TRANSCRIPT

EPISODE 2 - MLM SCHEMES

HELEN VOICEOVER: INTRODUCTION

So, if you listened to episode 1 of this podcast, you'll know That's a Cult? is basically me investigating some of the most interesting and surprising communities on the internet. And just basically trying to work out if they're a bit cult-ish or not. 

 

You don't need to listen to every episode of this podcast chronologically, but if you want the full explanation of why I think internet communities can compare to cults, the first 4-5 minutes of episode 1 will fill you in pretty well.

HELEN V.O: INTRODUCTION TO MULTI-LEVEL MARKETING (MLM)

So, episode 2 is about something some people are absolute obsessed with, and some people despise. Like, bile-in-their-throat despise. If you're in one of these camps, I'd ask you to just try and listen from the other perspective. The one you're not familiar with. It's a big ask, I know. It's like asking you to put your knickers on backwards and walk around like that, but investigating this and researching it has really highlighted how partisan this whole topics is. So I think you'll enjoy the episode more if you can step back a bit. Because I definitely started this with a very strong opinion, and the most I've learned, the more balanced I've become. I've not swung to the other side by any means, but I've definitely got a more healthy view of it. 

 

MLM stands for Multi Level Marketing. Sometimes it's called direct selling or network marketing. The definition of MLM on Investopedia isn't very helpful, but for the sake of transparency, I'll read it to you anyway.

 

"MLM is a strategy that some direct sales companies use to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales. The recruits are known as a distributor's downline."

 

In simpler terms, it's a company that encourages people to buy their products as stock, sell them to other people, get commission on those sales, and also encourage those other people to buy stock and sell it themselves.

 

The people who recruit benefit from the sales of those underneath them, and the people above them benefit from the people they've recruited, and everyone they go onto recruit.

I want to dissect MLM because it's really controversial. It's accused of being an exploitative business model, and it's very regularly compared to a cult. But there are people who claim to have made millions from it, and a few bad apples maybe have ruined its reputation? 

 

A few MLM companies are listed in the Cult Education Institute's index of potential cult organisations. But then again, so is Burning Man festival and I really do think that's just some people getting pissed in a desert. But you never know, maybe that will be a topic for a later episode. 

 

I won't be mentioning any individual company names in this podcast because I really don't fancy being sued. And it's kind of not the point anyway. When I talk about MLM, I'm talking very generally. I haven't sourced interviewees because of the specific companies they're involved with, I've asked to speak to all kinds of different people who sell all kinds of different products. I have tried to be as balanced as possible, but you'll see a little bit later on in the episode that that was actually quite hard to do.

 

I decided to start with the critics because they're vocal and very willing to talk. The first person I tracked down was blogger, Elle. On her blog, she's written 15 chapters about her experience in an MLM, why she joined, and why she felt she had to get out.

"I DON'T WANT TO SACRIFICE THINGS I VALUE FOR SOMETHING THAT I DON'T VALUE VERY MUCH AT ALL."
INTERVIEW: ELLE BEAU, BLOGGER AND FORMER MLM SELLER

Elle: I saw my friend, she was posting these pictures of her. She looked good. She also gave this illusion on social media, mainly Facebook, that you know, she was loving life and everything was wonderful. And she was getting paid every 3 hours, something to that effect. Always boasting about "I've just been paid, it's so brilliant to be part of a company that pays you 3 hours after making a sale."

 

So you see your friends posting this stuff and you think "If they can make a go of it, why can't I?" I was lured in because at the time I was struggling with employment. The people who end up agreeing and signing up to be an MLM presenter or rep, they're finding difficulties with employment. They could be a stay-at-home mum, financially struggling but doesn't want to leave her children. Or say me, I was a full-time student, and the income was helpful for bills, course books etc. Because I was struggling to hold down a part-time job because of my chronic health conditions, I thought "Oh, you know this is something that I could work around my health". And thought it would be brilliant (laughs). I think that's the trap we fall into, a lot of us are lured in like fish on a hook.

HELEN V.O: MLM RECRUITMENT ON SOCIAL MEDIA

If you're trying to think back and work out if you've ever seen a Facebook post trying to recruit you, like Elle was. They're often full of big promises and they'll refer to the MLM scheme as "an exciting new business opportunity". It'll be your friend, cousin, someone you went to school with, and you might find they're using language that you don't really recognise as their tone of voice. 

 

Here are a few examples:

 

"I'm so grateful for the time I'm able to have with my son, all thanks to a #free opportunity. I'm looking for people who want to change their lifestyle, all around current commitments. No startup fee, no minimum orders, full support, excellent rewards. If you fancy earning some money just in time for Christmas, pop me a message or comment below."

 

"Such a nice feeling to know our job has total flexible hours, and mums never have to miss a moment in their babies' lives."

 

"Start thinking in the present and not the past. Remember if you're doing what everything around you is doing, you're probably losing. If you win the rat race, you're still a rat. Be yourself, walk your own path."

 

"A traditional business in 2017 is ludicrous. This company is the most simple way for the average person to create wealth and confidence. Period."

 

Obviously, your British friends do not say 'period', unless they're talking about their own period. Also, comparing people to rats is just rude. Like, don't do it. What's wrong with you?

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: The only way you're going to really make any money is out of recruitment, and that is what all these reps are doing. They see the people above them, higher up in the pyramid, doing really well for themselves. They get desperate, they think "I want to be like them. The only way I'm going to push forward in my business is if I get more recruits." 

 

So that's when I think the lies get a little bit more intense. I've taken plenty of screenshots, and I've had screenshots sent to me, where they're claiming that their 'online business', as they call it, has paid for their holidays and it's given them financial freedom. When really, the truth is they're probably struggling and they're not admitting it to themselves. They've got uplines telling them "Oh you know, if you're not succeeding, it's because of your mindset" or "because you don't want it enough" or "you're not working hard enough". 

