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January 5, 2006
Analyzing An Attorney's Perspective
By QBlog in TEAM
The Team is a Quixtar motivational organization originally founded in 1999 by Orrin Woodward and Chris Brady under the name "Team of Destiny." The Michigan based business has grown tremendously over the years and is rumored to be one of the most successful Quixtar Lines of Affiliation.
However, as the Team has grown it's become the subject of criticism from consumer advocates like Dave Touretzky, Robert T. Carroll and Scott Larsen, who question the legitimacy of the motivational business. The Team has responded by publishing "An Attorney's Perspective," a detailed analysis of the Team compensation plan written by attorney Matt Abraham.
Clearly Abraham's analysis is intended to assuage the fears of potential (and existing) Team members by demonstrating that the Team and its compensation plan are legitimate and legal.
But since Abraham is also a member of the Team (having achieved the Quixtar Emerald level), and therefore directly profits from selling the Team, I thought it would be fair to provide an analysis of his "Attorney's Perspective." I asked LawDawg, the author of the LawBlawg, to share his perceptions of Abraham's analysis. His response is a lengthy and detailed analysis.
An Attorney's Perspective of "An Attorney's Perspective"
- By LawDawg
The ostensible purpose of this piece by Matt Abraham is to give his opinion as an attorney that the Team compensation plan is legal. What specifically is Team? It is a business that sells motivational “tools" to Quixtar (formerly “Amway")
distributors.
First, a little about Amway/Quixtar. Amway/Quixtar itself is part of a products manufacturing and sales company that sells its products through a network of “independent business owners" (IBOs) who make money by selling Amway/Quixtar products, but are promised vast rewards, early retirement and financial independence by recruiting a network of IBOs to do the work for them. Each of these recruited IBOs are made the same promises and in turn attempt to recruit their own network of IBOs, who are promised vast rewards by recruiting more IBOs . . . and so on. If an IBO is successful, he or she can recruit a large group of distributors from whose purchases and sales he or she earns a commission.
But Abraham's piece isn't about the Amway/Quixtar business, the company's products or its compensation plan. It's about something else. That “something else" is a highly profitable business selling tickets to motivational events where Orrin Woodward, Chris Brady, and Matt Abraham himself, get up on stage and talk about their vast success and financial accomplishments from following the Team “system." Those events are often recorded and sold to Team members in the form of audiocassettes and CDs. Team members are also expected to purchase books, videos, promotional materials, website access, a voicemail account and numerous other items as part of the Team system for success.
There is a lot of money made by selling these motivational products to Teams members. Indeed, for those at the top of the Team organization, there is a great deal more profit in this “tools" business selling tapes, books, videos and rally tickets to Team members than there is in selling Amway/Quixtar products. The Amway Corporation has known about this side business for decades. In an internal document, one corporate official discussing the findings of a corporate investigation of the tools business explained: “there is little question that this is where the big money is made." More about Amway's investigation later.
Who is Matt Abraham?
He tells us a little about himself at the end of his piece:
Matthew J. Abraham heads the Law Office of Matthew J. Abraham, PC and is a business and contract specialist private practice attorney. He is a member of the ABA and Michigan Bar Associations as well as the United States Chamber of Commerce. Mr. Abraham is also an IBO and is a member of the Team. He and his wife Cheryl have achieved the level of Emerald. Mr. Abraham actively participated with Orrin Woodward and the Team Policy Council in the design, review and analysis of the Team compensation plan in cooperation with the foremost legal experts in the industry of multi-level marketing.
According to the lawyer directory “Martindale-Hubbell," Abraham is a Michigan attorney practicing in Fenton, Michigan admitted to the Michigan Bar Association in 1993. He has a B.A. and a Juris Doctor (a standard law degree) from Michigan State University.
Thus, Abraham is not only Team's lawyer, he is also a profiting participant (an “Emerald" level distributor in Quixtar terminology) selling the Team system to Team's members and potential recruits. So the first thing to note, even before getting in to the substance of the piece, is that the mere fact Abraham is an attorney should be taken with a grain of salt in reading his justification for the Team plan because he has a direct, personal, financial interest in getting as many people subscribed to the Team system as possible.
Is That Ethical?
At the outset, the mere existence of Abraham's piece raises some interesting ethical questions.
Is Abraham giving legal advice to Team members and prospective recruits about the legality of a business in which Abraham has a personal, financial stake? The Michigan Bar Association's “Rules of Professional Conduct" state:
Rule 1.8 Conflict of Interest: Prohibited Transactions
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;
(2) the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
(3) the client consents in writing thereto.
Legal ethics opinions from the Michigan Bar Association raise some interesting questions about the limits on an attorney's ability to use his name and authority as a member of the bar to advance the interests of a non-law business. In Opinion CI-1203, the commission found potential problems with an attorney giving legal advice to business customers of a non-law business unless he provides full disclosure:
Performing legal services for clients of a nonlaw business in which a lawyer has ownership interest or is a manager, presents concerns of solicitation of business and conflicts of interest. MCPR DR 5-101(A) prohibits legal employment if the exercise of a lawyer's "professional judgment on behalf of his client will be or reasonably may be affected by his financial business, property, or personal interests," unless the client consents after full disclosure. It is clear that full disclosure is required if the lawyer wishes to provide legal advice to customers of the law-related business. As stated in ABA i1482:
"A lawyer who elects to engage in a law-related business while providing legal advice to customers of that business will, as a practical matter, have the substantial burden of establishing that any legal advice given has been free of the taint of any bias created by the dual capacities in which the lawyer acted."
In Opinion CI-797, the commission wrote that an attorney could provide general legal information in a public forum such as radio or newspapers, “so long as the lawyer did not emphasize his or her own professional experience or reputation and did not undertake to give individual advice." Has Abraham crossed the line? Is he giving basic legal information, or is he giving Team members and potential prospects specific legal advice about the Team compensation plan? If not legal advice, what is the point of emphasizing that Abraham is a lawyer and specifically drawing attention to the fact that he is a “business and contract specialist"?
Opinion CI-797, aside from setting guidelines about emphasizing the lawyer's professional experience or reputation and giving individual advice, also suggests some disclaimer language for use in newspaper articles that give general legal advice: “The advice given in this column is general in nature. Due to the complexity of many legal issues, the result of any matter may vary depending on the circumstances. Specific problems should be directed to your own lawyer. You are encouraged to submit questions you may have to XXX newspaper."
Abraham accordingly includes a lengthy disclaimer at the end of his piece:
IMPORTANT NOTICE AND DISCLAIMER: The articles, analysis, cases, legislative material and other content of this review are intended solely for general information, discussion and education. The contents should not be regarded as legal advice. For advice on specific legal and tax matters, always be sure to contact competent direct selling or multilevel marketing legal or tax counsel.
