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MLM companies get no love and usually for a lot of good reasons.
Just check out John Oliver’s episode of Last Week Tonight for proof of this and see his reasons for why MLMs have such bad publicity.
But it shouldn’t take a comedy show to tell you that you should probably avoid most MLM companies. For years, MLMs have been plagued with lawsuits, shutdowns, claims of cult-like following, claims of being outright scams and pyramid schemes as well as sub-par products.
The Cheatsheet named 15 MLM companies that people are hating right now and the list has a lot of familiar names, some of which I’ve reviewed right here on this website.
Below, I’m just going to share my thoughts on the companies that are listed in the article. The list includes:
Apparently, this MLM which started less than a decade ago in 2012, is a huge fail because you have to spend a boatload of money just to get started.
The company sells women’s clothing via distributors who have to pay at least $6000 just to get their first stock of inventory. And they aren’t even able to choose what styles they want to sell.
This seems predatory because the company gets their money but their distributors are out $6000+ before they even get their first sale.
Right now LulaRoe is being sued by dozens of former distributors who claim that the company is running a pyramid scheme and owes them.
Vice also did a report on the company highlighting some of the bad things about LulaRoe and why women are leaving this MLM in droves.
You can check it out below.
2. Rodan + Fields
Rodan + Fields sells skincare products via direct sellers, mainly stay-at-home moms who are lured in with promises of free vacations, a six figure income and a flexible career.
This all sounds great but in true MLM fashion, they’re able to taint these promises by drawing a class action lawsuit for marketing their Lash Boost eye serum without the proper disclaimers for side effects.
The $150 product apparently causes a number of side effects including “change(s) in iris color, eyelid drooping, itchy eyes, eye/lid discoloration, thinning and loss of eyelashes/loss of eyelash hair, eye sensitivity, eye infections, and vision impairment.”
No surprise here as Herbalife has become the poster-child for MLM pyramid schemes lately and is one of the most popular MLM companies worldwide.
I’ve reviewed Herbalife here on this website after the FBI launched their investigation into the company for claims of being a pyramid scheme.
Wall Street hedge fund manager, William Ackman is one of Herbalife’s biggest detractors and has waged his own war against the company. There is even a documentary movie about this called Betting on Zero which I watched a couple of years ago.
Herbalife was also the main MLM discussed in John Olivers MLM episode of Last Week Tonight and he doesn’t go lightly on them.
It seems that no-one has any love for Herbalife and it isn’t difficult to see why. The FTC mailed over 350000 checks to people who lost money as Herbalife distributors resulting in one of the biggest settlements the company has ever had.
Cheatsheet’s article on the most hated MLM companies is dated August 2018 when Advocare was still an MLM company.
They were definitely right when they included Advocare on the list at #4 because on May 17, 2019, Advocare shutdown their MLM model after “confidential talks” with the FTC on how they compensated it’s distributors.
I’ve always said that MLM compensation models were confusing and I have no doubt that Advocare may have had one of these confusing compensation plans. It’s likely that the FTC saw that they were running a pyramid scheme and would have forcibly shut them down in any case.
Advocare’s decision has impacted over 100,000 distributors and the company now chooses a direct-to-customer model. Distributors will only be compensated for selling directly to consumers via retail sales effective on July 17, 2019.
Nerium has been selling skincare products since 2011 as an MLM company.
There are several things wrong with Nerium though. Compared to it’s competitors, Nerium’s products are very expensive costing $250 or more.
The products are also criticized for their use of white oleander which is a toxic plant. All of this makes selling the products tough if consumers are doing their homework.
So how are people in Nerium making money? Well, everyone knows there is another way to make money with MLM besides selling the products.
Nerium was hit with a class action lawsuit in 2017 claiming that the company was running a pyramid scheme.
When I started this website, Monat wasn’t even in existence as yet. The company, which started in 2014 sells a miracle hair care system via it’s reps.
Here’s a case where the hatred for one company is caused mainly by having a bad product.
Monat claims that their hair care system will give you fuller, longer and thicker hair but consumers are claiming the opposite. Lawsuits and complaints claim that the products cause balding, hair loss and major hair damage.
To add to injury, the company filed lawsuits in an effort to silence people who speak out negatively against Monat claiming that they were protecting themselves from defamation.
It’s no surprise that an MLM company like Jeunesse is fighting off claims of being a pyramid scheme. Most of these MLM companies are anyway.
A recently dismissed lawsuit which sought up to $1 billion claiming that the company was operating an illegal pyramid scheme, had some pretty jaw-dropping things to say about the company.
