Multi-level marketing or network-marketing companies, better known as MLMs, are seriously predatory groups that you're guaranteed to find on your own timeline if you scroll for long enough. Each company has a different product it's pushing, from makeup to leggings to vitamin supplements. MLMs sell people on the idea that they can own their own business and be their own boss with a simple referral.
What's really happening is you're committing to selling a product where you can't make back your initial investment without recruiting people to sell under you, just as you were recruited. While MLMs will deny that they're anything like pyramid schemes, the similarities are plain to see. Modern MLMs appeal to people by having low barriers for entry. All you need is an active social media presence and some product and you're on your way.
COVID-19 has presented these companies with an opportunity to target moms. They are preying on our fears about providing for our families and our desires to stay safe at home. They're promising dreams they can't deliver on without consideration for who is hurt in the process. The idea of working from home and being your own boss is appealing. People so regularly fall victim to these scams that the Federal Trade Commission (FTC) issued a warning to MLMs about predatory practices in late April. In the meantime, moms need to know everything about what these companies are doing to stay vigilant and keep their loved ones safe.
MLMs are not taking a break during the pandemic. In fact, they're ramping up their predatory practices to take advantage of worried, stressed moms who are concerned about their safety and financial well-being. In particular, MLMs related to health and wellness are taking a two-tiered approach.
Health-based MLMs are making bold claims in relation to the coronavirus. They claim their products will improve your immunity. In some particularly astounding claims, they say their products can cure COVID-19.
The claims are so dangerous that the Federal Trade Commission (FTC) sent out a letter to 10 companies to put an end to dangerous practices. The letter demands that these companies "remove and address claims that they or their participants are making about their products' ability to treat or prevent coronavirus disease or about the earnings people who have recently lost income can make, or both."
The letter notes that the Food and Drug Administration (FDA) asserts there are currently no products that are scientifically proven to treat or prevent the virus.
"MLMs and other companies that distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making," said Andrew Smith, director of the FTC’s Bureau of Consumer Protection.
The other side of the exploitation MLMs are utilizing involves harping on emotion. Some moms are really terrified right now. The companies prey on that by appealing to your desire to provide for your family while keeping yourself safe. Working from home is one of the most attractive options out there right now, but MLMs don't provide legitimate opportunities.
"During this health and economic crisis, we are on the lookout for false income claims for work-at-home opportunities, in addition to spurious health claims that products can treat or prevent COVID-19," the FTC director added.
"The companies are so desperate to get people to join now, so they've really amped up their recruitment," Emma Rose, host of The Anti-MLM Podcast, told Business Insider.
"They're counting on the fact people are scared and looking for something to help them. They're all selling promises."
Sellers are also targeting the fact that many women are stressed out right now. They're increasingly looking for ways to practice self-care at home, and many of these beauty and wellness-related products promise to do just the trick. The reason so many of these companies are related to beauty and health is that the industry is seen as "recession-proof" and a sure thing regardless of what's going on in the economy.
"You're still washing your face, right? People are like, 'You told us we can't touch our face, but I still want to take care of it,'" Lisa Mack, a Mary Kay cosmetics distributor, told Business Insider.
"They're stuck at home, and they want to still feel good. People aren't going to a party and buying a party dress. To feel good, they might buy a tube of lipstick."
Here are some posts that the FTC cited in its letter as being problematic, according to Talented Ladies Club.
"I'll be going live on my #IGTV in a couple of hours talking about a product which we've got over at #Arbonne called 'Immunity Support'. Drop me a message if you're interested in finding out more and how you can boost up your immune system right now. #Corona Virus #ImmuneSystem."
"We have been thrown into the massive economic collapse in the past 13 years … Arbonne is a legitimate business, that rewards you for your hard work. In a little over one year, my wife is about 4 months away from replacing her income from working 40 hours/week [at a] local college. In addition, the possibilities are endless, I have met those who make $22,000/month as national vice presidents."
"Need to make extra money? Find it difficult to pay your bills? Were you laid off/#fired? Be your own Boss w/doTERRA essential oils. Msg me to achieve financial independence #laidoff #unemployed #cantpaymybills #cantpaymyrent #student #sales #sidehustle #makemoney #stayathomemom."
You may wonder why it looks like the women peddling these MLMs are doing so well. They often show off the fabulous products the fruits of their labor affords them. What they don't tell you is that those photos get cycled through thousands of upline sellers, who get tips on helping their downline from social media groups filled with others doing the same.
Lying is greatly encouraged in the industry. It's pitched as a "fake it till you make it" mentality, but it's flat-out dishonest. Large orders of products are faked with empty boxes. Screenshots are pieced together to look real.
There's a reason why these groups have been likened to cults. The pressure is so intense that sellers try to spin every moment of their lives as an opportunity to sell. There seem to be no boundaries aggressive sellers won't try to push through, as seen in this post talking about a person's death as a motivational factor to work their business.
MLMs are most attractive to moms because they offer a fairy-tale situation. You can live your life with your kids the same way you do while making money effortlessly. It speaks to the lack of work-from-home opportunities available for women who need to both provide for their families and be physically present with them. More companies are coming around to providing work-life balance, but not in substantive ways that allow more women who need to stay at home to enter the workforce.
A FlexJobs survey of over 900 stay-at-home parents interested in rejoining the workforce found that 36% wanted to continue working but had jobs that were too inflexible to accommodate their needs as working parents. Another 25% weren't able to find affordable or quality child care.
Work is, for these families, a necessity for various reasons. The survey found that 56% of parents need the money and another 45% enjoy working and want to get back to feeling professionally fulfilled. When trying to earn money from home, 34% of the surveyed parents tried freelancing, and 11% tried MLMs.
The coronavirus has exposed many of society's vulnerabilities, and this is yet another. We need to create a culture that supports the idea that people can want both parenthood and professional fulfillment. We need to find a way to make it so that the pursuit of both isn't an unusual situation that needs to be catered to, but one of several very common scenarios.
