Ep. 10 - Next Steps for the Anti-MLM Movement

Links for Robert and Melissa:

Robert’s book: Ponzinomics

Robert’s Website: Pyramid Scheme Alert

Melissa’s Podcast: The Teacher As...Podcast

Transcript:

Melissa Milner 0:00

Welcome to Ponzinomics 101. I'm Melissa Milner. I'm a 30 year veteran teacher and host of The Teacher As... podcast.

Robert FitzPatrick 0:22

And I'm Robert Fitzpatrick, author of the book Ponzinomics, the Untold Story of Multi- Level Marketing.

Robert FitzPatrick 0:30

We are co hosting Ponzinomics 101, a monthly educational podcast for anyone who would like to learn more about multilevel marketing, and why it should be avoided.

Robert FitzPatrick 0:40

We hope this podcast will be a resource for teachers and parents and provide valuable information that is not currently being taught in our public schools, colleges and universities. The best defense is awareness. Be informed think, question everything, and keep your mind engaged.

Melissa Milner 1:04

Welcome back to Ponzinomics. 101. This is actually our last episode of season one. We've had different kinds of episodes this season in ten episodes. We've had lessons from Robert, interviews, and our last two episodes are Robert and I just chatting about important MLM related topics. If you haven't listened to Episode Nine, or the other eight episodes, you are definitely in for a treat with a lot of MLM education ahead of you. So Robert, do you want to explain the important topic we're chatting about today?

Melissa Milner 1:35

Yes, everything that we've talked about up to now has been about a consumer recognizing what a pyramid scheme is, how multi level marketing qualifies in that definition of a pyramid scheme, and therefore, obviously, why to stay away from them. So this is why are we doing this? Well, we are part of something quite a bit larger than us. Of course, there are many podcasts now that are called officially anti MLM. So there is now a consumer movement. And this is new, I dated within the last five years, you could call this a consumer movement. Why a consumer movement? Because millions 20 million actually every year, are ensnared in these multi level marketing pyramid schemes. So now there is a voice rising from the consumer world, not from the government, not from Congress, or anything like that. It's coming directly out of the what you might call grassroots civil society,

Melissa Milner 2:47

People who have been in.

Robert FitzPatrick 2:48

Yes.

Melissa Milner 2:49

And been messed up by it.

Robert FitzPatrick 2:51

Yeah. And or their friends, sometimes it's family members, you know, the who were? Yeah. So it's not just from people who were harmed, and now, you know, are seeking restitution or something like that. It's just also people who say this, this should not be in our communities. The problem here, though, is now that it's a consumer movement, the question comes up, what do you want? You know, what do you want done? But before you can answer that, you have to also say, Well, what is it exactly that you are against? And that has not been defined? And, and until that is defined, I think the movement will be largely a cacophony of complaint. And that's not bad. I mean, complaining sometimes gets some results, you know, but it's very dispersed. It's ineffective. And, and it can become almost, it tends to lose energy. When it's unfocused.

Melissa Milner 3:57

Would you say this is your vision of what anti MLM should be trying to do?

Robert FitzPatrick 4:06

Yes, yeah. Yeah, I would call this the next stage. I'm not even saying it will necessarily get there. There are plenty of movements that just eat her out. For lack of organization and for lack of being able to focus on on a resolution, it does happen or the opposition is so strong, they just never overcome it. I mean, that that has happened. Yeah, certainly, we've seen this in other areas of American life. Yes, I see this as the next stage. This is where the the movement and so in a way, what we're going to talk about here today is a message to all those who are currently engaged in the anti MLM movement who identify that way and there are now 1000s since then 1000s of people in many countries, yeah, who actively want to do something and feel, and I hear it from even people inside academia, learning people that are in, for example, they're going to be in social work or counseling or psychology. They're dealing with people who have been damaged, personally, by multilevel marketing, and they're asking, what's the antidote? How do you get people out? And so it's coming from various sides. It has not yet reached the political side. But someday, it must. But right now, there's not a single member of Congress who has dared to speak about it. And we know why. Because two reasons why one is the money and the influence of MLM which is huge, they have a big lobby on K Street in Washington every day, to prevent law enforcement. Second, it's us, we have not mobilized ourselves as a voice. So that's, that's just the dynamics of power. That's the way it works, right? So, you know, the anti MLM declaration is hopefully a one, you know, step toward eventual mobilization, greater, more effective anti MLM movement. And and that's my, my intention for for writing it.

Melissa Milner 6:21

I think it's really important for everybody to hear this.

Melissa Milner 6:24

Well, as I should say, also, in the case of multilevel marketing, there are powerful reasons why there has not been a declaration or a focus, I think there's a threshold you can go up to with multi level marketing. And it begins with the very first declaration of defining what it is. And that's where a lot of people, they walk up to that line, and they they back away, because once you decide, maybe we should just go right in into them.