A 45-page document mentioned things like backroom deals, money laundering, tax evasion, forced uncompensated work, cancer cures and violations of foreign laws but mainly that the top executives, founders and some high-level distributors “intentionally and systemically concealed the necessary information regarding Defendants’ false advertisement[s], false financial disclosures, [and] false income claims” to recruit and keep plaintiffs in an illegal pyramid scheme.
When MLM companies start having legal troubles of this nature, it’s a sign that maybe this is a company you should keep from getting involved with.
8. It Works!
It Works! is a company with a weird name selling weight loss products. The company blew up on social media a couple of years ago as distributors worked Facebook and Instagram aggressively trying to promote the products and recruit people into the business.
I did a review about It Works! and one of my finds was that the product which is a wrap that claimed you could lose belly fat was quite a gimmick.
Although before and after pictures showed results supporting this claim, weight loss simply doesn’t work this way.
Consumers though seemed to be onto the gimmick as their are tonnes of negative reviews about the wraps and the only positive ones seem to come from distributors hoping to sell the products.
Besides this, there are numerous complaints about unfair business practices where consumers were being charged to stop their auto-shipment, billed after cancellation and generally poor customer service.
Essential oils is the product of choice for MLM company doTerra. They’ve been around since 2008 and have been claiming that their oils cure everything from insomnia to common cold.
Of course, you know making these claims can draw the attention of critics who were quick to question the use of the term “certified therapeutic grade” which seems more of a marketing term than something with actual meaning.
Amway is by far my “favorite” MLM company mainly because this is the only one that I’ve had direct experience with. I was an IBO for two years around 2004-2005.
But Amway does have a fair amount of criticism. Back in the early 2000s, Dateline did a report on them claiming that they were a cult.
The truth is that many people who join Amway do not make money but instead spend a lot of money on education, seminars and products just to build their business. A business where they make very little money.
And when they do make money, it’s usually from a few friends or family members who buy just to support them. I know, I’ve been there.
People do hate Amway and if you want to have your friends avoid you, just become a devote Amway rep and you’ll see what I mean.
Started in 1977, Primerica has been selling insurance and financial services for over 40 years.
Critics of the MLM company say that their sales agents are unqualified to be selling these services.
The company paid over $15 million in a settlement involving 238 lawsuits. Primerica was hit with a lawsuit in 2012 which claimed that they were targeting certain professions like teachers and public workers with high-risk retirement products.
Also, just like Amway, Primerica has also been called a cult due to the devoted following from it’s reps.
With high quality cosmetic products like Fenty beauty available nowadays, it’s a wonder anyone would even consider Younique as the main gripe about this company is their pushy sales tactics.
Aside from this, critics say that with the promises of all types of incentives, the main way to make money with Younique is to recruit other sales reps. This is where you will usually start hearing claims of being a pyramid scheme.
Le-Vel Thrivers sell vitamin patches with all types of claims that they can increase energy, control appetite, help with weight loss, improve circulation and more.
This company which has been around since 2012 is another company that has been identified as a pyramid scheme by it’s critics. The more people you recruit means the more money you make. Selling the product is just another income stream that comes second to recruiting.
If more MLM companies could just adjust their compensation plans to put the focus on selling the product instead then maybe they wouldn’t have this problem.
14. Nu Skin
Utah-based MLM company Nu Skin has been around since 1984 and since then they have been heavily criticized for their business practices.
In the 90s, the FTC investigated the company over claims that they overstated earnings potential for prospective sales reps and that they used other deceptive marketing tactics. The company had to pay settlements in 5 states.
Even China has had a problem with Nu Skin in their country with people claiming that they were lying about their business. Check the news report below.
Still this hasn’t prevented the company from continuing to do business and recruit new sales reps to promote their products.
Skin care MLM company Arbonne has been around since the mid-seventies and after coming back from bankruptcy in 2009, they’ve stabilized and recruiting reps to sell their products.
The company’s main problem is that with the high cost of the products compared to their competitors, it’s hard for reps to make a significant income selling the skincare products.
This leads the majority of reps, mainly women, to look towards recruiting in hopes of earning an income. As we already know, recruiting MLMs are pyramid schemes as long as they’re not mainly making their money from direct retail sales.
There are many other MLM companies that get a lot of hate and some eventually will get shutdown by the authorities if they continue doing business the way they’re doing it.
The hate they’re attracting isn’t without reason. Generally, I would encourage people to just avoid MLM altogether as there are much better ways to make money and much better business models to get involved with in 2019 such as affiliate marketing or ecommerce.
I personally recommend affiliate marketing for it’s low barrier of entry, high income potential and for the fact that you can start a business from anywhere and you’re not tied to a specific location.
Have you even been involved with any of these MLMs? Have you been recruited to any? Tell me about your experience below.