MLM Scams

First, we recognize that all MLM companies are NOT scams. This post is only to warn you to do your due diligence, because some MLMS ARE scams.

MLM scams have been around nearly as long as MLM businesses have been around, and over the years hundreds of thousands, if not millions of people around the world have been victimized to some degree by an MLM scam. Of course when someone finally discovers he or she has been scammed, the first reaction is to want to try to get their hard earned money back.

Unfortunately, MLM scams are usually among the smartest of fraudulent businesses and have devised ways to make legal recourse for victims nearly impossible. There are a few main methods employed to avoid ever having to answer for financial damages caused to victims; the most common method is to make themselves impossible to contact.

Having false addresses and phone numbers, or numbers that never allow you to actually speak to a live person is an easy way to doge having to answer uncomfortable questions. It is also common for the headquarters of MLM scams to move frequently so when lawyers come knocking, there is nothing left but an empty warehouse.

A more sophisticated and foolproof method of dodging responsibility is by adding confusing and often hidden clauses in the company contract. Many MLM businesses, even legit ones, require new recruits to sign a contract compiled of vast amounts of information, and buried somewhere in there in miniscule writing is an agreement not to sue the company for financial losses.

They literally make taking people’s life savings with little or no chance of any return on the investment legal. So when a victim realizes that he or she has been pouring time and money into an MLM business venture and is getting nothing back, he or she has already signed a contract to do nothing about it.

It’s best to just not get involved in MLM businesses until you’ve checked with the Better Business Bureau to make sure it’s a legitimate company. If you do decide to invest in an MLM business, make sure you read every line of the contract carefully, with a lawyer if possible, to make sure you understand all the implications before you sign. And if down the road you do discover you’ve been scammed, good luck to you and your lawyer getting any of that money back.

Review of Herbalife MLM

If Herbalife is one of MLM companies that you are thinking about joining, there is enough controversy over the company and its products to make informed investigators a little wary. The tricky part of dealing with Herbalife is that many of their marketing materials do a good job of avoiding the company name (sort of like Amway actually).

For example, according to residents in Sacramento, there are hundreds of signs posted across the city advertising “work-at-home” opportunities and weight-loss regimes that are all connected to Herbalife distributors but fail to mention the company name. Consequently, it can be easy to get started on the distributor track without even knowing what you are getting into.

And, even though there are definitely some incredible success stories connected with Herbalife, a large number of Herbalife distributors are unsatisfied with the financial profits they bring in versus the cost they have to put out during business endeavors. This is evidenced by blogs and other websites that warn potential distributors about the dangers of signing up. There have also been a few lawsuits over this issue.

Most importantly, there have also been health issues and other criticisms connected with Herbalife products. For example, they once contained an ingredient called Ephedrine that was later determined dangerous and banned by the FDA. Some studies also show a tendency for the products to cause hepatitis.

I also noticed that over 60 people a day search for the phrase “problems with herbalife” - not a good sign.

And finally, Herbalife products have also been criticized for being overpriced and nutritionally unbalanced. Since many of the products are meant to be meal replacement options, unbalanced nutrition can have a huge impact on your personal health.

A few good things connected with Herbalife are their donations to children’s charities as well as their role in sponsoring several Olympic athletes. Knowing that those athletes are sponsored by Herbalife also tends to make some investigators skeptical of the products though.

Although this report has polled many different resource, it may be wise to speak with experience Herbalife veterans and do a little of your own research before forming a concrete opinion.

Here is some recent good news for Herbalife: Herbalife says group retracts lead claims

Heralife What’s the Deal? (read the comments! note: this is an OLD post but still had some interesting dialog)