The scam that is MLMs....

I've always had reservations about MLMs (multi-level marketing). Their products have always been over priced for no particularly logical reason. Well, It didn't and still doesn't make sense to me. Why? There have never been any concrete peer reviewed scientific papers backing any of the impossibly unrealistic claims claimed by these products.

Here's what Wikipedia says about MLM
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation.[1] Other terms for MLM include network marketing,[2][3][4] pyramid selling,[5][6][7][8][9] and referral marketing.[10]
Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing.[1] Some people equate MLM with direct selling, although MLM is only one type of direct selling.[1][2][11]
MLM companies have been a frequent subject of criticism as well as the target of lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price-fixing of products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, encouraging if not requiring salespeople to purchase and use the company's products, potential exploitation of personal relationships which are used as new sales and recruiting targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion.[10][12] Not all MLM companies operate the same way, and MLM groups have persistently denied that their techniques are anything but legitimate business practices.[citation needed]
In contrast to MLM is single-level marketing. In single-level marketing, the salesperson is rewarded for selling the product, but not for recruiting or sponsoring other salespeople.[13]
 
Pyramid schemes in everyday society?
Courtesy of http://www.passive-income-passion.com/pyramid-scheme.html

Last week however, I was introduced to this blog written by Aidid Mu'aiddib, ironically called "Aididleaks". I must warn you guys however that the language is pretty harsh. It really shows how the author feels for the topic. His articles are very well researched and have all the info to back his claims. Its difficult to see how these MLM people can refute these allegations let alone sleep well at night knowing that they are supporting this enterprise.



The unsustainable pyramid 
Courtesy of http://money.howstuffworks.com/pyramid-scheme.htm/printable

Whatever it is, the take away about all this is we must always be conscious of where our income comes from and how we get that income. Something that is halal can become haram if obtained by unscrupulous means. Profiteering is also not alowed in Islam. Everything must be bought and sold at market price. Selling products with misleading claims that are not substantiated is akin to lying on weighing goods. Not good. The high price of these MLM goods is required to maintain the "uplines" and "downlines" of the MLM system. The main attraction of these schemes is to become rich, quickly. Greed. Better not feed greed with the promise of easy money. Anyways, check out the article on Hai-O and on other MLM related issues including medical doctors abusing their Dr title to endorse products that they themselves have no proof of their health claims, MLM practitioners using religion to make certain products haram thus making their products the better, halal choice and many more can be found on his blog here. I must warn you though, you have to forgive his language. It is very harsh, but the facts are all there. He really feels very strongly about this topic. You have been warned.

Just as a reminder to myself and others:
The United States Federal Trade Commission (FTC) warns "Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products."[33] and states that research is your best tool and gives eight steps to follow:
  1. Find — and study — the company’s track record.
  2. Learn about the product
  3. Ask questions
  4. Understand any restrictions
  5. Talk to other distributors (beware shills)
  6. Consider using a friend or adviser as a neutral sounding board or for a gut check.
  7. Take your time.
  8. Think about whether this plan suits your talents and goals[33]