Fox News Exposé on Fortune Hi Tech Marketing

Written by TRACY on . Posted in Failure in MLM, Other MLMs, Videos

Fox News in Los Angeles did an exposé on multi-level marketing company Fortune Hi Tech Marketing. This video exposes the truth behind the company: operating like a pyramid scheme, dismal failure rates, false earnings representations, few making any money, broken promises, FHTM lying about its relationship with big name companies.

Fox interviewed Pink Truth owner Tracy Coenen for their story, but you should note that the comments they used in this video were comments she made about MLM in general, not specifically FHTM.

Total Vindication in Malicious Lawsuit Brought by Medifast and its MLM Division Take Shape For Life

Written by TRACY on . Posted in Other MLMs

Written by Tracy Coenen

More than a year ago, Medifast Inc. (NYSE:MED) sued me, my company Sequence Inc, Barry Minkow, his company Fraud Discovery Institute, Robert FitzPatrick, William Lobdell, and an anonymous message board poster for defamation. Barry Minkow and FDI initiated an investigation of the company in 2008, and the rest of us researched the company and contributed our opinions to FDI’s reports on the company and its multi-level marketing division Take Shape For Life (TSFL).

We criticized the company and its MLM business model. We expressed negative opinions about the disclosures Medifast makes about this “business opportunity.” I dared to suggest that Medifast might be a weight loss pyramid scheme.

A year after the first report on the company was released by FDI, Medifast sued us for $270 million, alleging defamation, criminal conspiracy, unfair business practices, and market manipulation. The defendants each filed anti-SLAPP motions, basically saying that Medifast was attempting to silence critics in violation of our First Amendment rights.

It was clear to me that Medifast was trying to intimidate anyone who might dare to criticize the company. Give a negative opinion of Medifast and TSFL, and you too could be subject to a malicious multi-million dollar lawsuit filed by a company with deep pockets. And don’t expect those suing you to play fair. Medifast took the opportunity to blatantly lie to the court on multiple occasions.

The defendants each filed anti-SLAPP motions in the case, requiring the defendants to prove that their activity is protected conduct (such as free speech protected by the First Amendment), and requiring the plaintiff to demonstrate a probability of prevailing on their claims.

After months of discovery and hundreds of thousands of dollars in legal fees, the process ended with oral arguments in front of Judge Janis Sammartino. In a final ruling issued today, the judge granted my anti-SLAPP motion and I am dismissed from the case.

What does this mean? The truth has prevailed. Total vindication for Tracy Coenen in the malicious lawsuit brought by Medifast Inc. The judge ruled that I did not defame Medifast, and now Medifast is on the hook for all of my legal fees, which are in the hundreds of thousands of dollars. It should be noted that Bill Lobdell, Barry Minkow, ibzreporting.com, and Fraud Discovery Institute were all dismissed from the case as well. Medifast is allowed to proceed against Robert FitzPatrick on the issue of libel per se.

While it may be true that Barry Minkow has engaged in some bad acts, I did not know about any of them and I did not participate in any of them. I was simply a consultant doing work for a client, and I stand behind the work I did. While Barry may have lied to the court, fabricated documentation, destroyed evidence, concealed witnesses, and intentionally hid information, I was not involved in any of those bad acts and did not know that they were occurring. I never engaged in any misconduct in any litigation, and I was not involved in the concealment or destruction of any evidence.

The court has ruled in the Medifast case, and I have been exonerated. It has taken a long time and a lot of money, but the judge has made it clear that I did not defame Medifast, and the company was not justified in bringing suit against me.

Is Avon Just Another Pyramid Scheme?

Written by TRACY on . Posted in Other MLMs

avon callingI’ve long felt that Avon is really no better than any other MLM out there which pushes recruiting and building the pyramid. For years, Avon did have more of a focus on retail sales, but the profits to be made from doing so were very low because the products have such a low pricepoint. As Avon lost market share and watched other MLMs grow exponentially, management realized the key was recruiting.

Over the last 5 years or more, Avon has shifted to become more of a recruiting-focused operation, with inventory frontloading a new and exciting part of the company. And so Avon is just as damaging as the rest of the MLMs I oppose. One of our readers provides this insider’s perspective on the business of Avon:

Tupperware Sucks Too

Written by TRACY on . Posted in Other MLMs

It’s easy for us to forget that other MLMs suck just as bad as Mary Kay. I haven’t yet found one that isn’t a basic recruiting scheme, with the “real” money given out for recruiting (since the companies can’t stay alive without a constant stream of new blood), yet with something on the order of 99% never turning a profit.

