jesus É o caminho a verdade e a vida creia nele e terÁs a salvaÇÃo. united states bankruptcy court. district of massachusetts. in re: telexfree, llc, telexfree, inc. and telexfree financial, inc., debtors. stephen b. darr as he is the trustee of the chapter 11 estates of each of the debtors, plaintiff, v. paola zollo alecci, maria ricardina sousa dos santos delgado, fernando da silva gonzalez, yuncheng wu, yanmin. Freitas Bueno Consultoria Juridica [BR] French Rags Frequency Foods Frigga Import & Forsaljnings AB [SE] Friuli Thermolana SRL [IT] Frozen Lease Frutaiga Fruta Vida (ended Multilevel pay out May ) Fruitaiga Fuel Legacy International / eefuel Fuel Zone Fuh Jen International Co Ltd [TW] Fuji-Iryoki [JP] Fukufuku Co Ltd [JP] Full-Circle Success.
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BehindMLM received one such threat from Nehra back in Joseph Craft began working for TelexFree in early and remained with TelexFree through the filing of the Chapter 11 cases. Notwithstanding that Craft rendered these serves individually, he arranged to have TelexFree compensate him through the other defendants. Craft and the other defendants, acting through Craft, provided accounting, investment, and tax services to TelexFree and advised TelexFree respecting tax reporting and estimated tax payments.
Joele Frant Wilkinson Brimmer Katcher, upon information and belief, provides public relations services. Joele Frank Wilkinson Brimmer Katcher allegedly was not retained by TelexFree until April 11, , two days before the bankruptcy filings. Judge Hoffman has filed an endorsed order approving the agreement with a hearing scheduled for July 27th.
Advent Communications Corporation, upon information and belief, provides marketing services for multi-level marketing companies.
Hanna-Shea Consulting LLC, upon information and belief, provides executive placement services for companies purportedly engaged in direct sales. In the fall of , TelexFree retained Infinium purportedly to build a mobile telephone application. TelexFree had no interest or rights int he product being developed by Infinium for which it was paying. In early , TelexFree retained Opt 3 and Jay Borromei to provide website development and programming assistance, and compensation and network marketing advice.
Darr is not going to get all he asked for. Still, if Darr can get a few of these to cave settle out of court the rest will fall like Dominos. Others may go bankrupt, like Nehra and Waak. I expect Congressmen to get manipulated by special interests, but FTC members who are appointed to protect consumers should know better! This wasn't the DSA's first attempt at lobbying for exclusion of direct selling business opportunities from the Franchise and Business Opportunity Rule.
This does not take into account the money spent self-consuming over the membership's lifetime, and the MLM's products are generally only bought in order to qualify for "rebates", "commissions" from retailing?
The goal is to get enough people in your downline that your "rebates" and "bonuses" eventually zero out your purchases and hopefully you may even begin to profit. If you eventually begin making a profit, you're only stealing more from your downline! The MLM sure as heck isn't giving your purchases to you! In that same document, the DSA also argues that direct selling business opportunities differ from franchises in that "franchise agreements will occasionally restrict from whom franchisees can purchase supplies, equipment and inventory.
Unlike franchisees, many direct sellers are not prohibited from selling the products of competitors. By contrast, direct sellers are independent contractors who determine themselves when and where to sell , to whom to sell , which products to sell , and how much to sell. Perhaps Mr Ellman should have consulted first with one of the oldest and largest MLMs, Amway again , whose non-compete agreement of the time read:.
In order to protect these interests as well as those detailed in Rule 4. In other words, if you were in Amway, you couldn't sell to someone else's downline, and you couldn't sell vitamins for Herbalife or suchlike concurrently because Amway also sold vitamins among many other products. If selling products were the ultimate goal, you'd be able to set up a vitamin shop and sell to whomever you please whichever vitamins on the market you determined were BEST for your customers; MLM vitamins that don't actually compete in the open market to keep their prices down would be a hard sell.
Recall Avon's and Tupperware's rather disastrous experiments with trying to sell retail. So tell me again how that is freedom to sell to whom you please, however and wherever you please? You read that right. What a convenient omission! In the Commission's enforcement experience, fraudulent businesses have often passed themselves off as legitimate companies that use this business model.
