The thought of being victimized by MLM scams tend to scare prospective recruits away from joining any networking company. While the concern is legitimate and they are to be avoided, giving in to this fear automatically without giving the subject matter more thought and consideration can result in lost opportunity.
Because not all MLMs are scams.
And with the legitimate MLM businesses, there is serious money to be made.
Let’s get one thing out of the way first: differentiate the pyramid scheme, which is a scam, from a legitimate MLM operation. Pyramid schemes and their horror victims tend to lump, at least in the public mind, networking companies with some of the worst MLM companies.
This cannot be farther from the truth.
Pyramid Schemes And MLM Scams
A pyramid scheme does have the same layered structure as an MLM. However, it does not offer any legitimate product. What it entices the hapless customer with are commissions made from the membership fees of the recruits, as well as the recruits of those recruits. Listen carefully: no product – not a shampoo, soap, bag, energy drink, cellphone – is exchanged between the company and the customer through the intermediary which is the upline. All money made in a pyramid scheme is based on the recruitment or membership fees.
This is spurious business but does not turn legitimate networking companies into new MLM scams and they add to the MLM scam list. There are a few searches that people make online when it comes to this and I have found they are searches like: Team National MLM scam, Paul Burks MLM scams and even MLM Fraud companies.
Why? Because networking companies do have products to sell. Yes, the upline does make money from the commissions of his recruits and their recruits – but these are bona fide sales of actual products, immediately nullifying the “MLM scams” accusation.
Now that we got that out of the way, let’s look at the ways by which you can spot actual MLM scams. These are actual networking companies that have a weak business foundation and resort to unprofessional and unethical tactics to get you to sign on the dotted line.
MLM Scams That Raise A Red Flag
First, always do your homework. A thorough online search should immediately give you a list of the latest schemes that are preying on people. Come up with a list – avoid these companies. Or if you do have a company in mind, Google that company along with its management team.
Do not leave any stone unturned.
If there is so much as a whiff of scandal, move on.
Second, stories of instant success should raise your red flag. Legitimate networking companies that have withstood the test of time will promise you the rewards of doing the business, but they will not over promise. They will even let you hear of testimonials who had gone through years of rough patch before they hit the big time. They tend to over promise, enticing you with claims that you can make $100,000 in three months. The greater and the more grandiose the claim, without any substantiation, the more you should stay away.
Third, companies that pressure you into signing on the spot should be another tell-tale sign that these are MLM scams. Every legitimate business – whether it’s a network marketing company or not – will give you the professional courtesy of letting you study the business plan, document, or memorandum of agreement within your own space within a period of time.
Ethical business enterprises realize that you do have to let matters rest to your satisfaction before signing the dotted line. Companies or representatives who pressure you to “Sign Now!” or forfeit your opportunities may turn out to be a scheme. There are websites like MLM Watchdog that you can look into if you are wanting more information to see if what you are looking to join has been deemed a scheme.
Money Sucking MLM Scams
Fourth, in relation to that, too many pages of documents with unclear terms and wordings are another giveaway that the companies are multi level marketing scams. Your network marketing company want you to understand the business and the little things like the compensation plans. They will not make it hard for you, regardless of the many legal terms that they put. Scams, on the other hand, want to confuse you and obscure the issues in order to lure you in the soonest possible time.
Fifth, the company does not give training, which is an important part of your success in the network marketing industry. Or if they do give training, they will make you pay for it.
Sixth, they will charge you for everything that they can think of – from the desk that you use, the photocopy of the brochure that they give you, to your time with the trainer.
Remember: network marketing companies want you to succeed because your success is their success.
These types of scams only want to steal your money – use these tips to spot and avoid them.
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