CAI

Consumer Awareness Institute

Non-profit Corporation

PRODUCT-BASED PYRAMID SCHEMES (PPS) - E-series for legislators, consumer protection agencies, consumers, media, and other persons of influence

    In the 2006 Utah legislature, the DSA was successful in getting a bill passed amending the existing Pyramid Scheme Act. The bill would protect even the most predatory product-based pyramid schemes from prosecution. 
     It became apparent during DSA lobbying in Utah and other states that much misinformation was disseminated by the DSA as part of its well-funded lobbying efforts – which has resulted in legislation in other states that helps MLM’s, but weakens existing laws against pyramid schemes, thereby reducing consumer protection. To offset these deceptions, I am providing this series of articles to inform legislators, law enforcement officials, the media, and other officials about MLM/pyramid scheme abuse and to warn against the worst schemes.
     Questions to be addressed include:

 1. What are illegal pyramid schemes, and what harm do they do? (They are NOT harmless.) How is the typical 99.9% loss rate calculated?

2. Who and where are the victims of pyramid schemes? (Not where you would expect.)

3. Who are the real culprits or perpetrators of the more harmful schemes? (Not aliens)

4. Are multi-level marketing (MLM) or network marketing programs merely cleverly disguised pyramid schemes?

5. What deceptions are used to defraud victims of their time and money? (You’ll be surprised at the answers.)

6. If product-based pyramid schemes cause so much harm and loss, why don’t federal and state regulatory agencies act to stop them? (more surprises)

7. Victims of product-based pyramid schemes almost never file complaints with law enforcement. What are the reasons for their silence?

8. Who is the Direct Selling Association (DSA), and what is wrong with DSA-initiated legislation? And how and why do MLM’s and the DSA work so hard to be considered legitimate direct selling companies? (no surprise)

 9. Are MLM’s donating more to humanitarian causes than they are taking from vulnerable populations through pyramid scheme fraud? (big surprise)

10. How do the media and influential organizations and leaders inadvertently give credence to pyramid scheme fraud?

    For the protection of consumers, it is important that influential persons such as yourself be informed. I am hoping that you will accept this series of short messages, each with a vital component of the whole picture, and that you will help to disseminate this information to your associates and others who should or may also wish to be informed. In the meantime, please take the time to examine my web site – www.mlm-thetruth.com, which includes reports from ten years’ research, plus evaluations of over 200 MLM companies.
    If you find these articles helpful, please feel free to forward them, or duplicate and share them with others. Thank you.

 - Jon M. Taylor, Ph.D., Consumer Awareness Institute, and Advisor, Pyramid Scheme Alert

E-mail: jonmtaylor@juno.com

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