Melissa Milner 6:58

Yeah, it's a political thing to define it.

Robert FitzPatrick 7:02

It is.

Melissa Milner 7:02

Very political.

Robert FitzPatrick 7:03

It is. When you take that stand. There's sort of all kinds of ramifications from so let's just go go through them the very first one. In fact, the first one, the others, more or less follow the first one. And the first one is simply defining what multilevel marketing is. And you can begin to do that by simply saying what it is not, that is removing the disguise. Once you take the mask off, then you get the opportunity to say well, okay, what am I looking at, then, if it's not what it masquerades as.

Melissa Milner 7:36

Just like you talked about with the airplane game? Yep.

Robert FitzPatrick 7:39

Yeah, the airplane game had had a pretty thin disguise, but it was sufficient to enroll gigantic numbers of people and to mobilize millions and millions of dollars. Once the disguise is off, it's it's almost laughable. I find multi level marketing once the disguise is off, and many people realize that too. It's absurd. Once you take the disguise, That's so silly, almost. Okay, so number one is MLM is not business. MLM is not direct selling. So by business, I mean, the normal course of business. And usually, you know, there's, interestingly, there's not really very much said about what constitutes a business, when does something become something become a business? And it isn't just profit, nonprofit, because profit and nonprofit are also businesses, both of them are businesses, really. But MLM is the traditional definition of a business's that, first of all, it's a voluntary contract, you know, we're going to do business together, we both know what we're doing. We agree, each each of us willingly goes into the proposition together to make a transfer and exchange a transaction of some kind. And we do it willingly, voluntarily. That's that's the way businesses and secondly, that at when we get into the transaction, it results in an exchange of value or relatively fair, it one side can kind of get the advantage over the other perhaps, but not too much. Because once it gets too much, you call it a scam. You said this wasn't fair. So there is an element. And interestingly, MLM has been defined by the FTC, when they call it a pyramid scheme. They call it an unfair and deceptive trade practice. So they are saying it operated unfairly when it they call it a pyramid scheme, and it was engaging in deception. So there's no voluntary if if you're deceived, you didn't do it voluntarily. And it's unfair. So it didn't result in a fair exchange of value, but they still call it a trade practice. Yeah, so they're saying MLM itself is a business, but when it operates is a pyramid scheme is just an unfair and deceptive business. So

Melissa Milner 10:04

And you're saying no.

Robert FitzPatrick 10:06

No. It's not a business

Melissa Milner 10:07

It was never a business in the first place, right.

Robert FitzPatrick 10:09

The ones that they prosecute are indistinguishable from the ones they don't prosecute. And if you ask the FTC as many people have done, okay, your calling the ones you prosecuted unfair and deceptive pyramid schemes, and you singled them out. And you then but you also assert that MLM itself is legitimate. So fairness, and lack of deception would be the norm in that by that thinking. So give me one. Tell me one, please. Mr. and Miss Mr. or Miss FTC, which is not unfair, deceptive, that is not. Can you just name one, give give us give us some a benchmark? Silence. You'll never hear it from them, because they can't name one. And if you and then you see on the website of the FTC, this ridiculous advisory telling you well, you know, stay away from this type of company, one that emphasizes recruiting, overselling. Okay, 100%.

Melissa Milner 11:15

Hello.

Robert FitzPatrick 11:16

You just eliminated 100% of them.

Melissa Milner 11:18

Well, emphasize can be seen in different ways. I mean, it's such a gray area.

