in MLM thanks to my rather brief Primerica experience, and my compulsion to learn everything I could about Primerica and MLM, I moved on and MLM started to fall by the wayside, for the most part. Sure I would still occasionally run into the Primerica reps, but more often I was running into annoying Herbalife reps both in person and online, and they were cut from the same cloth as Primerica and Amway reps. They all had the same big fake smiles. To get them off my back I would lie and say I was very interested in going to their presentation, but then I would fail to show up. I still remember the angry emails and voice messages.

Due to so many things going on in my life, as well as all my running and joggling, and getting increasingly involved with vegan groups, fighting MLM wasn’t exactly a priority. But then a few years ago I started noticing something disturbing on social media — there were vegans pushing MLM! Just as Primerica had invaded my neighborhood years before this, MLM was invading my space, my pristine little corner of the vegan movement. And if you know anything about me, you know how little tolerance I have for people pushing BS on me, vegan or not. It was sad seeing some vegan MLM reps with hundreds or even thousands of followers trying to victimize them, using every trick in the book to lure them in.

This was completely unacceptable. A movement dedicated to ethical-living getting infiltrated by charlatans, and almost no one was pushing back. All these con-artists had to do was say they were “vegan” and their products were “cruelty-free”, and many vegans saw them as friends or their “business” as legit. This is exactly what I meant when I said before that MLM is very misunderstood. Read my post from last year, “Veganism and multi-level marketing” for a more detailed look at this problem.

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Besides pushing back, warning others and blocking the annoying MLM pushers on social media who were friends of friends, I started doing a lot of research again on MLM. This time, compared to 15 years ago, there was a lot more info on many of these scams, and a nascent anti-MLM movement was starting to take shape. The Dark Ages were finally over!

Ethan Vanderbuilt’s site was and still is one of the most important anti-MLM/scam-busting sites, and we in the anti-MLM movement owe a lot to his pioneering work. I frequently used his site to learn about the myriad MLM companies I was encountering, and still do.

Just when I thought my MLM education was complete, thanks to Amway, Primerica, then Ethan, I discovered the saga of Elle Beau, a former Younique rep. Before reading Elle’s story, I knew the mechanics of how MLM worked, but I didn’t understand the psychological manipulation of MLM that well. This was a real eye-opener for me, and many other people. The same big, fake smiles in Elle’s story and so many other stories were the same big fake smiles I remember from the Primerica bozos.

I started to realize that MLM wasn’t just a scam, it’s a cult. In fact, when a person joins an MLM, they’re joining a toxic sub-culture of deception, greed, and pseudoscience. And of course extreme tackiness. Pretty much all MLMs use the same psychological manipulation techniques which includes attraction marketing, “love-bombing”, and mind-set coaching, which usually means doing all you can to think positive and distancing yourself from people who are “negative”(this is why there’s something of a symbiotic relationship between the MLM world and the self-help industry).

Shortly after this the anti-MLM coalition site was founded, which now has a central place in the growing anti-MLM movement. Unlike many earlier anti-MLM sites and blogs, the anti-MLM coalition is proactive, collaborative, and is not narrowly focused on just one MLM.

Thanks to the anti-MLM coalition, its never been easier to find out about the latest(or even some of the older) MLM scams that seek to separate people from their money. A very bright light is being shined on every nook and cranny of this corrupt industry and they don’t like it. Even journalists have taken notice of the push-back against MLM.

I’ve come a long way from that seedy Primerica presentation. My education may never be complete, but the anti-MLM coalition and Elle Beau have been invaluable for enlightening me and countless others about this scourge of social media. While we may not drive this entire industry out of business, it’s good to know we are making a difference by educating others before they fall into the financial black hole that is MLM.

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Related articles:

Meet Primerica, The New Wall Street IPO That’s Really A Multi-Level Marketing Scheme

Primerica scam? Yes it is in my opinion!