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If they were really interested in sending a signal they would do something like shut down Amway. A company that is nothing more than a multi-billion dollar "leg

If they were really interested in sending a signal they would do something like shut down Amway. A company that is nothing more than a multi-billion dollar "legal" pyramid scheme which preys on the most vulnerable people in society operates with impunity and has for decades now. Literally brainwashes and robs MILLIONS of people on a daily basis. The FTC, FCC, and SEC are toothless against billionaires. Just like the IRS, they mainly focus on harassing small-time crooks these days because that's the easiest thing to do. The large scale fraudsters operate with absolute impunity. If anything these organizations actually act as a barrier to entry for people looking to get into fraud, because if you don't get big enough fast enough they will come after you. But once you hit a billion in revenue, you are golden.

gruez 4y ago
[deleted]
- themagician 4y ago
  Amway. Amway and all the clones. In the US you can run a pyramid scheme as long as you have enough money and political influence to do it “legally”.
  - parineum 4y ago
    That's not true. A pyramid scheme, legally, has no product but itself. Those are illegal. For example, pay me $20 to join my company and you get the right to recruit people for $20! Amway is essentially exactly the same except they add a product to the mix to get around the law. They still primarily profit from the "employees" rather than customers. Changing the definition of a pyramid scheme, for the proposes of law enforcement, to something more akin to "profits primarily off employees" is what needs to be done.
    - pessimizer 4y ago
      > A pyramid scheme, legally, has no product but itself. There are 0.0% of pyramid schemes with no product.
      - parineum 4y ago
        Because they are illegal. That's what the originals were though. You pay some amount of money that gets you basically nothing (maybe a few pages of "how to recruit") and that's it. MLM schemes are distinct in that they actually have a product and that's what makes them legal.
    - specialist 4y ago
      If you have model legislation handy, particularly the specific legal definition of scams like MLM, I'd be very grateful. Otherwise I'll poke around a bit, to see how UK phrased it.
- ok_dad 4y ago
  > Amway Literally the last word of the sentence before the sentence you quoted stated the very specific company name.
neonnoodle 4y ago
notacoward 4y ago
> they would do something like shut down Amway While I agree that Amway and other pyramid schemes (including most crypto) should be shut down, it's not because they're anti-competitive. They're fraudulent, which is arguably worse but certainly different.
- sharemywin 4y ago
  It's not really fraudulent. Most of the companies com plans are right there. I don's see it as any more fraudulent then tech companies offering products for free or significantly discounted using investor cash to buy massive market share then once they have a monopoly jacking up prices or loading up search results with ads to the point you need to scroll down to even see search results. Imagine if when google was first released it was nothing but ads and/or websites with more ads from its ad network
  - themagician 4y ago
    It is fraudulent. Fraud, racketeering, price-fixing, false income claims and operation as an illegal pyramid scheme. Sued many times in many countries. Banned from the UK and most of the EU. Several founders were indicted in Canada on criminal charges. But somehow it's just not enough for the FTC to really do anything other than settle and let them continue operate.
    - sharemywin 4y ago
      like lotteries and gambling.
Retric 4y ago
Multi level marketing is closely related but distinct from a pyramid scheme. The critical difference is the actual generation of profits and the health of the organization through time. Franchise agreements can similarly look really sketchy on the surface especially with a large buy-in, but it’s hard to argue a Mcdonald's franchise agreement is a scam due to the real profits and costs involved. Which isn’t to say every franchise agreement is a good investment. Where things break down for MLM is really the specific business model and percentages involved. If say 4% of a sales guy’s check gets sent to the chain of people who recruited him then no big deal. However, large percentages or large buy can quickly become very problematic.
- mjevans 4y ago
  Franchise agreements should have a very narrow path to the top of the chain. Maybe a state / locality, country, and global entity at most and that entirely for tax zoning / similar reasons.
- pessimizer 4y ago
  Non-MLM franchises don't make their money from sublicensing at all. It isn't like one McDonald's franchise is being paid by other McDonald's stores. It's single-level marketing. So I don't know that the distinction is so fuzzy.
  - bombcar 4y ago