Robert FitzPatrick 11:24

Yeah, that's right. That's right. That's right. It's a useless advisory. That's why I said it's a silly absurd advisory on its face. It's meaningless since all in the lamps emphasize recruiting, overselling all of them do. And secondly, they as you said, use the word emphasize, which is a vague term could mean anything. So the second part is flows from the first MLM is not direct selling. And we've done, I think, an adequate job on this fun podcast. To explain what direct selling is, I have a little book coming out soon, called direct selling, and direct selling, that is the story of what real direct selling actually looks like. Or I should say, looked like because direct selling door to door selling person to person is gone away, we don't need it. It serves no economic purpose. For the most part, there are a few things home contracting, perhaps you know, there's a few things that where they still come out to your house, but they still come out to solicit you to your house directly. So So anybody that would look at MLM on its face, again, with this is not rocket science here, you don't see 1000s of MLM errs out, knocking on doors calling on people, they don't sell the products, nobody I've ever met in MLM makes money from just selling the product. And you in fact, cannot because there's no profit, you have nothing unique, you have so many competitors, you couldn't possibly keep a customer, and so on. It's not direct signing. So we start off by saying that would be the first declaration. So you know, let's get real here. MLM is not a business and it's not direct sign. So that leads us on to the second one, in some ways, may seem less important, but actually, what you, what you find out is that once people change the language, the mind will change too. And this has been an educational process for me, because like everybody else, I began describing MLM in business terms, it was an industry, it was direct selling industry, but it was not, you know, it was somehow sinister and distorted. And, and ended up used people and it was predatory and so on. So eventually you say, well, this, this no longer qualifies as a business. So how do you even speak of it then? So if if sales are not really sales, and commissions are actually pyramid, money transfers, so So it begins by dropping these words. It's not an industry. It's maybe you could call it a cartel? You know, it's a group of gangs and I've heard you terms like gangs, gangsterism and things like this, but whatever the words are that people choose, scam swindle, whatever it pyramid scheme, whatever it is, just drop these terms of calling it an industry. Don't use the theatrical terms MLM itself invented like, oh, you're a distributor now. Oh, you're an executive director. No, no, no, that's just recruiting levels. That's all that is. That's level 123. Yeah, that's the masquerade. Don't call money transfers profits Commission's don't call the money that the company gets a profit. That's ill gotten money. That's right. So So once that language changes, then the reality becomes much more apparent and undeniable. But as long as you keep using that business language, you're stuck in there, your mind, you know, is being told one thing and your reality is another, if you kept calling Bernie Madoff, a hedge fund manager after it was revealed to you that it was a pyramid scheme, that he wasn't even investing the money, but you kept calling him the owner of prominent Wall Street at times, and that he was a member of the financial commit point, your mind can't hold two contradictory things. At the same time, you know, they've learned that we've discovered that. So that's kind of what you're doing when you keep using the business language.

Melissa Milner 15:51

And not only are you stuck in that mask, you know, stuck in that misunderstanding. But if you're a content creator, you're spreading that misunderstanding.

Robert FitzPatrick 16:02

That's right. That's right.

Melissa Milner 16:03

We as content creators need to work on that.

Robert FitzPatrick 16:07

Yeah. Because you're discrediting your your own statements you become now you want to say to somebody who's giving this long list of abusive practices of deception of ruined lives. And you want to say, are you talking about a business? If it's just a business, what were you doing there? Why would you be in a business like that, and it just doesn't compute to describe to us the terms that people the consequences that we know occur, the methods that are used to enroll people, those are not business, putting a gun to someone's head, and saying, you know, making an offer you can't refuse. That's not a business proposition. Right. And also deceiving somebody and getting their money. A bait and switch, for example, is not a business method. That is not marketing. That's a fraud. So, you know, we're talking about fraud.

Melissa Milner 17:03

Also in Lu La Roe's case, saying the moment you sell something you should be buying it by like having them if I'm not going to call them salespeople, the distributor, having the downline.

Robert FitzPatrick 17:16

Yeah, the participants.

Melissa Milner 17:18

Yeah, the participants buying things that they're never going to be able to sell as well. That's not business.

Robert FitzPatrick 17:26

That's right. So officially, you're buying something for the purpose of resale, but you cannot resell this product. And on the on the whole, I'm not saying you never could and you couldn't lean on your family and so on to buy the you can sustainably and profitably resell that stuff. So it is it is not a direct selling business. And so just because somebody purchased goods in order to join the chain, which you do have to do, and then purchase goods for a while every month in order to keep a position or increase their position, which

Melissa Milner 17:57

Should be a red flag, shouls be a huge red flag.

Robert FitzPatrick 18:00

It shouldn be a red flag of a pyramid scheme. And it should not be continuously called sales and selling and revenue. And so all those things will, will change, the whole thing comes unraveled. Once you shift your language, it's quite amazing when you change the language. So you know, as we said, in the airplane game, it was called a gift. You literally put money in an envelope and gave it to the person at the top of the pyramid who had the theatrical name pilot, and you had the theatrical name passenger, and you put the money in an envelope and gave it to that person. You did that. And that was the method of the scheme. And it was called a gift, a gift. So you know, it was never a gift. Of course, it was a payment. And it was for the purpose and you put your money in as the price for getting involved the person who got the money, that was the reward for having enrolled you. So classic pyramid scheme just changed the language to call it gifting and suddenly it was for people became a recent. Okay, so that's the two the two key things and then from there, I think we move on to the next thing about MLM we're now more we've said what it's not we can say more about what it is how does it work, and the number three is called first begins MLMs are essentially identical. This is why I said the ones they prosecute and the ones they don't prosecute are indistinguishable because they may have different names they may have different products and one is Mormon oriented and another is some other thing oriented and one goes after one ethnic group and another a different ethnic group or something one is oriented to women and others oriented to men. So what these are superficial characteristics, essentially they are all the same.