This article is written from a legal perspective of an attorney who has had the opportunity to analyze and participate in the drafting of the Team compensation plan and in doing so has had the opportunity to review other compensation plans in the MLM industry. The information, comments and opinions herein are for information purposes only and are not legal advice. The transmission of any information is not intended to create, and receipt does not constitute, an attorney/client relationship. Internet subscribers and on-line readers should not act upon this information without seeking professional counsel.
The disclaimer is thorough, and I have no opinion one way or the other as to what effect it has on the nature of his piece or whether Abraham has violated any ethical standards in writing this piece. Those types of issues are exclusively left to the committees and courts who police the practice of law.
It does beg an interesting question, though. Should a person reading this piece give it credence because it was written by “a successful attorney with a thriving law practice and more than 10 years experience in the areas of business, corporate, and contract law" who has analyzed the law and applied it to the Team compensation plan? Or should one just disregard it because it's not intended as legal advice, and should not be acted upon as stated in the disclaimer?
The Overview
Abraham writes:
I certainly was not looking to become involved in or affiliated with an "illegal pyramid." Upon meeting Orrin Woodward, the founder of the Team, and after seeing the business opportunity and its potential for success, I began to investigate some of the complexities of the Team and the multilevel marketing (MLM) industry. What I found is that, in general, the key issue concerning legality is whether a company is in business to merchandise goods and services to consumers or whether it attempts to profit simply through fees for the mere recruitment or "headhunting" of additional participants. (emphasis added)
The italicized part, in a nutshell, is Abraham's definition of an illegal pyramid scheme. It is not consistent with most of the recent legal cases on what constitutes a pyramid scheme, nor is it consistent with several state anti-pyramid statutes. While it's true that legal multilevel marketing plans are distinguished from “illegal pyramid schemes" by the emphasis (or lack thereof) on sales of products, the key distinguishing factor is not whether money is paid for “headhunting" fees or for products. Rather, the key distinguishing factor is whether the compensation paid in the plan is based “primarily" upon sales of the products to people who are not participants in the scheme. In other words, the mere fact that some product changes hands does not mean that the plan is not a pyramid scheme.
For example, we've all seen those chain letter schemes where you send $5 to each person listed in an email and they send you a “report" of some kind. Certainly a “product" is changing hands. And who's to say that product is not worth $5 to the person buying it? Yet, the United States Post Office, in its public statement on chain letter schemes states the following: “'Selling' a product does not ensure legality." This is a curious thing for the USPS to state if Abraham is correct in his explanation of the law.
However, several courts have agreed that merely conveying products does not insulate the scheme from a legal challenge. Indeed, in recent prosecutions against two members of the Direct Selling Association, a lobbying organization that works on behalf of multilevel marketing companies to make the law more favorable for them, the United States Federal Trade Commission clarified the definition of an illegal scheme. In the stipulated Final Order in the “Five Star Auto" case, the FTC offered the following definition:
'Prohibited marketing scheme' means a pyramid sales scheme, Ponzi scheme, chain marketing scheme, or other marketing plan or program in which a person participates under a condition that he or she make a payment, directly or indirectly, to receive the right, license or opportunity to derive income as a participant primarily from:
- the recruitment of additional recruits by the participant, program promoter or others; or
- non-retail sales made to or by such recruits.
'Retail Sales' means sales of products, services, or Business Ventures by Defendants, their successors, assigns, agents, servants, employees, and those persons in active concert or participation with them to third-party end users. Retail Sales do not include sales made by participants in a prohibited marketing scheme or multi-level marketing program to other participants or recruits in that scheme or program or to such a participants' own accounts.
Note, in determining whether the compensation is paid “primarily" as a commission for retail sales, “retail sales" do not include sales made by the participants for their own use. In the Temporary Injunction against another DSA member and multilevel marketing company in FTC v. Trek Alliance, the FTC used a slightly different version, but with the same basic meaning:
"Pyramid scheme" means a sales scheme, Ponzi scheme, chain marketing scheme, or other marketing plan or program in which participants pay money or valuable consideration to the company in return for which they receive:
- the right to sell a product or service; and
- the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of products or services to ultimate users.
For the purposes of this definition, "sale of products or services to ultimate users" does not include sales to other participants or recruits in the multi-level marketing program or to participants' own accounts.
This same definition was used when the FTC prosecuted another multilevel marketing company in FTC v. Equinox.
Thus, the real measure for determining if a scheme is an illegal pyramid scheme is not whether the compensation is paid for “products" or for “headhunting." The real measure is the cashflow. Does the scheme make money primarily by selling some product or service to outside customers or is most of the money made by selling something to participants in the scheme? This make perfect sense when you think about it. If most of the products are purchased by participants rather than outside customers, then the primary way to increase one's income is to focus on recruiting more participants. It fits with the Sixth Circuit Court of Appeals' opinion in U.S. v. Gold Unlimited:
MLM [multilevel marketing] programs survive by making money off product sales, not new recruits. In contrast, "pyramid schemes" reward participants for inducing other people to join the program; over time, the hierarchy of participants resembles a pyramid as newer, larger layers of participants join the established structure. Ponzi schemes operate strictly by paying earlier investors with money tendered by later investors. No clear line separates illegal pyramid schemes from legitimate multilevel marketing programs; to differentiate the two, regulators evaluate the marketing strategy (e.g., emphasis on recruitment versus sales) and the percent of product sold compared with the percent of commissions granted.
Several states' anti-pyramid scheme laws also reflect this rule. For example, California Penal Code §327 reads:
Every person who contrives, prepares, sets up, proposes, or operates any endless chain is guilty of a public offense, and is punishable by imprisonment in the county jail not exceeding one year or in state prison for 16 months, two, or three years. As used in this section, an "endless chain" means any scheme for the disposal or distribution of property whereby a participant pays a valuable consideration for the chance to receive compensation for introducing one or more additional persons into participation in the scheme or for the chance to receive compensation when a person introduced by the participant introduces a new participant. Compensation, as used in this section, does not mean or include payment based upon sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme.
State courts applying similarly worded definitions of “pyramid scheme," “chain letter scheme" and “prohibited marketing scheme" have repeatedly emphasized that the distinguishing factor is whether the emphasis is primarily on recruiting new members to spend money within the system or whether the emphasis is on bringing money into the venture by selling products to outside customers who are not, themselves, participants. For example, in People ex rel. Hartigan v. Dynasty System Corp., the court explained:
The defendants also argue that the evidence fails to show that the benefits received by TDSC distributors are primarily based upon the inducement of others to participate and are not primarily contingent on the volume of goods sold to persons for purposes of resale to consumers. We disagree.
