Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.
To Stop the Fraud, PSA Calls for Regulation of MLM
Pyramid Scheme Alert has made three key recommendations to the FTC that would enable consumers to tell the difference between legitimate direct selling companies and pyramid recruitment schemes (our research shows that virtually all MLMs operate as pyramid recruitment schemes, not direct selling companies.).
The FTC announced that it is going to adopt "rules" to oversee Multi-Level Marketing (MLM) and other promotions of "business opportunities." The new rule may require disclosure of key financial information so a consumer could make a valid judgment about investing or joining.
Please write the FTC now to support "full disclosure". Send your email to FTC Attorney, Frank Gorman, Ast. to the Director of Consumer Protection, at FGorman@FTC.gov or call him at 202-326-2156. Cut and paste these recommendations (in red) to include them in your email.
The FTC should adopt rules that require:
The full PSA report to the FTC that includes these recommendations and explains their importance.
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