Melissa Milner 19:55

A pyramid scheme is a pyramid scheme is a pyramid scheme.

Robert FitzPatrick 19:57

Yeah. And and going back To the products and the sales. Reality is, and this was actually in a lawsuit now been that has been brought by regulators in India against Amway, those regulators are saying those are not sales, those are Ponzi transactions. And it's a form of money laundering. And so that's what I'm really saying here. If you strip away the business terminology, and acknowledge that MLM does not qualify as direct selling, or even as a bit, well, then what's going on here, money is being transacted and exchange products are being moved back and forth. So what is actually occurring? Well, the products are really the methodologies that are putting money in an envelope, calling it a gift, you buy $100 worth of vitamin pills every month. You know, that's the method of the money,

Melissa Milner 20:53

and they're all over priced so that the money transfer can work.

Melissa Milner 20:56

Yeah, they're always going to be overpriced. You know, they're not price competitive. That's the point because they're never going to be sold in the outside market anyway, they're really an internal method of money transfer. And the and they also serve beautifully as disguise for direct selling. So people go, how could it be a pyramid scheme? It's all about essential oils, it's all about vitamins, it helps my hair grow. It banishes aging, it's stopped the wrinkles, it's, you know, it's revitalized my energy and stuff like that. So, you know, that's all part of the distraction. Look over there, look over there, look at the product. But you know, in fact, after you get in, you discover, oh, no, it's all about recruiting. It's just about recruiting. So let's just go back and say these 123 things again, first, it's not business doesn't qualify, not voluntary, no exchange of value here. MLM is not direct selling. That's an absurdity. You can't buy those products and go out in the retail, open, competitive market and make a living selling them never has, nobody does. It's all really about recruiting. Second, to talk about MLM, you have to change your language. And we don't go in here into exactly what language you should be using that can evolve. The first is to drop if you do use terms, like distributor that, you know, as they've been Breyer, who is one of my mentors, and one of the I think the most astute observers to this says, you have to use those terms with extreme irony.

Melissa Milner 22:31

Yeah.

Robert FitzPatrick 22:32

Right. You put quote, you put quotes around it. Yeah. The distributors, right. They're not distributing their recruiters or victims, but they're not distributors. So use those terms. Use them, you know, with quotes, air quotes, extreme irony.

Melissa Milner 22:47

What could you say? Like when I was just trying to figure out a better word, could you just say the downline because that's what they are.

Melissa Milner 22:54

The downline. Yes, the downline is the is the mechanism of pyramid scheme. It's the people below them. You know. So some people have called them adherence, meaning there's a belief involved here too, but we'll get to that in a moment. So. So then, so you, you know, you, you strip away the direct selling in the business disguise, then you take away the business terminology. And that's these are declarations, you know, assertively we say, they're not business, and they do not deserve and it's inappropriate, and it's misleading to use business language. And then the next thing was to describe them a little more particularly, they're all the same, they have essential characteristics. And we've named those essential characteristics, the first one starts with an endless chain, and then moves on to the pay, you have to pay to make money you have to recruit. And after you've paid and recruited, there's a transfer of money from the bottom and extreme transfer from the bottom straight up to the top. And that's the essential characteristics of MLM. And so the money transfers. That's what that's all about. And the products are merely the methodology for doing that.

Melissa Milner 24:08

You could say the products are kind of the mask, right?

Robert FitzPatrick 24:11

They're part of the mask, they are definitely part of the mask. The products have you talking about, you know, the design, like, we'll have a row when the mania was in force, and the illusion was maintained as reality that this was a business people talked about the design, Are they ugly? Are they beautiful? Are they creative? And then of course, when it all collapsed, people started saying, How in the world will we ever even buying those things? And it turned out the designer was was, you know, taking other designs from others. Yeah. So there was no quality, there was no imagination, there was no creativity, it was just pumping out these things, because they were needed for these money transfers, you know, right. Yeah, LuLaRoe had, as we know, certain disadvantages as an MLM because of things like that if you're just selling vitamin pills, you don't really have to worry about that. Nobody knows what's in the vitamin pill anyway. Right? Nobody can verify control, or whether it really does anything whatsoever. So then we get down to asserting, there's two more asserting, well, then what is it also, that we've, we've described it as a pyramid scheme, money transfer, whatever you want to call that. But there's something else going on, because it would never have survived just purely on financial terms. It's to its to the consequences are 99% lose every year. So how does anything endure in a marketplace? With that kind of a record? Well, it's because MLM is not just a financial pyramid scheme, or a financial scam, or whatever you want to say, however, you want to describe that. It's a belief system. And it's a delusional belief system. And in some ways that's more important to people. And this is hard for people on the outside to grasp this, the real harm of MLM is not that they just got your money, but they got inside your head, and they cause people to change their whole lives, in many cases.

