Before we share our list of over 300 MLM* programs we have evaluated, it is important that you do your own evaluation. We will not be responsible for the consequences of a decision that is ultimately yours to make. (See Disclaimer below.) But we are confident that here you will receive the best advice available on how to make that decision.  

To begin, obtain the compensation plan of the MLM program you are considering. Then answer the questions for each step and follow the links to its conclusion. Then again you might want to review some of the feedback we have received.

Click here to begin the evaluation.

Then you can see how your evaluation stacks up against ours. So start the 5-step evaluation now.  Or - if you wish - you may first want to read below from some of the feedback we have received:

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Feedback: 

Hello,  This website has great information and I appreciate it being made available to the public.

 MLM SCAMS have burned a lot of people that I am close to.

One thing that I think you forgot to mention in your website is the social risks of MLM.  Most of the people I know associate in MLM have lost most of their friends that they can't scam into joining with them. They get so caught up in the lies and the brainwashing that MLMs feed them that if you don't join them they stop talking to you and spent all of their time with their mlm, when they quit the MLM (which they always do) they expect you to be waiting there for them.

The worst MLM?  Most definitely ACN, I have seen so many people get buned with this.  they charge "new recruits" $500 just to join the company, and $99 a year after that.  No real money is made from the sale of their product, which is bad phone service and internet.

ACN is a terrible excuse for a company (its more like a cult) and until it is shut down, something should be done to stop them from stealing money from the public.

Thanks,  Nick Karim

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I was recently invited to attend a meeting for ACN.  After looking very closely at their compensation structure, I came to the conclusion that it's near impossible to make any money in that organization.

David Ko

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I found your website and all of it's information extremely compelling and useful, thank you for it.  Here is my dilemma, I hope that you can take a moment to respond.

I am an inactive attorney in California, currently staying at home to raise my 15 month old son (I also have a first grader).  I received a call from a friend (also an attorney) telling me about this great  "business opportunity" and after speaking with her I agreed to attend a PBR (personal business reception) about this wonderful new deal.

It sounded good of course, but light bulbs went off in my head for various reasons so I stalled my friend (I'll call her "Donna") and told her that I would think about it and get back to her.

Needless to say I did some further research, found your website (and others) and realized what a huge scam ACN (and others like it) really is.  Here's my issue:  I really like Donna, she is about 10 years younger than me and I knew her when she was still a law student.  She is now a public defender (as I was when I first graduated from law school) and is pushing ACN.  She learned of the business from her boyfriend (now her fiance) and even got her mother inolved in the "business".   She's very into it because she wants to have a family one day and stay home to raise her children but her law school debt is over $100,00.00, etc ect.  and this looks like the perfect vehicle.  You get the picture.

I think what pulls the wool over people's eyes with ACN is that they are not selling products (the lotions and potions you describe) but claim to be offering for sale something people use every day, the service on their phones (mobile and landlines) and of course the right to become a representative to sell the service to others.  So it seems distinct from an Amway or an Herbalife because people do pay for mobile (and cable and internet) every month, so why not sign them up with ACN and watch the dollars just roll in? 

Donna just called me the other day, and asked if I would at least sign up for a service if I did not want to become an "ACN representative".  I intend to put in writing exactly why I am not interested but would like to know how can I best refute the claims that ACN specifically makes. 

I know that I should just tell her no in conversation and move on but as a fellow lawyer and because she is someone I really care about, I feel compelled to make a strong case to help her understand what a mistake she is making.  I shudder at all the social capital she is expending, never mind all the money she's already invested in seminars and trips to conferences (I attended one in Modesto CA and was surpised at how many people were involved!).  Of course I will tell her about your website, the Merchants of Deception book and the fact that ACN was barred from "selling" eclectricity in California in the mid 90's but anything else that you may have on ACN would be greatly appreciated. 

Jon, Donna and I are both Latino and we speak Spanish and she keeps talking about how ACN is going to open up in Mexico etc. and I just cringe when I think of all the people who could get taken in by this and by someone speaking to others in their native tongue.  It just seems so wrong to scam someone and the fact that we are lawyers which gives us added credibility sends chills up my spine.  What really kills me is Donna really BELIEVES.  She would never bring her mother (a real estate agent whose business is right where you expect it to be in this economy) or speak with me about this otherwise.  She is sincere. We both have always cared about those less fortunate, hence our professional choices.

