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Pyramid Dreams

MLM foes give an insider's viewpoint online

By Ami Chen Mills

Multilevel marketing boils down to four words: Screw or be screwed.

Only the people at the top of a pyramid will make money, the rest of the group, will, by necessity, be screwed. But this fact does little to hinder the efforts of multilevel marketers, or to prompt efforts to regulate an industry remarkably immune to public scrutiny. Indeed most newspaper articles and attorneys general can't seem to get a handle on the basic premise of the biz. What little enforcement there is, is left to the states, which slap MLMs with fines. "If any of these guys had any genitals at all, they'd go for a clear conviction," says Greg Caton who worked with Bill Gouldd when Gouldd was cutting his teeth as a "heavy-hitting" distributor at Consumer Express in the 1980s. Instead, multimillionaires like Gouldd are fined a few hundred thousand. "To them, it's just part of the cost of doing business," Caton says.

Since leaving the industry, Caton wrote MLM Fraud and now runs a web site titled "MLM Credit Bureau" tracking the unsavory tactics of multilevels, the same tactics perpetrated by Equinox top dogs. "What the industry really is," Caton says, "is a corporate lottery, and people get fleeced over and over again."

Despite the miserable averages for MLM distributors, only a handful of independent website authors will unequivicoally denounce MLMs. These include Caton and informal, part-time, San Jose-based MLM critic Dean Vandruff. Vandruff, himself a devout Christian, says he's seen churches and communities crumble after the introduction of a network marketing "opportunity." Vandruff's "What's Wrong with Multilevel Marketing" site goes to the heart of the issue. Vandruff observes, "if you're going to sell a product, why would you bother going about it with an MLM tied around your neck? Everybody's going to run. Ultimately, all MLMs are intrinsically exploitative." And Sydney Schwartz, who stops short of denouncing all MLMs, ("I just wish they were a little safer," he says) has a bone to pick with Amway at his "Amway: The Untold Story" site.

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