"Pyramid schemes are considered illegal because they're paying distributors to recruit other participants. MLMs claim that they're different since you don't have to recruit but sell their products. However, without your network, you wouldn't be able to sell anything at all. People often get involved without even knowing that it's a total scam and lose a lot of money along the way. Fortunately, some of them do escape."
"My recruiter told me she made $400 at the party I was at. I later learned she made 25% of that. I was told if I could get 2 people under me, I would make $400-$500 per month.Then I was told I needed 4 people instead of 2.Then I was $2,000 in debt with nothing to show for it.Deleted them all and changed my phone number."
Multi-level marketing operates like a pyramid, rewarding those at the top while leaving most participants with losses. Companies portray themselves as product-driven sales opportunities but rely heavily on recruitment to generate income. Recruiters often misrepresent earnings and escalate recruitment requirements, causing recruits to accumulate debt. Sales tactics include cold messaging, persistent follow-ups, and pressure to meet quotas. Many participants report losing money and emotional strain; some escape by cutting ties, changing contact information, and helping downline members exit. Warnings and red flags include inflated income claims, shifting requirements, and toxic sales practices.
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