Post image for MLM Scam Revealed – 4 Ways To Avoid Being Scammed in MLM

MLM Scam Revealed – 4 Ways To Avoid Being Scammed in MLM

by Alex

November 29, 2011 – MLM Scam Revealed.

“MLM Company Gold Sukh has allegedly scammed over 175,000 investors. Jaipur based MLM Company Gold Sukh promised gullible investors returns on their deposits for buying gold, 27 times greater than their investment in just 15 months.”

If you’re you’re looking for an MLM business opportunity and you want to avoid an MLM Scam then you need to know the following.

1 ) An MLM Scam is one that offers no VALUE (product, real compensation plan, training etc.) in exchange for your investment.

mlm scamIn reality there are very few scams in the MLM industry. But as our poor colleagues in India discovered, scams still abound for those preying on those desperate to “get rich quick.”

So when investigating an MLM business opportunity simply ask this question, “What is the product and how reasonable is the compensation plan?”

2 ) An MLM Scam is one that makes outrageous promises

mlm scamThe promise made to Indian investors in Gold Sukh was outrageous. A return 27 times greater than your investment in just 15 months. Really? That should have sent warning bells to any reasonable investor. But then again, some extremely intelligent people were scammed by Bernie Madoff.

Be sensible here. If the promises look too good to be true, step away. Don’t get greedy. Building great wealth is a process. It takes time. It doesn’t happen overnight, unless of course you win Powerball.

3 ) An MLM Scam is one that disregards the law

mlm scamAll 50 states in the USA have implemented strict laws regulating MLM business opportunities; from the federal level including the FTC, SEC and U.S. Postal Service right through to state level.

MLM business opportunities have been around since the 1950’s with the likes of Amway, Mary Kay and Shaklee being the pioneers in this business model.

It wasn’t until the 1970’s that regulation had to be scrutinized when Glenn W Turner of “Dare To Be Great” & “Koscot” was charged with “aiding and abetting a pyramid”. He spent nearly five years in an Arizona prison.

All reputable MLM companies will employ a legal team that specialize in MLM law. So find out what type of legal representation your potential MLM business opportunity has.

If you are unable to find this information, go to the Division of Marketing Practices, within the US Federal Trade Commission and they will give you information regarding the legitimacy on your MLM Company.

Also if you do fall prey to an MLM Scam they will be your ally when making a claim.

4 ) An MLM Scam is one that employs illegal marketing plans

Abuses include:

mlm scam

MLM Scam


  • Products that have “no real world” marketplace.
  • Mandatory purchases of company products.
  • Products that are sold at inflated prices.
  • Plans that result in inventory loading distributors. Substantial cash investment requirements.
  • Mandatory purchases of peripheral or accessory products or services.
  • Plans in which company products are totally or substantially consumed only by distributors.
  • Plans in which distributors are left with substantial unsold inventory upon cancellation of participation.
  • Plans in which distributors purchase products in order to further the marketing plan rather than out of genuine desire and need for the product.
  • Plans that would fail without purchases by participants.
  • Plans which make no effort to emphasize retail sales to the ultimate non-participant consumer.
  • Plans that require no meaningful participation by distributors after becoming a distributor.
  • Plans in which fees are paid to distributors for headhunting.
  • Plans in which commissions are not based on actual retail product sales.
  • Plans in which emphasis is on recruitment rather than sale of product.
  • Plans that contain elements of a lottery rewarding participants based on chance rather than on bona fide sales efforts.
  • Earnings misrepresentations or inflated earnings representations.

In Conclusion

mlm scamThere are literally thousands of MLM business opportunities to choose from.

Do your due diligence and you won’t fall prey to an MLM Scam.

The MLM industry is one of the most promising industries for people from all walks of life, irrelevant of class or background, to make an incredible personal fortune.

But at the end of the day it will always come down to this, you will only reap as you sow.

97% of people fail in this industry because they quit. If you’re going to quit, then quit before you start. The only way to be successful with an MLM business opportunity is to stick with it no matter what.

Sadly, most of the 97% who fail, fail when they are inches away from success.

In this industry you must do W.E.I.T. (Whatever it takes).

Every day I see people with zero skill sets enter this industry and by applying a few basic fundamentals they are throwing in their J-O-B and living the life they only saw in their dreams.

The secrets to your success lie within.

For unbiased MLM Company Reviews check out our site.

Care to give feedback on this blog?

Please leave a comment below or just click ‘like’.

It just takes a second to spread the love :  )

mlm scam

Alex and Erica are Internet Marketing Coaches, Mentors and International Speakers. To work directly with Alex and Erica, Go HERE Now.


Be Sociable, Share!
If you enjoyed this post, make sure you subscribe to my RSS feed!
The following two tabs change content below.


Alex and Erica Udeanu are online Affiliate Marketers who have created a MULTIPLE SIX FIGURE INCOME* in multiple online businesses. They have built an International Team spanning the USA, the UK, the Philippines, Australia and New Zealand and specialize in Coaching and Mentoring "total newbies" who are Getting Online for the very first time. Whether you're trying to Get More Leads for your Home Based Business, or you're looking to Build a Home Based Business from scratch, Alex and Erica will provide you with the Systems and Strategies you need to Get You To Where You Want To Be. If you'd like to work directly with us, CLICK HERE NOW.

Great to see you both again and thank you for your comment : )


Great to see you both again and thank you for your comment : )


  1. […] get the best marketing tools you can find and I guarantee that you will be successful. (To avoid an MLM Scam read this […]

Previous post:

Next post: