MLM Scam Red Flags You Should Not Turn A Blind Eye On

MLM Scam Red Flags You Should Not Turn A Blind Eye On

MLM, an acronym for multi level marketing, is defined as a business scheme direct sales companies practice to encourage existing distributors to recruit new distributors who are paid a percentage of their recruiter’s sales. It is legitimate yet controversial due to its relation with the lower leveled members paying those on the higher level, hence the manipulation in ‘engaging’ the network marketing.

The MLM systems are often correlated to the pyramid scheme; a sketchy and unmanageable business model where higher-positioned members recruits new members who enroll newer members until a pyramid is formed where the lower levelled pay those who are above them. The scheme is illegal as it is under the scam category, basically sucking the money off the lower level members so that the one on top can receive the money unless the operation is stopped.

Here are signs or red flags you should not ignore when it comes to pursuing MLM:

The Products Are Lacking

If you come across a company that does not prioritize acquiring more customers or the sales of a product or service, you might need to reconsider your decision to work there. These characteristics of building a team for money to flow to the one on top of the pyramid should be a reason to avoid getting your income dried out over pointless ‘business’. A MLM company has its own goodness where it is all about receiving products and service to end consumers. Though having a team is a requirement in the business world, the profit gained is on the goods sold by the team, not within the suspicious recruitment.

Weak Company Communication


One thing about a legitimate company is they will make sure you are well-informed and give solid training and support about the mechanics in their business. It has stated in the law what a MLM business should do to their members, including financial information and details about the compensation plans.

A scam business will care less about it as long as there is money in the basket. Should mlm software over your question or even rebuke you for doubting your trust in the company, it is best to be safe than sorry.

Fraudulent Advertisement

It is easier said than done to tell if the ‘job’ advertisement is real or not. Representatives will lure prospects by stating their MLM as a profession in their employment, when it is actually a business. Other ways that these ‘jobs’ will offer is the little job needed to gain money. As tempting as it is, you still need to put effort to make it work, and to say that there is little to none to do is suspicious as it is. Do not be deceived with the fraud if you want to keep your money safe and sound.

There are more than these that you should keep an eye on, such as expensive fees to enroll, ridiculous product claims, poor rating and so forth. Be very careful when it comes to this industry as you may be fooled too easily.


Written by Jason Hansen