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England Wants to Kick Amway Out of the Country
The largest and oldest of US-based MLMs, Amway, is on trial right now in England for operating as a deceptive fraud. A Michigan newsaper where Amway is based wrote that the UK fraud prosecution "could be felt globally" in Amway's business.
The case against Amway was brought on behalf of John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform. The case seeks to close the company in the public interest. Mr Huttons department said that a review of Amways activities had been carried out by the Companies Investigation Branch.
The Times reported government findings that 71% of Amways UK sales people earned no commissions at all; of the 30% that earned some commission, 2/3rds of them earned on average just $27 (£13.53) a year. UK authorities discovered that 75% of all commissions paid by UK Amway were transferred to just 101 salespeople positioned at the top of the Amway UK pyramid, representing only one-fourth of one percent. The Amway income figures revealed in the UK are gross revenue numbers before normal business costs.
Therefore, the actual loss rates of UK Amway salespeople tracks closely to data presented in a widely read and translated statistical study by Pyramid Scheme Alert showing 99% loss rates among distributors (consumers) in major MLMs, in including Amway, operating in the USA
-- A class action lawsuit has also been filed against Quixtar (Amway) by plaintiffs who are at the bottom of the Amway/Quixtar pyramid. These charges against Amway/Quixtar assert that there is no retail "direct selling" opportunity, only an endless chain recruitment program. The suit was brought by Boies, Schiller and Flexner.
-- Police officials in India raided offices of Amway in the largest state in the South of India. The police are charging that Amway is deceiving Indian citizens and causing large-scale financial losses by perpetrating a pyramid scheme.
-- China, the largest market in the world, has effectively shut Amway out of that country. The government of China allowed Amway to gain a licence but strictly prohibited Amway from using its pyramid recruitment pay plan. No Amway distributor can earn money from purchases of others in a downline. Without the false lure of the endless chain, Amway's sales will wither in China.
-- Amway founders and top guns have contributed millions to Republican congress members and to President Bush. This was rewarded in 2001 with Pres. Bush's appointment of Timothy Muris, an attorney that worked for Amway, as chairman of the FTC. Muris has since left the FTC and several key Amway protectors in Congress (e.g. Rich Santorum in PA and Tom Delay in TX) were defeated. Dick Devos, the son of Amway founder Richard Devos, ran for governor of Michigan but was defeated.
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