Here’s part of a story about a woman quitting Tupperware who has many of the same complaints former Mary Kay consultants do. (At least MK women don’t have to pay additional money for a customer who wants to exchange products, though.)

Weekenders Closing: Reps… Stay Away from Mary Kay!

Written by TRACY on . Posted in Other MLMs

 

The big pink vultures are out in force. They smell fresh blood…. the blood of Weekenders representatives who are left in the cold as the company shuts its doors.

 

What does this say about Mary Kay? Doesn't it scream "opportunism" and "desperation"?

 

Please, women from Weekenders, consider the closing of your company to be Divine Intervention. Take some time away from multi-level marketing. Don't run to the nearest Mary Kay lady who just wants to get her hand into your pocketbook.

 

Take a look at how Mary Kay women are targeting these victims:

 

One Mary Kay "top" director:

Another opportunity to help others with our fantastic income opportunity. …

I am so proud that we are with the PREMIER Company in the Land — AND that our Corporation is 100% DEBT FREE! Love ******

 

Another top director in Mary Kay:

WOW- just called the # for Weekenders and confirmed it for myself. Weekenders and it's affiliated companies have ceased all operations as of June 9, 2008.

Another director:

What an opportunity for us to help those ladies be welcomed into our #1 Company!!

 

Like ***** said, get out your business cards and start networking.

 

We have THE Opportunity of the Land! Thank you Mary Kay Ash!

Yet another Mary Kay director:

At my networking meeting this AM was Kristy – an elite exec director from Weekenders Clothing Line. She has over 400 women in her area and is just back from a 2 week all expense paid company vacation to Puerto Rico (like our top director trip)…

 

Here’s the scoop. As of Monday, June 9 – yesterday. Weekenders closed their doors!!! NO warning – just out of business. She is owed a $6000 commission which will not be coming. Just like that the business that she built over 18 years is gone.

 

Of course, I’ll be talking to her about MK and asked if I could talk with her downlines too. Who do you know that sells (sold) Weekenders clothes?

 

Also, Holly said that Home Interiors is filing for bankruptcy!!!

 

Get out those networking cards.

 

These are women entrepreneurs looking to fill their budgets with NEW money since their source is gone. They already have a clientele. What an easy switch to Mary Kay Cosmetics.

 

In this economy it’s all about value for the dollar and selling something that is consumable!!! Yep, we’re still in the right place at the right time~again.

From One MLM Scam (Mary Kay) to an Even Worse MLM Scam (Isagenix)

Written by TRACY on . Posted in Other MLMs

The story of Robin Blackmon Dunda broke in the early days of Pink Truth (known then as Mary Kay Sucks). She was unceremoniously booted from Mary Kay with a 30-day termination letter . Her Mary Kay career came to an end as she was approaching the status of National Sales Director.

Her mother, Joann Blackmon was a NSD at the time but couldn’t talk Mary Kay out of the termination. She even rounded up people who apparently approached corporate and asked them to reconsider the termination.

Tupperware: Same MLM, Different Name

Written by TRACY on . Posted in Other MLMs

Written by mkdv24

Tupperware. Need I say more? Yes, my friends – Tupperware is an MLM, just like Mary Kay Cosmetics.

Tupperware has been around for 40 years, and it started off as one of the first direct sales home based businesses in America. Today, Tupperware is not only sold by its home based sales force, but it is also sold at kiosks in the mall, and you can direct buy from the Tupperware website (and never have to contact a consultant).

Cookie Lee shows some love to its consultants (No, not really.)

Written by TRACY on . Posted in Other MLMs

Recently Cookie Lee (jewelry MLM) has had a lot of problems, including apparently major corporate downsizing and exodus of consultants. The situation has gotten so dire, that many are wondering if the company is going under.

In comes Fashion Paramedic. She’s a Pink Truth friend, and she’s a former Cookie Lee consultant … well, actually a Cooke Lee consultant who pretty much quit, but then got terminated, and then was unterminated.

She wrote about the problems and questions surrounding Cookie Lee, including:

My inbox was HOT over the weekend with questions and concerns about Cookie Lee (CL). Rumors are rampant about CL’s financial stability, layoffs at the company, the CL lawsuit, and the number of consultants that seem to be quitting the business and sending their jewelry back for a refund. While a few of you made it clear that you would be concerned for me should I post anything about what I’ve read and heard, I would be remiss NOT to share what I could within certain limits.

