MLM Myth: This MLM is Legal so This Other One Must Be Legal

One common argument that a MLM distributor will make is that because one MLM is legal all of them must be legal. Often times the argument will come in the form of: Avon and Tupperware are legal have been around forever so [fill-in the MLM the distributor is pushing] must be legal. The logic seem sound at first and if you didn't know better you may fall for it.

However we know that MLMs with products can be illegal pyramid schemes. Some MLMs are legal are some are not.

This lack of logic is known as an association fallacy. The very same logic could be used to say that because a serial killer is a person and you are a person, you must be a serial killer. Hopefully, it is now clear how poor this logic is.

Bottom Line: There are many different varieties of MLMs. Use the guidelines from this FTC document on MLMs and pyramid schemes to determine if one is legal. If an MLM distributor is using this type of logical fallacy to convince you to join his or her MLM, it is likely they are trying to trick you. Avoid the person and the company like the plague.

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MLMs vs. Pyramid Schemes

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