"THEY SEE THE PEOPLE ABOVE THEM, HIGHER UP THE PYRAMID, DOING REALLY WELL FOR THEMSELVES. THEY GET DESPERATE. THEY THINK 'I WANT TO BE LIKE THEM'."
HELEN V.O: LYING ABOUT EARNINGS

In Elle's case, most of the distributors she had contact with were lying about their earnings and how much they'd sold. They were encouraged by their upline to 'fake it till you make it'. So they in turn would encourage their downline to do the same, and on and on it goes.

 

If no one was asking to buy products, they were advised to say their inbox was "blowing up" anyway. They were to keep hold of previous boxes, so if they made an order, they could fill the photo with empties to make it seem like they'd just received a big one. 

 

Elle spent months playing along, feeling bad about the lies she was encouraged to tell. Her stepsister actually stopped speaking to her. If Elle questioned it all - and why wouldn't she question it, she wasn't making any money she was just spending it on products - she was often scolded for her "negative thinking".

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: The upline of us all, who was sort of - on the status chart she was about mid-range on the colour statuses that they have. She posted, it was called 'The 7 essential posts', and she wanted us all, everyday, to do these posts. And it was always:

 

One post about the opportunity itself. So that's when you see all these people gushing about 'My life has changed thanks to this opportunity, I'm so blessed and I'm so grateful'.

 

And then she would want you to post something about your life. It could be a mundane thing like "I just went for a walk" or, I don't know, "I just baked a cake". Something like that, just to show that you are a real person and not just an MLM robot. 

 

Motivational quotes. Something inspiring, the #bossbabe.

 

There were other people in my team, as you saw from my chapters. Kerry - she was spot on, she did everything that was asked of her. She was the one that was very diligent in these social media posts. In the end, she didn't even want to admit how much money she lost, but she lost a lot of money. And she was embarrassed to admit it when I was interviewing her. She wanted to just remain anonymous because of the embarrassment. She did everything that the upline said to do in our training.

Helen: It's clear that even someone like you, who is a cynic and questioned it throughout. You still tried to make it work, you still spent money on it. 

Elle: Yeah.

Helen: The thing that I think is possibly more interesting is what you need to line up to actually leave it. You I feel like, the way you got out of it, I imagine is quite unusual.

Elle: When does the penny drop? I think is the question. I can tell you how the penny dropped for me. I'm always grateful to the fact that I kept a spreadsheet of my ingoings and outgoings.

HELEN V.O: GLOSSING OVER THE REALITY

The MLM recruitment posts you see on social media do not prepare you for the reality of actually making money in one of these schemes. The posts are never posted by any actual official representative of the company, or by the company themselves. They're always posted by independent distributors. 

 

The content doesn't mention accounting, business expenses, or registering as self employed, it doesn't mention risk, it doesn't say how hard it is to sell things to people, or how saturated the market might be.

 

The posters gloss over that. They're full of big promises, because they want to recruit the reader. 

 

The only reason Elle made a spreadsheet in the first place was because her stepsister insisted she keep an eye on everything. If you're not doing the maths, you won't know how much money you're actually making. And you definitely won't know how much you're actually losing. 

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: I started in November 2015 and I left, officially, in July 2016. Like I said, many women don't seem to keep any records of their ingoings and outgoings.

HELEN V.O: JUST A QUICK NOTE

Now, you'll notice that Elle said...(coughs) Ugh, God.

 

You'll notice that Elle said 'women' and not 'people'. A lot of the products are aimed at women, the sellers are predominantly women, and because we - you know - our social group is often people very similar to us, they recruit other women.

"ONLINE, WHEN YOU SEE STUFF THAT IS VERY CLOSE TO YOUR HEART, AND IT TRIGGERS YOU, THE FIRST INSTINCT IS TO FIRE OFF SOMETHING VERY VICIOUS UNDER THE COVER OF ANONYMITY."
INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: I kept a record of just the basics - what I paid for the product, what its retail was worth, what profit could I make, and any expenses like say if I had to ever post something. But I know a lot of women don't do that because, say if they're a full-time mum, they might not have the time to sit there and do a spreadsheet.

 

When I was looking at this spreadsheet, that made it more visual and clear to me. This is not good. I was lucky in the end. I made about, I think, £200. But that was because I was silently and quietly going into these secret Facebook groups, which do exist and there's thousands of members in them worldwide, and they're called 'Stock Swap Groups'. 

 

In this group, they're all buying and selling off each other. I think many of them do it to try and keep their status. 

HELEN V.O: TRYING TO UNDERSTAND THE COMPENSATION PLANS

In a lot of MLM schemes, you have levels to rise through. The whole objective is to get to the next level. The higher up you are, the more commission you make, and the more kudos you have with other sellers. If you don't sell enough, you can go back down to your previous level, sometimes you even go right back to the beginning. Many will sell to each other to stop that from happening.

 

So as you can imagine, MLM is quite complicated. I suspect deliberately so. And if you're not familiar with how they work it sounds a bit insane, really. I tried to read through a compensation plan for a particularly popular MLM in the UK at the moment. There are so many abbreviations and levels, it's impenetrable for most people. I've tried to read Ulysses, and that was easier than understanding this. 

 

Running a business is ultimately about what's coming in and what's going out. There's none of that simplicity here, actual pound signs aren't really mentioned until the second to last page, but there are lots of abbreviations to get your head around, and percentages to understand. You'd think those pound signs would be pretty fundamental but they're treated as an afterthought.