The evidence overwhelmingly demonstrates that the primary emphasis is on commissions earned by building a down-line organization. Testimony established that TDSC was represented as a consuming organization and not as a selling organization. Commissions are not dependent upon retail sales to ultimate consumers, but are paid solely upon purchases made by distributors in the participant's down-line organization.
The result is that an MLM company that pays most of the compensation to participants based on purchases by the participants themselves, rather than bringing money in from outside the pyramid of participants probably violates federal and many state anti-pyramid laws.
That brings up another interesting question. Who buys the Team's motivational tools? Are they “primarily" sold to Team members and participants or are they “primarily" sold to outside customers? That is the law Abraham should be applying, but doesn't.
Amway Knows
I'm not the only one with this opinion of the law, either. Rich DeVos, the founder of Amway Corporation, said likewise in his recorded “Directly Speaking" speech:
Now, the tape business, if it is not used as a support for the Amway business, will oftentimes be an illegal business -- in fact, it could be called a pyramid -- because, d -- does not get sold to the consumer. Which means that all the tape business does is take money out of the organization, and because the final person can't retail it, it never brings money into the organization.
Likewise, in an internal corporate memo specifically discussing the legality of the business of selling motivational “tools" to distributors (like Team does), a company official wrote:
THE PROBLEMS . . .
A) Widespread illegalities inherent in Amway distributor designed "systems" of tapes, books, and rallies. While most of these "systems" were conceived in the late 1960's and early 1970's as genuine "support" programs to help Amway distributors develop their Amway businesses, entre-preneurial "higher pins" discovered and developed programs
for substantial, separate, additional income, under the Amway "umbrella."
The memo goes on to note specific legal advice the corporation obtained from outside legal counsel regarding the legality of the “tools" businesss:
The following, important statement from Hogan & Hartson's 28 page legal evaluation of the legal risks inherent in selling and distributing non-consumable "products" through a multi-level system, has helped us greatly in getting the attention of the "systems" entrepreneurs:
"Because of the extensive and extremely adverse publicity associated with Glenn Turner's "Dare to be Great" operation -- an operation based primarily on the sale of motivational tapes -- it must be recognized that any multi-level sales plan which unduly emphasizes sales of motivational literature or tapes is likely to attract the attention of enforcement authorities!!!"
A Tautology And A Negative Pregnant
Unlike many states' anti-pyramid law, such as the California Penal Code quoted above, or Maryland's or Utah's similarly worded statutes, Michigan's statute does generally define pyramid schemes in terms of strict “headhunting" fees. Thus, Abraham quotes the Michigan statute as a subtle straw man. When it comes to other states' statutes or federal law, he offers gibberish: “Similar statutes in other states generally provide that pyramids or endless chain schemes are illegal. As long as a multilevel compensation plan does not fit within the parameters of the prohibited activities, under the pyramid legislation, it is permissible." In other words, as for states other than Michigan, it's legal unless it's not legal.
It gets even more interesting when Abraham turns to Federal law. He is correct that there is no specific written federal statute that defines a pyramid scheme and that the definition derives from the prosecutorial and administrative decisions of the Federal Trade Commission and the courts. Thus, those pyramid definitions used by the FTC and adopted by Federal courts are the federal laws governing pyramid schemes. Abraham then offers a negative pregnant. He argues “In The Matter Of Amway Corporation" continues to be “the standard in evaluating the difference between legitimate multi-level companies and illegal pyramids" but never explains what that case was about. As is often the case, though, the devil is in the details.
In the Amway case, the FTC decided that the Amway itself was not a pyramid scheme because it had and effectively enforced three rules that served to tie commissions paid to distributors (now IBOs) to actual retail sales and to discourage inventory loading. These three rules were described as follows:
72. Amway, the Direct Distributor or the sponsoring distributor will buy back any unused marketable products from a distributor whose inventory is not moving or who wishes to leave the business. The buyback rule has been in existence since Amway started. Amway enforces the buyback rule.
73. To ensure that distributors do not attempt to secure the performance bonus solely on the basis of purchases, Amway requires that, to receive a performance bonus, distributors must resell at least 70% of the products they have purchased each month. The 70% rule has been in existence since the beginning of Amway. Amway enforces the 70% rule.74. Amway's 'ten customer' rule provides that distributors may not receive a performance bonus unless they prove a sale to each of ten different retail customers during each month. The Direct Distributors have the primary responsibility for enforcing the ten customer rule in their own group. The ten customer rule was started by Amway about 1970. Prior to that, there was a 25 sales rule which required the distributor to make 25 retail sales a month without regard to the number of customers. The ten customer rule is enforced by Amway and the Direct Distributors.
75. The buyback rule, the 70% rule, and the ten customer rule encourage retail sales to consumers.
Whether Quixtar (Amway's current incarnation in North America) currently has and effectively enforces rules like those described above is debatable. Which of these rules does Team have and enforce to ensure that the products sold in Team are retailed?
Team - Multilevel or Not?
Knowing full well that he has no explanation for how Team's compensation plan meets federal guidelines for legal multilevel marketing companies, Abraham tries some fancy dancing to skirt around the issue by suggesting that Team's tools compensation can be considered an entirely separate business from the Amway/Quixtar products portion of the business under which Team operates. He then argues that Team doesn't meet some states' definitions of a “multilevel marketing company" and therefore are not subject to a new creature he introduces for the first time in his piece: “multilevel legislation." Up until now he has talked about what constitutes a “pyramid scheme," but now the terminology changes in Abraham's piece, because he has come up with some explanation for why anti-pyramid scheme laws do not apply to Team's compensation plan.
Abraham is wrong on several levels. First, Team's tools business cannot be analyzed as entirely separate business from the Amway/Quixtar products business for the simple reason that Team specifically promotes it all as a single opportunity with each part – products and tools revenue – as a separate “income stream." Thus, Team members and recruits are told that if they recruit enough people onto the Team system, they will get to share in the income from Team's tools business along with their income from the Amway/Quixtar products business.
Second, even if the Amway/Quixtar products business could be considered a multilevel plan and Team's tools business could be considered something other than “multilevel" the fact remains that Team pays compensation in its compensation plan to participants based on the number of people they have recruited to buy Team's motivational products rather than on retail sales of those products to customers who aren't Team members. Which of the Amway rules does Team enforce to ensure that the compensation is paid primarily on retail sales? The reason for Abraham's failure to discuss the ruling in In re Amway is becoming obvious.
Abraham argues pyramid laws do not apply to Team's plan because “a participant's income or price is irrelevant to that person's particular level. Qualification and compensation are based upon sales volume allocated in a certain number of sponsorship lines without regard to level." That is completely irrelevant, of course. Remember, the common definition used by the FTC is as follows:
"Pyramid scheme" means a sales scheme, Ponzi scheme, chain marketing scheme, or other marketing plan or program in which participants pay money or valuable consideration to the company in return for which they receive:
- the right to sell a product or service; and
- the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of products or services to ultimate users.