    Some franchises are basically scams against the franchisee- subway and Quiznos were famous for not caring much at all and being willing to sell a franchise to anyone with some money (normally franchises are protected from similar franchises within a given area).
    - specialist 4y ago
      This is also SOP for the value-added reseller (VAR) scam. One notable exception are car dealers. They somehow secured themselves durable lucrative carve-outs before the VAR thing matured.
geoelectric 4y ago
So, I know a little about this, unfortunately. My "shameful past job" at one point in the 90s was working for a company that basically made small-business CRM+accounting software you could customize to drive any MLM scheme you could think up. Amway's not the best example, since they actually sell real goods and because Amway's sellers' best customers have almost always been the sellers themselves. In other words, many sellers used it as a way to buy goods at "wholesale" and never really had any intention of reselling them. At one point, I think that was even part of the Amway pitch, particularly at the time they were inexplicably popular for their (expensive and therefore in theory a better deal discounted) water treatment products. I don't think there's a price advantage there compared to Costco or online, though--much of what made Amway fade into the background starting in the mid 90s. So too Stella Dot, Mary Kay, Cutco/Vector, probably Herbalife and even Transamerica, etc. They sell real stuff, whether or not the pricing makes sense, and you can technically turn a profit on it, whether or not the market is really there, so they're not technically considered a pyramid scheme in the scam/illegal sense. Now, I'm not saying they're good ideas--at all--and they absolutely operate on hype and pipe dream every bit as much as those awful timeshare presentations. They have the same exponential market saturation issue as any pyramid scheme and the same diminishing returns--but they are generally not considered fraudulent, just obnoxious. The really awful pyramid schemes mostly just sell "new seller kits" to prospective targets that teach them how to sell "new seller kits" to their targets, have no real product or way to make a profit, and the entire rollup is those kits and other overhead fees. They're the financial equivalent of a chain letter. I'm pretty sure those do get action taken against them if they're identified. The biggest problem there is most are pretty small, take a bunch of people's money, then burn out once it's all rolled to the top ranks who founded the scheme and new marks aren't easy to find.
- girvo 4y ago
  While I understand your point, I think society should treat all of this as a distinction without a difference. Herbalife et al. should not be allowed to prey on the vulnerable, regardless of if they happen to sell a “real” product or not. It’s not a real business selling a real product. Other countries rightfully have seen it this way for some for the companies under discussion.
sequoia 4y ago
What does “literally brainwashes” mean? I don’t think “brainwashing” is actually a well defined concept. Can you link to an explanation that would clearly exclude persuasion?
- xapata 4y ago
  "Literally" means figuratively, now. In much popular usage, at least. "Figurative brain washing," is quite clear.
  - waltbosz 4y ago
    I taught my children the correct usage of the word "literally", after we watched an irksome YouTube video in which the host made significant abuse of the word. Now whenever they hear someone say "literally", they double check with me: "Daddy, is (xyz) a figure of speech?" I find the behavior both cute and precocious.
    - antiterra 4y ago
      The battle has been lost and ‘literally’ lies with its siblings ‘very,’ ‘really,’ and ‘truly.’ I suspect ‘actually’ is in danger.
      - teddyh 4y ago
        Verily.
  - croon 4y ago
    It's literally (figuratively) meant figuratively for literally (literally) hundreds of years, depending on context. I was always a language stickler growing up but am becoming more measured in most areas of life as I age and discover the subtle nuances of literally (figuratively) everything, and as long as I'm understanding someone figuratively (figuratively), I won't question their language.
- sequoia 4y ago
dragonwriter 4y ago
> If they were really interested in sending a signal they would do something like shut down Amway. Sure, if the signal was “we just want to get beaten up by the courts for trying to turn a regulatory agency into a lawless dictatorship”. > The FTC, FCC, and SEC are toothless against billionaires None of them are in primarily aimed, legally, at indivduals, regardless of wealth. > Just like the IRS, they mainly focus on harassing small-time crooks these days because that's the easiest thing to do. I don’t think a review of the actual enforcement record of any of those agencies supports that claim. Vonage, Harley-Davidson, Weber grills, Westinghouse outdoor power equipment, OpenDoor Labs—just to cite FTC enforcement actions in the last couple weeks—aren’t small actors.