 

I read a few compensation plans and the ones that I saw were all pretty much the same. If most people were handed this as a recruitment leaflet, if this was the first thing they saw, I really couldn't see them joining. They wouldn't understand it.

 

But from what Elle's said, and the posts I've seen on social media promising an extra income, this leaflet isn't what people see when they first agree to sign up. It doesn't do the selling, the distributors do. And they have an incentive for you to sign up.

INTERVIEW: JEROME, FINANCIAL BLOGGER AND FORMER STOCKBROKER

Jerome: Legally they have to provide income disclosure statements. They have to tell you how much they're paying their representatives, and they do their best not to tell you.

HELEN V.O: INTRODUCING JEROME.

This is Jerome. He writes a blog called The Finance Guy, where he deconstructs popular MLM schemes to find out if they're actually profitable for the distributors. He's a former stockbroker - he knows how to read the compensation plans.

INTERVIEW: JEROME, THE FINANCE GUY

They'll show you a table of people that earned from $50,000 up to $1 million dollars a year. But then you look at it and then you're like "Wait. That's only the top half percent of members." 

 

So at a glance, you see $50k to $100k, you're like "Wow, sign me up!" But if you took time to read the details, you'd see little things like - the very smallest print is something like "83% of active associates earn nothing".

 

Your chances of earning a single dollar are 17%?! Then you've got less than a 1 in 5 chance of even getting paid $1 for a year. And let's not pretend that $1 is profit because you had to buy $100 worth of products a month to earn that dollar. So you've spent $1200 in product, you've spent all these hours, and fuel and whatever else going to their seminars, trying to find other members, to make that $1. It's a joke. 

 

Deconstruct the math from their own data, you'll find the results are quite disturbing. If you look at my review of (name bleeped) and my link to their own financial statements - because they're a publicly listed company and legally they have to disclose all their financials. I found that year, that annual report that I studied, blatantly showed that 48% quit in the previous 12 months. 

 

If you were coming into a company as a commission-only salesperson, because that's exactly what MLM is. You're not a business owner, you're a commission-only salesperson. I've sold for commission for Citibank. If I knew on the day of my job interview that 48% of the salesforce quit every year, would I have accepted that job?

"THAT ANNUAL REPORT I STUDIED BLATANTLY SHOWED THAT 48% QUIT IN THE PREVIOUS 12 MONTHS. 
 
I'VE SOLD FOR COMMISSION FOR CITIBANK. IF I KNEW ON THE DAY OF MY JOB INTERVIEW THAT 48% OF THE SALES FORCE QUIT EVERY YEAR, WOULD I HAVE ACCEPTED THAT JOB?
HELEN V.O: WHY DON'T THEY JUST QUIT? 

So when someone's bank account is rapidly depleting, and they're being told to piss off by old school friends who don't want to buy their stuff, how does their upline keep them motivated and stop them from leaving?

 

Well, some use the Law of Attraction. It's kind of woven into the fabric of MLM. If you've heard of it, you're either a huge advocate, or you're probably groaning right now. If you haven't heard of it, this is the helpful definition provided by lawofattraction.com

 

"Simply put, the Law of Attraction is the ability to attract into our lives whatever we are focusing on. It is belief that regardless of age, nationality, or religious belief, we are all susceptible to the laws which govern the universe. In basic terms, all thoughts turn into things eventually. If you focus on negative doom and gloom, you will remain under that cloud. If you focus on positive thoughts and have goals that you aim to achieve, you will find a way to achieve them with massive action."

 

Of course, like everything, there's a subreddit for the L of A. In it, people trade stories about how the L of A has worked for them, or how they can make it work for them. 

 

It was through that subreddit that I found Mario, who has an actually quite refreshingly simple view of it all.

INTERVIEW: MARIO, r/LAWOFATTRACTION SUBSCRIBER

Mario: Regardless if you believe it or not, it's working. I can say from my own personal experience, without any spiritual mumbo jumbo, that it works. 

 

When me and my ex-girlfriend broke up, I was so depressed. I was Googling "How to get your ex back". Some YouTube video just turned out and I was really interested, so I read more, I watched more YouTube videos, and I started writing down things I want. I have a little diary.

 

I'm going to get back my ex

I'm going to get this car

I will have a nice home

My mother is going to be healthy

 

I was writing them down each day, and I was visualising myself having these things. Now, it turns out, that the more you care about these things, you are hindering the process. You know what you want, let's say you want your ex back or you want money. But if you're constantly thinking about "I want money, I want money, I want money", the vibration you're giving out is the 'want'. You need the 'I have', not the 'I want'. 

 

Law of Attraction gives you what you give out. If you give out the vibration of want, you're just going to get back more wanting. 

 

You don't even have to visualise, it's all about the feeling. The feeling of having that lover, the feeling of having that car, the feeling of having that money. I can imagine sitting in a Ferrari, but in the meantime, if I have a feeling of "I'm never going to sit in a Ferrari because I don't have enough money", then it's not working. 

 

You have to have the feeling, it's all about the feeling. 

HELEN V.O: SUNK COST FALLACY

This Law of Attraction stuff, to me, seems a lot like believing in ghosts. It makes sense for someone to believe in ghosts if they've seen one right in front of them. It's like believing there's a glass of water on a table. It's fact to that person.

 

If you want something desperately - you want your life to change, you want to be happier and wealthier - it makes sense why someone would subscribe to a belief that makes it sound so easy. It's nice and reassuring to think the universe will bring you what you want eventually. 

 

People who are deeply involved in MLMs have invested money and time. It's amazing what we can all justify when we feel we've got no other option. It's often called 'sunk cost fallacy'.

