Scam Alert: Multilevel Marketing Practices
Unfair and illegal multilevel marketing practices have become a concern on an international level for consumer authorities. Indeed, many consumers around the world have complained to econsumer.gov about marketing opportunities that turn out to be pyramid schemes or ponzi schemes.
Multilevel marketers use different methods of selling. Many of them are legitimate, but some are not. In multilevel marketing, individuals sell products to the public — often by word of mouth and direct sales. Typically, distributors earn commissions, not only for their own sales, but also for sales made by the people they recruit. Some multilevel marketing plans, however, do not comply with consumer protection principles and other laws. For example, if the money you make is based on the number of people you recruit and your sales to them, rather than sales to the public and the vast majority of participants lose money, the multilevel marketing plan could be an illegal scheme. If you’re considering buying into a multilevel marketing plan, you can ask questions to help you figure out whether or not the marketing opportunity is legitimate or an illegal scheme.
If you believe you’ve responded to an offer for an unlawful scheme, you can file a complaint with:
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