Articles under ‘theory’:

Is Forever Living Products encouraging affiliate autoship recruitment?

Forever Living Products’ Leadership Bonus pays affiliates on sales volume generated down three Manager generations. To qualify for the bonus affiliates must meet sales volume requirements, which can be met entirely with self-purchase (no retail). The volume can of course be also generated via retail sales (or a combination of retail and personal purchase), and [Continue reading…]


The Moolenaar Amendment: Why is the DSA pushing pro-pyramid law?

Personally I think MLM regulation in the US is in a pretty good place. Other than the host of affiliate autoship recruitment scams that still need to be cleaned up (nutrition niche, I’m looking at you), there hasn’t been any major Ponzi or pyramid scheme launches in the US since the Vemma and Herbalife busts. [Continue reading…]


Documenting the collapse of a bitcoin doubler (GladiaCoin)

The MLM underbelly doubler business model is nothing new. Affiliates sign up and invest, with a 200% ROI offered either via a set timetable or open-ended. The only source of revenue to pay the ROI is subsequently invested funds, making every doubler a Ponzi scheme. HYIP scams have been using it with fiat currency for [Continue reading…]


Latest FTC guidance to MLM industry emphasizes retail sales

One of the more frustrating aspects of covering MLM regulation and litigation is a tendency for people to ignore what’s currently happening, in favor of past legal opinions and decisions from the past. Some of these opinions and decisions are decades old but people still cling to them as gospel. One of the more common [Continue reading…]


FTC: MLM companies with little to no retail activity are illegal

Retail sales requirements within an MLM opportunity is perhaps the most decisive issue facing the industry today. Proponents of pyramid schemes argue that affiliate purchases of product should count as retail sales. I myself argue that to permit as much would open door for product-based pyramid schemes to operate freely. This stance is strongly rooted in [Continue reading…]


John Oliver’s Last Week Tonight exposes “pyramid scheme” MLMs

In line with the nature of Last Week Tonight, this is more of an entertainment piece as opposed to BehindMLM’s regular coverage. In the latest episode of Last Week Tonight, an Emmy award-winning weekly news and current events show aired on HBO, host John Oliver discusses MLM. Oliver begins the segment with the familiar MLM [Continue reading…]


SEC’s Ceresney: Legitimate MLM involves retail sales

Despite a lack of retail a key focal point in several MLM-related enforcement actions over the past few years, there are still those who argue the legitimacy of chain-recruitment autoship schemes. Typically in this business model, retail is either insignificant or absent altogether. Instead, products are sold exclusively to affiliates, with participants in such schemes arguing [Continue reading…]


Affiliates self-funding commission qualification = pyramid?

The single-biggest takeaway from the Vemma preliminary injunction order was the correlation of affiliates self-funding commission qualification. This wasn’t just a Vemma issue, it’s patently widespread throughout the entire MLM industry.  Following the Vemma preliminary injunction, what could follow is the biggest MLM compensation plan shakeup we’ve seen in years. Or not.


Does limiting levels legalize a pyramid scheme?

The reasons participants in pyramid schemes come up with to justify their participation in one are just as numerous as the schemes themselves. Here on BehindMLM we regularly bear witness to all sorts of logic-fails, ranging from the tired “everything is a pyramid scheme” to “why hasn’t X company been shutdown if it’s a pyramid [Continue reading…]


Why aren’t MLM companies compliant BEFORE launch?

Two of the big buzzwords currently being tossed around the MLM industry are ‘compaliance‘ and ‘being compliant’. Or in other words, attempting to ensure that a company is legal and won’t be shut down for being a thinly veiled Ponzi or pyramid scheme. Typically compliance issues are related to US-based MLM businesses (or offshore businesses [Continue reading…]