Monday, December 09, 2013

Tin Promises: How MLMs Can Tear Lives Apart, Part 1 of 2

For nearly a year and a half I have devoted an inordinate amount of time and blog space to the ongoing saga of currently jailed serial scammer Kevin Trudeau, whose huge scheme, the Global Information Network (GIN), had a multi-level marketing (MLM) component (the "GIN Affiliate Program") that was only recently suspended by the court appointed receiver. Some months back, the receiver had called the legitimacy of the MLM into question, as the "product" being sold is not a physical product but a Level One GIN membership (normal cost $1,000 "initiation" fee, with $150 monthly fee for as long as one is a member). According to court order the receiver had a legal obligation to keep GIN and all of Trudeau's business entities operational until and unless the entities were determined to be illegal (or unprofitable). The receiver's job is to uncover monies that can presumably be used towards paying the $37.6 million fine that the FTC has levied against Trudeau for deceptive marketing of his book, The Weight Loss Cure "They" Don't Want You To Know About.

Many people were reportedly shocked and outraged that the MLM was being discontinued. Some were actually making a little money in the program, though most were losing money, as is all too often the case with MLMs. But clearly, without the MLM -- the whisper of a promise of a possibility of making at least a little bit of money -- GIN's value plummeted in the eyes of many remaining members and prospective members.

As I've also reported at length on this Whirled, groups of current GIN and even ex-GIN members are struggling to save GIN and breathe new life into the "club," despite the fact that its leader will presumably no longer be able to participate, at least not in a visible or obvious way. Some of these people have said they never really had any interest in the GIN MLM program but that they found the other part of GIN -- the "training," which was delivered via increasingly pricey "membership levels"-- to be invaluable. Many of these folks claim that they want to keep GIN alive to continue to deliver this sort of value (but at a lower price than the exorbitant upgrade costs in the current setup).

However, it is clear from the communications of some of the main activists in the "save GIN" movement (including the leader of the "Intervenor" movement, Ohio GIN member Perry Kiraly) that the MLM is what really interests them. Some refuse to give up on that dream, perhaps because they have many thousands of dollars invested and they still hold out unicorn fantasies of recouping their losses. According to one of Kiraly's latest updates to his "Stand With GIN" followers, he has been consulting with an "MLM attorney" who is currently reviewing the GIN MLM to see how it can be modified to get it in line with US regulations and with regs in any part of the world where GIN members reside. To me this is akin to slightly altering the sausage-making process so that the levels of insect parts and rodent feces and possible carcinogens are within "acceptable" guidelines. There will still be insect parts and rat poop and other things you wouldn't want to put into your body, but they'll be there in a quantity that has the blessings of the regulators.

In any event, it seems clear that reviving the MLM is a top priority to some of these folks. And these are some of the same people who will argue till the cows come home that multi-level marketing is a wonderful way to make money and that just about anyone can become a zillionaire through participating in an MLM -- if they only work the program correctly and, of course, have the right attitude. The statistics tell a different story, as do the painful narratives of those whose lives have been torn asunder by MLMs and the self-help/prosperity cults that both support and are supported by various MLMs.

One such narrative comes from the pseudonymous Roger Willco, who told his story
in a more abbreviated form on Salty Droid's blog in October, and whose story and MLM observations I also cited on my own blog at the same time. I also invoked Trudeau and GIN on that post, noting that GIN is but one drop in a huge ocean of fraud.

Roger has painstakingly expanded his narrative and has graciously given me his permission to share it here. Because it is lengthy, I am presenting it in two parts. Of note, the person in his life who was a serial MLM participant also joined GIN and became, Roger told me, a passionate defender of Kevin Trudeau's messianic qualities.

It is Roger's hope -- and mine as well -- that reading his story will help at least a few people rethink their decision to join or continue participating in potentially finance-wrecking, soul-destroying money schemes (and/or self-improvement cults), or at the very least that his narrative will help troubled MLM participants' loved ones gain a better understanding of the dynamics of MLM culture. As I noted, this is long, so you know the drill... print it out if you're prone to screen fatigue. But please do read it, even if you've already read the shorter version on Salty's blog, because much has been added to this one. And in particular, if you or someone you know is involved in an MLM and beginning to wonder why finances -- and lives -- seem to be spiraling out of control, this story may very well speak to you. ~CC
Tin Promises
My Life on the Fringe of MLM
by "Roger Willco"
© 2014, all rights reserved • Used by permission

This is the story of my 8½ years living on the fringe of multi-level marketing (MLM), its impact on my life and the lives of my former significant other and her son. It’s a sad story, parts of which you may find more than a little unsettling. However, it’s a story conscience and compassion compel me to tell. Although most of my involvement in the MLM industry was on the periphery, I look back at some of the things I did—knowing better in my core—and I feel remorse for the role I played in promoting MLM’s deceptions. More importantly, I feel compassion for the dozens of wonderful people I know and the millions I don’t know who remain trapped in MLM because they believe its golden promises. They’re convinced their success is just around the corner, despite overwhelming evidence that their eventual failure is inevitable.