gruez 4y ago

[deleted]

themagician 4y ago
Amway. Amway and all the clones. In the US you can run a pyramid scheme as long as you have enough money and political influence to do it “legally”.
- parineum 4y ago
  That's not true. A pyramid scheme, legally, has no product but itself. Those are illegal. For example, pay me $20 to join my company and you get the right to recruit people for $20! Amway is essentially exactly the same except they add a product to the mix to get around the law. They still primarily profit from the "employees" rather than customers. Changing the definition of a pyramid scheme, for the proposes of law enforcement, to something more akin to "profits primarily off employees" is what needs to be done.
  - pessimizer 4y ago
    > A pyramid scheme, legally, has no product but itself. There are 0.0% of pyramid schemes with no product.
    - parineum 4y ago
      Because they are illegal. That's what the originals were though. You pay some amount of money that gets you basically nothing (maybe a few pages of "how to recruit") and that's it. MLM schemes are distinct in that they actually have a product and that's what makes them legal.
  - specialist 4y ago
    If you have model legislation handy, particularly the specific legal definition of scams like MLM, I'd be very grateful. Otherwise I'll poke around a bit, to see how UK phrased it.
ok_dad 4y ago
> Amway Literally the last word of the sentence before the sentence you quoted stated the very specific company name.

neonnoodle 4y ago

notacoward 4y ago

> they would do something like shut down Amway While I agree that Amway and other pyramid schemes (including most crypto) should be shut down, it's not because they're anti-competitive. They're fraudulent, which is arguably worse but certainly different.

sharemywin 4y ago
It's not really fraudulent. Most of the companies com plans are right there. I don's see it as any more fraudulent then tech companies offering products for free or significantly discounted using investor cash to buy massive market share then once they have a monopoly jacking up prices or loading up search results with ads to the point you need to scroll down to even see search results. Imagine if when google was first released it was nothing but ads and/or websites with more ads from its ad network
- themagician 4y ago
  It is fraudulent. Fraud, racketeering, price-fixing, false income claims and operation as an illegal pyramid scheme. Sued many times in many countries. Banned from the UK and most of the EU. Several founders were indicted in Canada on criminal charges. But somehow it's just not enough for the FTC to really do anything other than settle and let them continue operate.
  - sharemywin 4y ago
    like lotteries and gambling.

Retric 4y ago

Multi level marketing is closely related but distinct from a pyramid scheme. The critical difference is the actual generation of profits and the health of the organization through time. Franchise agreements can similarly look really sketchy on the surface especially with a large buy-in, but it’s hard to argue a Mcdonald's franchise agreement is a scam due to the real profits and costs involved. Which isn’t to say every franchise agreement is a good investment. Where things break down for MLM is really the specific business model and percentages involved. If say 4% of a sales guy’s check gets sent to the chain of people who recruited him then no big deal. However, large percentages or large buy can quickly become very problematic.

mjevans 4y ago
Franchise agreements should have a very narrow path to the top of the chain. Maybe a state / locality, country, and global entity at most and that entirely for tax zoning / similar reasons.
pessimizer 4y ago
Non-MLM franchises don't make their money from sublicensing at all. It isn't like one McDonald's franchise is being paid by other McDonald's stores. It's single-level marketing. So I don't know that the distinction is so fuzzy.
- bombcar 4y ago
  Some franchises are basically scams against the franchisee- subway and Quiznos were famous for not caring much at all and being willing to sell a franchise to anyone with some money (normally franchises are protected from similar franchises within a given area).
  - specialist 4y ago
    This is also SOP for the value-added reseller (VAR) scam. One notable exception are car dealers. They somehow secured themselves durable lucrative carve-outs before the VAR thing matured.