How can I help her?  What can I say?

 . . .I live in Berkeley, CA and this ACN is really taking off, not right here in the bay area but in places like Modesto and Fresno.  At the meeting I went to, they were all very excited that ACN was going to be featured on an episode of the "Celebrity Apprentice" (Donald Trump, enough said) in March and were really pushing hard on this.  I HATE to see this happen. 

Please consider me an on-line friend (and fellow MLM enemy) in Berkeley and feel free to contact me if there is anything I can do to assist you in toppling all the myths about this pernicious and ugly "business" practice.

Paz,

Vylma O.

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  A short message to say thank you for your information on network marketing. It's well-done and clarified a lot for me. A good friend has been on and on to me about becoming a rep for ACN since May this year. All the characteristics you describe are so present in her behavior. She has spent lots of money on travelling for training, babysitting and phoning, and has neglected her family, etc. She hasn't seen any money back yet but continues to dream and believe that her life will change given more time: the bigger flat, exotic vacation, etc.

 Should I just watch her or is there something more concrete to do? She says that I am "prejudging" the situation.

Jane

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I read your paper about the 5 red flags of a pyramid scheme, and I
found it very informative and well-written.  I went last saturday to
an ACN meeting, in Salt Lake City.

As I sat through that meeting, and I consider myself to be an educated
individual, if only 21 years of age, I am a student of Accounting at
Brigham Young University, and almost instantly I began seeing the
flaws.  I wanted to shout, "Where does all this money come from?  The
numbers just don't work!  With all of the "customers" this top
distributor had, there is no way that all of the "representatives" he
had underneath him could be paid... Maybe I'm the only one who
crunched those numbers out.  I was horrified to see that ACN's selling
technique was to convince your family member or friend to "do you a
favor" by buying your product, and that if they didn't, you were
supposed to make them feel bad like they didn't love you.  I work in
sales, and I have never heard a worse approach for anyone who actually
wants to sell something.  You must make the person feel like they need
the product, not feel like they may jeapardize your relationship if
they do not make the purchase.  Many other things I saw there on
Saturday... including a $500 dollar sign-up fee.  It is interesting
however, that these distributors do not make almost ANY money from
commissions.. Only after the 7th level (yes, the 7th level) do they
begin making real commission on sales.  (7%).  Before that it is about
(0.25%)  So what is the incentive?  Every month you get bonuses for how
many new recruits you have in your group and if they sold the
requirement of phone service... which they are encouraged to purchase
themselves and get their families to do them a "favor."  Their bonuses
are large, however.  $2000 dollars promised to those people who get
even 2 people below them to do the same thing.  I have good friends
getting involved in this, and I am going there today
with my buddy once again.  However, he does not know that I am only
going there to see if I can grill these guys into the ground with
questions they cannot answer.  At least, I don't think they will be
able to answer them.  If so, I can hopefully keep them from joining,
or at least help them understand why I won't do it.  Because my
questions could not be answered.

Eric D., Salt Lake City

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 wonder if you can help me in finding credible information on the MLM ACN. I want to find statistics on its employees and revenue. It is difficult to ascertain where exactly its $500 million profit comes from. The company claims, but nowhere proves, this money comes from its telecommunications service, not from recruitment. Is this honest?

My interest in this company began when a friend invited me to an ACN "business meeting", for he wanted me to give him support. As a friend I obliged and found that the presentation full of confusing nonsense. Those who do not rise to high ranks are seemingly required to recruit an absurd number of people for even a modest income. And so it seems those at the top are making money from those below them, who work for virtually nothing. The 90% failure of people at the bottom to reach "level 2" indicates that company makes its money from recruitment.

Robert B.

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My sister-in-law has become involved with ACN and has been “pressuring” my wife and me to become involved.  My initial research into this group does not give me a warm and fuzzy feeling and by all indications, appears to be a pyramid scheme, or new talk a multi level marketing operation.  My sister-in-law, who just got started with her ACN venture, emphatically denies that this is the case, and claims she will be making $8,000 a month very soon, yet she seems more focused on signing up sales reps then trying to sell us any products or services.  To me this a pretty good indication of a pyramid scheme.  I have also seen, on the internet, videos of special reports done by Fox and CBS news regarding ACN, and they are not too flattering.  I have also read numerous articles and commentary from people involved, some say is greatest thing in the world, others say is a scam.
 