For the purposes of this definition, "sale of products or services to ultimate users" does not include sales to other participants or recruits in the multi-level marketing program or to participants' own accounts.
Do Team members pay money or valuable consideration to Team in return for the right to sell a product or service? Yes. They must participate in buying the system and recruiting a group of others to buy the Team system and in exchange they get to share in the income stream generated by the tools profits for the tools they sell to their downline Team recruits.
All About “Participants"
Are the rewards in the compensation plan “unrelated to sale of products or services to ultimate users" i.e. sales to people other than participants in the program? This issue is what Abraham's whole defense comes down to. He believes that people who are working to build a network of Team members large enough to get them a cut of the Team tools money, but who have not yet reached a sufficient volume to share in the compensation from the tools are not “participants." He cites no legal authority for this distinction, though he cites parts of statutes that include a specific definition. For example, Georgia's statute defines a participant as “anyone who participates at any level in a multilevel distribution company." Under Idaho's “'participant' means a natural person who joins a plan or operation." In Kentucky a "'participant' shall include, but is not limited to, those who give consideration in order to participate in the pyramid distribution plan." Notice, the definition is not limited to those who are currently being paid, which is what Abraham argues.
What Abraham is trying to sell is the idea that despite the hard work of recruiting Team members to get a share of the tools compensation, Team members are not “participating" in the compensation scheme until they finally start getting the money. If asked, I suspect most Team members believe they are participating in Team's compensation plan by building a large enough network to share in the tools “income stream." After all, that is what they are specifically told they are doing – participating in the Team business and building their downline organization in order to take part in the tools income stream. What they are paying is a huge up-front investment in time, money and labor to buy admission into the tools “income stream." They are “participants." The fact that most of them will fail to build a group big enough to tap into the tools money does not change the fact that they are recruiting, at least in part, in order to profit from the tools purchased by their recruits at some point.
Other than Team members, who would purchase Team's motivational products? I would guess that almost nobody who wasn't trying to build a Team business would be interested in these products.
What rules does Team have and enforce that would ensure the compensation paid to Team members from the sales of Team motivational products is tied to retail sales? Abraham doesn't mention any in his article. I suspect there are none.
Conclusion
Abraham's is a purported piece of legal analysis that is conspicuously thin on legal authorities or analysis. It all comes down to Abraham's assertion that the Team compensation plan can be viewed as a separate business opportunity when Team doesn't promote it that way and whether Team members building their business to try to share in the tools money are “participating" in the program.
Imagine if you will that Team operated without the umbrella of Amway/Quixtar's products business and was simply a stand alone company that sold motivational products to its members. Remember, that's what Abraham is actually asking us to imagine. Now imagine that the way it worked is that recruits were promised phenomenal amounts of money if they recruited a large number of people under them to buy (but not sell) Team's motivational products. Now imagine that there was some set volume of tools sales they had to reach before they started to tap into the compensation, but that every member was working hard to recruit enough people to start to share in the tools money.
Ask yourself: Would that be an illegal pyramid scheme? Before you answer, let me remind you of the opinion of Amway's founder, Rich DeVos:
Now, the tape business, if it is not used as a support for the Amway business, will oftentimes be an illegal business -- in fact, it could be called a pyramid -- because, d -- does not get sold to the consumer. Which means that all the tape business does is take money out of the organization, and because the final person can't retail it, it never brings money into the organization.
Comments
Wow that was great. I love ya Dawg! That should be stickied at the top of the forum, superb!
Excellent analysis of the analysis. And in clear, concise language! Bravo Lawdawg!
lawdawg states -
"the key distinguishing factor is whether the compensation paid in the plan is based 'primarily' upon sales of the products to people who are not participants in the scheme"
So, yet again, lawdawg completely ignores the official position of the FTC on MLMs, where they state -
The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate
in a money-making venture.
So, who's definition should we use? The FTC's or an anonymous web blogger?
What's more lawdawg goes on to quote definitions out of some FTC cases to support his argument. What does the FTC say about using these definitions in this way?
These definitions draw very clear lines for those who have demonstrated a willingness to violate the law, but are not intended to represent the state of the law
Read the opinion yourself. It's an official staff advisory letter to the DSA by James Kohm, Attorney and Associate Director of the FTC.
http://www.mlmwatchdog.com/files/FTC_Letter.pdf
Lawdawg knows this. QBlog knows this. Yet they fail to mention it at all in this article. I wonder why?
What was that question about ethics again?
thank god I found this site...Thanx Forbes... I almost believed, but after alot of research & the discovery of AMWAY's involvement... Consider me OUT! I even said tonite at the open house when they were talking about buying CD's for like $8.50... I was like thats alot for a taped meeting... I could get a real CD for that! What a PYRAMID SCHEME!
Insider:
I realize this is a lengthy piece. And since you are mostly used to listening to tapes & reading success books which ask you to memorize & repeat phrases as short & simple as 'I WILL', it's understandable that you missed the subject of LawDawg's analysis. He states it very clearly in the beginning of his piece....
But Abraham's piece isn't about the Amway/Quixtar business, the company's products or its compensation plan. It's about something else. That “something else" is a highly profitable business selling tickets to motivational events where Orrin Woodward, Chris Brady, and Matt Abraham himself, get up on stage and talk about their vast success and financial accomplishments from following the Team “system."
So ask yourself again, does the 'system' fit the definition:
"the key distinguishing factor is whether the compensation paid in the plan is based 'primarily' upon sales of the products to people who are not participants in the scheme"
The 'system' compensation plan is ONLY paid to those who ARE participants in the plan.
Insider or anyone else,
Has the FTC ruled about the "System" business? Not the MLM aspect of a company, but the inside structure of a motivation business?
Insider,
I think you miss the point about the motivational system. The IBO's cannot market their tapes to non-IBO's and make a retail profit. They cannot sell tickets to NON-IBOs and make a profit, so thus it is a pyramid according to the FTC's definition.
I would like to hear if there have been FTC investigations in the pyramid tool business.
I'm afraid you've missed the point completely. Lawdawg is asking whether this system fits his definition of what an illegal pyramid is. Who cares??? If you read the FTC letter you'll see they explicitly state -
In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.
Understand? They explicitly state his definition is wrong! You apparently believe that lawdawg's opinion of what is an illegal pyramid is of greater importance than that used by the Federal Trade Commission!! Lawdawg knows the FTC opinion, but he completely ignores it.
You are right, insider, the FTC does not care how much internal consumption a MLM has, but rather how much external consumption! If there is zero external consumption (purchases made by non particpants/IBO's) then you have a de facto pyramid scheme. Follow the bouncing $. The only time someone upline gets paid is when he himself or someone below him spends money. The exact same thing can be said about a Ponzi scheme.