One must wonder why the DSA and the MLM industry it represents continue to oppose requirements that are designed to help the consumer avoid getting defrauded by them!
After all, the entire reason the Franchise and Business Opportunity Rule exists is to define the proper scope of the term ''business opportunity,'' the types of business opportunities that are known to engage in deceptive or fraudulent conduct , and the types of disclosures that are material to business opportunity purchasers.
MLM cannot even decide what it IS, an unregistered buyer's club, or an unregistered security investment, or an unregistered franchise! Compare the April 29, archived page to the May 22 , archived page , which is not-so-coincidentally about the time this article pointed out Amway's hypocrisy.
The phrase "business opportunity" now appears under the " About Amway " page. Page states:. The Commission therefore determined to continue to challenge unfair or deceptive practices in the MLM industry through law eforcement actions alleging violations of Section 5 of the FTC Act and not through the Business Opportunity Rule.
Recall that all this opposition was to avoid a simple one-page disclosure that would have "disproportionately affected the MLM industry" by "showing [MLMs] in a distorting negative light. What has history taught us thus far then? If you walk away from this article with one thing, let it be this: any "business" in which the total of commissions exceeds the FINITE marketable retail markup of the product has only one purpose: funneling money up a chain. Most recruits will join because of the "business opportunity" and because they are led to believe the products are not only in high demand but are unique "always!
When the business opportunity fails, they either accept the theft because they've had it drilled into their heads that only losers quit and settle on believing that they're buying these products at some tremendous discount because they're in a "buying club", or quit and feel so guilty they fail to understand they've been robbed.
Now imagine an entire legion of MLMers paying for millions of these overpriced, uncompetitive products just so they can participate in a compensation plan they believe is leveraged to help them earn a reasonable part-time supplemental income if not a vast fortune, and you've got MLM's gravity-defying money funnel, which is more aptly compared to a vacuum cleaner sucking the income stream from the bottom up.
MLM author and consultant Daren C. Falter, who is obviously pro-MLM, explains his version of "wholesale buying clubs" vs. The organization offers the same items you might find in the retail and wholesale store at similar prices, or possibly a bit higher. The organization retains the profits that would otherwise have been savings to the consumer. These profits fund the organization. Note the mention of the company developing their own products and recall the second chart from earlier in which the MLM manufactured its own products for a fraction of what they retailed for.
He also adds:. He's technically quite right, though he tries to use the these facts to defend MLM while I use the exact same facts to gut it. I challenge you to find any MLM whose commission structure rewards all salespeople equally based on their actual product sales. If the company were truly interested in marketing the product efficiently and avoiding the taint of "scam" it would never bother with MLM.
I repeat:. I've picked a random U. Shaperite Concepts and 4HealthDirect , from the list at the left in order to try to illustrate potential warning signs that an MLM is financially raping distributors. If you're in an MLM, it is to your advantage to compare yours!
This should not be interpreted as proof that they are running a pyramid scheme. The very concept of MLM is outdated, redundant, and exploitive. Only a few years back when Amway began marketing itself online in North America as Quixtar , the Quixtar website hawked to distributors " your own Web-based business ". Quixtar's website home page originally had no mention of Amway, and you couldn't view the products without logging in with a distributor ID number or whatever they called it.
I only knew Quixtar was Amway because a relative who was in Amway told me. I began to see a proliferation of cookie-cutter Quixtar distributor websites, which distributors were apparently buying. They all led back to Quixtar's original site where the products were actually sold.
If this silliness didn't expose the redundancy of the MLM model, I don't know what can! Some time later those distributor websites disappeared, and for a while Quixtar simply awarded unreferred orders to the random rep nearest the buyer. But why pay somebody commissions when they did no work to procure the sale and you can just keep it? Amway scrapped the Quixtar idea relatively quickly, and today you can buy products directly from Amway's home website without logging in or needing any distributor whatsoever.
