Earn UNLIMITED income! Quit your job! Change your life!
Do we have your attention? Good! Are you rolling your eyes? Even better. That means you’ve heard warnings about illegal pyramid schemes that masquerade as legitimate multi-level marketing (MLM) businesses and promise life-changing income, but take your money instead.
The FTC’s latest case charging a company with operating a pyramid scheme concerns “Success By Health” (SBH), a venture that the FTC alleges has bilked consumers who joined its sales network as “Affiliates” out of more than $7 million.
According to the FTC, SBH tells consumers they can replace their job income in six months and gain “financial freedom” in 18 months by selling its coffee, tea, and dietary supplements and recruiting other people to do the same. In reality, the FTC says, the vast majority of SBH Affiliates pay SBH more than they earn.
The complaint alleges that SBH pushes Affiliates to max out their credit cards, borrow from family, get bank loans, and sell or mortgage their homes to buy inventory and attend costly “training” programs. But, according to the FTC, the amount Affiliates earn is based on how many new Affiliates they recruit and how much inventory they and their recruits buy, not on their sales of SBH products to retail customers.
At the FTC’s request, a federal court has ordered SBH to halt its allegedly unlawful activities while the case is pending.
If you’re planning to buy into an MLM plan, get the details. Start by searching online for the name of the company and words like review, scam, or complaint. Be skeptical of portrayals of lavish lifestyles made possible by participating in the program. And, if promoters emphasize recruiting as the real way to make money, head for the nearest exit. That’s a hallmark of a pyramid scheme.
For more tips about avoiding a bad business deal, visit Multi-Level Marketing Businesses and Pyramid Schemes.
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