It's why there is the 70% rule and the 10 customer rule. True a high level pin won't personally sell 70% of what he sells to customers, but if he has at least 10 non-IBO customers, and all of his downline have at least 10 customers, then 70% (or more) of the high pin's check will have originated (in theory) from the wallets of non-participants, making a scheme legal. But if the majority of the high pin's check originates from the wallets of IBO's, the only distiction between this and a Ponzi scheme is a product changing hand. And remember, a product chaning hands is not enough to make a scheme legal.
From MLM specialists Grimes and Reese, LLP
http://www.mlmlaw.com/library/guides/Primer.htm#mlm
"Despite the literal language of the Koscot test, courts have interpreted and state Attorneys General are increasingly interpreting the term "ultimate users" to mean persons who are not participants in the program, that is to say persons who are not distributors. The most recent federal decision on this issue was rendered by the Ninth Circuit Court of Appeals on March 4, 1996. In Webster v. Omnitrition International, Inc.(6) the court found that personal consumption by a distributor's downline does not satisfy the Koscot requirement that sales be to the "ultimate user." Therefore, when designing a multilevel marketing plan, the approach presenting the least risk is to institute and enforce a rule that at least 70% of a distributor's purchases result in true retail sales to persons who do not participate in the compensation program."
Even if you ignore those portions of "In re Amway" that talk about preventing the payment of commissions based solely on the recruits own purchases (which is what "insider" wants to do), and instead read the opinion to only prohibit "inventory loading," which of the three rules are in place for the tools system to prevent inventory loading?
Finally, when all is said and done, "insider's" sole legal argument is based on a staff advisory letter from James Kohm to Niel Offen of the DSA that DIRECTLY contradicts Kohm's own public statements on behalf of the FTC:
"In pyramids, the emphasis is on recruitment," says FTC attorney James Kohm, "and most, if not all, of the sales are to distributors."
http://www.ftc.gov/bcp/conline/features/mlm.htm
So on the one hand you have contradictory statements from James Kohm. On the other you have the Ninth Circuit Court of Appeals, the Sixth Circuit Court of Appeals, the United States District Court judges in Michigan and Nevada, several state appellate courts, several state legislatures, MLM law experts Grimes and Reese, Amway's outside legal cousel Hogan & Hartson . . . and even Rich DeVos himself (as noted in the analysis above).
Yeah, whatever "insider" . . . You can keep repeating this as much as you want. It isn't getting any more credible.
I am only talking about the seperate tool business Lawdawg, And I think it falls under your definition as a pyramid, but has not been investigated.
i meant to say Insider not Lawdawg
sorry
Insider,
Do you consider the tool business to be a pyramid? Do you consider it a seperate business?
Forgive me if you have answered this question before, I had not seen it.
Insider wrote: "I'm afraid you've missed the point completely. Lawdawg is asking whether this system fits his definition of what an illegal pyramid is. Who cares??? If you read the FTC letter you'll see they explicitly state -
In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.
Understand? They explicitly state his definition is wrong! You apparently believe that lawdawg's opinion of what is an illegal pyramid is of greater importance than that used by the Federal Trade Commission!! Lawdawg knows the FTC opinion, but he completely ignores it."
It's funny you clain lawdawg as ingnoring information to prove his point but you're doing the same thing. there have been many ftc precedents that if Quixtar (and definately their AMO's) were measured up against, would show that this opportunity isn't legit. the original Amway case in the seventies states the three reasons why Amway wasn't found to be a pyramid. their 70% rule, does not allow for front end loading, the member client rule makes it a requirement to sell to customers that are not IBO's, and that there isn't a headhunting fee. well we know that the 70% rule is pretty meaningless now, and that getting customers is taking a back seat to recruiting other IBOs, and we know there is no headhunting fee. well based on this I'd say Quixtar is operating illegally from what the ftc found.
It's ironic. The big money apparently is in the tools business. The tools business
exists to teach people to become successful in the quixtar business. However, because of the tools business, most people lose money in the quixtar business.
I love all the hype about pyramids..legality, and all the stupidness you all argue about.
Being a business owner, I realize I pay for the cd's, etc...and the speakers make a profit. Great! Singers sing, and they make a profit. Motivational speakers speak, and they make money on the seminar. So be it. Fact of the matter is...if you want to learn how to do something, you probably want to listen to somebody who has done it. Whether that be Quixtar, an auto mechanic, or a restaurant owner. All I have to say is that I have made exactly what I was told I would make. And btw...I wasn't "promised" anything. Basically, this business give syou what you put into it.
TB, it's not the fact that these diamonds make money off these tapes. it's the fact they make money off the many people who dream and hope for a better life only to have what life they have sucked out by the dependancy of these tools. I can make money being a drug dealer too, should I quit my job and start slinging cane on the streets?
TB,
It would be ok if the speakers actually taught you something of value, such as how to file business taxes or something like that. Also, the motivational/teaching is far overhyped because the ratio of success stories to the vast majority of those who don't profit doesn't justify the expenditures of funds to pay for those cd's and seminars.
It's like holding motivational seminars on how to win a lottery. Some may win, but the vast majority will not.
Hello lawDawg. You might like it:
http://tinyurl.com/9pk7m
ahh, lawdawg, so nice to see you back. Have a nice break? So.... lets be clear here. You are saying that in the opinion of your brilliant legal mind, a press release by James Kohm addressing non-specific issues is of more legal weight than an official staff advisory opinion by him directly addressing the topic in question? Interesting. And I guess the President can do whatever he wants too - constitution be damned. Always nice to have lawyers like you around.
As you know, I completely agree that the Omnitrition case backs your argument. Pity none of the others do unless you cherrypick non-binding definitions like you do. No offence, but if I was looking for advice on the legality of an MLM scheme I'll take the official advice of the FTC's attorney with responsibility for prosecuting illegal pyramids over yours.
It's an official opinion. It's recent. It's very very very clear. It directly addresses the topic. You know it exists and you do not even mention it once in your article here.
It would appear that you are either incompetent or intellectually dishonest. Which is it?
As for your question ex-dd, about whether the tools business are an illegal pyramid. I think some of the personal experiences recounted on forums like this indicates that some IBOs have been pressured to buy tools they didn't need or want and that those doing the pressuring profit from this. IMO this means the purchasing IBOs are not legitimate consumers, or end-users, of the product.
If this behaviour is widespread in an organisation then it absolutely runs the risk of being an illegal pyramid.
"insider":
I've already given you all the response necessary to this one same, silly argument of yours. Kohm's opinion doesn't matter because he doesn't make the law. Period.
I know you know this, because I've told you before, "insider", but a staff advisory opinion has ZERO legal authority in a court of law. [b]ZERO.[/b] Moreover, it carries [b]zero[/b] authority when it comes to violations of inidividual state laws.