 

We don't just invest money in MLM, we invest hope and emotion. It's impossible to get that back, so when it's turning sour, we let money follow more money in the hope it'll all work out.

 

This isn't remotely unique to MLM, it's something many of us do. We binge eat because we already ruined our diet that day. We carry on dating someone bad for us because we've already invested so much time in them. Sounds mad and destructive, but it's actually very human.

INTERVIEW: MARIO, r/LAWOFATTRACTION SUBSCRIBER

Helen: To me, it sounds like - maybe it's not the universe. Because you got that car, you went out and bought it, and you had the money to buy it. So I'm wondering where the universe actually comes into it?

 

Mario: You just have to believe and you have to accept good things are coming to you. Trying to figure out how things will come, that is a bad part. That is when you should let go of it. That is why most people say the minute you stop caring about what's going to happen, it manifests because you let go of the resistance. 

 

I don't believe in God, I don't believe in any spiritual thing. I think of Law of Attraction like gravity or something like that. Like a law of nature. It works for me, so that is all.

HELEN V.O: HELEN TRIES 'MANIFESTING'

I mean, fuck it. Okay. I'll try it myself. 

 

It wasn't really right to judge all this unless I gave it a go. So I've done this thing called manifesting, that people who subscribe to Law of Attraction do quite a lot. So you say this paragraph:

 

Dear universe,

Show me that we are connected through the following signs of alignment. Remind me of my power to create my r... (stumbles) my own reality. 

 

It would help if you could say it, Helen.

 

Set the intention to manifest at least one of the following things within 24 hours.

1. A feather

2. Money

3. A gift

4. Hear from an old friend

5. See the number 111.

 

I gave it a go and...(pause)...this happened.

(Recording with background street noise)

So as part of this 'trying out the Law of Attraction' thing, you know I did the talk to myself. And yesterday, because I work from home, I don't really (laughs) sounds ridiculous - I don't really go out that much, let's be honest. A working day for me can literally be at one desk in my flat, and I thought it probably wasn't really fair to try the Law of Attraction stuff out on a day when I'm not going out.

 

Anyway, today I've had an appointment, and I saw a feather (laughing) on the floor. Now, it's clearly a pigeon feather. And I live in Manchester, where there are a lot of pigeons, so I'm not really that sold on it. But for the sake of honesty and the podcast - I saw a feather! That part of it potentially worked.

WE DON'T JUST INVEST MONEY IN MLM, WE INVEST HOPE AND EMOTION. IT'S IMPOSSIBLE TO GET THAT BACK, SO WHEN IT TURNS SOUR, WE LET MONEY FOLLOW MORE MONEY IN THE HOPE IT'LL ALL WORK OUT.
INTERVIEW: JEROME, THE FINANCE GUY

Jerome: Dream-building is a part of sales. It's all about positioning for the future, they distract you from how badly you're doing now from their system, with promises of the future - of future success.

 

If you got people to buy lottery tickets, and the only people that spoke at the seminar were people that had won the lottery, would that make the lottery sound like a great deal?

 

That's exactly what MLM is - only hearing from the winners, ignoring the millions of losers. 

 

They think they're going to get this path to financial freedom, you know - tell a friend and they'll tell two friends, and they'll tell two friends, and it'll grow exponentially and you'll have millions of dollars of sit-on-your-arse-do-nothing income. But if everyone's sitting on their arse doing nothing, where's the income coming from? 

 

It's not a passive income. They're selling it as a passive income and it's a complete fallacy. Keep a record of your time, keep a record of your cash flows, and just monitor it, and you'll find you're losing money. 

HELEN V.O: TRYING AND FAILING TO TALK TO THE SUCCESS STORIES

Someone has to be making money out of this. It's probably a very small percentage, as Jerome said, but they do exist.

 

I searched Facebook for some popular hashtags to find people involved in MLM with lots of followers. These are the people at the top of the pile. Or at least, very near the top of the pile. 

 

They're often called network marketers, and thousands of MLM distributors look to them for inspiration, guidance, how to make a success of themselves. These network marketers' social posts can be cryptic at times, and they don't always talk openly about the company they're involved with. What they do post involves insights into their own often quite luxurious lifestyle. They're always on the go, they commend their team members for rising through the hard-to-understand ranks. They're always busy. 

 

I contacted 9 people who appear to do really well from MLM, and who have highly public Facebook pages. Now, I'm quite used to being ignored by people because - you know - I am asking people to talk about personal things sometimes and I'm a complete stranger so, you know, not everyone's comfortable being recorded and that's fine. 

 

But this time I had a different response that I haven't encountered that much of before. The ones who did reply to me were very, very suspicious. Most ignored me, no one said yes. The ones who did ask me a few questions were very wary of how the podcast was going to portray MLM. I was pretty honest and said it was looking really anti so far, but would appreciate their perspective to balance it out. No luck there though.

 

It's difficult to not speculate here. I really feel like they didn't want to talk to me because despite being all about promotion, they couldn't control the way that they might come across. 

 

Could I have contacted more than 9 people? Yeah, definitely (laughs). The reception I got from people who did reply kind of put me off from pursuing anyone off, because I just became suddenly really aware that this is a community that talks to each other. I mean, this might not have happened, but there were potentially people who were telling their downline to not speak to me. I just got the impression that me nosying around was shutting this door and shutting the next door and the next door.

 

Also, it's weird but, even though I have no real interest in - erm - how do I put this? I don't really have that much time for people who shout about everything on social media, just because I feel like it's a bit false. I don't really believe it. And yet, I did get this sense of "Oh, they're too busy for me".

 

So even though I suspected a lot of it was false, and exaggeration, it still had a weird effect on me where part of me believed they were these - like - super busy, super successful tycoons. And I was going to be completely pushed aside. It still had caché with me, and I'm investigating this fucking thing. 