Several of you asked whether or not CL (the actual company) is for sale. While I can’t confirm that, I did find that their building was for sale as of June 9, 2008. I did a Google search for the building’s address and found this link to the CBRE Website Listing. There is also a “For Lease” listing as well.

Now, why the building is for lease/sale is unknown to me. Maybe they are moving. Maybe they don’t need as much space as they used to, or need more space than they have. I just know that the building was at one time listed for both sale and lease.

There has also been talk at message boards and questions posed to me about the quality of CL’s jewelry, layoffs at CL corporate, and consultants resigning and returning their jewelry at a rate that is higher than normal. I’d like to first say that message boards — while they are fun for gossip and a good way to connect with others — aren’t exactly filled with fact. I’d normally dismiss talk at message boards to be nothing but “heresay.” But, when I see it at more than one board, hear it from more than one source, and receive the same questions more than once in my inbox, I tend to think that there may be some truth behind the rumors.

[snip]

IF YOU ARE CONSIDERING JOINING COOKIE LEE, my advice to you is to HOLD OFF. Let your consultant know that you’ve got some concerns about CL’s financial stability and that you’re not hot on the idea of joining a company and putting work into a business that may not be around in a year. That doesn’t mean avoid CL altogether — instead of joining, you can still be a really good hostess for your consultant and earn free and discounted jewelry for yourself in the process.

I am crossing my fingers in hope that the executive- and director-level consultants are completely in the dark about this. Right now, hundreds of them are planning summer retreats with their units and meet-ups at convention this August. They have smiles on their faces as they tell would-be consultants that Cookie Lee is the best direct sales company in the nation. They continue to give motivation to their current consultants to reach their goals and take their business to the next level.

But, it would be absolutely shameful to find out that they DID know something, still continued to recruit people into the business, encouraged them to buy jewelry and recruit even MORE people, and then have it all collapse because they built their hopes on a foundation of sand.

THAT’S what I’m hoping to prevent by sharing what I know.

Naturally, any such discussion of “negative” aspects of Cookie Lee is verboten. Fashion Paramedic began receiving emails from consultants, some of them upset that she’d dare write about the company. After all, the people higher on the food chain still need to recruit and frontload, and any discussion of the company’s financial difficulties and potential closure might impact that!

And the company wasn’t too pleased either. They terminated her for violating this provision in their policies and procedures manual:

5.3 – Nondisparagement

Cookie Lee wants to provide its Independent Consultants with the best products, compensation plan and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the Consultant Care Department. Remember, to best serve you, we must hear from you! While Cookie Lee welcomes constructive input, negative comments and remarks made in the field by Consultants about the Company, its products or Compensation Plan serve no purpose other than to sour the enthusiasm of other Cookie Lee Consultants. For this reason, and to set the proper example for their Downline, Consultants must not disparage, demean or make negative remarks about Cookie Lee, other Cookie Lee Consultants, Cookie Lee’s products, the Marketing and Compensation Plan or Cookie Lee’s directors, officers or employees.

And then after writing about being terminated , Fashion Paramedic was unterminated. Who can keep up? 

I’m so proud of Fashion Paramedic for helping to get the word out about Cookie Lee. Just like Mary Kay, it sounds like the company is tight-lipped about what’s going on… to the detriment of consultants.

Welcome to the club, sister. You are forever more a negative person who should be avoided for daring to tell the truth about a multi-level marketing company. Prepare to be called a dream stealer and a lazy “looser” who just couldn’t hack it in “direct sales.” Much name-calling is soon to be headed your way, and we love you for it. Rock on…

Shop To Earn: Is it a scam or a legitimate business?

Written by TRACY on . Posted in Other MLMs

There's a new multi-level marketing company on the scene, with a not-so-new concept. The idea is to capitalize on an increased instance of online shopping and create a great big network of distributors who each receive a cut of the action. This isn't new. MyPowerMall, TeamNational, and Quixtar have pushed the same concept, encouraging potential recruits to "shop from themselves" and save on their purchases.

In my opinion, all of these programs are a waste of time and money. You can often find better deals on your purchases outside their systems, and you don't have to pay a signup fee or meet some silly minimum purchasing requirements.

ShopToEarn is a typical MLM, in which recruiting is the real focus. I don't believe shopping is the true focus of the company. Just like Mary Kay isn't really focused on selling cosmetics and Usana isn't really focused on selling vitamins… these companies are really focused on recruiting new distributors into the plan.