There is plenty of good information available online to anyone who’s interested. It takes quite a bit of time to sort through all the pro-MLM websites masquerading as objectively informational; but learning the facts is worth the effort. There are thousands of stories that could put much-needed human faces on the nearly universal consequences of MLM involvement, if only they were told. This particular story exposes some of the more extreme costs MLM can exact from its victims. I hope its telling will help encourage a compassionate public to act before the MLM industry—largely centered in the United States—gains a foothold with its economic and social predation in more of our global community than it already has.

Several years ago Danielle (Danni), a friend whom I’d known since college but hadn’t seen much since, asked me to meet her at a regional training event held in a nearby city by the MLM company in which she was a distributor, also known as an independent business owner (IBO). The training was primarily motivational—the facilitator a top "Level 7" distributor in the company. Danni had been recruited four years earlier and was optimistic about her future success. She anticipated achieving the rank of "Level 3" in the near future through sales made by the downline of IBOs she’d been building during her tenure with the company.

Danni has always been a sweet and gentle woman with an unforgettable smile that begins in her twinkling gray eyes and spreads to her generous mouth (her lips are so luscious I often teased her that she couldn’t have gotten them without collagen injections). It doesn’t end until it bathes her entire slightly freckled face, exuding enough warmth to melt the polar ice cap in just a matter of hours should she happen to get too close. Danni cares for and trusts everyone—whether or not she’s met them; and she has a heart for service to others. She is an attentive mother, a delightful and affectionate companion and a concerned friend. Danni has always taken good care of herself, maintaining total fitness and high energy. Her accomplishments on several fronts—surfing, photography, music, academics and marathon running—are extraordinary. I suppose vivacious with infectious positivity would be the best description of her personality. On top of all that, Danni is exceptionally intelligent; and in her late 40s, she’s gorgeous…truly every man’s dream and for a time, she was my dream come true.

Several months after that initial reconnection, our renewed friendship blossomed into a delightful romantic relationship. I was retired from my own career and able to turn my time and energy to doing what I could to help Danni succeed in hers. To launch our business relationship, she enrolled me as an IBO in her downline at a cost to herself of over $1,000. Danni believed my life and health depended on consuming the company’s dietary supplements—a prospect at which I was decidedly unenthusiastic. In fact, she was unquestioningly convinced that the company’s products were revolutionary; and that the business opportunity and products she was selling dramatically changed lives. Danni also believed she was part of a movement embodied in the company that was changing the world. Her fervor was contagious, I wanted to help her bring her dreams to life and signing on would expand her downline. So, I agreed to the arrangement.

That autumn, Danni asked me to help her organize her previous year’s income and expense records for her tax return. That included tabulating her business expenses for the previous year. I was amazed to find that her expenditures for products alone exceeded $16,000. When we met with her tax accountant, I learned that most of the products she bought had been for her personal use. The rest was for inventory—much of which she gave away as promotional samples or sold at a loss. Danni’s personal consumption of over $1,000 worth of supplements each month seemed excessive to me. However, she explained that "large servings" (high doses) of the company’s array of bioactive products had cured her frozen shoulder in the past and that maintaining her high intake levels had prevented her from contracting the usual seasonal viruses ever since. Other possible reasons for her disproportionate product use would become apparent a few years later.

Danni and I attended her MLM’s annual three-day national event a few weeks later. In each of the general sessions, I experienced what I now recognize as manipulative mind control. Every general session included rousing music with the audience often clapping in rhythm, jumping to their feet and cheering as company platitudes were uttered from the podium, and according frenzied welcomes to each company luminary who stepped onto the stage. Speakers unrelentingly hyped the company and its products. Stories and pictorial depictions of endless wealth awaiting motivated MLM distributors peppered the entire event. I remember feeling isolated as I sat silent through many of the crowd’s emotional outbursts at each meeting.