Even Amway has essentially admitted that its distributors are redundant. It's little surprise that Amway rather recently began its ironic "Now You Know" advertising campaign on television like any traditional retailer — but though they could have simply advertised the products, they pretty much had to advertise the "business opportunity" or risk alienating their distributor force.
When I checked that list again in , the total MLMs evaluated had grown to over , and only Pampered Chef passed Taylor's compensation structure test, and even then that one was rated as only marginally better than the rest. The "intolerable potential to deceive" pointed out in the Amway case has only proven all too real. And yet MLMs keep on recruiting. MLMs often have a meteoric rise and end up in Inc. Magazine's fastest-growing companies The Inc.
Meteoric growth often only happens when consumers join a feeding frenzy based on deceptive product and income claims, and the promoters are only trying to rake in as much as possible before getting caught , hence recruiting is emphasized over retailing in order to saturate the market as quickly as is feasible, and then try to maintain saturation equilibrium for as long as they can by replacing all who drop out.
The first attempt, federal HR , failed. Since savvy federal regulators keep blocking incarnations of that one, they've resorted to searching out dupes at the state level. According to PyramidSchemeAlert. You might note that while DSA's old page on HR included language from the ruling that found in MLM an " intolerable capacity to deceive ", the current page conveniently omits this.
M any parts of DSA. If MLM were so clearly legal, they would have no need of lobbying for special exemptions and hiding behind flimsy legal double-speak. DSA members have been prosecuted by regulatory agencies and state Attorneys General for operating illegal pyramid schemes or similar crimes. For those who enjoy gambling, that means even with U. As for how the DSA penalizes members who violate their " Code of Ethics ", the most severe penalty they can inflict is to terminate the member's DSA membership.
You can guess how often DSA terminates memberships. Monavie was presumably punished for "encouraging distributors to violate their Amway non-compete agreements". Especially ironic is the fact that Amway was started by two Nutrilite salesmen who quit and took their downlines with them! Speaking of the DSA's "Code of Ethics", at one time the DSA hijacked archived; click on a date to see the proof the mistyped web traffic of a critical site, www. ORG , by registering www.
A screencap from July shows that pyramischemealert. This disgraceful behavior belies the spirit of DSA's own " Code of Ethics " , which states: "Member companies shall ensure that no statements [ I sincerely hope he will continue what Pitofsky started. MLM has essentially managed to get itself out from under scrutiny by defining itself as "not a business opportunity"; so force MLM to define itself!
Buying club, security, or what? SOMEbody is responsible for regulating them. And it's time to stop worrying about prosecuting on the potential for fraud; fraud is inherent in the very business model. It's as simple as looking at the structure and who it's really rewarding. Even if a distributor wants to do nothing but retail an MLM's products, he must join in somebody's downline to buy at wholesale price and pass his business volume up the pipeline through them, with everybody or at least many superfluous levels above him taking a cut.
That's typical, because in MLM the "business" is optimized for both retailing wink wink and recruiting. The FTC can continue fining offenders into bankruptcy after the vast majority of the damage is done, but far better would be regulations targeted at ensuring consumers receive all material facts up front so they can make truly informed choices before the brainwashing begins.
This will also require a strengthening of regulators so that they can actually do the jobs we expect of them. Best of all options, of course, would be to altogether outlaw this predatory "business" model and all its incarnations which have infested other industries - and other countries. The world can learn from the U. What can you do to avoid becoming a victim of MLM fraud? The simplest answer is to never, never get involved with an MLM or any company that has adopted any elements of the MLM model.
Don't fool yourself into believing that you will make a good living by taking a share of the business of those you "help" below you, because statistically all you will be doing is making you and them poorer while enriching only a numbered few at the very top of the pyramid.
Even if you become one of the infinitessimally few who DO net any profit, is it worth defrauding your friends and family to do so? If you still aren't convinced by this article and want to give MLM a go, it's your funeral, but please, go in with your eyes open! And if you're already participating, your eyes may still need opening.
First of all, remain skeptical. If you type the name of the company into Google and Google's "suggest" or "autocomplete" feature automatically fills in "scam" after it within the first few results, that indicates those exact search terms are very popular, meaning you're not the first or only person who is suspicious of the company being a scam.
