This was how the mic dropped at the end of what might have been the shortest Personal Finance article in Business Insider history. In other words, with a loss rate of 86.5%, the finance writers for a 2022 Pulitzer Prize-winning magazine thought the idea of calling gambling a worthwhile investment or an income opportunity was laughable, full stop. (literally)
So, why is it that nearly 6.2 million Americans are purportedly actively
investing funneling their time and money–as we speak*–into a business model which claims to be an exciting income opportunity, but has a much worse loss rate than gambling?
* This statistic does not even include former distributors
This is the question at the core of #Anti-MLM on Youtube, Reddit, TikTok, and Instagram; documentaries like LuLaRich, Betting On Zero, and The Vow; and podcasts like The Dream, Life After MLM, and From Huns To Humans (oh, and apparently ICYMI?!). Yet somehow, it feels as though the more they are exposed for the commercial cults they (allegedly) are, the more MLMs pop up and the more friends from high school get coerced into spending money to join an “income opportunity” with a 99% chance of just costing them more money.
Let me speak clearly, on behalf of OutOfMLM.info: We do not trust or support any Multilevel Marketing company; neither are we single-minded or closed off from learning and growing in our beliefs. We believe that, as things stand, the world would be better off without any Multilevel Marketing companies; however, we also accept the reality in which we live and can see a tangible path toward incremental change in consumer protection, educational programming designed to target young adults and instill in them the ability to spot a scam, and promoting/facilitating social and mental support to those coming out of MLM.
We can see–as advocate Jessica Hickson put it in her MLM Recovery Facebook group–the “light at the end of the pyramid.”
To promote meaningful, incremental, and systemic change in an inherently predatory business structure.
OutOfMLM.info is part of a collaborative project to provide helpful resources surrounding the massive problem of multi-level marketing companies making promises to all that they can only keep for a select few.
Hear from the experts
“Averages in MLM income disclosure statements are often atypical and, in fact, outliers relative to what most distributors experience. That MLM companies continue to report distributor incomes using averages demonstrates a lack of interest in providing meaningful information to current and future distributors. Recent FTC actions and statements highlight a growing concern for deceptive MLM practices.
Peter Vander Nat, PhD
MLM Income Disclosures: When Average Does Not Equal Typical
“Although MLMs are often compared to pyramid schemes, consultants argue that participation in a MLM allows them to make money outside of the traditional full-time labor force. This paper examines the law, economics, and psychology of MLMs, suggesting that MLMs may draw on prospective consultants’ cognitive biases in persuading consultants to join and continue a MLM. Consultants may be led to focus on unlikely benefits and to conform to notions of success that seem consistent with the “American dream” — even to their financial loss.”
Heidi Liu, PHD student, Harvard University
The Behavioral Economics of Multilevel Marketing
“In 2020, TINA.org investigated the 16 MLMs targeted by the FTC for making deceptive COVID-related claims and found that each of the MLMs has continued to make unsubstantiated health claims and/or deceptive income claims, either directly or through distributors.
“A majority of the MLMs (10 out of 16) have also continued to put these claims in the context of the pandemic.”
Truth In Advertising
2020 FTC MLM DATABASE
“Work from anywhere!”/”Work from your phone!”
“Be your own boss!”
“Spend more time with your kids!”