Speaker after speaker spoke of traditional social sensibilities as roadblocks to success. They denigrated "J-O-Bs" as "enslavement . . . trading time for money"—as if working in an honorable occupation were some profane and immoral pastime. They discouraged distributors from associating with anyone who took issue with the way they conducted business. Company icons taught that persons "guilty" of critical thinking, as might be evidenced by questioning the company’s claims and the achievability of "the dream", were "losers, negative, and dream stealers" whom they’d be wise to avoid. They encouraged a unique version of "due diligence" by referring their listeners to the company’s own "informational" website where they could find "scientific studies" done by "independent researchers". To any critical investigator, the "scientific studies" posted there were markedly substandard and the "independent researchers" were easily recognizable as company shills whose conflicts of interest rendered their conclusions unconvincing at best.

Top-level distributors facilitated dozens of breakout trainings; and Danni was compulsive about attending as many as possible during the two days they were offered. Most of these trainings included at least implicit endorsement of deceptive techniques in prospecting distributors and customers. Obfuscation, avoidance, omission and just about any other means that didn’t involve outright lying were encouraged as effective, acceptable and ethical IBO practices. Facilitators regaled their audiences with depictions of lavish lifestyles and promises of lucrative passive income streams. They took every possible opportunity to emphasize that these were attainable by any distributor who believed in their upline, the company and its products, and followed top distributors’ "easily-duplicable" systems.

Even though I’d suppressed my own critical thinking to a limited extent, I was troubled by the testimonial session that ended the first evening. Dozens of distributors lined up to tell their stories of experiencing or witnessing healing and relief of suffering which they attributed to use of the company’s products—usually in remarkably large quantity. Many of the diseases, such as multiple sclerosis, discussed by testifiers are characterized by a labile course in which sufferers experience repeated spontaneous cycles of improvement and deterioration. This characteristic renders them susceptible to causal fallacy—the belief that a possibly coincidental variable caused the improvement. Other testifiers spoke about relief from diseases in which a psychosomatic (symptoms originating in the mind) component is highly suspect. Those afflicted with psychosomatic conditions are particularly predisposed to the placebo effect—a variant of causal fallacy. It was interesting to me that the evening’s master of ceremonies frequently repeated a disclaimer I eventually came to know by heart: "Our products do not diagnose, treat, prevent, mitigate or cure any disease." I found that statement incredibly ironic, given that every testimonial I heard described how the products had done exactly that.

No miracle cures
I’ll never forget one of Danni’s prospects who had contacted her seeking answers for his multiple sclerosis. Mark headed an exceptionally nice family that included an adult daughter who suffered the ravages of lupus. I went with Danni to their home with a full complement of her MLM company’s products to demonstrate their efficacy with "kinesiology". This is a pseudo-scientific and highly subjective method of testing the effect of any substance in physical contact with the subject’s tissues—often mucous membranes in the mouth—on their muscular strength. Increased strength indicated that the subject’s body had an affinity for the substance and that the subject should therefore take or apply it and by the prescribed route in order to achieve "optimal wellness". Based on the results of Danni’s tests, Mark and his family signed up for several hundred dollars worth of products each month by "auto-order".

These wonderful people had invited us to share their noon meal after the conclusion of business. As we sat around the family table, enjoying homemade pea soup and BLTs, I was buoyed by the look of hope on every face. It was obvious too that Danni was delighted to have again helped someone.

Several months later, Mark phoned Danni about his and his daughter’s apparent unresponsiveness to the products they were taking. As it happened, there was a regional company event scheduled near Mark’s home within a few weeks. Danni advised Mark that he and his daughter should continue on the products until then; and if they would meet us there, she would put them in touch with an RN we knew who could better evaluate their lack of improvement.

Danni and I played host to Mark, his wife and his daughter at the event; and at the appointed time, the five of us met with our RN "friend", who also happened to be another IBO in the company. She asked Mark how much of which products he and his daughter were taking; and with no further evaluation of any kind advised them to "Just take more of the same products for longer."

No hole would have been too small for me to crawl into when I saw this woman’s cavalier exploitation of two suffering people in need. It was a clear indication of the moral depravity that was becoming more and more apparent in the culture that surrounded us. It also explained how similar exploitative advice might well have convinced Danni to purchase and consume $1,000 worth of products every month.