You might as well avoid. Note, however, that this feature is increasingly being thwarted by online "reputation management" companies. Legitimate companies don't play games solely designed to hide or suppress complaints; they fix the causes for complaints. If you simply want to try the MLM's products, you needn't join — remember that if you are not willing to buy the products at retail price from a salesperson, neither will YOUR customers.
If you decide to join in order to buy the MLM's products at "wholesale", remember that MLM is NOT a buyer's club nor legally can it be without triggering onerous buying club laws and is structured such that participants MUST recruit in order to offset the wholesale prices, which are generally too high to be competitive on the open market anyway why do you think they're "selling" it through MLM?
If the MLM's products carry a label indicating that the product has not been proven to help, prevent, treat, or cure any ailments, then question why the devil you're buying it at all, much less considering selling it!
Be aware that any health claims YOU make about the products must be per the manufacturer lest YOU be legally liable for not backing them up. If you tell someone that your gingko-biloba based product is perfectly safe, you've just lied and possibly endangered someone's life, as those with circulatory problems should avoid gingko-biloba because it inhibits clotting.
And the maker of the product is NOT required to disclose these side effects on the packaging, as dietary supplements are not as tightly regulated by the FDA. The DSHEA states that FDA's only responsibility regarding dietary supplements is to order them taken off the market after the harm has already occurred.
MLMs love vitamins and dietary supplements because of their consumable nature and the ignorance of the general public regarding their use remember how Nutrilite started? See here for the few exceptions who should be supplementing their diet. Also see here for Dr Ed Zimney's explanation of one rather ubiquitous method dietary supplement sellers use to scare the public into buying them — all based on twisting information into misinformation and truth into lies.
In , Sen. Even if the MLM's products carry the FDA's warning that it has not been tested nor proved effective in the treatment, prevention, or cure of any ailment, it will often rely on shills or unwitting consumers to do their lying for them.
For instance, a woman whose cancer went into remission after she began taking a product may provide ecstatic testimony that the product cured her cancer, when the truth is that no proven cause-effect relationship actually exists. If a stampede of cancer patients suddenly begin consuming the product based on her testimonial, they will likely be losing time that could be better devoted to proven treatments that really CAN help them.
To me, that's unconscionable. If the MLM claims its products' benefits are backed by scientific research, make sure that research supports the MLM's claims. Many scammers will try to find the vaguest published scientific research they can, even if it doesn't even pertain directly to their product, and twist it to support a conclusion it doesn't really support.
If the research doesn't support their claims, they're lying, and why should you want to work with liars? Remember that if you innocently repeat a lie, it is still a lie and YOU are legally liable.
Do not join any MLM that pitches its business opportunity as an investment which is designed to eventually rely solely on the efforts of others ; if it isn't registered with the SEC, it isn't a security, and it is illegal to promote otherwise. Similarly, never join any MLM that allows you to "buy in" to a higher level distributorship position instead of building your organization from the ground up.
Such MLMs are generally only pyramid schemes trying to make all the money they can before they get caught. If the MLM claims everyone has an equal chance to succeed because the market isn't yet saturated, they're not only lying, they're breaking the law. Don't get suckered into "investing" in your business "so it can grow", because your chances of succeeding will NOT depend on the car you drive or the suits you wear "fake it till you make it" ; it will depend upon how saturated the market in your area already is for that particular MLM, and the MLM has no interest in giving you that information nor is it required to, nor can it legally do so without triggering sales territory laws that make you its employee!
Avoid any MLM that presents its business opportunity as a "franchise"; it is NOT one — when you buy a franchise, you are buying a known, finite territory and brand name with an established customer base. Don't be fooled by the MLM's attempts to sell you on "residual income". They usually avoid comparing MLM's residuals to securities because that would be a red flag to the SEC, or an insurance policy that pays the agent limited commissions over a portion of the life of the policy as that would alert the Departments of Insurance, but comparisons to royalties on creative properties like those of writers, musicians, and artists are common.
