It’s 2022 and can you believe it, multi-level marketing scams are still a thing. By now, you’ve probably been sent a direct message on social media by a ‘friend’ or family member promoting an exciting business opportunity. You can work from home, be your own boss, and basically make all your dreams come true. It sounds amazing, right? Well, multi-level marketing scams are meant to sound amazing, but they often end up draining people of their money. Similar to a pyramid scheme or Ponzi scheme, they are designed to make the people at the top lots of money. The only real difference is that a MLM scam actually has a product, which is what makes them hard to shut down.
So, how can you spot a multi-level marketing scam? The people involved in this scam are usually marketing health and wellness products like skincare, weight loss, or essential oils. Not only do they want you to buy the product to use yourself, but they want you to buy lots of products ‘at a discount’ to sell to all of your friends and family too. The other catch is that every time you recruit another seller to join, you can earn a percentage of commission on their sales too. As the market becomes more and more saturated with lots of people selling these products, the last sellers to sign up often end up with an excess of product. A recent study found that at least 76% of sellers end up losing money by signing up with a multi-level marketing company.
The Top Multi-Level Marketing Companies to Avoid Right Now
Here is a list of the most hated multi-level marketing companies in the U.S right now.
One of the biggest complaints about an MLM company is how big the upfront payment is to purchase initial inventory to become a seller. LulaRoe is an apparel retailer which seems to have one of the highest initial inventory costs, forcing new recruits to buy $6,000 worth of inventory to start with. Majority of sellers never end up making a return on their investment. LulaRoe has been exposed as a MLM scam and currently has more than a dozen lawsuits against them by former sellers.
Herbalife is probably one of the oldest and most well-known MLM brands as it was established in 1980. Herbalife sells weight loss products and nutritional supplements. In 2016 the company came under fire as it promised new sellers, they could make a significant amount of money promoting and selling their products. The company ended up agreeing to a $200 million settlement, paying over 350,000 former sellers for the money they lost. Herbalife is still in operation today and had to undergo a complete restructuring of its business.
Arbonne is a MLM brand that sells skincare products. All Arbonne’s sellers are women and have managed to accumulate a huge global following. This particular MLM seems to be all over social media right now even after it became bankrupt in 2009. What makes Arbonne a particularly frustrating MLM is that the products are expensive, leaving many sellers in debt.
Nu Skin is yet another MLM company selling skincare products and has been around since the early 1980’s. Despite this company facing lawsuits in the 90’s for grossly overstating the earning potential of sellers, it is still around today. Don’t be fooled by how long the brand has been around, or how much money the sales reps say you can earn. Majority of these sellers end up in debt from buying into this multi-level marketing scam.
Le Vel is a MLM company promoting itself as a health and wellness movement. This company sells patches that are said to help with weight management, increased energy, mental clarity and more. Basically, these magic patches can help solve all of your problems! This is definitely a MLM to avoid falling for in 2022.
Keep Up with The Latest Multi-Level Marketing Scams With Anti Fraud News
Multi-Level Marketing Companies are essentially just legal pyramid schemes. The only difference is that these companies are actually selling a product. More often than not, these products don’t do what is advertised, and end up being very hard to sell. This makes it very difficult for new sales reps to make any return on their investment.
Avoid falling for the next MLM scam to hit the U.S. by keeping up with Anti Fraud News.