In retrospect, I wish I’d had the strength of character to call "foul" on what I saw that day. Soon after this incident, Mark and his family stopped their auto order and terminated contact with Danni; and that gave my conscience some relief. However, I will forever carry guilt for my part in helping Danni unknowingly perpetrate fraud on this beautiful family. I’m so far unable to access Mark’s last name so I can contact him and make right my part in his victimization. My unresolved experience with Mark and his family has become an important driving force in my determination to do all I can to make up for my wrong to them by helping expose the fraud embodied in the MLM industry.

A "naive cadre of distributors"
At the national event, a "storefront" was open during breaks between sessions. While a few of the company’s products were displayed for sale, the majority of shoppers seemed to spend most of their time looking at the abundant selection of "company-approved" sales aids and promotional materials offered for sale by the company’s purportedly independent tools-marketing partner. Danni usually spent a minimum of $1,000 at the storefront at each of the eight national or international events we attended together. She was certain that her dream of ascending to the next distributor level was just around the corner. Danni thought that if she just knew more and had the latest promotional literature and CD’s available for the prospects she canvassed, her sales and recruiting volumes would quickly increase.

However, like most people drawn in by MLM’s golden promises of wealth based on projected exponential sales growth, Danni hadn’t analyzed the model beyond the first few levels and neither had I. If we’d understood the implications of exponential growth—rapid market saturation with an oversupply of both products and distributors, we might have recognized that Danni was trying to succeed in a market which had long before become saturated. The solution for her frustration would only have been found by expanding into an unsaturated geographical market . . . not in updated sales aids. With uncontrolled exponential distributor propagation, there was no way for Danni to find out if or where an unsaturated market existed—just one more obscure but catastrophic flaw in the MLM distribution model.

The final evening was devoted to "giving back" through the company’s "charitable" arm. A company executive solicited donations of its "healthy candy" product or cash to purchase it for starving children in foreign countries. I watched in disbelief as Danni deposited a check for $500 in the bucket that was circulated after an emotionally charged offering appeal and prayer at the end of the meeting. To my knowledge, the company didn’t pay commissions on the products distributors bought at a discount for donation. It wasn’t until after I extricated myself from MLM world that I realized this had been a scam within a scam—particularly reprehensible for masquerading as a charity—further preying on the company’s naïve cadre of distributors.

While I couldn’t clearly identify why at that time, something about the whole event felt very wrong. I chalked my feelings up to nothing more than my personal discomfort with the appeals to avarice that seemed to dominate the atmosphere; and as I thought about it, there’s really nothing wrong with being rich. Out of my love for Danni, I suppressed my misgivings and continued forward, assisting her in her business to the extent I could.

As I look back, the entire event appears to have been engineered to combine principles of
group think, emotional contagion, collective behavior and collective narcissism with the power of a large assembly of peers. The objectives would have been to coerce conformity from individuals to the anomalous behaviors, perceptions and attitudes of the crowd surrounding them and to cultivate a sense that they were part of an exclusive elite group. Whether or not use of these mind-control techniques was deliberate or simply the way it’s always been done is open to question. However, the result was the same either way—participants’ suspension of critical thinking or healthy skepticism that would otherwise prevent their acceptance of MLM’s array of deceptions and entry into its warped reality.

The company’s international event took place every spring. It was identical in format to the national gathering. Smaller groups of distributors in our state organized regional 1½-day conferences patterned after the company’s national and international events—only on a smaller scale and without the breakout sessions.

On the local level, individual distributors hosted periodic "opportunity meetings". The purpose of these meetings was to present the MLM’s "business opportunity" to prospects in a group setting. The usual practice in our community included stocking attendance with existing distributors who would bring their own prospects as guests and supply contagious enthusiasm. Opportunity meetings included some combination of training, promotional presentations and product sampling. Time was always set aside for testimonials.

Local meetings typically ended with an appeal by a facilitator to those in attendance to write down names of fifteen friends or family members with whom they’d want to share this "fantastic, once-in-a-lifetime opportunity". The prospective recipients of their "sharing" were identified to new initiates as their "warm prospects". By this time in the encounter, through hype and the same mind-control techniques used at the company’s national event, newly recruited IBOs were eager to follow through with their "warm prospects," believing they would be doing their friends and family a favor.

That they were about to violate the universal social taboo against exploiting personal relationships for profit seemed to be lost on them. I saw over time that this turned out to be the first step many new IBOs took onto a slippery slope of increasing social aberrancy. I also noticed early on that with few exceptions, it seemed friendships within our MLM culture were quickly formed and intense, but shallow, unreliable and remarkably phony—yet another indicator of tortured social values within that culture.

