Hi and welcome back! This past couple of weeks has been yet another bad time for multi-level marketing schemes (MLMs). However, this time around they garnered some attention from some unusual sources. News outlets normally avoid the controversy that negative MLM coverage so often provokes. Maybe we’ve gotten to a societal point by now that this coverage has become much safer! Today, let me show you the latest bad news from the world of MLM scamming.
(Previous MLM posts: Desperation Breeds Dark Deeds; Christianity and MLMs; Another Bad Week; MLMs and Affinity Scams; MLMs on the Prowl; Coronavirus Scammers; A Really Bad Week; Yes: They’re a Cult; The MLM Deception in Christianity; An MLM’s Extraordinary Claims; The New Snake Oils Are Essential; Major Changes For LuLaRoe; LuLaRoe’s Founder Releases the Hounds; The Possible Wreck of the LuLaRoe Train. I write about MLMs a lot because MLMs and toxic Christianity overlap so much.)
(See endnotes for MLM info and terminology if you’re new to all this stuff.)
A Bombshell Accusation Against MLM Huns.
This one blew my mind.
A couple of weeks ago, I began to see complaints surfacing against a few MLMs whose huns were starting what they referred to as healthcare worker fundraisers.
See, their customers would buy various things from them like “fizz sticks” and candles. Then, huns packaged that stuff up for a local hospital instead of for the purchaser, then deliver these goodie packages there.
Hooray Team Coronavirus Relief!
See, see, now these huns’ customers could feel good about helping people during the global pandemic! Right? Everyone wins! The customers win cuz they feel better about helping, hospitals and care workers win cuz they get free stuff, and the huns win cuz they make huge sales during a time when they are probably panicking about low sales!
Pink Truth’s got a bunch of ads like the one above — all are just so so so sincere-looking! Many I’ve seen use overtly Christian imagery and jargon like that one, too.
Unfortunately, all was not what it seemed with these fundraisers.
How this scam worked:
The huns clearly ran these “fundraisers” out of personal self-interest, not concern for health-care workers’ energy levels or whatever.
Even if huns retail-priced the products in a way that eliminated their own commissions, they still made the sale itself by purchasing the products from their MLM. Those products still counted against their monthly purchase requirements — and their upline still made commissions on those purchases. So they were trying to make their minimum purchase requirements with these fundraisers. In a bad sales month, after all, they must buy product themselves to make up whatever minimum their particular MLM requires.
In effect, then, the huns sought to use their unwitting customers’ money to make those required purchases instead of their own this time. Ambitious huns could easily even use these fundraisers to rank up in their MLM!
Another possibility: the huns already had tons of product they’d had to purchase earlier and stockpile for lack of consumer demand (see: garage qualifying). They sought to offload some of it to make back at least the cost of it.
Whatever the case, this “fundraiser” tactic was an incredibly low one, even for huns. And this time, they gained an audience they really did not want examining their new low.
The sheer naked opportunism and greed on display here was not what blew my mind. Hey, I’m used to scammers chasing the headlines, to paraphrase the FTC.
No, what really surprised me was that this time, their scamming ways caught the attention of one of the major news outlets, which normally don’t trouble themselves over the minutia of huns’ scams.
CNBC tactfully called the fundraisers a “marketing ploy.” They tell us:
Distributors for companies including Arbonne, a skincare, cosmetics, and nutrition MLM; and Scentsy, an MLM that sells wax warmers and products, are soliciting funds through Facebook fundraisers, asking for money on social media through Venmo or PayPal or asking for consumers to buy items directly through their sites so they can be donated. On Facebook alone, dozens of fundraisers had gathered more than $13,000 for “care packages” or “break room bundles” containing items like “fizz sticks” or protein bars from Arbonne. Distributors are posting on Facebook, Twitter, Instagram and even LinkedIn to raise funds.
The problem was that the hospitals in question didn’t want what the huns wanted to give them. Many were not able to accept food donations of any kind and certainly didn’t want candles or snake oil like essential oils or supplements.
The Dangers of MLM-Style Sales, For MLM Companies.
Both Arbonne and Scentsy denied having any role at all in the fundraisers. They stressed that these huns are just independent resellers of their products.
And yes, sorta. If I sold one of my mom’s old Avon collectible perfume bottles on eBay and claimed its contents were still usable 30 years after that initial purchase and would function as a Fountain of Youth if someone drank it, Avon sure wouldn’t be on the hook for my misrepresentation. In the same way, Arbonne and Scentsy aren’t on the hook for what resellers say about their stuff once the products are sold to them.
In a real sense, the huns buy these products as consumers, not retailers. They might as well run eBay shops stocked by garage-sale shopping — and it’d make way more money, just sayin’.
But where’s the glamour in that?
The Problem MLMs Have.
Thus, for the authorities to find MLMs responsible for misrepresentation and scams committed by resellers, the charge must involve people they actually are responsible for.
And therein lies the rub. See, MLMs pay their huns according to a compensation plan and schedule.
Avon wouldn’t be paying me anything to resell that old perfume bottle, so they have no real connection to me.
However, huns have a tight business relationship with their MLMs!
That’s why, in 2014, the feds sent warnings to Doterra and Young Living, two essential-oils MLMs: the FDA thought they’d gotten way too close to huns being paid consultants rather than independent resellers, which made it yes-their-problem that their huns were making false health claims (in this case, about Ebola).
So MLMs must maintain this micrometer-thin veneer of lack of responsibility for their huns, while also paying those huns to resell their products.