My initial reaction to ACN is that if it walks like a duck, quacks like a duck, it probably is a duck, and I do not want to have anything to do with it.

Larry H.

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 NOW - 

Click here to begin the evaluation.

After extensive research corroborated by MLM company reports, "5 Red Flags" have been identified which when found in a compensation plan lead to losses in excess of 99% – in at least four independent investigations. Read the full report on "The 5 Red Flags of a Recruiting MLM", a summary of which was published in the newsletter for the National White Collar Crime Center and presented at the Economic Crime Summit Conference in 2004. 

Since it is based on solid research, It is much safer to use the "5-step Do-it-yourself Evaluation" for an MLM program, than to accept the claims of MLM recruiters in making your decision on whether or not to participate.

"Your logical questions and objective research are exactly what is needed in this industry."  —Donna Horowitz

Research and Consumer Guides:  This research and information on MLM (multi-level or network marketing, etc.) was prepared with the help of top experts over ten years by the Consumer Awareness Institute, directed by Dr. Jon Taylor. Opinions vary widely on MLM's legitimacy. But here you will find objective research on success and loss rates, compensation plans, etc.

What Went into This  Research: The investigative research that formed the basis of these reports includes: 

• Extensive comparative research on MLM compensation plans and alternative business models to clarify differences,
• interviews with and feedback from thousands of MLM distributors and ex-distributors in a wide variety of MLM programs, 
• Interviews with the top experts in the field, 
• Surveys of hundreds of tax professionals where MLM is concentrated – representing thousands of tax returns of MLM participants, 
• Actual tax records examined by Wisconsin investigators
• Court records in MLM cases – including IRS income tax records of top distributors in one state, 
• Household consumer surveys regarding MLM participation, 
• Surveys of leading MLM company presidents, 
• Private and public financial disclosures by MLM companies, 
• Communications with law enforcement officials at all levels, and— 
• Direct experience with prominent MLM companies.

For more information on the research and analyses underpinning these reports, go to – MLM Research and MLM Consumer Guides

"Thank you for your great insights and all the work you have put into researching this little-understood subject.  If every [person] interested in joining recruiting MLM's would just take the time to read your [reports] and educate themselves, they could save a lot of grief."  —Michael Rawlings

DISCLAIMER: These evaluations are intended purely as a communication of information in accordance with the right of free speech. They do not constitute legal or tax advice. Anyone seeking such advice should consult a competent professional who has some expertise on endless chain or pyramid selling schemes. Readers are specifically advised to obey all applicable laws, whether or not enforced in their area. Neither the Consumer Awareness Institute nor the authors assume any responsibility for the consequences of anyone acting according to the information in these reports.

* Chain-selling programs are referred to as "multi-level marketing" (MLM), "network marketing," "consumer direct marketing," etc. The MLM industry would even like to be called "direct selling," even if little direct selling to actual customers is taking place. Regardless of what promoters call a program, this 5-step do-it-yourself analysis will help you evaluate their potential for income or loss.

Avoid falling for the semantic trap of chain-selling promoters who say they are not MLM, or multi-level marketing. If the program pays on more than one level of participants, it is multi-level or MLM. If you get paid only for selling directly to customers and get no override commissions (other than a small referral fee) for recruiting more than one level of participants, it is single level compensation and could be considered true direct selling.

PLEASE HELP!  We believe this site presents information about MLM/network marketing that is as close to the truth as can be found. It can save you much time, money, and grief, as it has done for many others. And since law enforcement has essentially looked the other way on this type of consumer abuse, it is left to informed consumers to inform and warn their friends and relatives about the potential losses they could suffer from participation in a &quotrecruiting MLM." So please print and distribute at least 5 copies of the answer cards to those you care about – and ask each of them to share answer cards with 5 people, and each of them with 5 more, etc., etc.  . . .  In this way, you can influence many people for good – through an endless chain of truth-telling.  Check out these handy answer cards (8 to choose from) that you can print and distribute now –  as well as carry with you for those awkward moments when you are recruited by a well-meaning friend or relative. For more information, click on the appropriate links above.