Declining fortunes and "channel stuffing"
Two years into our relationship, Danni bought some $20,000 worth of her MLM’s stock at around $20.00/share. Two years later, the company’s stock value began to drop after a nationally televised exposé on healing claims made for its products by one of its IBOs. Two months later, the attorney general for the state in which the company was headquartered filed suit, alleging deceptive marketing practices and violations of the state’s food and drug act. As the company’s stock continued its nosedive in the ensuing months, I pled with Danni to divest herself of her clearly doomed holdings. However, she remained steadfast in her refusal to sell, saying that to do so would betray the company. It wasn’t until another two years had passed that she finally let her stock go when its value had dropped to $3.00/share.

Danni’s flawed thinking was by no means the result of stupidity. By then, she was living almost exclusively inside the MLM culture where critical thought was disparaged as negative and counterproductive. "Believe in the products, believe in the company and believe in your upline" was an oft-repeated mantra that actively contributed to critical thought suppression. This was simply one more indicator that Danni’s thinking had been crippled by her exclusion of influences outside that bizarre culture.

The year after the company’s fortunes began to decline, I again helped Danni organize her business tax records—this time on my own computer. Somehow, working with each expense category one at a time, I had no sense of how much her business was costing her in total. Years later, I ran across the spreadsheets I’d prepared to calculate her expenses. Yielding to my curiosity, I totaled her write offs for the year. I knew Danni had sustained substantial net losses in her MLM business, but I was not at all prepared for what I discovered. Her MLM business expenses, excluding what she claimed for housing and utilities—expenses she’d have had with or without her business—totaled $49,606 for that year alone. I never tracked Danni’s finances; but I can’t imagine she received more than $20,000 in commissions and bonuses for the year. Extrapolating $30,000 in annual net losses over the course of our first 5½ years together, they would have totaled $165,000. However, with her savings exhausted after that time, Danni would have had to reduce her expenditures. That being the case, I have no basis for estimating her actual losses over our final three years.

Throughout our partnership, there was a constant influx of product shipments to Danni’s address. She received at least one shipment each week—sometimes two or three. We collected discarded shipping cartons in a corner of Danni’s garage; and every month or so we’d break them down so we could take them to our local recycling center. One day, while preparing to take our collection to recycle, I happened to notice that the addressee on a shipping label wasn’t anyone I knew. However, the street address was correct. Curious, I looked at several other shipping labels; and discovered that many of them were addressed to people I didn’t know at Danni’s home address.

When I asked her about it, Danni explained that by ordering product under the names of her downline members, she was able to maximize her commissions and bonuses. "So you’re paying for the products?" I asked. "Yes," she replied. "But they’re products I use or sometimes resell." Still puzzled, I mentioned that I thought the company would surely object to that practice. "Oh no." Danni said. "The company doesn’t care. Everybody does it and the company’s total commission payout isn’t affected." My initial concern assuaged, I never mentioned it again. However, I remained uncomfortable with what seemed to me an irregularity that could have an adverse impact on those in Danni’s downline who served as phantom product recipients.

Although I didn’t know it at the time, I had stumbled onto a variant of "channel stuffing", an illegal practice used by a company or sales force to inflate its sales figures. In retrospect, it’s obvious that this was part of the reason Danni always had a large surplus of product on hand, much of which she had to give away or turn at a significant loss. It could also explain—at least in part—Danni’s motivation for her inordinate personal product consumption. Her scramble at the end of each month to generate a product order in her own name large enough to qualify her for commissions on any of her or her downline’s sales only compounded her excess inventory load.

It was just one more seemingly inconsequential deception that added to many others. In combination, they comprised a huge ethical compromise for me that had accrued so insidiously I didn’t recognize it until much later. Always mindful of my personal history of controlling behaviors, I scrupulously avoided doing or saying anything that could be construed as controlling where Danni was concerned. However, I was also asleep at the wheel of my own life. I consider myself to be reasonably bright; but even my attenuated exposure to MLM’s reality warp somehow immunized me against recognizing my part in the fraudulent deceptions that are now so painfully obvious.