INTERVIEW: JOHN, MODERATOR OF FACEBOOK GROUP, 'MLM LIES EXPOSED'

John: I think you've got the cult of network marketing/MLM. People that are in MLM - and it doesn't really matter what particular company they're with - there's a kind of cult surrounding network marketing. 

 

So people that are network marketers are considered...they're kind of like free spirits, they haven't got a boss, they control their own destiny, they're kind of considered to be a bit more brave and bold within their world. 

 

When Facebook came along and social media, it created a platform for people to join MLM companies more easily. There was probably a period where being in an MLM was actually quite a good idea, it probably had some viability and you could probably make some good money. Because people weren't so aware of them, and Facebook had just come out. 

 

But I think nowadays, as time's gone on, it's just become so saturated. More and more people are doing it. I mean, everyone knows someone, either a friend or a friend of a friend, who's done network marketing. Or is a rep.

 

I think that people are getting more aware all the time. The MLM Lies Exposed group that I started is getting bigger and bigger. There's loads of sceptical websites and groups out there.

HELEN V.O: INTRODUCING JOHN

This is John. He runs a Facebook group called MLM Lies Exposed. We talked for about an hour and a half about the deceptive sales tactics MLM reps sometimes use.

INTERVIEW: JOHN, MODERATOR OF FACEBOOK GROUP, 'MLM LIES EXPOSED'

John: It's not particularly an anti-MLM group, it wasn't my intention to say "We're going to start a group that's against MLM, we want to destroy it, we're all against it." The basic kind of philosophy is MLM isn't bad, inherently bad, it's a business model at the end of the day.

 

When you do business with someone, or you invite them in to work with you, you should have full transparency. I've joined companies before in the corporate world and they've said to me "Listen, this is tough. All day long you're going to get rejected and you've got to be the sort of person that can cope with that. If you're not that sort of person then don't join this company." 

 

I've had bosses say that to me, but in MLM they would never - or they don't appear to tell you, and from my experience I've never heard them telling - the absolute transparent full disclosure truth. They wouldn't say "To be honest, it's really dead out here. If you're going to get sales, you're going to really need to find an original way to promote your business and your opportunity and your product. Because doing it the normal way, you will fail." 

 

No one's going to ever tell a prospect that, are they? What you end up with are people writing some of the most ridiculous things I've ever heard. Like, saying "Do you want to earn £400 before Christmas?" And then you've got people that will obviously think "Yeah, I'd love to earn £400 before Christmas." But the fact is, they have got less than 1% chance of earning £400 before Christmas. The very first thing that person has read is a lie.

HELEN V.O: BIG PROMISES AND HUGE MEDICAL CLAIMS

The prospect of earning £400 before Christmas might not sound quite so excessive, but it is when you consider the fact that it might cost about £400 to actually set up your MLM business. It does not come free.

 

The selling posts that are more about flogging the actual product make big promises too. They swear blind they can cure anything from Crohn's disease, to autism, and depression.

 

If you're a bit doubtful and you think "Surely, people can't lie to their Facebook friends and family quite like this." Then just have a look at John's group, MLM Lies Exposed on Facebook. People submit screenshots every single day.

"PEOPLE HAVE LOST TONNES OF MONEY...THEY'VE BURNT BRIDGES WITHIN THEIR SOCIAL CIRCLES, FELL OUT WITH THEIR FAMILY. MAJOR FAMILY RIFTS."
INTERVIEW: JOHN, MODERATOR OF FACEBOOK GROUP, 'MLM LIES EXPOSED'

Helen: One of the women who I wanted to speak to, she's clearly very popular. She has like 5000 followers, she didn't actually mention the product name at all. I'm wondering if the next wave of it is less about the products and more about "I have financial freedom, I'm going on all these holidays, find out how".

 

John: They're finding new ways to recruit and to get prospects to buy their product, without mentioning a product name. If you type the names of these products into Google, you're going to get a mix of results. Some of them positive, some of them negative. It eliminates any possibility of someone looking up the company name and finding someone that's had a bad experience with it.

 

You can kind of understand that, because you don't want people to decide they don't want to buy the product before they've even heard you out. But you're getting people like setting up fitness groups: "Who wants to get fit for 2018?" The only reason they've started that group is to sell whatever their product is.

 

Another one they do is they'll say "Does anyone suffer from..." - I don't know - "...excema?" They'll invite people with a particular medical condition to say "Yeah I do." And then they'll say "Oh, I've heard of this product that could really help you." And they'll try and sell they're product, so they're kind of baiting people in.

 

Some of the stories we've had posted in our group are scary. People have been desperately ill from taking products that weren't recommended by their doctor, but were recommended by an MLM rep. People have lost tonnes of money, they've wasted hours and hours of their time. They've burnt bridges within their social circles, fell out with their family. Major family rifts. I had one woman message me saying that she no longer has a relationship with her sister-in-law. Her attempts to raise a valid criticism here and there ended up just destroying the relationship.

HELEN V.O: POSITIVE AND NEGATIVE 'MINDSETS'

Ahhh the old cult classic. Cutting off your friends and family and isolating yourself so that all you hear and see is the language, morals, and philosophy of the group you've joined.

 

According to a lot of blogs and first-hand experiences of being in MLMs, uplines are very quick to call out people who have 'the wrong mindset'. They seem to want people to internalise problems and focus on themselves, rather than considering maybe their product isn't very appealing. 

 

It keeps people quite busy, and it makes them feel very threatened by anyone who might negatively affect their 'positive mindset' with questions or criticisms. Even if they're a close friend or family member who's worried about them.

