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 “recruiting 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.  Click here to see these handy answer cards (4 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.

1. The 2005 victory for consumers at the Utah Legislature was short-lived.

In 2005, the Utah Senate recently defeated HB 269, a deceptive bill that would have legalized product-based pyramid schemes in Utah. If you are interested in what happened in 2005, read the "Questions and Answers" report and the "12 Reasons to Defeat HB 269" that caught the Senator's attention. In the closing minutes of the session, two brave senators urged the Senate to vote against the bill, and it was defeated.

2. With the aid of Utah-based MLM's and complicit law enforcement, in 2006 the DSA successfully influenced legislators in Utah.

But in the 2006 session, as expected, the DSA (Direct Selling Assn) exerted even more political clout and more blatant deceptions to get a bill sponsored by the Senate, having recruited eight co-sponsors. Only a handful of legislators understood either the language or the consequences of the bill, and even Senator Mark Madsen, the primary sponsor of SB182, demonstrated in House hearings he had no real understanding of the real purpose or probable consequences of the bill. The bill cleverly exempts chain selling, wherein products need not be sold to non-participants to qualify as a legitimate business. As long as they are sold "for actual use or consumption" they are not considered an investment in pyramid scheme. This is contrary to laws in other states and the definition used by the Federal Trade Commission. To familiarize yourself with these issues, read the full 40-page report originally prepared for the National White Collar Crime Center and the Economic Crime Center titled "5 Red Flags of a Recruiting MLM, or Product-based Pyramid Scheme."

3. Utah law enforcement turned its back on consumers to support chain selling, in spite of solid evidence of the harm it does.

Amazingly, the present and former directors of Utah's Division of Consumer Protection lobbied for the bill. See our Feb1 letter to Francine Giani, pleading with her to speak for and not against consumers worldwide, and explaining why it would be better to repeal Utah's Pyramid Scheme Act altogether than to allow SB182 to pass. Attorney General Mark Shurtleff, whose lead corporate contributors were MLM's that would directly benefit from SB182, spoke in favor of the bill without disclosing his conflict of interest. (Prepaid Legal –  which has been sued for conducting a pyramid scheme more than any other MLM in recent memory, contributed $50,000 to his last campaign) Mr. Shurtleff also demonstrated his lack of understanding of the issue, when he said that one of the earmarks of pyramid schemes is that they have no legitimate products. If he had read any of the recent independent research  on MLM (not sponsored by the DSA), he would know that the most virulent and harmful schemes operating in Utah are all product-based ("recruiting MLM's") - with the highest loss rates, greatest aggregate losses, largest number of victims, and most enduring systems made possible through Ponzi-style world-wide expansion.

Three months before the legislative hearings, Dr. Taylor e-mailed a series of articles on product-based pyramid schemes in Utah in hopes of increasing awareness of the problem before the DSA introduced a new bill. And on Feb. 2, after the bill was hurriedly introduced, Dr. Jon Taylor of the Consumer Awareness Institute e-mailed a memo to all the members of the Utah House of Representatives titled "10 Reasons SB182 should be defeated" and another memo on Feb. 4 titled "10 questions to ask before voting on SB182." On Feb. 7, Bruce Craig, former Assistant Attorney General of Wisconsin, who has been studying this issue for 30 years and has worked diligently on behalf of consumers, sent a letter to the legislators, urging them to defeat the measure.  With the hundreds of e-mails coming in, it appears few if any legislators read these papers. They apparently preferred to accept the views of law enforcement, which has been asleep on this issue for decades, of the sponsors, and of the DSA. The latter is like seeking the advice of foxes on how to guard the henhouse.

4. In committee hearings, Dr. Jon Taylor argued against the bill, but was outnumbered by spokesmen representing or influenced by MLM's – who related one falsehood after another without rebuttal.

On behalf of consumers world wide (the vast majority of victims of Utah-based MLM schemes are out-of-state), Dr. Taylor spoke against the bill at both Senate and House hearings. At the Senate hearing, a daughter of one of the victims of Amway also spoke against the bill and told of 20 years of devastating effects on her family caused the by Amway program. The significance of her account was essentially ignored, and she left in tears. 

At the House hearing, attended by numerous pro-MLM lackeys, Dr. Taylor was the only person speaking on behalf of consumers. Incredibly, even the Attorney General and past and former Directors of Consumer Protection spoke in favor of SB182 and (if one understands the issues) clearly against the interests of consumers they are paid to protect. For that hearing, they effectively donned new hats - "Directors of MLM Protection!" Not understanding the issues any better than the latter officials, House Committee members accepted their opinion that the bill was helpful to consumers. Taylor urged the Senate committee to assign the bill to interim study where there would be time to get adequate information upon which to act on the bill, but the request was ignored.