Throughout her latter years with the first MLM, Danni believed with all her heart that her advancement to "Level 4" would happen in the next three months. It was a target that had inexorably moved farther and farther out of her reach with each passing year. To this day, Danni believes in the company’s products and the MLM distribution model; and she chalks the company’s declining fortunes up to bad management decisions. More to the point, Danni also believes that she was truly helping every person she recruited into what she’s certain was an outstanding business opportunity.

However, Danni’s efforts to keep new IBO’s coming in at a rate sufficient to offset the number of those she was losing couldn’t have succeeded. The company’s distributor "churn" rate in our community as well as nationwide was greater than 100%. In other words, the number of new distributor recruits was less than the number who were exiting the business. That development was a premier indicator of market oversaturation as mentioned earlier in this story; and it meant that new recruits didn’t have a reasonable chance to even recoup their expenses, let alone make a profit. This reality was totally divergent from the representations everyone involved in the recruiting process—including the company—made to them.

The money isn't greener in the other MLM

"Friends" of Danni’s—high-level distributors in the first MLM who could see the writing on the wall—recognized an opportunity to build a new downline in a different company from the ranks of disappointed colleagues. After nine years of steady losses (3½ years of which preceded our partnership) and at her friends’ urging, Danni finally abandoned her involvement in the first MLM and joined her friends’ new downline in their new company.

By then, we could no longer afford for me to accompany Danni on her business-related travels. Therefore, I didn’t see what went on at the national events she attended. I did however, attend local trainings with Danni in another community as well as opportunity meetings she hosted in her home. These events followed essentially the same pattern as the first MLM’s—replete with instruction in deniable deception techniques and the ever-present appeals to avarice.

A year after her move to the second MLM, Danni’s "friends" left that company, initially complaining of wrongdoing on the company’s part. However, they finally settled on a different explanation: While they’d been doing well, their downline had not. The inconsistency in their stories seemed to be completely lost on Danni; and she eagerly followed them into a third MLM. Again . . . more of the same.

Within months of her transition to the third company, my growing cognitive dissonance finally overcome me; and I withdrew from any significant supportive involvement with Danni’s upline, although I continued to assist Danni. Our household financial losses had begun to mount to the point they were no longer sustainable and our lives were diverging—eventually to the point that although we were still living in the same space, we existed in completely separate worlds.

Concerted efforts by our couple’s counselors to gain Danni’s cooperation in formulating a household budget and rationalizing her business involvements were unsuccessful. After months of upheaval, I reluctantly told Danni she would soon be faced with having to choose between her continued MLM involvement and me. Without hesitation, she replied that given that choice, she’d stay with MLM. Several months later, she spent an afternoon exploring yet a fourth MLM "business opportunity". Sensing impending loss, I was hurt and my anger became unrelenting. Our conversations were now nothing more than rehashes of the same old arguments in which my conduct was openly and inappropriately hostile. I’d come to see Danni as my enemy and my verbal tirades were frightening her. I began to find sleep nearly impossible.

A painful goodbye

Early one morning I found myself again lying awake, staring at the moon through the bow window in Danni’s bedroom. I remember looking at the clock on her nightstand. It was 2:30. My mind began to process my predicament; and as I lay still, the realizations started to come—slowly at first, but soon flooding my thoughts in a relentless rush. My emotional fuel was exhausted. I was out of financial resources, even though I’d filed for bankruptcy a year earlier. I was smoking again, I’d become obese, I was constantly overwhelmed by fatigue and worst of all, I was hurting the love of my life.

The changes in Danni over the years were so insidious that I hadn’t really recognized them; but I finally realized that I no longer knew her. The sweet guileless woman who only wanted to help others was now totally consumed by her pursuit of material wealth—a pursuit that recognized no bounds. Danni’s rationalization for her ambition was that the more material wealth she possessed, the more resources she’d have to help those in need. However, her expressed motive wasn’t the main issue for me. That Danni’s obsession had become the transcendent priority in her life and now overshadowed every aspect of both our lives was really the problem.

It was finally clear to me that Danni’s active involvement in MLM’s twisted and isolating culture had become so compulsive and destructive that I could no longer ignore the looming specter of an addiction. MLM’s glittering promises had revealed themselves as worthless counterfeits—nothing more than tin masquerading as gold. Our relationship had lost its magic; and I had been withdrawing more and more from Danni and from life. I could no longer deny that my very survival now depended on me making the change I’d hoped would never be necessary.

I studied Danni’s graceful moonlit silhouette sleeping peacefully next to me; and tears welled up as I realized that the woman I still loved with all my heart had become exactly what I saw—a barely discernible shadow of the woman I had once known.