Melissa Milner 26:31

That's the culty piece, yeah.

Robert FitzPatrick 26:32

The cult. Well, cult, again, is a difficult word. It's not easily defined. But we know that a cult is about coercion. And we know that it is sometimes called undue influence, or sometimes brainwashing. So this is a powerful persuasion method in which people are separated from objective reality. They are separated from their, their identities that they have grown up with and assumed in their childhood and their family, in their community, we all have an identity, a cult has the power for you to put aside your own identity to doubt your own identity and no longer accept your own identity and leave you completely vulnerable to the influence of someone else who tells you that's not who you are, here's who you're going to be.

Melissa Milner 27:30

Right. And those people, it's the us versus them to which is that was big in Amway,

Robert FitzPatrick 27:35

Right? So cults always control. They are about domination and control. So this is actually in a way, I should say. In reality, the power of MLM is in its ability to dominate people's minds, and change their belief systems. Once you do that, of course, you can take their money, but you can take everything you can take their homes, you can take their credit, you can get them to abandon their spouses to even to neglect their children and so on. unbelievable things that you can do. They become literal slaves. They are enslaved, mentally enslaved. Well, this abundant evidence that MLMs are doing this on a gigantic scale all over the world. And now even in popular language, the term bought honeypot and people say it laughingly, but what are we talking about? We're talking about people who have become fallen under a spell, they're under control. And that this scheme has this kind of power uses these methods. Again, this is another reason why you should never call MLM a business businesses cannot do this because businesses involve voluntary contracts, and exchanges of value. And those are very rational things. And people can buy and sell crazy stuff, but it does not dominate their whole lives. You know, you can be a great fan of a car, computer or whatever or movie star but it doesn't completely dominate your whole life. So you know, this is this is should be said this should be part of the Declaration and the members of Congress didn't stop dancing around and being afraid to say, what are we talking we're talking about a destructive cult movement, or arguably the largest cult in the world.

Melissa Milner 29:40

I hear people call it commercial cult.

Robert FitzPatrick 29:42

A commercial cult an economic cult.

Melissa Milner 29:44

But commercial gives it credence as well

Robert FitzPatrick 29:47

It does.

Melissa Milner 29:47

Because that sounds like business.

Robert FitzPatrick 29:49

It does. And in fact, in business, I think people and I've heard this in Wall Street and others they look at MLM and they go, Oh my god, this is the greatest business I've ever seen. I mean, talk about marketing power, they have total control over their customers so called customers. How do we do that? And how do I want to get in on that? How do I invest in that? Because this looks like heck a lot better than investing in, you know, real business. And if this is legal, I went in on it as a prophet here, you know, so, but part out part of the the delusion of the MLM cult is to accept the idea of the endless chain, as a viable business. There's the first delusion, the Infinity factor, that Oh, I can recruit five, how do you recruit the five? Well, I tell them, they can recruit five each also. Well, now we're up to 25 and 25 125, and so on, you only go about 12 more levels, you pass the population, it's not possible, you pass the population of the earth. So it's unsustainable. And for as long as it operates, the vast majority are always in the bottom ranks. Yep. So whether it runs for 10 days, or 10 years doesn't matter. The proportion of people of all people who have ever participated will remain mathematically the same, which is virtually everybody. When you think about it, this is the most, it's an impossible proposition. And they managed to convince people that it is a real business proposition.

Melissa Milner 31:24

And again, with the FTC saying not necessarily disagreeing. That's a huge issue.

