Renée Carver’s family was poor her whole life. At the end of 2018, she had just graduated college, moved back in with her parents and tried and failed to start her own business. When she met a woman who claimed to have made $1 million through this company, she couldn’t help but feel intrigued.
“I was starstruck. I had never met someone who claimed to be a millionaire before,” Carver said. “I was just kind of glamorized by the thought of being able to break the cycle of poverty in my family.”
Carver worked as a distributor for a diet multilevel marketing company under this woman for about five months. The woman treated her as a daughter, put people in her downline and took advantage of Carver and her skill set.
“One reason why she kept putting people under me was because I was essentially her personal assistant for a while,” Carver recalled. “It was what I spent most of my time doing. She kind of set up some of these sample (parties) for us, but I spent a ton of time making business cards for her, looking at websites for her because that's what I went to school for, so she kind of abused my skills in exchange for helping me progress in this company.”
Women in vulnerable positions like Carver’s may be especially susceptible to MLMs. New mom? Tight budget? Hoping to lose weight? They want something, and MLMs appear to be an ideal way to get what they need.
Rebekah Dubé was a new mom and part-time university student when she started looking for a job to help ease the financial burden on her young family. The job listing was demonstrating and selling air purifiers for a home wellness MLM. They promised prospective employees $20 an hour, the ability to set their own hours and that they wouldn’t have to find any leads. When she came in to interview, they even let her bring her daughter along since she couldn’t find a sitter; they were a family company.
Everyone who interviewed that day was hired. Dubé said she noticed a series of red flags during her time distributing for them:
— She wasn’t paid for demonstrating the product to people who didn’t make at least $30,000 a year.
— She wasn’t allowed to demonstrate to men, only women and families. When she asked why this wasn’t allowed, her higher-ups told her it wasn’t the target audience and that she wouldn’t be paid for the demonstration or the sale if she went through with it.
— Although they were only paid for up to two hours per demonstration, they were encouraged to stay as long as three or four hours to better demonstrate the product.
— The senior discount cost of the product came out to cost $150 more than the standard pricing.
— When Dubé underwent emergency surgery, they invited her to exaggerate the truth of her situation to make more sales instead of allowing her the time and space she needed to recover from surgery.
Though she noticed these red flags popping up, she wanted to stick with it and do what she could. However, she ultimately left.
“I was a 20-year-old, naive, young mother who just wanted to do better for her family, right?” Dubé said. “So I tried.”
Dubé’s experience unfortunately isn’t unique.
“We talk about these young mothers, or military families, or people in these precarious situations, people who grew up in poverty and are trying to get out of poverty still, and who suffer from mental or physical illnesses, that feel like this could be a way out for them,” Carver said.
Especially in a COVID-19 world, many people find themselves in vulnerable positions. Someone may lose their job and see an MLM as an easy opportunity to quickly make up for the income they’ve lost, but this is generally not the case.
According to a 2011 report by the Federal Trade Commission, over 99% of MLM participants lose money. People might think they’re different, that somehow if they join they’ll get lucky and make loads of money. Technically it could happen, but is it worth the high risk of losing money instead?