You have been targeted by a multi-level marketing scheme

In the month of December, I received a DM on Instagram from a student my age, who most likely attended a neighboring school and found me through mutuals.

“Hey Erica, sorry if this is super random, but I work for a local business in Virginia Beach and we have openings to positions where you can work from home. Figured I’d reach out to let you know about the opportunity since we work with a lot of students! The starting pay is $17 and my manager is looking to fill positions right away. Would you be available for me to tell you more about the position? And/or do you know anyone who would be interested? Thank you!”

Upon receiving this, I looked through the website that the student represented. Was this high starting pay of $17 something to take, or was it too good to be true? It seemingly looked like an easy job opportunity for students, however there was a minor issue. The website and chain message I received provided little to no information on what the actual job was, and the company required no experience from me. 

The student was also advertising the company on their page and accidentally leaked the numbers, schools, and full names of people I knew on their posted files that I would later reach out to in my research for this article.

I knew what this was right away and identified that it was an attempt to make me fall victim to a multi-marketing scheme. Since then I have actively spread the word against these kinds of “opportunities.”

A multi-marketing scheme is a system where participants make money mostly by recruiting more people, or “investors,” to buy the company’s products to sell, thus creating a cycle. Large down payment requirements are not uncommon before joining the job.

There are many cases of students taking part in these.

If I had answered this student’s DM, they would have scheduled a zoom conference with me, where I would find out my job would be to become a salesperson to my friends, family, and others to sell a companies product, and to also ask these people to join me in this job and recruit the people that they knew as well. Again, this is part of a cycle.

Let us be clear: Multi-level marketing schemes are actually perfectly legal; they are considered the acceptable version of a “pyramid scheme” which is similar, but illegal. 

The Division of Consumer Protection provides the defined difference between multi-level marketing and pyramid schemes.

“Multi-level Marketing (MLM) or network marketing, is individuals selling products to the public – often by word of mouth and direct sales. The main idea behind the MLM strategy is to promote maximum number of distributors for the product and exponentially increase the sales force. The promoters get commission on the sale of the product as well as compensation for sales their recruits make thus, the compensation plan in multi-level marketing is structured such that commission is paid to individuals at multiple levels when a single sale is made and commission depends on the total volume of sales generated.

Pyramid Schemes are, however, fraudulent schemes, disguised as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.”

The company that contacted me claims they are neither a pyramid scheme or an MLM, but are a “single-level, direct-to-consumer marketing company and is recognized as an official member of the Direct Selling Association.” However despite their denial of being an MLM, there are many reasons to claim that their business practices are rather unethical.

The company that contacted me has been sued eight times. One of which was when a teen working for them was drugged and raped. She received no safety training due to negligent hiring. Companies like these target high school and college students with no experience, making up 85% of the company’s workforce, to buy and sell their products.

According to FTC, 99% of people who join a multi-level marketing scheme will lose money in the end.

People who do turn a profit are the ones who do it at the expense of the rest of the 99%, damaging others in the process by pulling them in to fail and provide money to the company.

The people who message you, however, won’t mention any of this. Companies like these train their workforce to deny claims that they are a scam. Below is a statement by one of these companies defending their legitimacy.

“[We are] not a pyramid scheme in any way, shape or form…reps are not responsible for recruiting new reps or buying any sort of product or service. In fact…reps are independent contractors and they set their own schedules and have the opportunity to control how much they earn through a guaranteed base pay and commissions earned on each sale. [We are] also not a “get-rich-quick” scheme. Success is not guaranteed and it may take hard-work and dedication in order to succeed.”

That being said, companies like these are perfectly legal but rampant. You most likely even own some of their many different products in your household. While they have provided many arguments to back themselves up as an lucrative business opportunity for all, the students who receive a brief DM must ask themselves if such a wonderful opportunity, with no experience or job description required is in their best interest. Maybe the lawsuits are one too many at this point, or maybe I don’t know if I can put in enough “hard-work” to match up to the 1% chance of becoming rich. For now, I will have to turn this down. 

To the people who are participating in systems like this, look for the signs and consider that it is never too late to leave. When you recruit friends and family, you will most likely end up hurting their finances and your relationships with them as well.

According to mlmtruth.org one in three people who join MLM’s will lose a friendship to their practices and two in five report fighting with close friends and family over their time and money invested.

After I began spreading the word about MLM’s on social media, friends began reaching out to me to let me know they almost fell for these very schemes and shared their experiences.

Senior Sarah Rush is a friend of mine who almost started working for the same company that contacted me.

“I was DM’d by a girl about my age. She initially contacted me asking me if I was interested in making $14 an hour. Like anyone, I was interested,” said Rush. “I messaged her back asking for more information on the job and what exactly I would be doing, and she said that it was just “customer service”. I asked her if she could be more specific and she immediately asked for my number to give to her manager instead of telling me the job description. After a few minutes I started to feel like this was a scam.”

From this point on Rush began doing her own research after looking up the girl’s name online and discovered the same truth. It was a locally run company that was actually run by a larger business which reaches out to cities around the country, and was notoriously noted to be unethical. 

“I then started receiving phone calls from the manager, urging me to join their team. It just seemed so weird and off, so I blocked the girl and the manager’s number. That’s when I found out it was a scheme.”

Rush has a piece of wisdom to her peers out there who will most likely encounter the same situation.

“My best piece of advice is to just pay attention and trust your intuition. If something seems too good to be true, it probably is.”

Senior Emma Smith was another potential victim, though the company tried to make her pay a large down payment before joining which would have put her into debt.

“I had a friend who worked for them, and she didn’t know she was being scammed. She was told to try and get as many people to apply as possible, and that’s when her company called me. They tell everyone the same thing and talk about how they want to hire you and that you seem like a great candidate,” said Smith. “I didn’t go because it seemed like a scam and was really weird. They said when I started I would have to invest a certain amount, but said I would get it all back quickly in sales. I said no.”

Smith’s friend who worked for them also had a rough experience. 

“Later on my friend told me the company threatened to fire her if she didn’t make as many sales as they wanted her to, and kept giving her phone number to people who were not interested at all. She claimed they kept calling her multiple times a day and even got death threats from people.”

Smith warns others to be careful in the future.

“Be weary of virtual jobs. Any time they want you to go into debt for them at all you should be skeptical.”

Always be aware and do extensive research into any job opportunities you are offered. Doing so preserves the safety of your time, finances, family relationships, and future as a vulnerable high school student. Multi-marketing schemes, while a controversial topic, are never worth the effort.