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CAI
Consumer Awareness Institute
Non-profit Corporation
WARNING
to Consumers in ASIA and Other Markets Targeted for Expansion – The DSA
Promotes Pro-MLM Legislation –
Readers' Comments:
"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
"We are having so many problems in Asia that Asians are very gullible to any 'quick money making scheme' from black money to 'unclaimed monies in Nigeria' to simple 'magic stone which cure all illness.' I am sure more scams will surface as more people are desperate for alternate incomes. —Karen P., Singapore
"I am extremely grateful for the internet-based information that you provided." —Marjorie Walle
PLEASE HELP! I 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 great 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 below for further information.
U.S.-based MLM's are Exploiting Markets in Asia and elsewhere
Based on numerous communications from many countries in Asia, it has come to our attention that US-based MLM (multi-level marketing) companies are recruiting aggressively in Asia. Their lobbying arm, the Direct Selling Association (DSA), has exercised its political muscle to gain acceptance by foreign governments, especially in Asia, of MLM as legitimate direct selling operations. As endless chain recruitment schemes, nothing could be further from the truth. Read more about it in “MLM, direct sales, & the DSA.” We have also learned that the World Trade Organization is requiring that entry into the WTO by China and other nations be conditioned up on acceptance of direct selling, including even MLM companies.
Legitimate Direct Selling Can Be a Good Thing – But the Typical MLM Is NOT Legitimate Direct Selling!
Legitimate direct selling can be a good thing, but few officials in these countries are prepared to clearly identify the downside of endless chain recruitment schemes, such as Amway and Nu Skin. The distinction between legitimate direct selling and MLM, or any scheme built on an endless chain of recruitment, is clearly spelled out in "The 5 Red Flags" [PDF] report.
The DSA states well what direct selling IS –“the sale of a consumer product or service, person-to-person, away from a fixed retail location.” But it avoids mention of what legitimate direct selling is NOT – an endless chain of recruitment of distributors as primary customers.
The DSA has been successful in getting
legislation passed in several states in the USA that would exempt MLM companies
with legitimate products from prosecution as illegal pyramid schemes. 
Legislators are easily duped on such complex issues when the apparent intent of
the legislation is to help consumers. But such legislation is a wolf in
sheep’s clothing. Based on research reported on this web site,
product-based pyramid schemes are the most harmful of all – with the highest
loss rate and with aggregate losses exceeding all other types of pyramid schemes
combined. (See “MLM NUMBERS – the Odds of
Success.”
In recent years, as consumers in the U.S.
become weary of recruitment by MLM companies in programs that seldom pay off for
anyone, the MLM industry and the DSA have been very active in lobbying to gain
acceptance overseas, especially in Asia. By paying off early investors
with investments (in products) by new recruits, they can keep those at the top
of the hierarchy of participants happy and paid off. So they become a form of
Ponzi scheme. Rank and file participants almost always lose money.
An excellent example of the effects of MLM
recruitment in Asia is Nu Skin. Read excerpts of letters from victims and
inquirers in Asia in the “REPORT OF VIOLATIONS” of the Order
by the Federal Trade Commission for Nu Skin to stop its misrepresentations
regarding earnings of its distributors. You will find many quotes on page 13 and
pages 30-39 (“Misrepresentations in Asia” section). See the
“Index and Summary of Key Points” to find what is of greatest interest.
Read also about
law enforcement in the U.S., which has
been ineffective in stopping the progress of product-based pyramid schemes, or "recruiting
MLM's." Information
on proposed U.S. legislation is available on the web site for Pyramid Scheme
Alert. Go to — http://www.pyramidschemealert.org/PSAMain/action/SubcommitteeLtr.html
Return to Home Page for a starting index to reports explaining the truth about all aspects of MLM – based on 12 years of solid independent research. Check out recommended links to other sites with excellent reports to be further informed on the topic.
MLM – the truth!