Monday, 18 April 2011

'Amway' and 'TVI Express' are essentially identical

Sadly, Kasey Chang is not as well-informed as we thought. He seems to have accepted some of the reality-inverting 'Amway' propaganda at face value. In fact, it is more than worrying to observe that Kasey Chang has repeated 'Amway' propaganda  (without qualification or heavy irony) on this Blog.
My question for Kasey Chang is: what quantifiable evidence has he seen that 'Amway' adherents have been motivated by the desire to sell  more products: rather than the desire to recruit more 'Amway' adherents? For if a crook sets up a centrally-controlled money circulation scheme in which he/she pretends that simply by handing over regular cash contributions and recruiting more and more regular, contributing participants into the scheme, ad infinitum, any contributng participant/recruiter can eventually become rich, then that scheme is easily recognized as a pyramid fraud or what should be more-accurately described as a 'closed-market swindle.' However, if the same mathematically-impossible money circulation scheme is hidden behind a so-called 'direct selling' company that offers its agents banal products, and/or services, in exchange for their regular cash payments, and the company publishes rules that say that a significant percentage of the company's products, and/or services, have to be regularly retailed by the company's agents to the public for a profit before the agents can receive commission payments from the scheme, in order to keep the scheme legal, then, to casual observers, that scheme can appear to differ fundamentally from a pyramid fraud in that its participants can appear to be motivated by the desire to sell more  products rather than the desire to  recruit more participants.
Obviously, the way to determine whether any such scheme is legal, is not naive to ask its controllers: does your scheme have rules obliging participants to retail to the public to make it legal, but to establish whether the scheme has rules to make it legal which have actually been rigorously and independently enforced and, thus, discover whether the scheme's participants have actually been selling significant quantities of products, and/or services, to the public for a profit or whether they have merely been regularly buying the products, and/or services, themselves and recruiting their friends and relatives to do the same, ad infinitum, in the deluded belief that the exact duplication of a plan of recruitment and consumption is the proven way to generate a limitless, passive income?
Any so-called 'direct selling' scheme without significant, profitable retail sales to the public is a dissimulated closed-market swindle, based on endless-chain recruitment in which the products and services might as well not exist, because they are merely there to hide the fact that victims have been peddled infinite shares in their own finite money.
A veritable mountain of evidence, proves beyond all reasonable doubt that this has been the case with 'Amway' and dozens of copy-cat 'business opportunity' scams (including 'TVI Express'). The  'TVI Express' racket differs only from the 'Amway' original in respect of the fact that its front company has foolishly produced material which actually admits that participants don't have to sell anything. In the 'Amway' racket, the front companies have produced reality-inverting material which says that participants are obliged to sell if they want  to receive commission, but in practice 'Amway' has absolutely no means of verifying that it agents have made retail sales whilst these people have been repeatedly told by their leaders that selling is for losers, winners must copy their leaders' example and buy and recruit.
'Amway' should have been closed down in the 1970s when it was investigated by the FTC. At that time, it was discovered that 'Amway,' a (relatively small operation) comprised a pyramid of constantly-churning persons arbitrarily defined as 'distributors,' but who weren't actually trying to retail 'Amway' products and services to the public for a profit, mainly because these materials were grossly over-priced and of banal quality, but also because they had been told that selling products was for losers. Since, the 'Amway' market had always been effectively closed, the so-called 'Amway business opportunity' had an effectively 100% overall failure rate, and this has been deliberately hidden from the public.  However, 'Amway' escaped closure in 1979, when a federal judge slapped its owners with a fine for price-fixing, but accepted their empty promise that rules had been introduced which would henceforth ensure that significant quantities of Amway' products and services would be retailed to the public for a profit. These rules have simply never been enforced, and at least 10 million Americans have been churned through 'Amway's' closed-market, falsely believing that 'Amway' offers a viable business opportunity which has the approval of US government regulators. In reality, a laughable US regulatory failure, in effect, authorirized ' MLM business opportunity' fraud all around the globe. Today, it is very difficult to estimate the true scale of the problem. 
The origins of 'Amway/MLM' racket lie in Carl F. Rehborg's 'Nutrilite' scam.
In the late 1940s, Rehnborg and two criminal associates, Mytinger and Casselberry, dissimulated a pyramid fraud behind a valueless placebo ('Nutilite Double X') and persuaded thousands of Americans to hand over around $20 per month and to recruit all their friends and relations to do the same, on the pretext that this was a miraculous system to stay happy and healthy, and to become rich. (The profit margin on 'Double X'was estimated by the FDA to be at least 1000 %). 
The secondary advance fee fraud, a.k.a. 'Amway' tool scam (which has gradually become the major source of revenue within the 'Amway' racket) only works, because the so-called 'Amway business opportunity' was designed to produce universal  insolvency, and because the 'Amway'  organization has systematically blamed its victims for failure. 
The recent Pokorny versus 'Amway/Quixtar' RICO lawsuit in California accused the 'Amway' organization of hiding an immense racket comprising a dissimulated pyramid fraud and related tool scam. Amway's attorney's are still trying to halt these civil proceedings by offering to settle with the plaintiffs and their attorneys without admitting fault. So far, they have put around $150 millions on the table, but (to date) the judge has rejected the proposed settlement. 
David Brear (copyright 2011)