Now those written court opinions and state statutes I cite to regularly (the [b]ACTUAL[/b] law, which you continue to ignore), they DO carry legal authority in a court. Of course, you don't understand the law so you don't have any idea what you are even talking about. I'd give you a basic lesson in American government if I thought you were the least bit willing to get something right.
I'll tell you what, if you are so sure you're right, go tell Grimes and Reese to start counseling their clients that they no longer have to include retail sales to outside customers as part of their MLM plans. Let's see how far you get.
Your arguments are tired. Your legal understanding is severely limited. And there is no point in debating this matter with you any further.
Now, continue repeating your one, stupid argument. Perhaps by highlighting a different part of the sentence each time you repeat it, it will seem more credible.
Good luck.
Of course, Quixtar complies with the 70% rule. At least that many who sign up never show
the plan not retail a single product. They are, in effect, nothing more than end consumers, buying an occasional product costing hardly any less than what an active IBO usually retails for at a great discount.
The IRS doesn't consider these people active business owners, as they are not actively
participating in the marketing plan. Why then, should the FTC?
Samuel Wrote:
"Of course, Quixtar complies with the 70% rule. At least that many who sign up never show
the plan not retail a single product. They are, in effect, nothing more than end consumers, buying an occasional product costing hardly any less than what an active IBO usually retails for at a great discount.
The IRS doesn't consider these people active business owners, as they are not actively
participating in the marketing plan. Why then, should the FTC?"
Really... what facts do you have to back your statemet that "the IRS doesn't consider these people active business owners, as they are not actively participating in the marketing plan"?
sigh. Lawdawg, I do understand is how the law works. Which is why I understand that what you are focussed on is how to win your "case", and find evidence to support your side, as any good lawyer should be, particularly an appellate lawyer! So kudos to you, you likely do your boss proud. You ignore the official FTC opinion because it doesn't support your case. You ignore that Grimes & Reese explicitly state that what's important is that you don't get paid to recruit and your products are sold to legitimate "end consumers".
Interesting that you say that the FTC's opinion doesn't matter because they don't make the law. Indeed. That is interesting. Because as you know there is no law specific to what we are discussing. as Grimes & Reese say "anti-pyramid and multilevel statutes, like most consumer protection legislation, are drafted and interpreted very broadly "
Which is why we get to have so much fun arguing about it.
So , we have this broad interpretability. And in the first instance, who does the interpreting? Who is responsible for prosecuting fraudlent MLMs? The FTC. The FTC decides who has overstepped acceptability.
And whose job is it at the FTC? Why, it's James Kohm's job to decide who to prosecute. Unlike me, he is a lawyer. Unlike you, he's a lawyer whose actually job it is to decide whether an MLM is fraudulent or not. you elect to ignore his, and thus the FTC's, official advice because it doesn't support your case, and when this is pointed out, you make the astounding claim the FTC's opinion on hwat is a pyramid is unimportant!!.
Unbelievable.
Tell me lawdawg, what's the ethics of this situation? How does the Texas State Bar look upon a lawyer who deliberately withholds highly relevant information from a client? You can check out http://www.txethics.org if you need help answering it.
So - here we are in a field where the law is not clear. Where it is open to wide interpretability. Let me see ....
who do you think an MLMer should get their advice from?
You, an anonymous web lawyer who doesn't even work in the field of MLM law and is known to deliberately withold relevant information when giving advice?
Or James Kohm, the attorney who will actually be prosecuting you if the MLM is fraudulent?
No, lawdawg, I'm not a lawyer. James Kohm does not make the law. You do not make the law.
But I certainly know which of the two above lawyers I would rather get advice from.
Insider,
lawDawg has laid out where he gets his advice, from case law.
You get yours from letters issued by an official at the FTC.
Ultimately a court will decide which is most authoritative and the law.
To the point of this post, Abraham is speaking to the legality and legitimacy of his business and lawDawg is pointing out some of the inconsistencies.
Until you can show case law that contradicts the cited case law then this conversation is over.
Spinstopshere writes:
"Really... what facts do you have to back your statemet that "the IRS doesn't consider these people active business owners, as they are not actively participating in the marketing plan"?"
You've got to be kidding, right?!?
Give me some evidence the IRS allows business deductions for the majority of "IBOS" who do nothing but consume product.
Come off it Eric. The guy is claiming that the official opinion of the Federal body responsible for prosecuting illegal pyramids is unimportant in determining what is an illegal pyramid!
As for case law, it is made by the judges decisions, not by specific definitions used by the prosecution when making the case, which is what lawdawg likes to quote. Lawdawg knows that. James Kohm explicitly explains it in the staff advisory. But lawdawg persists with the BS that it does, and you apparently believe him.
But hey, it's your blog and you're the "client" in this case, so if you're happy with a lawyer that deliberately withholds the legal opinion of the Federal prosecuting body, and in addition apparently claims that prosecuterial definitions make case law, not the judges, who am I to argue? So I'll refrain from further comment on this thread. Cheers /insider.
Spinstopshere writes:
"Really... what facts do you have to back your statemet that "the IRS doesn't consider these people active business owners, as they are not actively participating in the marketing plan"?"
Samuel Writes:
"You've got to be kidding, right?!?
Give me some evidence the IRS allows business deductions for the majority of "IBOS" who do nothing but consume product."
I never said anyting about the IRS and business deductions. What does that have to do with our discussion on IBO's being 3rd party end users according to my understanding of your statement? You are SPINNING.
Review Lawg's post and you will find legal interpritations of who is considered an "end user" which is what you and I are discussing. A 50pv IBO is considered an IBO - not an "end user" and thus does not count as a "retail - end user" sale. Review the IBO contract. Actually - here is a quote from 'FTC vs Trek Alliance' - 'For the purposes of this definition, "sale of products or services to ultimate users" does not include sales to other participants or recruits in the multi-level marketing program or to participants' own accounts.'
What say you?
sorry Spin, but the IRS will NEVER consider a "participant" in a marketing plan a legitimate business entity unless some action has been taken to generate income from that business, i.e., retail product or receive compensation from the business plan. An "inside" end-user alone does not satisy that requirement. They are not recognized by the IRS as business participants in the marketing organization.
Despite a signature on some past application, those persons are considered defacto consumers. This person does not fit the interpretation of the term, "participant."
I guess that means insider can't site any case law to support his jaded opinion.
I meant cite, not site.
Samuel Wrote:
"sorry Spin, but the IRS will NEVER consider a "participant" in a marketing plan a legitimate business entity unless some action has been taken to generate income from that business, i.e., retail product or receive compensation from the business plan. An "inside" end-user alone does not satisy that requirement. They are not recognized by the IRS as business participants in the marketing organization.
