REEDER: Be careful with multi-level marketing companies | Columnists

I find no joy in someone getting scammed, but I do find it a bit ironic that the DeVos family, the founders of Amway, were scammed out of $100 million.

Amway is a pioneer in multilevel marketing, a concept where participants are expected to not only sell something, but also recruit other people to sell it. Avon, Mary Kay, Tupperware and Herbalife are other well-known MLMs [multi-level marketing].

Elizabeth Holmes, the founder of Theranos who was found guilty of fraud charges on January 3, kindly convinced the DeVos clan to invest in her company which falsely claimed to have revolutionized blood testing.

The problem is that the fancy blood-testing machine she invented didn’t work. And she lied to entice wealthy investors like the DeVos family who had dancing dollar signs in their eyes.

When the Wall Street Journal uncovered the deception, the company’s valuation went from $9 billion to less than nothing.

The DeVos family may be in the millions, but things could be much worse. They could have fallen for another scam and ended up with a basement full of unused merchandise. This is what happens to many people who get involved in multilevel marketing programs.

Robert Fitzgerald of Pyramid Scheme Alert is an MLM expert.

“Think about it. Could you possibly make a living today from your home, as an Amway distributor selling laundry soap or something like that? So basically those detergents and stuff could be consumed by the sellers themselves. It’s true. You can’t make a living.

According to the Federal Trade Commission, most people who join legitimate MLMs make little or no money. And some lose money.

In 2020, my family got scammed. The saddest thing is that we knew we were being scammed from the start and couldn’t stop it.

It happened like this, the mother of one of our child’s friends invited my wife, Joan, to a Touchstone Crystal party. We love the woman who invited her and our daughters are good friends. But Joan didn’t particularly like the product. She is a veterinarian and the jewelry clings to the paws and claws of her patients.

As she was about to attend the online party, I rolled my eyes and said, “You know we’re going to expect you to buy something. And it will be overpriced and probably something you don’t like.

She nodded and gave the look of resignation one would expect from someone heading for the gallows. Unfortunately, in our society, too many people learn to please.

When she returned from her virtual engagement, she was even more sullen. She won the door prize. And what was the door prize? The opportunity to organize your own Touchstone Crystal party.

I looked at her and said, “Tell them, ‘No’. It’s a scam.”

My wife nodded in agreement. And then the emails and phone calls started coming in from someone higher up the Touchstone Crystal food chain. Let’s call her queen bee.

We were in the middle of a pandemic and the governor declared a strict lockdown so we said we couldn’t have a party. But Queen Bee had other ideas. We would be hosting a virtual party on Zoom.

“Tell him, ‘No.'” I mouthed across the room. But my wife said, “Yes. The queen bee seemed to know exactly which buttons to press to get a nod.

Then my wife had her own idea: Scam the scammer.

We’d throw a fake party. She pointed to our eldest daughter, then her sister, then me and said, “You will be my guests at the party.

Can’t we just say no to him? My wife just gave me The Look. She finds it hard to say “no” to friends, acquaintances and strangers but with me it’s not a problem.

On the day of the party, we all took our phones and computers to different parts of our house and logged in using different Zoom accounts. And there she was, queen bee.

When I introduced myself, she gave me a surprised look.

After a long pause, she said, “You know that crystal glove that Michael Jackson was wearing? This was done by our company. Thus, men sometimes use our products.

I can see it now, me walking on the moon in the newsroom wearing a crystal-embellished glove and whistling “Billy Jean.”

At this point, I put on my journalist cap and started asking questions. “How much money did you make last year doing this?” The queen bee spluttered and said, “Well, I’m just not sure.”

How much does your income depend on recruiting others to sell? “Well, I just don’t know what you mean.”

Is it a multi-level marketing program? “I’ve never heard that term before.”

And then Queen Bee said let’s do a drawing for a door prize. My wife, God bless her, said, “We’re not looking to throw another party, are we?” A look of discouragement crosses Queen Bee’s face and she says, “Uh, no.”

At this point, I walk over to Dollar General, phone in hand, and ask questions as I walk down the cough medicine aisle. My investigations must have proved too much because soon she was closing the party. I signed.

As soon as I hung up, my wife bought another jewel. I asked why and she said, “Well, I was expected to.”