With those professions, the property is copyrighted and royalties are paid each time copies are sold as with a book or used as with performance of a song , providing the author and his estate a residual, passive income stream for a specified period of time, generally the author's life plus seventy years, after which the work enters the public domain.
In MLM, there is no direct equivalent. You do not own a single copyrighted property that pays residuals when it is sold or used; all you realistically own is a position in a chain. In MLM, residual income is generated not by any single copyrighted property you own but by the works individual sales of others , your downline's.
Before you fancy yourself CEO of your own company who is entitled to retire comfortably off the work of others, ask yourself if you can look the very last person entering the scheme in a saturated market in the eye and truthfully tell him that he can achieve exactly the same level of success in this MLM as the promoters of the scheme.
If you can say that, trade places with him and prove it. I guarantee the MLM promoters won't trade places with you either. NEVER join any MLM that pays commissions on recruitment in any form ; know that no compensation can be paid to your sponsor on the "at cost" introductory sales kit, IF you bought it.
If the MLM requires you to buy the sales kit in order to join, just give them a pass. Most reputable direct sales organizations provide the brochures, demo equipment and sample products free to their sales force, or with a deposit required for expensive items, but there is no requirement for salespeople to buy them up front.
Don't get conned into buying the biggest sales kit the MLM offers! Along those lines, while the MLM may tout its constantly improving product line, know that replaced "discontinued" products are usually not eligible for buyback.
Lip service means nothing. Never join any MLM whose primary marketing strategy consists of recruiting a revolving self-consuming "sales" force. If little to no retailing to actual retail customers outside the scheme is going on, it's likely just an illegal pyramid scheme that is funneling money from the bottom to the top while maintaining the illusion of legitimacy through selling products.
A good way to gauge this is simply to note if the person who introduces you to the MLM approached you first about selling you the product s and not because he was desperate to grow his downline by showing you his "fantastic business opportunity. You are perfectly capable of asking your friend for the business opportunity promotional materials supplied by the MLM itself and making your decision based upon number-crunching, and not emotions whipped up by "dream-building".
If the MLM employs the 10 Customer Rule or better AND enforces it, you may have at least some confidence that money from non-participants and not everybody's downlines may be the majority funding distributor compensation, meaning the products have actually got some real value in the retail market. Of course the 10 Customer Rule is useless for that purpose if distributors typically have 10 retail customers and 50 downline members buying "from" them, but you can guess how often that happens.
You can also guess how often the 10 Customer Rule is enforced. Avoid any MLM whose distributor agreement contains a non-compete clause that prevents you from selling the wares of other companies concurrently or prevents you from retaining your customers i.
Restraining your ability to continue making a living in your chosen profession, even if just for a few months, constitutes an unfair restraint on trade.
This could become an incredible headache later, particularly if it's coupled with a rule demanding that any legal action you take must be through arbitration or mediation see more on those in the next section. If mediation or arbitration can't help bring the parties to a mutually acceptable solution, in most cases the case can proceed to civil court, but be aware that the average judge doesn't understand MLM and will try to kick you back to arbitration to get rid of the headache.
If you join the MLM, know that you will be a vague class of independent contractor for IRS purposes, but other regulatory agencies may treat you as the MLM's employee based on how much control they exert over you.
Assume nothing! Be prepared to eat at least a third of any income you make as expenses — or just eat those expenses anyway since the chances of your ever making any net profit are so slim to begin with. Pay no attention to "tax benefits" of owning "your own business" unless the MLM also informs you what percentage of sales reps made a NET profit that qualified them for the deduction s.
You cannot generally claim deductions for meals, the family car, travel, hotel expenses, entertainment, a home office, etc. Note that prizes, bonuses, trips, awards, and gifts are all taxable. Last of all, once you've joined be extremely careful not to get sucked into attending any dream-building "motivational seminars " or buying any " motivational materials ".
Those are designed to do one thing and one thing only: to keep your emotional fervor up so you will ignore the damage being done for as long as possible. Anyone telling you to avoid "negative people and websites" that "bash MLMs" is abusing you by trying to control your access to opposing information for the same reasons. So that brings me to the next section What can be done to recover money lost through MLM fraud?