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: I would say from the perspective of what I've seen of other people floundering to try to make sales, a lot of the time their uplines are very clever. They'll get them to blame themselves.

 

"Your mindset isn't right", they'll say. 

"You're not working hard enough"

"You're not being positive."

"You're not putting yourself out there more."

 

They'll tell them that's their fault. So I think they're stuck in limbo, there's a big part of them which is starting to doubt and think "What have I done?" But there's another part thinking "Is it my fault that I'm not succeeding?"

 

There was this Law of Attraction mindset coach. We were always getting shared stuff by this mindset coach in our training groups. And she was another one living the dream and saying that she was helping empower and raise women up by helping them achieve their best self. When really, I think, she knows that people in MLMs are doomed to fail, but she's making money off someone paying her a fixed fee for her to tell them why they're failing.

HELEN V.O: A QUICK INTERRUPTION

Just a quick side note. I messaged this mindset coach on Facebook, asking for an interview, and she said she had nothing to do with MLM.

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER

Elle: And she charges for mindset lessons, which is done via a webcam. If someone ever doubted themselves in our little training group, and I'm sure it happened in other branches, they were sent to her. And she would persuade them to stay.

 

And it wasn't just in that particular MLM. I've spoken to other people who've contacted me from other MLMs and they know who this mindset coach is, and it turns out their uplines did the same thing. 

 

So people like my stepsister, they would be what the uplines would refer to as "A negative Nancy". They would say "Oh, she's not supportive of your business. You don't need people like that in your life, you should consider cutting people like that out."

 

Some people have cut members of their family out. I had a girl message me a few weeks ago, just to get something off her chest. And she was telling me about how her relationship with her brother, she said "When we were growing up we got on great, we were very close. Since he's been doing this particular MLM, it's broken down and destroyed our family, our relationship." She said "We tried to go on a family holiday all together, and he just made the holiday all about his MLM." Trying to recruit and sell to his family members when they should have been enjoying a holiday.

"WE TRIED TO GO ON A FAMILY HOLIDAY ALL TOGETHER, AND HE JUST MADE THE HOLIDAY ALL ABOUT HIS MLM. TRYING TO RECRUIT AND SELL TO HIS FAMILY MEMBERS."
HELEN V.O: TALKING TO THE PRO-MLM SIDE

So where's all this balance you were talking about, Helen? What happened to that? Good point. I did manage to get two MLM people to speak to me. 

 

I found them by reaching out to John, who you heard from before. He couldn't think of any MLM people off the top of his head who would be honest and open enough to do a frank interview about it. So he suggested I post in his MLM Lies group, seeing as there were clearly some pro-MLM people silently reading all the posts.

 

So I posted in the group asking to speak to people who do MLM and feel like they do it honestly. The first comment popped up within a few minutes - a guy saying "Good luck finding one in here." 

 

There were some good responses and about 5 or 6 people pretty happy to speak to me. But there were far more anti-MLMers asking me why I wanted to see the balance in it. Some of them insisted there was no balance to be found, that it was important not to try and look for balance when looking at cults.

 

One commenter said "If you were doing an investigation into a religious cult, you wouldn't interview a member who says it's all fine." To that lady, if she's listening - she's probably not listening. Thank you for your concern, but, honest to God, that is my idea of Christmas.

 

So first up, for the pro-MLM side is Leanne. And I had to start by asking her why she was in a group about exposing MLM, when she's part of one.

INTERVIEW: LEANNE, HAPPY MLM SELLER

Leanne: I wanted to see why people hated the MLMs so much, and I do laugh at a lot of the content. It is funny to see the methods that people approach.

 

In my business, I don't want to use methods like that to bother people. I guess I'm not very pushy, I'm not as active as some sellers, I guess you could say. I have my own group for things, I don't post to my personal page, I'm more of a like: "Here's what I use, here's what helps me". And I don't like when people share testimonies from other people when it's not themselves.

HELEN V.O: DO PUSHY SELLERS MAKE MORE MONEY?

I asked Leanne if she thought the more pushy sellers who use emotional sales tactics, and big financial promises, were more likely to make more money. She was quite tactful about it, but the gist was - yeah, probably.

INTERVIEW: LEANNE, HAPPY MLM SELLER

Leanne: A lot of them are more predatory towards those people, so they are a little more, I guess harsh - we could use that word - towards that audience. So I think they are in a way making more money, but it's not going to last very long! (Laughs) That's what I can say.

 

As a lifestyle, it's not as easy as everyone thinks. You're not going to replace your income unless you're all the way up here. And they realise "Oh, I'm putting more money in than I'm getting out of it".

HELEN V.O: THE REALITY OF RECRUITMENT

Knowing that a lot of the manipulation and the lies come into recruitment posts, I was quite keen to find out what Leanne thought about recruitment, and if she does it. She doesn't actually pursue people, but has still managed to create quite a good team of sellers underneath her.

INTERVIEW: LEANNE, HAPPY MLM SELLER

Leanne: I think I've actually recruited one person, I usually have people come to me. I have a team of about 27 now. The company I work for actually is (laughs) not as hated as the rest of them.

HELEN V.O: A DIFFERENT KIND OF SELLER

"The company I work for". When Leanne said that, I knew she was not the typical MLM seller. She was not like the people who I'd initially tried to interview. This isn't the language they like to use. 

 

As John said before, the big figureheads of network marketing are all about being an independent business owner, flexible, in charge of their own life. You can hear it in the sales pitches. 

 

So Leanne clearly sees this as a source of income, and that's kind of it. It's not a way of life, it's not a calling, it's not a way to achieve financial freedom even. It's a bit of cash she makes selling products she actually likes and uses.