Also, several blatant falsehoods were given to the committee by the bill's proponents, with no opportunity for Dr. Taylor to refute them, since he had already spoken. One of the most blatant falsehoods was that by Misty Fallick, legal representative for the DSA, who misquoted (in a flat-out lie) the position of the FTC – the exact opposite of their long-standing position, which is that unless the majority of sales were made to non-participants, it was a pyramid scheme. But perhaps even more disturbing was the fact that when Dr. Taylor offered to present the evidence of the harm done by these MLM's (99.9% loss rate, etc.), only one of the committee members seemed interested, since (as the Nu Skin spokeman claimed) the MLM industry was bringing in four times as much money as the ski industry. And the fact that most of the victims of Utah-based chain selling schemes are out-of-state was also  ignored. Money before morality! Politics before principle!

5. Governor Huntsman bowed to political pressures and signed the bill.

On Feb. 8, the bill passed the Senate 24-2 (with 3 absent), and on Feb. 15 it passed the House 70-3 (with two absent). With Robert Fitzpatrick of Pyramid Scheme Alert and his and our expert advisors, we wrote numerous letters hoping to inform the Governor and his staff of  the issues, in hopes they would see the wisdom of vetoing the bill, especially since it was promoted by the DSA under false pretenses. We also suggested he appoint a committee of independent investigators to study the issues, including extensive recent research that the legislature would not (or could not) take time to consider. Numerous concerned and informed consumers in the USA and abroad also wrote him, urging him to veto the bill.

On Feb. 25, Pyramid Scheme Alert sent a special report to Governor Huntsman titled "Utah Legislature Passes Pyramid Scheme 'Safe Harbor' Amendments. In it, the governor was asked to veto the bill on the grounds that it was harmful, misleading, and introduced under false pretenses. On March 13, Dr. Taylor wrote a "My Views" column for the Deseret Morning News titled "Pyramid Scheme Deserves Veto." In spite of all this, on March 17, Utah Governor Jon Huntsman signed SB182 into law, and Utah became another victim of the relentless efforts of the DSA to weaken pyramid scheme laws (in favor of its MLM members) in this country – and world wide through the World Federation of Direct Selling Associations. DSA officials are  gloating over this victory, since Utah is one of the DSA's greatest plums - being the state with the highest per-capita sponsorship of MLM programs. 

6. The practical effects of the bill are predictable.

Technically, at least ten MLM's have for years been blatantly violating the Pyramid Scheme Act (title 76). (Utah has the highest concentration of "recruiting MLM's" in the country.) In fact, based on available data, it is estimated that over 5 million victims of Utah-based "recruiting MLM's" have been defrauded of over $10 billion worldwide in the past two decades – several times the total of all humanitarian contributions by the entire state of Utah (including the LDS Church) to victims of natural disasters! So Utah has effectively been at the heart of a financial tsunami defrauding MLM victims worldwide.  Since July 1, 2006, when SB182 went into effect, these same MLM's could be operating legally without any change in their compensation plans. It will not make much difference so far as Utah Law Enforcement is concerned, as the Div. of Consumer Protection has been passive and blind on this issue for many years – but the options for private action are sharply curtailed. In effect, victims of product-based pyramid schemes headquartered in Utah will have no consumer protection - and no real recourse for recovering losses in the courts. Of course, considering the typical misrepresentations used in MLM recruitment, victims can charge simple fraud. However, fraud may be hard to prove, since fraud implies some intent - and most MLM recruiters are in severe denial about how they themselves are deceived into thinking the program is something it is not.

7. Now you can promote a pyramid scheme in Utah – and get away with it. Here's how. 

Thanks to the DSA, highly exploitive product-based pyramid schemes are being legalized in a growing number states, with Utah the latest. So why not start one and make millions? Anyone can do it – without fear of prosecution. (The MLM people had already figured it out, and took advantage of passive law enforcement to conduct some of the most extreme pyramid schemes ever created. But only a few were prosecuted) Read "How to Start a Pyramid Scheme that Is very Profitable – and Get away with It"  The only problem is that if you do succeed at sponsoring a chain selling (pyramid) scheme, you will have to live with the knowledge that approximately 99.9% of those to whom you promote this "opportunity of a lifetime" will lose money - based on several independent studies. Those who place the most faith in your promises will lose the most (except for those at the top). 

However, you should find plenty of MLM scam artists – especially in Utah County – with whom to brag about your conquests - and they will have some excellent rationalizations (deceptions) to share with you that you can incorporate into your recruitment campaigns. None will admit to lying or conning people, even if they know in their hearts it is a scam. Network marketing (MLM, etc.) will continue to be touted as the "wave of the future" by Utah-based chain sellers recruiting new victims. No wonder Utah is seen as the "scam capital" of the world by many knowledgeable consumer advocates. Now Utah has that reputation reinforced by statute.