More and more Multi-Level Marketing programs (“MLM”) are appearing every day.  While not all MLMs are inherently bad, many MLMs are actually pyramid schemes disguised under a different name.  They promise unlimited income, the ability to be your own boss, the ability to set your schedule, and bonuses for recruiting more participants.  They state that no experience is required and that you will be a part of a community.  However, many MLMs rely on the constant influx of new participates who have little chance of ever making a profit.  According to a 2011 study, less than 1% of MLM participants will make a profit. MLMs often offer products that are more expensive or of lower quality than products sold through traditional sale methods, thus making it very difficult for participants to make a profit.  The hallmarks of pyramid scheme are as follows:

  • Payment by participants for the right to sell a product.
  • The receipt of payment for the recruitment of other participants.
  • Compensation as your recruits buy/sell product.

In today’s society, these types of sales arrangements are increasingly common and well marketed.  There is nothing to be ashamed of if you are a victim of pyramid scheme disguised as an MLM. Don’t be a victim. You may have the right to recover for the harm that you have suffered.  If you believe you are the victim of an MLM/pyramid scheme, contact Marsalka Law, LLC.

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