Finally clear on my only reasonable course, I slipped silently from between the sheets of the bed I knew Danni and I would never again share, gathered a few clothes, packed them in a small suitcase in the next room, took a quick shower, then labored for a few hours over a goodbye letter to her. Knowing I could no longer delay my departure, I slid my packed suitcase into the back seat of our old beater second car and returned to Danni’s bedroom for the last time. Again, I took in her still sleeping form, now clearly visible in the early morning light. Wiping away tears that by now were beyond my control, I leaned over and softly kissed her forehead. It was over; and I was tearing myself away from the woman of my dreams. However, I was also leaving a crumbling life that had inexorably been destroying me.

I’m no angel; and I brought my own issues into Danni’s and my relationship. In fact, I’d become an isolated, brooding and grumpy old guy no one would’ve wanted to be around. It would take me nearly two years to sort through my own garbage enough to finally put most of the puzzle of our relationship’s failure together. Writing this story has been the catalyst that has enabled me to assemble a recognizable picture of our disastrous descent from what started out as an idyllic life together. A lifetime of accumulated baggage for both of us undoubtedly contributed to many difficulties in our relationship. However, it’s crystal clear to me that our involvement in MLM was at the center of everything that tore us apart.

Hard-learned lessons about the MLM business model
Time and distance from my life on MLM’s fringe is lifting the fog of confusion and depression that engulfed me for much of the time I lived in that sinister world. Intensive self-directed study since I left that life has led me to some solid and carefully considered conclusions:
  1. The MLM business model is reliant on "business opportunity" prospects being sold on two foundational fictions:
  • There is an endless chain of prospective distributors.
  • There is a perpetually virgin market for the products offered for sale.
If prospective distributors aren’t at least implicitly convinced these two fictions are actually truths, an MLM cannot even launch, let alone survive.
  1. The deceptive behaviors and mind-control practices of MLM are essential for its viability. Distributors who are capable of critical thinking get out when they recognize the logical fallacies on which MLM relies. Therefore, MLM must prevent its distributors from becoming "infected" with critical thought; and cult methodology works efficiently to that end.
  2. Most MLM recruits are drawn into MLM’s alternative reality for any of a number of reasons—most having nothing to do with personal character flaws or a lack of native intelligence. The human mind is predisposed to intuitively accept certain logical fallacies. Cults (including MLM) exploit that tendency in order to deceive their victims and induce them to act against their own self-interest. Case in point: Danni was the valedictorian of her high school graduating class, but was still drawn into the false promise of MLM. Another case in point is my own gradual descent into complicity with MLM’s constellation of deceptions; and I hope I’m at least reasonably bright.
  3. Only a very few MLM distributors are knowing perpetrators of predatory fraud. Their prey are new recruits, many of whom become unwitting predators as well. Unaware participants lose their money—sometimes all of it, rack up debt—often insurmountable, sully or destroy many of their personal relationships and forfeit their personal credibility. Most of what they sacrifice in pursuit of the MLM dream can never be recovered.
  4. They are victims of the most pervasive and costly ongoing business-opportunity fraud in America—15.6 million victims losing in aggregate, $15 billion in 2012, according to one authoritative source.
  5. When these unfortunate victims run out of money, credit and other external means of support, they tiptoe out of the industry—isolated, embarrassed and convinced they were the cause of their own failure. They "didn’t work hard enough," they "didn’t follow the system well enough" or they "didn’t believe enough". For those reasons, they seldom complain to regulators. In fact, only 1.4% of consumers who actually realize they’ve been harmed file a complaint with authorities, according to the Federal Trade Commission; and empirical evidence suggests that only a small minority of MLM victims are even aware they’ve been defrauded.
  6. At least 990 of every 1,000 MLM recruits lose their investment and more—completely unaware they never really had a chance. Danni is just one of them. They are unaware because no MLM can reveal the truth to prospective or existing distributors and remain viable. Moreover, the public has been snookered into a belief that MLM’s proffered "business opportunities" level the entrepreneurial playing field to the benefit of the little guy.
  7. Linear depictions of exponential growth as pyramids are demonstrably inaccurate—optimistic myths. A linear graph of a binary (base 2) exponential growth progression actually looks like a flat line with an imperceptible peak in its middle. In fact, the graph of thirty three levels of binary progression (one recruits two, who each recruit two and so on), in which each level is represented as one inch high and each participant is represented as one inch wide, would be thirty three inches high and more than 67,000 MILES wide. That’s wide enough to wrap around the circumference of the earth nearly three times. It would encompass the entire human population of our planet—including every man, woman and child plus another 1.5 billion.
Here’s a graph of the first 11 levels—the most that can be viewed on a computer screen (click to enlarge):
The larger the base number, the flatter the graph will be. By any objective analysis, especially taking into account the downline overlap that invariably occurs with uncontrolled distributor propagation, this growth pattern is completely unsustainable.
No MLM can survive without being deceptive. For that reason, the industry is incapable of self-regulation. Unfortunately, most state and federal government agencies charged with protecting the public from fraud don’t step into the regulatory void. So MLM scams roll on, crushing their millions of victims with impunity year after year and decade after decade. MLM, with its tin promises and nefarious mind control has damaged Danni immeasurably—defrauding her, her downline and her customers and leading to her divestiture of normative social values.

