Join An MLM Company. Get Rich. What Could Go Wrong?
- Current Affairs
There are three questions that Singaporeans get most miffed by:
“Have you heard of the Lord and saviour Jesus Christ?”
“Haven’t seen you since primary school, let’s meet for lunch … By the way check out this insurance package?”
“I just joined a company and made my first 10k within a month. Got flexible working hours and high commission, interested to join or invest?”
The last is the most vile of all, since nothing good ever seems to come out of multi-level marketing (MLM) business schemes. To most of us, an MLM is as perilous as the other three-letter word, HIV. Such business “opportunities” are no more than elaborate pyramid schemes that prey on the old, weak and naïve, who are enthralled by the prospects of striking rich without having to slave through a 9 to 6 job their entire lives.
Just rope in as many friends and relatives as possible, get them to do the same, and you will be rewarded with huge bonuses that can pay for a nice car or even a house.
Yet the Singaporean dream can never be achieved with “easy money”. There’s a reason why MLM companies, no matter how successful they claim to be, are never in the Fortune 500 list.
It’s also the shady way in which MLM companies attempt to recruit the unsuspecting. Usually, this happens under the pretext of a dubious “marketing job” or “networking session”, only to then shower you with the glitz of a lifestyle that an MLM position could afford you.
But has that bottle of vitamins your neighbour is trying to sell you even been clinically tested, or is it simply a concoction of deadly chemicals?
In truth, most MLM companies are never about selling products, and they don’t even care how crappy they are. Their bottomline is selling the system that enlarges their network exponentially, and more often than not they end up collapsing under their own weight, thus further perpetuating the industry’s bad rep. One only needs to look at the infamous Sunshine Empire that swindled 20,000 Singaporeans out of nearly $90 million.
In fact, MLM companies are deemed illegal in Singapore through the Multi-Level Marketing and Pyramid Selling (Prohibition) Act. Anyone found guilty of promoting or participating in such unlawful businesses could be fined up to $20,000 or jailed up to five years, or both.
Yet companies like Herbalife and Amway still operate prominently in Singapore after so many years, only because they fulfill certain criteria (existing as a direct-selling company) that qualify them as legitimate businesses.
Yes, there are a number of people who have managed to carve out a career in the MLM industry, but they are a dime a dozen. The horror stories are just too overwhelming for us not to believe that MLM is nothing more than an intricate scam designed to serve only the company’s founders while the rest of its employees are screwed over.
As usual, WorldVentures members, or “sales reps”, earn commission by recruiting more people to join the company. The Observer, an online newspaper in New York, wrote in 2012:
“WorldVentures has a virtually inscrutable payout schedule comprising seven ranks and two pyramid-shaped hierarchies. The first pyramid is called the ‘lineage’. You sit at the top and everyone you’ve personally recruited is added directly below you, and everyone they’ve recruited is below them, and so on. Lineage is factored into rank, which is factored into compensation.
The second pyramid is the ‘binary organisation’. Here the pyramid spreads out by twos: the top spot sits directly above a left and a right spot, each of which sits above its own pairs, and so on. You can then earn bonuses based on sales made by the binary organisation, which is comprised of the reps you recruit, and the reps they recruit.”
Despite these legal troubles, the reputation of WorldVentures was still propped up by seeming endorsements from celebrities holding up the YSBH sign – another tactic frequently deployed by MLM companies to boost their legitimacy and recruitment. Katy Perry, Kanye West and T.I are just some of the A-list faces of the organisation, though it’s unclear if these celebs knew exactly what they were fronting for.
In Singapore, the celebrity endorsement was much more overt. Mediacorp artistes Gurmit Singh and Darren Lim were seen in this video from 2013 sharing their testimonials at a WorldVentures event.
Jeremy (not his real name), a former sales rep at the WorldVentures Singapore office, says that he left the company this year after a string of management troubles that have hurt the company’s finances and direction. He is owed $5,000 in commission, and is currently represented by a lawyer along with 30 other former colleagues.
One troubling sign that pointed to WorldVentures’s dishonest business practices was how certain aspects of tour packages could be downgraded at the very last minute. For example, on a trip in Europe last year, Jeremy’s luxury hotel stay was suddenly downgraded to a business hotel without any reasonable explanation.
He adds that over the past year, half of his team has already left due to grievances with the company and its overdue payments.
WorldVentures did not respond to Rice’s queries.
The website Singapore Legal Advice advises anyone who suspects being part of an illegal MLM scheme to withdraw immediately and request for a refund during the valid window period. To report an illegal MLM scheme, you may lodge a police report with the Commercial Affairs Department online, in person or call the police directly at 6325 0000.
Lost your money to an MLM scheme, or can’t get out of fishy business? Make a police report first, then write to us at firstname.lastname@example.org.