How can you help prevent others suffering your fate? If you can truthfully tell yourself that you are buying the MLM's products simply because they are the best value for you and not so you can participate in the "income opportunity", then congratulations and move along, but given the extremely high turnover in MLMs you can understand that you are the rare exception. It is much more probable that you bought the MLM's overpriced "exclusive" and "unique" products and sponsored others to do the same only because the MLM misrepresented to you the true chances of your making a reasonable supplementary NET income, much less getting rich through the scheme.
Before I tell you what to do to help yourself and others, let me stress what you should NOT do. First , try to sell any returnable inventory back to the MLM.
Second , sue. It's extremely difficult to recover for fraud from the MLM itself under current laws, so your most likely avenue for recovery will be through suing your upline in civil court for misrepresentation of the business opportunity, products, and whatever else applies.
Try to initiate your case as a class action lawsuit so others similarly wronged may join, and let the attorney do the job of soliciting others to join.
B e prepared for that upline leader you believed was rich to knuckle under and admit that he really isn't — and he may just be telling the truth. But that isn't your problem. If he's got assets, he'll be forced to disgorge them to satisfy a successful judgment against him. If he's got a job, then his wages may be garnished to satisfy it. Be prepared to continue pursuing the money trail as he tries to hide assets. If he was lied to by his upline, he can sue them , but where he gets the money to satisfy the judgment is not your problem.
If everyone down the line continues to follow the responsibility trail upward, they will eventually get to those who profited most from the deception. I'd love it if every distributor in every MLM wised up and launched a class action lawsuit against the promoters up top who defrauded them! Just because a few people made a net profit does not mean they were not also defrauded!
After all, they recruited their downlines based on lies. See the FTC's definitions of mediation and arbitration here. Mediation simply helps everyone come to some agreement so forget that; only arbitration implies an award [decision]. In order to avoid them and thus help others , you'll need to prove to the judge s that those processes unfairly favor the MLM, or more specifically:.
Third , submit your complaint against the company to appropriate regulatory authorities. Be aware that none of these regulatory authorities have any legal clout to punish anyone beyond assessing fines, but those fines can at least lead to putting the MLM out of business so nobody else can be harmed, and a pattern of complaints can lead to a referral to eventual law enforcement actions that CAN punish the guilty.
Just don't expect to recover much money, if any, once the attorneys have taken their share. But since you joined the MLM presumably to help others, now you can actually do that. Fourth , know that none of the above regulatory agencies can do their jobs without proper laws to enforce , so if you REALLY want to help others, write the folks below and point out how they're being duped so they can make the necessary changes. Feel free to forward this page to them.
Last of all, sign up for mailing lists of MLM watchdog websites that keep abreast of MLM laws and can inform you when you need to get active and flood your congressmen and regulatory authorities with your insistence that they stop pandering and return to their job of consumer protection!
These laws are usually creatively written to mask their real intent, so the websites below may spell out the real consequences in plain English.
If you believe this website helped , please do NOT shove a print-out in the face of one of these companies on the way out the door or include a link to it in a final email.
I do not need their harassment. I've sourced as much as possible but this article was written over a period of years, so some links may no longer exist. You can try using Archive. World's Standard of Online Poker.
Their "product" was "biz packs". I found the companies listed below advertising jobs on popular job search sites like Monster. Hotjobs , CareerBuilder , and Indeed. Many have advertised the same positions for years on end, indicating either legitimate expansion or high turnover - you'll have to decide for yourself which it is. Please be patient while page loads. All off-page links open in new windows so it only needs to load once.
This site was previously hosted at www. Never use GoDaddy. Introduction If you've found this website, you were probably researching one of the companies in the margins of this page, seeking reassurance that they're not running one of the many scams infesting their industries. The SEC noted in its investigation that the Koscot manual instructed distributors to recruit using Opportunity Meetings, which were part of the "motivational materials" business, to drive recruitment: "Never explain the program to a prospect before bringing him to an Opportunity Meeting.