INTERVIEW: LEANNE, HAPPY MLM SELLER

Leanne: So I signed up, paid the $99, got my kit. And then about a month or two in, I started making $1k per month. Okay, this is pretty cool. So I started getting a little more active in it.

 

I told myself from the beginning - "I'm not going to buy stock, I'm not going to be one of those people with a garage full of crap" (laughs). It isn't about that. 

 

My sponsor, she's been a childhood friend, we always chat, so she wasn't really predatory like "You'll make a grand a month" or stuff like that. So I did (company name bleeped) and I felt very approached to by that, because I was pregnant and they said "You can provide for your baby, everything's going to go great." And I didn't sell anything. And they were like "Just buy more, buy more, and you can reach your quotas". So I felt very targeted.

 

Helen: What do you think of the comments people make when they say "Oh MLM it's all bullshit" or "It's all a scam". What do you think they need to know to understand it better?

 

Leanne: I think that's a hard one because I think once someone gets that bad taste in their mouth, which a lot of people from the group have, it's hard to get back from that. I think the ones that bother people are the ones that make health claims, or make the weight loss claims. And I understand that because a lot of people do just join MLMs will be like "Oh, it's quick money. I've never used it before, but let me jump in."

 

Next March will be 2 years that I've been in my company, so I guess seeing it just stay where it is would be good. Or even get better. It's more of like "Oh you like it, great. Buy it." Other than that, if I project hard times in my life, or it's going down, I'd probably just back off it. But I still back behind the products, so I'd still buy them.

"ONCE SOMEONE GETS THAT BAD TASTE IN THEIR MOUTH, WHICH A LOT OF THE PEOPLE FROM THE GROUP HAVE, IT'S HARD TO GET BACK FROM THAT."
INTERVIEW: GAYNOR, HAPPY MLM SELLER

Gaynor: The products I love, I still like them. The products are really good (dog barks in background, Helen laughs) It was the...the sisterhood thing. The amount of times I'd seen people leave and they turned on that person. Some of it's all like; "Oh well it's loyalty". No, actually it's not. We're just here to make money.

I'm very happy to have another northerner on the podcast. This is Gaynor. It's hard to say "this kind of person wouldn't be sucked into a cult", because we're all pretty much susceptible to the cleverest tactics. But I really don't think any cult would be a match for Gaynor.

Gaynor: There's an awful lot, an awful lot of that. They treat it, and they make you feel like, it's really disloyal if you leave. Well it shouldn't be like that, because that crosses into emotional then. "If you don't like it, leave." Well that's fine, see you later then. You know, and I was off. Whereas some people would be destroyed by that.

 

Gaynor's tried loads of different MLM companies. She's worn nearly every t-shirt there is to wear. She spent quite a while talking me through the ones she's tried, which are good to work with, which are not so good. The ones she does rate are a lot more relaxed in their approach.

Gaynor: To earn a lot of money, you then have to have the big team underneath you. But if they're paying 25%, 30%, if you've just joined to earn money, they don't push you either way. You can either just sell or you can sell and build a team. It's up to you. Well that's how it should be really. I agree with a lot in that group. If there's a cure for cancer, it won't be sold on a Facebook selling site, will it?

They've got to be seen to perform, and a lot of it it's higher up. They'll say "Oh well just copy my posts." They're just copying the posts because they think that's allowed, they don't question whether it's allowed or not. Now, I started my own...

 

Very frustratingly, the sound went really dodgy on the last 20 minutes of this interview. But what Gaynor has to say about starting her own MLM is important, and my eyes lit up when she said she'd started her own MLM. Because the companies, so many of them must be absolutely rubbing their hands together at the prospect of having all these people underneath them, continuously buying stock. So when she said she'd started one, I thought "Bloody hell, either she's a mastermind, or she's actually found a way to do it ethically." Well, you'll see which one it is.

 

Gaynor: We sell like gift stuff, bath bombs, things like that. They just sell that and make 25%. They do pay to join, they don't pay for the website, so they can't get in debt to start. There isn't a target, I made sure there wasn't any targets. So all they have to do is sell what they've got, sell from the website, they don't have to have it at home, and they earn money from that. They don't have to invest a penny, they just earn from what they sell. I set it up like that because I knew what the gripes were. They are now making money.

HELEN V.O: ANOTHER NORTHERNER
INTERVIEW: GAYNOR, HAPPY MLM SELLER
HELEN V.O: WORN EVERY T-SHIRT
INTERVIEW: GAYNOR, HAPPY MLM SELLER
HELEN V.O: A BRIEF INTERRUPTION ABOUT SOUND QUALITY...
INTERVIEW: GAYNOR, HAPPY MLM SELLER
INTERVIEW: JOHN, MODERATOR OF FACEBOOK GROUP, 'MLM LIES EXPOSED'

John: MLM's like "try and block everyone out from reality". And try and say look "Don't listen to these people." People don't realise how people who join MLMs are usually victims. They've been lied to to get them in there in the first place. I want this group to be an open discussion group where people can be positive and negative, and not get flamed if they say anything that's positive about MLM. And I think we're getting there.

 

Helen: For some people, it's a small step up from their normal social media activity. Or is it a form of therapy, does it make yourself feel better? Is it like, you're living it in a way because you're posting about it? The people, who like you said, don't make any money out of it for ages, if ever. It's a community for them. Why would they leave, it's giving them something. But...

 

John: That's deep.

 

Helen: But I don't know what that something is.

 

John: I can imagine someone who likes seeking approval on social media would be quite happy in an MLM company that invites them to seek approval for themselves on social media. I think that inside, on some level, that's not a nice existence. To constantly be having to have a false front. Because you're not ever allowed to be free and yourself. I think it must be, actually, very isolating to live that kind of existence. 