Robert FitzPatrick 31:32

And yeah, and which we will come to the last the last item is, is that, but you're absolutely so true i Is that I've said this, if the FTC just shut up and said, We have nothing to say, we have nothing to say about this. I think more people would come to an understanding quickly on their own, that oh, my god, yeah, I'm not making money. Nobody around me is making money, what the heck is going on here, and they figure it out. But as long as this thing has the authorization of the Federal Trade Commission, of course, we there are others, the silence of Congress, the backing of the of the Better Business Bureau, the backing of the Chamber of Commerce, and so on the promotion of it by the US Department of Commerce, and Department of State, the fact that former members of the Secretaries of State have worked for these MLMs members of the Federal Trade Commission have gone on to work for MLMs. So this gives it a fake credibility that is very hard for an individual to refute. Say, Well, who am I I've had this given to me so many, who the hell are you? Are You Smarter Than Chamber of Commerce in that approach? Well, no one that's smarter, but Facts are facts. Just look at them. I didn't make this up. So let's go to the last one. Which again, we said, there's a threshold you can go up to, when you say it's not a business, it's not direct selling, you're left with this terrible question. Well, then what is it? And that's where a lot of people shrink back from I don't want to go there. Because if you're saying it's not business, it's some kind of a swindle on a gigantic scale that the government is allowed to occur. And that's just too big. That's too much. I'm not gonna go there. So Well, we already past that point. And now we go on to the last point of this whole business of being state sponsored, so to speak, state supported, government endorsed, protected from law enforcement by law enforcement. And this is achieved over and as I tried to explain in Ponzi omics, I have a long, long chapter on this. This has been done in the old fashioned way, lobbying, political influence, buying, media, control, and so on. All of these things can come into play. But in the end, it all happened really. In 1979, when the Federal Trade Commission reversed its entire policy contradicted its own lawyers and gave Amway which was the oldest and largest of multilevel marketing companies a green light called it not a pyramid scheme. That in effect, authorized the MLM model as the business and and then it exploded. Of course, once that was it's a it's a license at that point. Kind of franchise And hundreds and hundreds of them have now been spawned. They're cloned, so to speak, and and all of them for years said, we're like Amway. That's why we're legal. We're like Amway, because Amway was called legal. So the point here is, though, what does law enforcement actually say? Well, mostly they say that multilevel marketing is a legitimate form of direct selling. So the declaration reads, the fifth declaration, the final declaration is that US law enforcement policy toward multi level marketing is unfounded. It perpetuates harm, and it must be changed. So we say unfounded. I point out the obvious that there's, you know, the evidence does not support the claim that MLM is a legitimate direct selling, or that it is an opportunity. And we've had decades decades of evidence now piling up that people don't, and cannot profitably sustainably retail these products. So that's the first thing so it's disqualified is direct selling, nobody's direct selling.

Melissa Milner 36:10

So are you saying the anti MLM content creators, people doing the podcast, the books, etc? This is something to focus on in their content... is this decision is wrong? And it needs to be changed kind of thing?

Robert FitzPatrick 36:28

The FTC? Yes. The FTC needs to be held to account here.

Melissa Milner 36:32

For the actual facts.

Robert FitzPatrick 36:33

Yeah, we're, we're pretending that these facts aren't sitting right in front of our faces. For the FTC to call this direct selling. Well show us how could something be direct selling in which 99% of the people never make $1 from it, and the products are unsellable and they're not being sold. There's no evidence that they're being sold in the open market.

Melissa Milner 36:58

And the amount of work they're putting in does not necessarily equate to money that they make. They're not, you know, those downline, might be working harder, probably are working harder than the upline and they're making nothing. So it's not like direct selling you work really hard. You would you would make some money.

Robert FitzPatrick 37:15

Exactly. That's right. So yeah, somebody has to be it's, first of all, how could there be 20 million direct sellers in America? I mean, selling why? And, but, so the evidence is, I say becomes so overwhelming, so obvious, it, it borders on absurdity. And people often ruefully laugh, I hear that a lot in the anti MLM community, we laugh, because the facts are so overwhelming and so contradictory of what official reality official reality tells us is going on. So there's, there's nobody out selling these products, they are not sellable. It's a joke. So let's stop calling it so their policy of calling this legitimate direct selling, is unfounded. Stop doing that this should stop doing that. The other thing is the loss rate. You know, I again, the best number, you know, people say all these silly income disclosures there, oh, there exaggerating income and so on. There's only one number of any value in MLM. Take any company, any of them. Add up all the people who've ever been in it from the day one when it was founded, what percentage of those people made a net profit, the number is so close to zero, it might as well be called zero. So it's an effect. You can say, you know, nobody makes money. Well, the people that are soliciting you, they do, but they're not the ones that you know, constitute the direct selling sales force. So this is obvious, this is verifiable. This is not difficult to to research and determine the FTC knows that they have to know how could they not know it. Anyway, the final point about this is that there's there's obvious here that there's pervasive, deliberate falsehoods that sustain multilevel marketing. That's how it functions is on obvious, pervasive and deliberate falsehoods. These are deliberate and they inflict harm on 1000s Millions of people. That's the reality of what is occurring. So what should the FTC do? Well, not just the FTC. And in fact, the FTC is really not the proper agency. Why because they regulate trade. But we said the number one this is not trade. So what should the FTC be doing then? Well, they should at least be investigating. They've never done an overall investigation of MLM and all these years. They've never investigated the end. The street, they look at payday loans, they look at, you know, other kinds of industries, the cigarette industry was investigated. And you know, all kinds of other industries have been investigated. Multilevel marketing as a quote industry or a cartel or whatever you want to call that has never been investigated. So...

Melissa Milner 40:18

That's crazy. That's absolutely crazy. Again, political.

Robert FitzPatrick 40:22

Right, yeah, political they they are paid to not look

Melissa Milner 40:26

or or they want to do their own MLM when they're out of the FTC. So they don't want to take it away. Yeah.

