Robert L. Fitzpatrick

In Utah, chain-selling schemes have become a leading export. With a new bill amending Utah’s Pyramid Scheme Act, these schemes will have state protection in Utah, similar to the de facto protection that the government of Nigeria provides to the notorious Nigerian scams. On February 17, 2005, the President of the Utah State Senate signed a bill (SB 182—“Direct Sales Amendments”) that effectively nullifies Utah’s Pyramid Scheme Act, at least as it applies to the most damaging of all the classes of pyramid schemes—product-based programs that have proven to cause financial loses to over 99% of participants. This extraordinary loss rate has been documented in at least four separate independent investigations. The financial harm is mathematically predetermined by the scheme’s multilevel and recruitment based structure …

The multilevel marketing (MLM) field grows, and its member companies multiply. Solicitations to join seem to be everywhere. Its promoters would like you to believe that it is the wave of the future, a business model that is gaining momentum, growing in acceptance and legitimacy, and will eventually replace most other forms of marketing. Many people are led to believe that success will come to anyone who believes in the system and adheres to its methods. Unfortunately, the MLM business model is a hoax that is hidden beneath misleading slogans. Calling it a “great business opportunity” makes no more sense than calling the purchase of a lottery ticket a “business venture” and winning the lottery a “viable income opportunity for everyone.” MLM industry claims of …