Then This Happened.
Yesterday, I caught this post on the subreddit r/AntiMLM. The poster offered up what she said was an email from a very high-ranking set of Arbonne huns to the drones in their suspiciously three-dimensional-triangle-shaped “teams.” It’s a very long email and — rather strikingly — features not one single emoji.
Arbonne’s panicking over these fake fundraisers. These huns are garnering media attention for doing it, and it’s making Arbonne look super-bad and could be a gateway to very unwanted government attention — and blow their pretense of non-connection out of the water for good. They’ve communicated their concerns to the top huns in the scam. The letter begins,
I want to address a discussion that has been going on among the NVPs, and give you my advice regarding donations for hospitals and medical professionals.
“VP” seems to translate to Regional Vice President, which is the level you must hit to be eligible for the “free car.” I guessed this translation because this level is named in the Arbonne “free car” incentive page, which requires eligible huns to send their car applications to “VP Support.” In Arbonne terms, Regional Vice Presidents, or VPs, are close to the top of Arbonne’s suspiciously three-dimensional-triangle-shaped MLM. Above them are the top of the business, the National Vice Presidents or NVPs. So this letter comes from the tippy-top of the suspiciously three-dimensional-triangle-shaped business.
(BTW: Check out this page analyzing the above income disclosure statement; it’s just shocking to see how hard Arbonne’s owners try to hide just how difficult it is to earn a living wage in their company and how few people manage it even at the upper levels.)
The Directives From the Top.
However, the top huns are absolutely not ordering their drones to quit doing the fundraisers.
Instead, they’re asking the drones to keep it all on the down-low.
The drones must not talk about the fundraisers on any social media anywhere. They must not write down anything about it anywhere, either. Anybody checking out their social media and public writings must not suspect that a fake fundraiser is even happening!
Instead, here’s how they must conduct their fake fundraisers, according to their top hun in Arbonne:
Right now, we need to lay low on social media regarding this. [. . .] I do think its [sic] okay to help medical professionals with Arbonne products. But as I said on our first VP call, I think you should personally call your BEST clients, who know you and trust you, and ask them if they want to buy anything to donate to medical professionals, but do it privately, on a one-to-one person…not publicly.
What I’m hearing here is COVER YOUR ASSES, LADIES.
Also, the huns need to contact the hospitals involved away from social media and make sure they can accept those donations, in case anybody checks. And no huns should be talking to any news people!
I cut Arbonne slack on the last bit — a lot of companies ask employees not to speak to the media on anything related to their employer. SWIDT?
Why This Is A Scam.
So certain rules govern these kinds of fundraisers. Sometimes the company needs to obtain a license and registration for the fundraiser. Sometimes rules govern how the money must be handled. The fundraiser’s details must be posted in certain ways and contain certain kinds of information. Laws often govern how the fundraiser communicates the request for money and what data must be kept about the donors, as well as how it’s kept. And obviously, laws govern where the money goes and how it gets there and how much of it can stay in the fundraisers’ hands.
Obviously, Arbonne is not a charity or a nonprofit, which only makes those rules more important to follow.
Often, a business desiring to run a fundraiser gets advised to hire a lawyer to help make sure everything’s where it needs to be. Even churches have to be really careful about this stuff!
But Arbonne huns don’t care about any of that. They’ve done absolutely none of it. They never have.
See, they’ve done this exact thing before, many times.
In 2019, someone spotted an Arbonne hun running this exact same scam. That time, the apparent recipients were “new moms and their babies.” A 2018 scam sought to raise funds for teachers. At present, the new 2020 scam claims to aid healthcare workers.
I suspect that this “marketing ploy” has been part of Arbonne’s playbook for way longer than two years. I also suspect it won’t be the last time they run one. They’ll just ask huns to cover their activities so nobody official notices.
Toxic people don’t stop doing toxic things on their own. They have to be forced to stop it, and so far nobody’s forced Arbonne huns to stop doing these fundraisers!
If You Want to Help Healthcare Workers:
Contact the hospital, charity, or care center directly and ask what they want. Chances are it’ll be protective equipment or just money. Give them that instead of helping someone create “care packages” for anybody. Or you can donate to established charities you already trust who are running fundraisers to help somewhere.
If you’re handy with a sewing machine or needle-and-thread and aren’t dealing with worrisome symptoms, some hospitals are even accepting handmade masks!
See how easy that is?
You don’t need to appease frantic huns with pity purchases to feel like you did something good. There’s lots of ways to do something good. Choose one of those instead and tell the huns you gave at the office. Cuz in a way, you did!
NEXT UP: How MLM leaders (and Christian leaders) turn enemies into strawmen to maintain the bubble’s protective outer shell. Seeya tomorrow!
MLM terminology: A “hun” is a shill for an MLM; these are usually women. A hun’s “upline” is whoever signed her up to join the scam, plus whoever signed *that* person up, and so on all the way up to the founder of the scam. Her “downline” is whoever she convinces to join the scam under her, plus whoever that victim recruits and so on down the line to whoever gets it in the shorts at the bottom of the suspiciously three-dimensional-triangle-shaped scam.
- it depends on endless-chain recruiting
- it rewards huns more for recruiting than sales
- huns buy more product themselves than selling it at retail
- the scheme advances huns through levels depending on their recruitment rather than their retail sales
- the scheme pays commissions/rewards for more than five levels down the downline chain (potentially creating an “endless chain” of recruitment that soon eclipses our planet’s population)
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