Robert FitzPatrick 40:32

Yeah, it's a career pathway for... that's the saddest reality. So, you know, the declaration says, what should the FTC, all of them the Consumer Financial Protection Bureau, which is also never looked at in MLM? The SEC does look, the Securities Exchange does look at MLMs. Rarely, when they are either publicly traded, or when the distributor ships or sold like a security where they may go out and solicit investments from people for startups of MLM. And they get interested in this. But in general, the three agencies in the US that I think are most obvious to us, the FTC, sec, and the Consumer Financial Protection Bureau, they should first stop the current policy of neglect. That's what they're doing. It's a kind of don't look, don't tell on ml, and they just look the other way pretended? We don't we don't know. We don't know. If you ask them. Is there? Is that company selling retail? Are there really people out there selling? We don't know, we haven't looked at it. You know, we don't have that data. They should begin an investigation again, wouldn't take you and you have to leave the office as we know, you could do it right. Yeah, online. just peruse the web, you know, you wouldn't have to do much talk to a few people. The podcasters have networks now of 1000s of victims. So the resource, the reason the leg works already been done.

Melissa Milner 42:11

What could an anti MLM content creator do with that information, those episodes that they've done? Or those those connections they've made with people who have failed?

Robert FitzPatrick 42:22

There are a few who have actually been able to make some contact with the Federal Trade Commission and who are feeding their information directly. Yeah. And that's, that's what I would say. But it has to have a point. It can't just be Hey, look at this one company, it has to always be looking at this company as a window into the broader picture. Actually, ultimately, these findings should be referred to the Department of Justice, because we are speaking about frauds here, and a few MLMs have been prosecuted for fraud, not unfair, deceptive trade practices, but for fraud, and the few that had people who have gone to jail, the MLM CEOs that have gone to jail, like Keith Ranieri, or there's been a few others, not many, but a few. It was because the government determined, this is deception, deliberate and harmful, and with intent, and with knowledge that people would be horrified. And they did it for profit.

Melissa Milner 43:29

It's so frustrating the Keith Raneire thing was there was also some other things going on there that that were undeniable. It was not necessarily his MLM structure of his business, but it was sex sex trafficking. And yeah...

Robert FitzPatrick 43:44

That's right. He had started as an Amway distributor. Yeah. Right. But that's all again, a function of the MLM ability to take away your identity, and persuade you to adopt this delusional belief system that's based on you know, endless expansion plus, the idea that they have a secret secret on how to be happy and financially successful. You don't have it, they have it, and they will give it to you once you come in and join. That's the allure. And when you have it, then you will succeed. And you will be healthy and wealthy and happy and fulfilled and everything. It's a utopia.

Melissa Milner 44:28

Yeah, it's so interesting, because I was still in that... it was still the mask was working for me even after getting out of Amway and getting out of like, just a silly little Silpada jewelry thing that was just because I wanted to get the stuff cheaper. So I joined but it you know, I watched Lula row and then I watched you know, I watched the vowel and for the vowel to be the thing that really woke me up. This was I was watching the vowel going, but that's just like, the way I thought you know, we thought we We're like, we looked at everybody else as if those poor people, you know, that whole us versus them and the blue light, you know, driving home and seeing the blue light on Look, they're just watching TV. That's all they're doing with their life. And, you know, just, you know, the hustle culture and the it's unbelievable.

Robert FitzPatrick 45:20

Yeah. Because if you take away again, the name Amway and just look at the methods that are used there, as universal and MLM that they have. The leaders are exalted into guru status. Yeah, they, they claim they have power and information that you don't have about success. And then they introduce you after that into a completely unsustainable false business proposition based on an endless chain until you it before it's workable, it is workable, and it works as long as you believe. So you have to have a belief. And how do you attain this belief? Well, they can even sell you courses on how to learn to believe. But it's always that it's you your mindset, that is flawed, and they can correct that for you. And then once that happens, then the endless chain will work for you. And you know, and everything else will fall into place in your life, your family life.

Melissa Milner 46:17

And when it doesn't happen. You know, I left Amway just thinking, wow, I thought I worked hard, but I guess I didn't work hard enough. I'm a failure. Like, at no point did I think that the system was wrong? At no point because I had been totally brainwashed. Yeah.

Robert FitzPatrick 46:34

Well, the system presents itself as omnipotent, you know, infallible, and that it never admits error. It never allows question. So it is extremely authoritative, and hierarchical and dictatorial. And it's, and that's why many people have called MLMs. fascistic, you know, it's like a fascist state you're in, you're inside, where there's one leader, who is self appointed, who has all knowledge he is infallible, or she is infallible, and all your only job is to obey and follow the rules. And should you disobey or question there are severe consequences. So in MLM, of course, they don't have guns, and they don't have violence, but they have only mental violence. So they will try to persuade you that your life will be ruined, you'll go back to it. Nothing life of mediocrity, or if that if you should still speak up, then, as we know, from so much documentation, they will send the recriminations the character assassinations, the harassment vilification of the individual to do to convince you to shut up. If that still doesn't work, then they have the lawyers to come after.