Despite a signature on some past application, those persons are considered defacto consumers. This person does not fit the interpretation of the term, "participant.""
Where are you getting this info? I, as I assure you are too, willing to change my mind on this issue if the facts warrant a change. Yet, you haven't shown facts or sited any factual sources... My upline EDC tried to make this claim to me too. However, I called Quixtar and they told me to qualify for my retail PV/customer purchases it had to come from a "client" or "member" - a 3rd party, non-financially interested consumer. This backs many of the courts definitions too as stated on this post. Since WWDB went to direct pay for bonuses - I we have had to make sure we meet AmQuix' client volume rules to get our bonus. I was curious as if non-participating IBO's would count towards our client volume - they don't.
I challenge you to discuss this with your upline Diamond on a 3 way call with Quixtar while all 3 parties have the courts definition of an end conusumer in front of them - let us know the out come if you choose to go straight to these sources that you should to get this cleared up.
Again - I am willing, I'm sure others too, to change my mind if the facts warrant a change.
I'll give you the last word.....
I meant to say - to qualify for my bonus we had to meet the requirements of retail PV/customer purchases and it had to come from a "client" or "member" - a 3rd party, non-financially interested consumer.
Ahh... 'Insider' is at it again, huh ;-)) ??
You GOT to admire this guy's chutzpah! Shameless doesn't even come close describing it! He's even more persistent than the usual inarticulate Quixbot/Ambots who post the same thing over and over and over again, in the hope that somehow that would make it valid. He's pretty much a one-note whiner, "James Kohm said it - so it must be true".... ;-)) Wherever the FTC's "Retail Sales Rule" is discussed, he is there, posting the same repetitive comments over and over again. It is NOT that he is not intelligent or doesn't understand the fundamental logic behind this CORE test that is used to determine the legality/illegality of an MLM scheme.
The idea is simply this - DECEPTION.
Repeat something long enough, and hopefully that will create some legitimacy in the minds of pro-MLM people. That's the idea, right, Insider?
I had a post on my blog about Insider's prolific posts on different critical websites about this, and guess what?
http://quixtaramwayinfiltrator.blogspot.com/2005/12/insiders-obsession-with-retail-sales.html
Surprise, surprise ;-), Insider actually agreed that my explanation of the LOGIC behind the 'Retail Sales Test' used by the FTC and the Courts in the prosecution of different MLM schemes was right on! Yet, here he is executing a complete turn-around, again!
In case he still doesn't get it, here's something to chew on. 'Laws/Statutes' are NOT created arbitrarily. There is a logic behind every law/statute that is enacted. There is a certain logic behind every court 'opinion/verdict'. And I have explained in a concise fashion [which Lawdawg has done a brilliant job of explaining in detail] on that post, the logic behind the FTC and the Courts using the "Retail Sales Test". And if you were honest with yourself [like the rare occassion ;-)) you were, when you responded to the post on my blog], you would agree that this test DOES make sense, right? AND, the case-law on this subject has evolved pretty consistently over the years. The verdict is the same every time - "Unless there is RETAIL SALES TO AN END-CONSUMER WHO IS NOT A PARTICIPANT IN THE MLM SCHEME, the MLM scheme IS illegal."
Now, Insider, you could possibly argue that one state that enacted the anti-pyramiding statute made a gross error. But the legislators of so many states that have anti-pyramiding statutes are ALL wrong? Were they ALL corrupt? Were they ALL, bought by Trial Lawyers? What are the odds?
Again, you could possibly argue that one court erred in its opinion/verdict against an MLM scheme. But, every single court that has ruled on this subject is wrong? Were ALL those judges corrupt? Were they ALL bought by the Trial Lawyers? What are the odds?
Now consider this. Is it possible that ONE employee of the FTC can be bought? Food for thought, don't you think?
I know you are intelligent enough to figure out what I am driving at, but seeing your general behavior pattern, I guess it's safe to assume that you will pretend that you STILL don't get it.
You asked for it, you got it.
A definitive takedown of lawdawgs lies, with citations -
http://www.webraw.com/quixtar/forum/viewtopic.php?t=2448
For a nick like "Perceptive", well, you're not very perceptive. My comments here and on the forum about lawdawgs laughable "analysis" have nothing to do with whether the products are of value or not.
Read the cases yourself, not lawdawgs deceptions. They do not say what he claims they say.
And your defence? The FTC was bought. Uhuh.
Believe me, I'll start on the state statutes soon. Surprisingly, lawdawg quotes Georgia statute in his diatribe to define "participant" but surprisingly neglects to mention the law there actually DOES require sales to non-participants. Glaring support for his thesis, yet he apparently missed it.
So perhaps he's not lying, he may indeed be legitimately incompetent.
More likely is that it is because straight after he quotes Idaho and Kentucky statutes, which both explicitly exclude his thesis. I'll post these on the forum.
Insider, Read my statement carefully - I said one employee of the FTC.
So now, according to you, "James Kohm = FTC" ??
Like I said, your persistence is admirable. I have to run, heading out to church. But I'll be back, and I'll address your so-called refutation of Lawdawg's lies.
Ah, 37 posts and no one is still the wiser, no perceptions have been changed. I hope you children feel better about yourselves over this little spat.
Given the fact of the legality of said business opportunity, I would rather find a different opportunity. One that isnt embattled with legal complications.
I hope other prospects see these postings and continue to seek out REAL opportunities elsewhere.
BTW, the friend of mine that is in this (and tried to recruit me) is 4 years into it. So much for the 3-5 year plan! And now he is telling me it isnt about the money, it is about helping people. GIVE ME A BREAK
Just wait, I am sure that is the new edict from the upper eschelons of this business - it isnt about money. WHAT A JOKE
SpinStopsHere, I am stating to you where the IRS stands on the issue. The IRS doesn't care what the qualifications of your marketing program are, as long as the scheme is not designed to illegally shelter money, and so forth. As for the FTC, it seems they are not actively involved in pursuing action against the Quixtar marketing organization. Quixtar itself has no way of knowing the percentage of its products reaching an end-use consumer, outside the various classifications of participants you describe. And you state yourself, you are complying with the Quixtar requirements, along with, as it seems, many other of your similar associates. And the corporation does have a long history which suggests it is viewed as a compliant business model.