The Washington Post hinted at one s change that seemed to entrench MLM in spite of its tangles with regulatory authorities: "[Amway's] founders' proximity to power — their former congressman, Gerald R. Complaint counsel pointed out: "[ In spite of the high turnover, a stagnant number of distributors were making more sales than ever: "[ But the misrepresentations were quite purposely verbal and not actually included in the company's literature: "Amway literature urges recruiters not to 'quote dollar incomes on specific individuals even though you may want to use their stories about the homes in which they live, the cars they drive, or the airplanes they fly.
Only 3 years after Amway had emerged victorious against the FTC, co-founder Rich DeVos chastised his organization: " You [the Direct Distributors] present the wonderful numbers on the blackboard about all the money they [distributors] can make. For example, the company escapes responsibility for: Tax and trust fund obligations e. He replied: "No. Having been an Amway distributor in the s under Dexter Yager's downline, I can attest that my upline taught me to ONLY recruit, completely ignoring retailing; their mantras were: " Buy from yourself " AND " Show The Plan to your friends and family " in order to " duplicate yourself "; and teach your downline to buy from themselves and duplicate themselves too.
Newspapers have a long history of paying "paper boys" to deliver papers. However, with today's laws against child labor, they have been forced to deal with a more demanding workforce pool. They either allow the carrier to buy and resell the newspapers at a set price or pay a commission per paper delivered. Carriers at these newspapers bear all expenses, including wear, tear, and insurance on their own automobile; reporting taxes; health insurance; etc. Although the advertised high wage looks pretty good to new carriers, they find that when all expenses are deducted from the "business", they are working barely above minimum wage — or even at a loss!
Many newspapers charge the carrier a " complaint fine " several times the retail cost of the paper when a customer complains about a wet, torn, misplaced, late or missed paper. This is particularly problematic when the newspaper requires the carrier to bear the costs of bags and rubber bands for the papers without rubber bands, the papers are difficult to throw , and paper theft is commonplace in apartment complexes.
Carriers complain of being pressured to ignore traffic laws in order to get deliveries done on time, since their route is assigned by the newspaper. They burn through automobile brakes, gasoline and headlights, and face robbery and carjacking in the wee hours of the morning. Real estate agents. Some real estate businesses stick to the now-safe method of hiring agents as "independent contractors" and advertise to attract as many new agents as possible in an agent-mill fashion, arguably in order to gain access to the agent's leads , which often consist of friends and family.
These new agents, making a lesser percentage of commissions than an experienced agent , make a few sales and often end up leaving the business for lack of income; the annual turnover rate for agents is high. Agents complain about operating their own "businesses" and having to pay for advertising, desk fees, insurance, taxes, etc.
Some comments from real estate agents regarding the above model: "The reason brokerages use new agents like puppy mills is they know most people getting into real estate are not coming from a business background but from a 40 hour 9-to-5 collect-a-paycheck crowd.
Statistically, each 'temp agent' will do less than a few deals in a year. Again, more states should follow suit! Agents carrying all expenses and generating all leads wonder why they have to split commissions and pay a broker for desk space at all! Fault lies in the law, which requires RE agents to be sponsored by a broker who may abuse his role. You'll see the same complaints in the financial services industry below.
Keller Williams Realty is one real estate company I am aware of that uses an overt MLM-type model to compensate its employees, through a 7 levels deep "profit-sharing plan".
Per KW's " Build Wealth " page, Keller Williams is "committed to treating associates as stakeholders and partners [and] has created a unique profit sharing program in which close to 50 percent of every market center's profit every month are returned to those who have attracted other productive associates into the market center.
I find it telling that reps tend to deny that it is MLM. Exit Realty is another real estate company that has an MLM-type compensation plan that compensates agents for recruiting, though it claims to only pay one level deep. Per their " Residuals " page: "With Residuals [ I couldn't help but notice that the home page includes significant space devoted to recruiting agents; compare that to Coldwell Banker 's or Century 21 's home pages, which make no such mention.
This blog compares Exit Realty to "Amway, World Financial Group", and schemes that depend largely on new recruits' high failure rates. It speculates that Exit Realty's real income must primarily come from "annual membership fees, training courses, training dvd's, stationery that you have to buy through exit resource center.
