MLMs with at least 4 of the 5 red flags
of a recruitment-driven MLM (H-M)
After the most extensive research ever done on MLM as a business model, Dr. Taylor has identified five causative and defining characteristics, or “red flags,” in MLM compensation systems that lie at the root of the deceptions and horrendous loss rates suffered by MLM participants. Where data is available, approximately 99% of all participants are found to lose money, after subtracting incentivized purchases and minimum operating expenses.
But before we share our list of approximately 500 MLM programs we have evaluated, in addition to some shut down by law enforcement. it is important that you do your own "5-step Do-it-yourself Evaluation." We will not be responsible for the consequences of a decision about participation that is ultimately yours to make. (See Disclaimer to the right.) 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 of the five steps and follow the links to its conclusion. You might also want to review some of the feedback we have received.
Listed below are MLMs we have found to use recruitment-driven and top-weighted pay plans, which is the case with virtually all MLMs. For a thorough discussion of problems associated with such programs, download and read the ebook The Case against Multi-level Marketing as an Unfair and Deceptive Practice – which can be downloaded in whole or in sections from this website.
(MLM's come and go, so a few may now be defunct.)
MLMs Evaluated H – M (below)
HBW Insurance & Financial
Heritage Health Products
Hsin Ten Enterprise USA
Ignite/Stream of Energy
Interior Design Nutritionals (IDN) –
later Pharmanex (Nu Skin)
International Galleries, Inc. (IGI)
iZigg Mobile Marketing
Jewelry by Park Lane
Learning Global USA
Legacy for Life
Liberty League International (LLI)
Life Force International (2-up)
Life without Debt
Mary Kay Cosmetics
Mavericks (World Health Card)
Monarch Health Sciences
My Leisure Business
My Harvest America
My Video Talk
NOTE: This list includes only those MLMs for which we have obtained and evaluated compensation plans. Most of the MLMs were listed following requests for information by website viewers.
*A recruitment-driven 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 recruitment-driven MLM could also be considered a "product-based pyramid scheme;" i.e., a pyramid scheme that requires purchases of products to participate in commissions or advancement in the scheme, rather than a cash investment such as those required for no-product pyramid schemes.