Monday, November 21, 2011

The American Federal Trade Commission has advice for real people looking for real opportunities

The American FTC is the federal level agency tasked with protecting consumers, i.e. you and me from fraudulent businesses in general, including MLM or businesses that claim to be MLM. They have 8 recommendations and three major questions you should ask of the people recruiting you. Let's start with the questions first, and try it on TVI Express (feel free to try it against your favorite MLM):

1. What are your annual sales of the product? How much product did you sell to distributors? What percentage of your sales were made to distributors?

In TVI Express, the only honest answer from the upline is Zero, All (however many people he recruited), All 100%. 

TVI Express "distributors" doesn't sell any hotel vouchers or travel or any such thing. They sell MEMBERSHIPS to TVI Express (which supposedly gets you a voucher for travel, and alleged discounts). Or in other words, they don't sell trips to people outside the company at all, thus they are NOT a travel business. And that, is bad, because having NO PRODUCT means the whole thing is a pyramid scheme

If you ask about this, then the upline will try to claim various things as product.
a) They will claim membership itself is a product (it's not, but it's a requirement for access to product. ). 
b) They will claim the free trip that comes with the membership is the product (again, it's not, as you can't get the trip without the membership). 
c) They will claim the discounts you can get for the membership is the product (again, it's not. Discount to other products is not in itself a product. )

In other words, all of the explanation are bogus, and the upline is desperately spinning bull**** hoping you won't notice the bogosity of his explanations. 

2. What were your expenses last year, including money you spent on training and purchasing products? How much money did you make last year — that is, your income and bonuses minus your expenses? How much time did you spend last year on the business? How long have you been in the business? How many people are in your downline?

Most TVI Express members, who are honest, will admit that they only just joined up for a few weeks, or perhaps a few months, and they just recruited people, and didn't advertise or anything. Then they'll glide right into "I paid only $250 USD (plus fees) to join and I am about to make ______!"  They claim they have no expenses, and have dozens, hundreds, etc. in their downline. 

Come on, how can a business have no expenses? Some will claim they setup websites, send out e-mails, print flyers, paid for ads, and so on, but all of them are toward RECRUITING, not selling anything. Thus, they have defeated their own explanation: they aren't selling anything. They are all recruiting. 

A business that recruits and sells nothing except memberships (i.e. recruits) is a pyramid scheme, not a business. 

3. What percentage of the money you made — income and bonuses minus your expenses — came from recruiting other distributors and selling them inventory or other items to get started?

In TVI Express, ALL income is from recruiting (cycle out of 2 "boards"), which guarantees that TVI Express is a pyramid scheme. There is no inventory or actual items or training. It's all recruit people, get paid. That is the very definition of pyramid scheme. 

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