GuyReviews said...

I am not here to debate you on Amway as I am no expert on Amway. I think you ascribed that to me.

I merely wish to point out that Amway business *can* be operated ethically by selling products (and occasionally recruit a few who are good at selling products).

(Whether its members actually do so is not relevant to this particular discussion. )

TVI Express, on the other hand, has NOTHING to sell, and thus, is much more of a scam than Amway ever COULD be. If you say Amway has a scam rating of 5 (higher being more of a scam), then TVI Express would be a 10 (just as an illustration)

Whether Amway is a scam or not is up for debate. Robert L. Fitzpatrick (author of "False Profit") agrees with you that MLM seem to be fundamentally prone to abuse and fraud. I agree in part, but I don't think it's beyond redemption. But then, my experience in scam tracking is limited to ONE scam that falsely claim it is a multi-level marketing company.

So let's leave it at that. No need to insult me.

Shyam Sundar said...

Probably, Mr Kasey Chang has not come across the judgement of Andhra Pradesh High Court which held that the business model of Amway India attracts the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978. Even the Supreme Court of India has also upheld the decision of the AP High Court. The judgement stated, "It is thus evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme. By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money." (Para 34)
Corporate Frauds Watch sincerely advises Mr Chang to read the judgement before coming to any conclusion on Amway India. These crooks have been bleeding people all over world for quite some time.

GuyReviews said...

I wasn't talking about Amway India, but the ENTIRE Amway.

American FTC have also sued Amway when it first started, 20+ years ago. Amway was forced into a series of reforms that essentially defined the MLM industry we have today.

As I've said, I am NOT an expert on Amway.

Why is TVI Express, a company legally registered in Bangalore India, and VERY OBVIOUSLY a scam, is allowed to continue to operate, while a multi-national corp with real products, is pounced upon?

Unknown said...

Amway America was blessed years ago by the FTC and also runs the DSA. Some US government moron determined back in the 80's that if an MLM scam sold product to outsiders (more than 70% and had a return policy) there were not illegal.

Here is the key to this discussion: What MLM company policy says and what the reps in the field actually do are usually 2 different things.

In the case of Fortune Hi-Tech Marketing, the company makes it the responsibility of the representative to verify that that product has been sold to outsiders by simply checking a box in their back office for that order. So if most lie there is no verification. It doesnt matter if all product was shipped to the representative or not. This is another huge gray area that needs to be shut down.

Product sales do not necessarily mean legal!

GuyReviews said...

@Monte -- I agree, that how the company actually OPERATES is paramount. Having products, but not selling them, would make products mere "tokens" and thus the company a pyramid scheme. However, is that the fault of the MLM system, its leaders, or both?

FHTM is indeed a pyramid scheme being sued in multiple states.