You are reading

Join An MLM Company. Get Rich. What Could Go Wrong?

Join An MLM Company. Get Rich. What Could Go Wrong?

  • Current Affairs
  • Opinion
Top photo by rawpixel on Unsplash

There are three questions that Singaporeans get most miffed by:

Have you heard of the Lord and saviour Jesus Christ?

Havent seen you since primary school, lets 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. Theres a reason why MLM companies, no matter how successful they claim to be, are never in the Fortune 500 list.

Its 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.

An alleged Facebook message from a WorldVentures recruiter. (Image credit: HardwareZone)
Weve all heard stories of friends who get suckered to put down a sizeable sum as investment, only to realise months later that they will never be earning that figure back. And its not like the products that these companies tout are the most reliable. MLM companies love to dazzle the uninformed with suspicious groundbreaking technology that their products often feature.

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 dont 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 industrys 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 companys founders while the rest of its employees are screwed over.

Take WorldVentures for instance. Its a global MLM company that claims to offer its paying members cheaper travel packages, and even brazenly offers to fully subsidise the trip if a cheaper package for the exact same itinerary can be found elsewhere. Its signature motto You should be here (YSBH) is printed on signs held by members in various exotic locations to sell the dream of an adventure via a work less, travel more lifestyle to those disillusioned with their jobs.

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 youve personally recruited is added directly below you, and everyone theyve 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.

An ad posted on WorldVentures's Facebook page.
While the premise of WorldVentures as a travel and fintech company sounded promising at first, the company soon found itself embroiled in controversy in almost every country where it operated. A simple Google search will reveal almost nothing positive about the company: false advertising due to expensive tour packages, suspicious additional fees that members have to pay, and late or defaulted payments of commissions owed to reps.

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 companys 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 WorldVenturess 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, Jeremys 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 Rices queries.

WorldVentures often holds glitzy parties to sell the dream of a lifestyle that one can have as a member of the company. (Screenshot from WorldVentures video)
Jeremy says that he’s fortunate that he was able to leave and seek legal advice. While he’s adamant that he had joined a legitimate MLM business at the start, he warns anyone considering joining the industry to do their own stringent company checks before committing their time and money to avoid falling prey to yet another pyramid scheme.

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 community@ricemedia.co.

Author

RICE STAFF