As you state, your organizational directives provide the basis for receiving bonuses in your marketing plan. This is not always necessarily based on clear-cut law. It is, rather, a requirement, designed by the corporation, to protect the marketing corporation from what it might determine to be questionable trade practices that might come under scrutiny at some point by a regulatory body. However I see this dilemma one of terminology and potentially resolved with the reclassification of your terms such as "clients," "members" and "business associates" or "owners." There are other direct sales and multi-level business companies, compliant with the Federal Trade Commission, which more clearly delineate who is actively pursuing the profit side of the business plan from those who are participating solely for personal use of the product mix, for example, calling them "preferred customers." Your marketing corporation, Quixtar, has a similar classification, "members," and this is where the pool of many of your current "IBOs"should reside if, as I explained before, are not participating in any significant income generating activity. From what I understand about the activity of "IBOs," two-thirds are involved to the extant they are presenting the business plan, retailing product or attending a business plan meeting of some sort. Taking away those not attending those said business meetings, you are left with a very sizable pool of users, consumers, of product. They do not have any significant business investment other than a nominal application fee. They do not have business expenses or income. These are NOT "IBOs" in any legal, trade or practical sense. Only your marketing organization still calls them that. They should be reclassified.
What legal complications? There are none except in lawdawgs imagination. No court, no attorney general, no FTC has challenged Quixtar since the issue was clarified 30 years ago.
But lawyers like lawdawg still have hope of some business I guess.
I am not a lawyer, I dont want to be a lawyer and I will not pretend to know what is or is not legal concerning the BSM sales by IBO's in the Quixtar/Amway business. I am a former IBO and I think that my experience in the "business" is sufficent to comment on the ethics involved in the sale of BSM's. In 2000 I had been in the business for about 5 years. I earned some bonus checks nothing impressive, I will not say I earned money because of the several hunderd tapes and other BSM's that were purchased cost way more than I got in those bonus checks. I was never shown how to get customers and not once did I ever meet a pure customer of any of my upline. I was always told change my buying habits and teach others to do the same and plug in to the BSM's and I would make it. The 10 customer rule was explained to me as more of a 10 customer suggestion that wasnt really inforced in either case. In 2000 I was having severe relationship and financial problems and approached my upline and told him that I wanted to stay in the business but I was going to exercise the option not to purchase the BSM's. I did not find them helpful and had other more pressing needs for the money I was spending on them. He tried to convience me that I needed them and even though they were optional "officially" they were "in reality" essential. I stuck to my guns. I never heard from him again. A few weeks later I brought a prospective IBO to an open meeting, as I had said I intended to stay with Quixtar and I did feel the open meetings were helpful. My prospect called me a few days after the meeting and said that one of the people I introduced him to, not my sponsor who avoided me during that meeting but another of my upline, had called him responding to a question he had and told him that I was not that serious about the business and he would be better off signing up under him. My prospect realized in a few days that something wasnt right with the way things were being done, something that took me 5 years to admit. Maybe the sale of BSM's are legal I dont know. I do know that when I stopped buying them I was treated like I had the plague. It may be that the BSM's are not required according to Quixtar but the IBO's that profit from them act otherwise. It may well be legal thats for the courts to decide but the behaivor of the IBO's that sell them is unquestionably unethical. What is legal isnt always right and I would encourage those that are part of this system to look at the ethics involved in this. After all most of us arent lawyers but we all should have a sense of right and wrong and that should be enough to decide the merits of this "business" oportunity. I made my decision, I did not renew my distributorship. I will find a way to make more money I am still looking and still have the same hopes and dreams I had when I first got that Amway business kit, but I will find away that doesnt take advantage of similar hopes and dreams in others while leaving them empty-handed.
That is utterly disgraceful. I'm sorry you had that experience and completely understand your decision not to renew. But please know that kind of behaviour is not universal to the A/Q business.
I should add - I strongly recommend, indeed request, that you report this behavior to Quixtar, with specifics including names. It's unlikely to result in any immediate consequences, but if enough people to do so then action will be taken. Without official complaints nothing can happen.
I considered reporting it but at the time just wanted to wash my hands of the whole situation. It has been almost 6 years since those events and last I heard most of the people I knew in the business are no longer involved with A/Q themselves. I found this site researching A/Q because I realized that not everyone involved with the company is like that and I thought if I could avoid the tools mess it would be worth a try to start up again. After research I was suprised to find just how widespread tools abuse is although trying to steal prospects seems to be rare. I think that the MLM style of business is still a good one but unless A/Q can put an end to the tools abuse I cant see it surviving much longer as the internet is making such abuses wide known. Its a shame really becuase I think DeVos and Van Andel started with the most honorable intentions and that their company has basically been hijacked by the kingpin distributors. I heard Bill Britt say once "we dont need Amway, Amway needs us". I wish you the best of luck Insider but I am going to avoid the whole company for the time being.
Insider>>It's unlikely to result in any immediate consequences, but if enough people to do so then action will be taken.
Quick question - So, Insider, are you suggesting that an individual IBO's complaint should not be addressed? Or are you suggesting that Quixtar is terrible when it comes to addressing individual complaints of IBOs?
Insider>>Without official complaints nothing can happen.
So, Insider, tell me, what happened, when
Eric Scheibeler
sent detailed documentation of systematic defrauding of IBOs in his group, to the Amway/Quixtar Management? What about the fact that Amway/Quixtar owners/management have known about the "System Conflict of Interest" since 1983?
What about the many lawsuits over the years alleging the same thing - Prospects are deceived into joining Amway/Quixtar by implying that the System-King-Pins and the other top-level IBOs make their money from the Amway/Quixtar Bonuses, and not primarily from the 'System'
I mean how many more complaints are needed? Or is it just that the Amway/Quixtar Owners/Management COULDN'T CARE LESS?
Could you educate us?
And don't worry, I'll be back to address all the rest of the stuff that you raised.
That's the key! I know many corporations such as microsoft have complaints/lawsuits, but the quixtar complaints/lawsuits are primarily over tools and corruption whereas other companies may have other issues such as product liability, etc.
Please, Quixtar people be truthful to yourself. Since you have been in this business you have been presented with all kinds of revelutionary ideas.
They tell you not to think.
Take a good look at them. Are they trying to control you or are they controlling you.
Who tells me not to think?
Who is this mysteriuous "they"?
'They is you,
and 'They' is me;
in 3-5 yrs,
just wait and see;
you'll either be coming or going,
to the bank;
your ship will have come in,
or will have sank.
'They is you and they is me;
here's another tape, just wait and see.
lol! clap clap clap! very creative! :-) I recommend a book called "Them" by Jon Ronson. I just read another of his called "The men who stare at goats". Could be a good one for Imran :-D
I don't understand the goat thing either; and I never understand the 'Rhino' thing .
I even bought this ceramic rhino, as like a mascot... (i must admit, however, looking at him from behind he looks like a lota bull-ha)
ahh, the thing with the Rhino is simply it takes a lot to get them moving, but once you do you can't stop them! As for the goats, I think Imran just has a fetish.
Why the hell you spend your time looking at the rear-end of a rhino .....
I can't tell which is bullshi- and which is rhino shi-, so I thought I'll look at it from another, perspective-ha
Once a pyramid, always a pyramid.
Posted by: Joecool18 | January 5, 2006 7:12 PM