"YOU'RE NOT EVER ALLOWED TO BE FREE AND YOURSELF. I THINK IT MUST BE, ACTUALLY, VERY ISOLATING TO LIVE THAT KIND OF EXISTENCE..."

Elle: Most of us as people, we are always...we always have some degree of scepticism. If something sounds too good to be true, it usually is. But I suppose there's always a part of us that has this little hope; "Maybe this could be different. Maybe this can work out for me."

I didn't really go into much detail about the various common signs of a cult in episode 1, because Childfree didn't really fit the bill enough. With MLM, it seems quite pertinent to go through the checklist...

(Helen's phone makes a notification sound) Oh, you absolute dickhead.

I'm going to go through the checklist with MLM. I've been ticking some of them off in my head as I've gone along, and if you know anything about cult warning signs, you probably have too. So these are from the Cult Education Institute:

1. A charismatic leader who becomes an object of worship. 

This is a yes, quite clearly. The network marketers with their thousands of followers set an aspirational standard in terms of behaviour and what sellers should want out of life. They're used in the little training groups to motivate sellers, but really they just kind of make them stick to a specific path.

2. Coercive persuasion or thought reform.

A.k.a. brainwashing. So obviously Elle's experience is her own, but we've also heard from people who know the MLM groups can get very controlling. Even the people who are pro-MLM have experienced that.

3. Economic, sexual, and other exploitation of group members by the leader and rulers.

When an environment is created in which people are financially rewarded for recruiting other people into a scheme that they don't really think works, you create an environment where many are going to lie. If everyone in your downline quits, you're not going to make any money. Like, your empire is over. It's not hard to see where the exploitation comes in. 


Also, there was something in Elle's story that I read that was hugely fucked up, that demonstrates this quite well. One of the other women who'd been recently recruited was really struggling to make any money, so when a new product was launched by the company, and her upline was encouraging her to buy it, along with everyone else, she said she was going to be making the choice between new school shoes for her child and this product. And they told her she wasn't committed enough. Absolute twats.

4. Any criticism or questioning is persecution. 

It's positivity or else in MLM. It's complying with the group mentality or else. The Law of Attraction is a good way to convince people to stop asking too many questions about why and how, because it makes it seem like self-sabotage. 

5. Those who leave are branded as negative or harmful.

That's a yes.

6. No meaningful financial disclosure regarding budget or expenses.

Please do try and read one of those compensation plans and see if you can understand it. Particularly if you have a good maths brain or maybe you have a background in accounting or you've run your own business. Give it a go.

I'll just quickly run through the rest. 

7. Unreasonable fear about the outside world.

8. Former members often report similar stories of abuse.

9. Followers feel they'll never be good enough.

 

Tick, tick, tick.

There's also a checklist for healthy non-culty groups as well. The two women who I spoke to who had good experiences with MLM tick many of these off, including:

 

Keeping a boundary between the group and their personal life

 

Answering questions without becoming judgemental or defensive.

 

Autonomy

 

And can admit failings and mistakes.

So in episode 1 I said I was pretty ready to subscribe to the Childfree subreddit because I can identify with the people in the community. Well, I never want to be recruited by someone in an MLM. Not again anyway, they've tried before. 

And I'll be very happy to tell them I'm not interested. But I'm certainly not going to be a dick about it, because behind every message of recruitment is potentially someone who's feeling quite isolated and desperate. 

And I'm also happy to stop seeing the constant negativity of the anti-MLM Facebook group I joined. I understand why John founded it, you know, he gets emails where people really want to share their story and their experience, and I think that's really important. He's genuinely concerned that people are being ripped off. But a lot of the people who contribute to the group just like laughing at people they think are gullible. They didn't think I should even speak to someone in an MLM, they want to keep them at arm's length, probably because it's easier to laugh at them. 

For the first few weeks, I enjoyed the voyeurism of the anti-MLM group, and I laughed at people's dodgy health claims and their copied and pasted promises of financial freedom, just like everybody else.

I'm not going to make a habit of it though, in the words of Cady Heron in Mean Girls; "Calling someone stupid doesn't make you any smarter."

That's a Cult? is written and produced by me, Helen McCarthy. You can follow me on Twitter at @helenlmccarthy, and you can follow this podcast at @thatsacult. You can find all the sources I've used for each episode at thatsacult.com, so you can do your own reading and research.

 

Thanks to my interviewees: Elle, Jerome, John, Mario, Lianne, and Gaynor. Their contributions, as always, are the most important part of the episode.

 

Elle's MLM experience is on her blog; ellebeaublog.com. That's E-L-L-E-B-E-A-U blog.com. Jerome's blog is finance-guy.net. And I can't say the full name of John's Facebook group because it features a company name, but just type 'MLM Lies Exposed' and you'll find it. 

 

Just like episode 1, the music in this episode was produced by a really generous guy on Reddit called Antti Luode. Spelled A-N-T-T-I L-U-O-D-E. He's made over a thousand pieces of his music free for people to use, royalty-free, as long as you credit him. You can find out more about him at anttismusic.blogspot.fi

 

I've donated to his PayPal as a thank you, and if you use his music for your own projects, I recommend you throw him a few pounds as well. It's quite hard to make money as a creative.

 

If you want me to investigate a specific community or potential cult, email your suggestions to thatsacult@gmail.com. They don't have to be internet-based, just niche and compelling and enjoyably weird. Thanks for listening.

INTERVIEW: ELLE, BLOGGER AND FORMER MLM SELLER
HELEN V.O: APPLYING THE CULT CHECKLIST TO MLM
HELEN V.O: EPISODE CONCLUSION
HELEN V.O: END CREDITS