Aren't all mlm companies just illegal pyramid schemes?

MORE PYRAMID DEFINITIONS HERE

I have heard several people say that mlm companies are illegal and that people who are involved in them are going to go to jail. If you are one of those people, please stop saying that because it makes you look extremely ignorant.

Yes, it is true that several network marketing companies have been investigated by different states and even on the federal level, but that is not because they were multi-level companies. In most of those cases, they were under investigation for illegal practices or for misrepresentations made by their representatives.

Then what are these illegal practices? There are several things that are blatantly illegal and if you see a company that practices any of them, you should run in the other direction as fast as you can. They include:

Sign-up fees that don't do anything but get you in the company. If some person shows you a plan that doesn't have a product and/or they charge you $300 to sign up without giving you any products for that money, it's bogus. (I am not talking about a one-time administration fee of $25 or less.)

Any plan that just involves you paying a "membership" fee and where you can only make your money back by getting other people to buy a "membership". By this I mean that the membership doesn't have any benefit other than allowing you to sign other people up. This is the same reason why chain letters are illegal. No product is exchanged for the money.

Misrepresentation of income potential. This is one that the reps are usually guilty of more than the network marketing companies themselves, but the companies are required to keep it under control. I think you can argue this one either way, because you can't really prove or disprove the income potential that anything has for any given person. What can be proven are false income claims made by people already in the company. It's called lying.

A few bad companies have certainly tainted the entire industry and have made a lot of people doubt whether anyone can actually do something like that and make money.

Check out this Government Website to see if your MLM is a Pyramid Scheme.

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Contact Me : Heather Garcia