And me? I’m collateral damage—just one among tens of thousands of others who’ve lost loved ones to MLM’s thickly veiled depravity. I sacrificed my self respect on the altar of expedience—my judgment clouded by my own emotional needs, and my discounting of what seemed at the time to be harmless departures from time-proven social and ethical principles. In the process, I injured unwary distributors and hope-filled disease sufferers by carelessly encouraging them to become victims of MLM’s tangled web of deceit.

I’m out now; and I’m grateful for that. As I sit at my desk, completing yet another revision of my story, I’m struck by how each iteration—each telling—brings new realizations to the surface. Each telling makes the story longer; but each telling also makes the picture for me more complete.

This experience won’t discourage me from trying new things or thinking in new ways. Openness to change has always enriched my life and helped me understand those who live differently from the way I do, who see things differently from the way I do and who look different from me. However, during my life in MLM, a voice from deep within me was always there, telling me to "Be cautious. Something isn’t right. You may be harming others. You may be betraying who you are." Knowing now how painful it is to face the reality of my failures during those years . . . how it haunts me to know I can never make right the damage I’ve done, I’ll never again ignore that cautionary voice.

Finally, I sometimes wonder if I’ll ever fall in love again. When I ask myself that question, sweet memories of the Danni I once knew come flooding back into my mind and my heart; and I realize I really haven’t fallen out of love . . . but that’s OK. The current Danni and I are moving in very different directions with our lives. I’m more than content and fulfilled answering my calling to help people stay out of the MLM trap and to provide relief and resolution to those who are caught in it but want to get out. My calling has become my passion and with that, I can live well.

"Oh, what a tangled web we weave when first we practice to deceive." — Sir Walter Scott . . . and Mom

This narrative has a tragic epilogue, which I mentioned in my previous post on this matter. That is coming up in Part 2.
* * * * *
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T.beast said...

Great read. I was cringing as I read number six. So many of those barbed statements were thrown at me when some of my old new age friends sensed I wasn't accepting the MLM golden calf they were offering.

The one that really infuriates me to this day is, "Well maybe you aren't quite ready for prosperity." It's been about eight years since I've heard those words fired from a so-called-friends mouth. The very thought of it still sends me into a suppressed rage.

Keep up the good work.

Cosmic Connie said...

Thank you, T.beast; I appreciate your support. I imagine you will be far from the only one who has a sense of deja vu when reading Roger's story.

Anonymous said...

This was a very good read and mirrored my company experience almost exactly, although my company is new in my country (been in the US for about 15 years)so it not totally saturated but I'm really conflicted. I personally know several people who are 6 figure earners that have been in the businesses less than two years. Also I couldn't put it into words until I read your piece, but the meetings are as you described the group think, the narcsim (bragging about making $10 000 a year) etc. Thankfully I haven't lost any money, but some of my downline has simply because they feel the need to spend hundreds on products every month which is more money than they are making. The funny thing is a never set out to have a downline but people just started joining because it is a hot product. Overall I do see the value of MLM but the culture can be dangerous and costly for unsuspecting people.

Cosmic Connie said...

Thank you, Anon. It seems that in MLM culture there generally are far more losers than winners, but there's also a substantial base of people who are neither. They aren't "winners" in the sense of being fabulously wealthy, but aren't "losers" in the sense of losing everything (including all of their money, their relationships, and their physical and mental health -- or even their lives). They get just enough positive reinforcement to keep them going and keep the folks at the top of the pyramid rolling in cash.