Melissa Milner 47:57

Right, exactly. And I do think that's like you mentioned the Department of Justice. There's there's actually a lot there that maybe could be prosecutable. I mean...

Robert FitzPatrick 48:07

Yeah, absolutely. Keith Raniere was suing everybody, all the schemes that have as they go down, they're suing any critic that dares question. I've been sued other people have been sued. In other words, so they have the mechanisms as they say, we're using analogies of dictatorships, of course, they have guns and violence. MLM does not have that. But it has the ability to ruin your life financially to bankrupt you to assassinate you, and your character to make you think you are a terrible person to ruin your social circle you first they get you to abandon most of your friends and family. Now you're dependent on this social network inside an MLM should you withdraw or come out that they will take that away from Oh, yeah, you got a non person? Yeah. And yeah, you will be shunned. So these are powerful techniques, and they're very well known. And they are the common techniques of all cults. This should not be a joke. It should not be called culty. Cult, like, cult, it can be Caltech, but not cult like and cult. D. It is a cult. And that's a very dangerous thing. That is not a funny thing. It's not a silly thing or anything like that. A cult is a very dangerous form of organization. It's all about control, domination and abuse. You know, once somebody has total control, and you know, Keith renourish showed it can then result into literal sexual enslavement, but for many other people, it's mental enslavement, financial enslavement, they will work for free for years and years, they will take on debt.

Melissa Milner 49:44

Well, that that teaching that no one's a victim, which was a Keith Raniere big thing, you know, I mean, then you you you don't want to complain, you don't want it you know, your it just shuts you up. When you've been brainwashed that you're not a victim. You're not a victim, you're never a victim, it's you, you have to figure it out, you're, you know, that it's, it's unbelievably powerful, and it shuts people up.

Robert FitzPatrick 50:09

Alright, so that's the, that's the five points of an anti MLM declaration that I hope gets out into the world and that the people inside, all over the world began to use these points, so that we can advance this movement from complaint. And just public awareness, which is all good. My goal is that this would advance the cause advanced the movement, and ultimately result in more people being helped by the movement than are currently being helped. And I know, for some people, it means stepping out of the zone of comfort that we kind of were in where, you know, you appeal to the FTC to maybe look at this company, or look at this particular deception of this product, or this practice of, you know, exaggerating income and so on. So looking at the more fundamental issues that affect all of these companies.

Robert FitzPatrick 51:08

Yeah, the big picture of what MLM is, yeah. Well, it's really important, and I hope it you know, people who listen to this, tell some other people to listen to this, because it's really, these are the points that I think need to get out there. And I, you know, Robert, you've been doing this forever. I just want people to listen to you forever. I just want people to listen to you. Just listen to Robert guys.

Robert FitzPatrick 51:37

Well, I have been at it a long time. And and my, I think my origins are a little bit unusual, and allowed me and maybe my background was unusual to allow me to stay active in this. And, you know, for as long as I have it's not common people burnout. So and I've seen over most of the people I started working with, back when we started pyramid scheme alert are no longer active. Now, very few of them are still active. Yeah. A couple of have passed away, but most of them just said, I can't do this anymore. And, and I have myself had those same same feelings, too, especially when I was getting sued for five years. But, you know, in general, though, the movement has exploded. But this is a tremendous achievement that has occurred in civil society. And millions of people are not getting into these schemes as a result of that. And, and I think the movement is underway, and it's a really positive thing. And there's some brilliant people out there exposing it with great podcasts and writing and speaking up, and eventually it will, it will have even greater effect. Eventually, you're gonna see some politicians speak up about this. But

Robert FitzPatrick 52:54

It's inevitable, right? I mean.

Robert FitzPatrick 52:56

Yeah, you would think.

Melissa Milner 53:00

I know. But again, just like some people give up on the anti MLM because it's exhausting. And it's like a brick wall with the politics. The people who are politicians are, you know, they've got to be pretty brave to take a step out like that.

Robert FitzPatrick 53:14

They do.

Melissa Milner 53:14

All right. Thank you, Robert. This is amazing.

Robert FitzPatrick 53:17

Thank you, Melissa.

Melissa Milner 53:18

And thanks for listening to season one and season two. We'll be back probably September. So I hope you continue to listen. Please remember to check us out on Twitter, Facebook and Instagram @ponzinomics101 and check out our website www.ponzinomics101.com We hope you spread the word about this podcast because the best defense is awareness. Thanks for listening.