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The Scam That Keeps on Taking

MLMs are not some get-rich-quick scheme that only the gullible or lazy get into. If they were, they would have died out long ago along with fraudulent preachers and snake oil salesmen. Click To Tweet

Nita was a new mother when she came across the message on Facebook that got her into multi-level marketing. An old friend from high school said that she had been selling supplements and vitamins for a few months and was ready to quit her full-time job to focus on her side gig. For a single mother living in Nairobi with few prospects, the message was a sign that Nita’s struggle was at an end.

She got in touch with the company selling the supplements – which included a slimming tea and a skin ‘rejuvenation’ gel – through the same Facebook friend. The friend was now her sponsor, and Nita would start at the bottom of the tiered company structure.

You may be familiar with this type of business model (read: scam). Multi-level actually means tiered hierarchy or simply, structured like a pyramid. New recruits like Nita go on the bottom and make up the highest number of people in the organization. Once she recruits a specified number of salespeople, she moves up in the pyramid and so does her old sponsor. At the very top are a handful of ‘diamond level’ people to whom most of the money made by the pyramid goes.

Now that we are on the subject of money, let’s talk about how the money works. Nita pays a fee, hers was called a stock fee (justified as a deposit for inventory) but it goes by many names. The money is attributed to her sponsor and that is added to a goal amount that each member must reach in order to get to the next level. The sponsor keeps some of the money but the rest of it goes to her sponsor and that sponsor gives to her sponsor and so on until it gets to the very top.

At first, Nita thought her primary job was to sell the supplements and vitamins. She posted on Facebook walls for local businesses, she reached out to friends, colleagues and families, she even attended conferences where she could learn to sell better. This was a chance to fulfil a life long dream of being her own boss and taking care of her baby at the same time. But customers were slow to come and no matter how hard she tried she could not breakthrough. The products were expensive, no doubt about it. The company claimed that this was because the special formulas they used produced better, sometimes miraculous, results. Some products came just short of claiming cures for diabetes, IBS, high blood pressure and kidney failure. No one was buying it and Nita started to wonder whether she had made a terrible choice.

“I talked to my sponsor about it and she told me that sales took a while to pick up. While I waited, she suggested that I start finding recruits of my own.” Nita says.

This is the singular defining characteristic of a pyramid scheme. The money does not come from product sales, it comes from recruits. It comes from the exorbitant fees charged to attend conferences, buy books and get a one-on-one meeting with ‘diamond’ level elites.

This is where she should have left but Nita, like many of us, held on until it was too late. She started reaching out to friends on Facebook, members of her Chama and her prayer group in church. She sold them the same dream that her sponsor sold to her.

“Some people took 18 months to get to the upper levels. At least that is what they told me.”

The day came when Nita sat in her small 1 bed flat, surrounded by boxes of product she would never sell, and gave up. She was tens of thousands in debt, her rent was late and on the verge of a mental breakdown. I asked her why she let it get so bad.

“I was ashamed.”

She had recruited people, not many but enough. She had told her parents about the new business she was going into. She had convinced people she cared about to make the same terrible mistake as she had. How could she look them in the face and say that she was conned, lied to, played for a fool?

Still, she cut her losses and moved back in with her parents. She still hopes to start a business one day, a real one this time. But until then, all she can do is recover.

MLMs are not some get-rich-quick scheme that only the gullible or lazy get into. If they were, they would have died out long ago along with fraudulent preachers and snake oil salesmen. They are actively harmful organizations and they must be exposed for the sake of us all.

Joy Matiri

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2 responses to “The Scam That Keeps on Taking”

  1. Kevin Doyle says:

    Don’t be shy….name the MLM/Ponzi scheme that is most prevalent in Kenya today: CROWD-1

  2. 492481 154253Lovely sharp post. Never considered that it was that effortless. Praises to you! 505705

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