geoelectric 4y ago

So, I know a little about this, unfortunately. My "shameful past job" at one point in the 90s was working for a company that basically made small-business CRM+accounting software you could customize to drive any MLM scheme you could think up. Amway's not the best example, since they actually sell real goods and because Amway's sellers' best customers have almost always been the sellers themselves. In other words, many sellers used it as a way to buy goods at "wholesale" and never really had any intention of reselling them. At one point, I think that was even part of the Amway pitch, particularly at the time they were inexplicably popular for their (expensive and therefore in theory a better deal discounted) water treatment products. I don't think there's a price advantage there compared to Costco or online, though--much of what made Amway fade into the background starting in the mid 90s. So too Stella Dot, Mary Kay, Cutco/Vector, probably Herbalife and even Transamerica, etc. They sell real stuff, whether or not the pricing makes sense, and you can technically turn a profit on it, whether or not the market is really there, so they're not technically considered a pyramid scheme in the scam/illegal sense. Now, I'm not saying they're good ideas--at all--and they absolutely operate on hype and pipe dream every bit as much as those awful timeshare presentations. They have the same exponential market saturation issue as any pyramid scheme and the same diminishing returns--but they are generally not considered fraudulent, just obnoxious. The really awful pyramid schemes mostly just sell "new seller kits" to prospective targets that teach them how to sell "new seller kits" to their targets, have no real product or way to make a profit, and the entire rollup is those kits and other overhead fees. They're the financial equivalent of a chain letter. I'm pretty sure those do get action taken against them if they're identified. The biggest problem there is most are pretty small, take a bunch of people's money, then burn out once it's all rolled to the top ranks who founded the scheme and new marks aren't easy to find.

girvo 4y ago
While I understand your point, I think society should treat all of this as a distinction without a difference. Herbalife et al. should not be allowed to prey on the vulnerable, regardless of if they happen to sell a “real” product or not. It’s not a real business selling a real product. Other countries rightfully have seen it this way for some for the companies under discussion.

sequoia 4y ago

What does “literally brainwashes” mean? I don’t think “brainwashing” is actually a well defined concept. Can you link to an explanation that would clearly exclude persuasion?

xapata 4y ago
"Literally" means figuratively, now. In much popular usage, at least. "Figurative brain washing," is quite clear.
- waltbosz 4y ago
  I taught my children the correct usage of the word "literally", after we watched an irksome YouTube video in which the host made significant abuse of the word. Now whenever they hear someone say "literally", they double check with me: "Daddy, is (xyz) a figure of speech?" I find the behavior both cute and precocious.
  - antiterra 4y ago
    The battle has been lost and ‘literally’ lies with its siblings ‘very,’ ‘really,’ and ‘truly.’ I suspect ‘actually’ is in danger.
    - teddyh 4y ago
      Verily.
- croon 4y ago
  It's literally (figuratively) meant figuratively for literally (literally) hundreds of years, depending on context. I was always a language stickler growing up but am becoming more measured in most areas of life as I age and discover the subtle nuances of literally (figuratively) everything, and as long as I'm understanding someone figuratively (figuratively), I won't question their language.
sequoia 4y ago

dragonwriter 4y ago

> If they were really interested in sending a signal they would do something like shut down Amway. Sure, if the signal was “we just want to get beaten up by the courts for trying to turn a regulatory agency into a lawless dictatorship”. > The FTC, FCC, and SEC are toothless against billionaires None of them are in primarily aimed, legally, at indivduals, regardless of wealth. > Just like the IRS, they mainly focus on harassing small-time crooks these days because that's the easiest thing to do. I don’t think a review of the actual enforcement record of any of those agencies supports that claim. Vonage, Harley-Davidson, Weber grills, Westinghouse outdoor power equipment, OpenDoor Labs—just to cite FTC enforcement actions in the last couple weeks—aren’t small actors.