Saturday, 25 June 2011

Teacher knew 'Amway' to be a fraud, but still wanted to join

Down the years, many people have asked me: How can adults be so stupid as to fall for the puerile 'MLM'  lie? However, a while ago, I was asked a variation of that perennial question by an Eastern European, English language teacher who began looking at 'MLM business opportunity' fraud, when (to her complete amazement) one of her junior colleagues encountered 'Amway'
My correspondent described how an apparently-bright 'thirty-something' fellow had begun to tell other members of staff, and his adult students (at a private language school), that he was going to retire from work by 'building the Amway business.' However, what he proposed was even more crackpot than usual, because he openly-declared 'Amway' to be a pyramid scam. He then claimed that he'd worked out a fool-proof plan to cheat the 'Amway' cheats, but it required the use of other people's names.
Tellingly, this strangely-frank fantasist had no real commercial experience. However, he did have a background in IT, as well as access to the wider-evidence. Amazingly, he had directed my correspondent to Robert Fitz Patrick's Pyramid Scheme Alert, and to my own articles about 'Amway' and 'MLM business opportunity' fraud, published on the 'Quixtar Cult Intervention' Blog. Consequently, he clearly understood that the so-called 'Amway business opportunity' (as it has been operated for more than half a century) is an economic impossibility, because participants do not make their livings by selling 'Amway' wampum to the public for a profit. He realized that 'Amway' participants have actually been told to hand over their cash each month (in exchange for effectively-unsaleable goods and services) and to recruit more participants. Thus, perpetuating the same camouflaged money circulation scheme. The teacher had also read about the UK government's civil enquiry into 'Amway UK Ltd' and about the US FTC prosecution of 'Amway' in the 1970s. He apparently understood that the 'Amway' organization is a major, organized crime group which has escaped closure and criminal prosecution for decades, simply because its billionaire bosses have arbitrarily defined all transactions (internal and external) as 'sales,' thus, appearing to offer a lawful commission-based pyramid 'sales' scheme in which the higher the volume of 'sales' participants (their recruits and the recruits of their recruits, etc. ad infinitum)  achieve and maintain over a 12 month period, the higher successful participants climb in the pyramid, and the higher their commission payments. However, 'Amway' has not been subject to rigorous external regulation and obviously the organization itself cannot, and has not, verified if participants actually make sales to the public. Unfortunately, like many others, at this point the teacher became bedazzled by the organization's attractive claims that once participants reach the higher levels, they need never work again, because 'Amway' guarantees to keep on paying the corresponding commission to any successful participant, even if he/she ceases to be active. In simple terms, this fellow began to believe that all you have to do to receive a substantial passive income from 'Amway' for ever, is deceive the organization into believing that you have generated the required level of 'Business Volume' for the required period of time. Therefore, he openly-proposed to sign up for the 'Amway' fraud himself, and he began asking his friends, family members, colleagues and students, if he could put their names down as his recruits. Apparently, he intended gradually to invest a recent inheritence to make it appear that he was 'building the business,' and that his (imaginary) recruits were obediently duplicating his example. He reckoned that it would take him a couple of years and around $150 000 to go 'Diamond,' but then he would be paid at least $50 000 per year for the rest of his life for doing nothing.
At the time, I explained that, in order to go 'Diamond,' this fellow would have to keep on inventing more and more recruits, and to keep handing over around $2000 per year to 'Amway' for each one of them. Thousands of imaginary 'distributors' and millions of real dollars would actually be required. I half-jokingly advised my correspondent to throw a bucket of cold water over her deluded junior colleague in the hope of bringing him to his senses. The last I heard, this dunce with a diploma had finally decided not to sign up for 'Amway' after being threatened with suspension from his job if he tried to put his fool-proof plan into operation.
David Brear (copyright 2011)


Monil said...

I would like to bring to the notice of the readers that people in Bangalore are being now cheated in the name of 'independent business opportunity with limitless income'. Please let me know how do I curb this menace. Many igorant bangaloreans are falling in to the MLM Amway trap, the version called as Britt world wide.

Shyam Sundar said...

You ;could approach the police, if possible with one of the victims and file a criminal case against Amway. You could quote the judgement of Andhra Pradesh High Court which held the business model of Amway illegal.

Monil said...

The problem is these are individuals who get in touch with you in retail malls etc and get your contact number and then call you after a few days using the line 'Me & my wife have started a new business which you may want to join'..these people are working in the corporate world and I just cannot report them to the law. I have explained these people my argument of the flawed business model but they then just do not answer your calls later.

ravi said...
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