Morris states that because only one level of residuals are paid out, no laws have been broken in the US. Direct sellers include mostly single-level and multilevel MLM direct sellers and insurance and financial services companies. Misclassifying this class as independent contractors is particularly odious because the companies usually train the "independent contractor" from the ground up, and in spite of what their recruiters tell them, these inexperienced and unsophisticated contractors may risk having their "business" classified as a not-for-profit or hobby by the IRS if they fail to show profit for 3 out of 5 years.
Complaints are similar to both classes above; in fact the Internet is so rife with them that many websites have sprung up just to get the word out to others similarly situated.
ACN, Inc. Alleges: misrepresentation of business opportunity, average expected incomes, chances of "success" ; cult mentality ; promotion of abuse of friendships.
Long thread alleges: high pressure sales tactics ; salespeople seem desperate ; deceptive advertising ; only way to make money is to recruit ; cult mentality ; high dropout rate ; inferior products, training , and customer service.
The Millenium Project archived. Critical Websites. Mentions examples of alleged SLAPP suits Strategic Lawsuits Against Public Participation in which Amway repeatedly continued naming critical websites as defendants in an apparently unrelated case, ultimately forcing those critics to close their sites due to lack of funds to defend them. A FTC Order determined that Amway had violated its FTC Order against making earnings claims for its distributors without disclosing actual average gross income figures.
The Pokorny v. Among other settlement concessions, Amway agreed to change its income disclosure to clarify that incomes are gross and not net a big difference! However, the problem is, once again, that accountability is only as good as regulators' ability to police the results, and as we've seen in this article, that part is sorely deficient. Alleges misrepresentation of realistic average expected income and artificial boosting of sales figures.
In August the California Court of Appeals dumped the case but then reinstated it on appeal in May I can't seem to find any updates past that. According to mlmWatchdog. TelexFree stopped payouts on April 1st, if I remember correctly. This could be true, but likely is immaterial in the overall scheme of things. At the time of the roll-out of the Revised Comp Plan, the Company decided to honor certain discretionary payments to Promoters under the Original Comp Plan. Better answer.
These people may be subject to bankruptcy clawback. The pdf Schedules filed with the court are just the tip of the iceberg and should not be considered complete, accurate or final. Sorting this out is going to be a monumental task. They would be extracted from the books of telexfree and combined with KCC proofs of claim to create a preliminary list of creditors.
This is likely what is contained on disc submitted to the court. The 3b list oz extracted from are Paid creditors…. PPBlog : This could be true, but likely is immaterial in the overall scheme of things. The schedules list the 20 largest known creditors only. Telexfree frustrated all my financial plans. Is there any hope for us? Schedule F of the Schedules contains, in three parts, a list of parties who may have claims against TelexFree. You are able to search for your name or user sign-in electronically.
If your name or user-sign is shown in Schedule F, you do not need to take any action at this time. If you cannot locate your name or user name, please click here to submit your information. The Trustee is developing a process to enable TelexFee participants to file claims electronically through this website. The process will require approval by the Bankruptcy Court. Once this process has been approved, a notice of the procedures to file electronic claims will be sent to each participant listed in Schedule F with instructions for filing claims electronically.
Thank you so much for the support. Only one account had paid me. Can i send again my details so that you help me? Am from masaka,Uganda. Thanks for your help. You can register contact details on kccllc. If you cannot locate your name or user name, please click here to submit your information email registration. Consent to Email Notification: Please provide an email address that can be used to send you periodic communications relating to this Case.
Please note that if a claim holder does not sign up to receive automatic notification of the notices posted on the Website, he or she may not receive the important information contained therein. We will check that website for updates from time to time, but not very often. Only monetary transactions will count, money paid in to Telexfree or to people in upline and money paid out from Telexfree. The above is my name from Nigeria. Please help. I could not check with the trustee.
Is it possible for that to be done online, what is the procedure? I filled the claim form sometime ago. How do I get access to the full list of claimants to ascertain my name is on the list? Is it possible to update my current email address because I had cause to change it to the one I am using now.