Archive for October, 2014

Eric Nelson’s MLM Scam

I was reading an article about an MLM that claimed not to be a scam... and it linked to this video by Eric Nelson:

It starts out with a funny joke about how the MLM representative who sells a product to a customer does not actual give customer service. It's funny, because it tells you how ridiculous MLM is, not funny to the people who have to figure out how to get customer service. It gets less funny when they have to call a corporate line and navigate a phone tree instead of simply calling their representative.

That's not the point of the video though.

One character says to another that he read that MLM is a scam. He did a Google search for the product and scam and of course it came up, so it must be a scam. The person who introduced him invites him to look up other things such Microsoft, Wal-Mart, Make-A-Wish, even paper towels, with "scam" and concludes that everything is a scam.

Of course we know that everything isn't a scam. Thus one is left to conclude that MLM is not a scam... except it is.

What Eric Nelson doesn't tell you is that you should read the actual articles to determine if it is a scam. For example, when you search for "Make-A-Wish scam" you'll find this report by ABC News of scammers that don't have anything to do with the Make-A-Wish foundation itself. You'll also find this CNN report where bad charities try to confuse people to donate to them with names that sound like Make-A-Wish.

The point? If you read the details nothing implies that Make-A-Wish is a scam in any way. Make-A-Wish should probably sue Eric Nelson for defamation.

What's not mentioned is that the person isn't asked to search "Enron scam", "Bernie Madoff scam", or "Zeek Rewards Scam." There are plenty of things that are scams that come up for the search too.

Thus the search itself is stupid. Either Eric Nelson needs some critical thinking help for suggesting that is a good test or he is trying to scam you. I'm guessing the later, as it is a lot of work to go through to create a video like this... you'd have to think he put in 30 seconds of thinking about the logical points he was making.

Finally, the FTC says to do the searches because some MLMs are scam:

"Find — and study — the company’s track record. Do an internet search with the name of the company and words like review, scam, or complaint. Look through several pages of search results. You also may want to look for articles about the company in newspapers, magazines, or online. Find out:
- how long the company has been in business
- whether it has a positive reputation for customer satisfaction
- what the buzz is about the company and its product on blogs and websites
- whether the company has been sued for deceptive business practices
- Check with your state Attorney General for complaints about any company you’re considering, although a lack of complaints doesn’t guarantee that a company is legitimate."

Also keep in mind that many online marketers target searches like this. They use this bring someone in and then make a case for it not to be a scam, and then suggest that the person go sign up. It's a good idea to not trust any online marketer who tries to say it's not a scam and then sign you up.

This post involves:

Bad MLM Arguments, MLM Video Scams

... and focuses on:

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Mark Cuban is Against MLM

In the past we've covered how Donald Trump is paid to support MLM. Robert Kiyosaki has exposed for having false logic when it comes to his support of MLM.

It's time to bring some good news. There are some level-headed people who aren't simply trying to sell you their brand and/or their book to make a quick buck for themselves. There are people like Mark Cuban who will tell you the way it is:

"With all of this craziness in the stock and financial markets, there will be scams popping up left and right. The less money you have, the more likely someone will come at you with some scheme . The schemes will guarantee returns, use multi level marketing, or be something crazy that is now 'backed by the US Government.' Please ignore them. Always remember this. If a deal is a great deal, they aren’t going to share it with you.

I don’t broadcast my great deals. I keep them all to myself. The 2nd thing to remember is that if the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker. There are no shortcuts."

This is exactly why you don't see Kiyosaki and Trump wasting their time recruiting people into MLM businesses. They'd rather spend a dozen hours working with ghostwriters (I'm assuming, most celebrities do) to put together a book that they can market to a dozen million people. It's easy money and almost no work if you already have the brand.

Once again Mark Cuban is dead on. Ignore his advice at your own peril.

This post involves:

MLM Business Opportunity

... and focuses on: