Examples of MLMs shut down by law enforcement.
NOTE: If you have not already evaluated an MLM, go to"5-step Do-it-yourself Evaluation.
Though law enforcement has generally looked the other way in cases of product-based pyramid schemes, a few have been successfully prosecuted and/or forced to cease operations, at least for a time. Examples include those to the right. It is assu It is also assumed that had law enforcement had been more proactive in enforcing laws against pyramid schemes and simple fraud or deceptive sales practices, you would not be reading this today. Had the FTC ruled that Amway was an illegal pyramid scheme in 1979 (See MLM Regulation) , the integrity of the marketplace for income opportunities would be much more intact today. But the reality is that these schemes are strengthening and proliferating to the point that regulators would not be likely to contain it now if they tried. So it remains for you, the consumer to make intelligent choices. Hopefully, this information and that on others sites will help. (See recommended links.) For an explanation of the reasons for the general failure of law enforcement to crack down on most product-based pyramid schemes, go to – "Top Ten Things I Learned from Ten Years' Research on MLM/Network Marketing." To gain more information for and about regulation and law enforcement related to MLM/pyramid schemes, click here. For an excellent analysis of the inherently flawed concepts underlying multi-level marketing, read Dean VanDruff's excellent article "What's Wrong with Multi-level Marketing." REMEMBER – Aside from the standard job market (and MLM) – there are many satisfactory alternatives for earning an income. Almost any of them are superior to recruiting MLM's. Read more about them in the article "Alternatives to MLM/Network Marketing." * A recruiting MLM, or product-based pyramid scheme, is an MLM with a compensation system that rewards recruitment more than actual sales of products to persons outside the network of participants. So significant income is unlikely without recruitment of a large downline, which requires deceiving recruits into believing it is a legitimate "business opportunity – and persuading them to invest in inventory (front-loading) and/or to subscribe to ongoing monthly product purchases or payments to "do the business," to "be a product of the products," etc. For purposes of analysis, a recruiting MLM could also be considered a "product-based pyramid scheme."
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LIST OF MLM'S shut down by law enforcement:2Extreme Performance Bestline Boston Finney Burn Lounge Club Atlanta Travel Culture Farms Destiny Telecom Equinox Five Star Auto Club Fortuna Alliance Fortune in Motion Global Prosperity Group Globion, Inc. Holiday Magic Infinity2 International Heritage Jewelway Koscot Interplanetary National Safety Associates NexGen3000 Omnitrition Rennaissance – the Tax People (See MLM Numbers page.) Skybiz Tele-Card International Trek Alliance Unimax Click below for evaluations of MLM companies that have not been shut down (as far as we know at this time), but in which we have found the "5 Red Flags" in their compensation plans: 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 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. |
med that evaluations of the compensation plans for the above programs would have placed them in the category of "recruiting MLM's*," since they were shut down by law enforcement – which tends to act against only the most blatantly exploitive of the pyramid schemes. 