Multi-level marketing line of defense

July 16, 1:09 PMScam ExaminerKarin Malchow

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Multi-level marketing is a difficult scam topic since many versions exist, some skirting legality's fringe.  Also,  those involved will fervently defend them.

At best, the business design of earning commission from both your product sales and the sales of those you recruit benefits a very small percentage of ambitious super-salesmen, primarily those beginning early with the company.

In the middle range, buyers who regularly purchase a specialized product receive a discount after a small buy-in, not losing much without actively recruiting or selling.

At worst, an MLM is a pyramid scheme, where offering a negligible product disguises that income mainly depends on fees from new recruits, making profits an exponential impossibility for late-comers.

Because of MLM risks, scrutiny is essential.  Apparently, an internet MLM company, ShopToEarn, disagrees.  Their attorney recently sent cease-and-desist letters to several bloggers questioning the company.

Here is a link to forensic accountant Tracy Coenen's analysis of the internet shopping rebate company; an article which initiated legal threats.

The Scam Examiner's opinion:  Any company attempting to shut down investigation is worthy of suspicion.