 Here's why I think ShopToEarn should be avoided by customers:

Get the same thing for free elsewhere: You can get money back on items you’re already going to shop for for free on a variety of sites. One example is Jellyfish, which rebates part of every purchase you make through the site. No fees. No catches. No recruiting.

Cost of Shop To Earn is too high: To become a “website owner” you must pay $349, or to become just a “business builder” it’s $99. To become a “broker” which is a website owner and business builder, it’s $448. There is also an annual renewal fee that is charged, which is $69 for a website owner or business builder, or $119 for a broker.

You could duplicate the system for free: ShopToEarn is basically a huge collection of affiliate links. When you want to buy something, you click on an icon, which takes you to the particular retailer’s site. Shop to Earn is paid a commission each time you shop using those links to the retailers, and you are given part of that money. You could actually get access to the exact same links by creating your own website and signing up through LinkShare, Commission Junction, and ConnectCommerce.

You can make more from shopping on your own: Once you set up your affiliate account with the companies listed above, you can shop with them and get all the money generated by shopping. Most of these affiliate links offer payments in the range of 1% to 10% of purchases, with the most typical payments being 2% to 4%. ShopToEarn only gives to associates up to half of the money, and they only reach half if they meet all the requirements of the complicated commission pay plan. The actual money given back to associates is likely far less than half of the total collected from the affiliate links.

Don't be mislead by the high percentages quoted: Shop to Earn says you can make up to 30% back on your online purchases, but those payouts don’t occur often. The payouts from the retailers rarely come close to that, even with volume incentives or bonus programs.

Most won't earn back their investment by shopping: How can I confidently state my opinion that the real name of the game for ShopToEarn is recruiting rather than shopping? Simple mathematics. Suppose a member makes 5% back on their purchases. That member would have to purchase $9,000 of merchandise to even earn back the initial investment of $450.

And I’m not even convinced that most people are even making an average of 5%. I bet they're making a much smaller percentage. Those figures demonstrate that without recruiting new people into the company, the average consumer is probably unlikely to make their initial investment back.

Is it a pyramid scheme? Multi-level marketing companies craft their plans very carefully so as to avoid being deemed a pyramid scheme. If there is a legitimate looking product or service involved, they can probably successfully claim it's not a pyramid scheme. Yet that doesn't mean the structure of the recruits and downline doesn't resemble a pyramid.

There is continuous recruiting, and the bottom of the pyramid shape is ever-expanding. The people at the bottom can only hope that they can find enough new marks to recoup their original investment. Check out this graphic from the company itself, and see if you think it looks like a pyramid or not.

Better deals elsewhere: You can probably find some really good deals through the Shop To Earn affiliates. But you will be restricted. Not all retailers are invovled in this program, and if you find a better deal with a non-affiliated company, you can't take advantage of that deal and get your ShopToEarn kicker. How much of a deal are you getting if you can't have full control overy the brands you use?

You don't really own a business: You don’t really own a business when you sign up with ShoptoEarn. Heck, you don’t own anything with them, other than your login and password. You can build a downline, but you don’t own them either. The company really owns them, and you operate as long as they allow you to. When the company goes away, so does your “business.”

Need to qualify to get commissions: You can get commissions and bonuses from your Shop To Earn downline, but as with any MLM, there are lots of catches and confusing details to the pay plan. As with all MLMs, you must “qualify” to get commissions. You don’t just get them automatically when someone you recruited buys something. You initially need 3 recruits to purchase the website owner option and generate $100 of “monthly volume” to even qualify to get a commission.

Then there are the complicated bonuses that you could get depending on your number of recruits and and their purchases. Check out these two illustrations of the commission structure here and here.

Problems with earnings claims: Claims of earnings of thousands of dollars a month with MLM companies are normal. That’s how they entice you into the scheme. Sometimes these earnings are real. But the people getting the big checks are far less than 1% of all the people involved in the scheme, and that check has been generated based upon massive recruiting of new marks.

Your chances of making that much money are slim to none. And the claims that all you have to do is work hard and you’ll make that much money too? Not true! Millions of Americans have invested significant time and money into MLM ventures and have lost money because of them. Your odds of success in an MLM are extremely low, and unlike real businesses, your hard work isn’t a good predictor of how much money you’ll make.

MLM recruiters tell you those people failed because they were lazy, didn’t want to work hard, didn’t really want to make any money, or just wanted a get-rich-quick scheme. Those are nice phrases to explain away the high failure rates in multi-level marketing schemes, but they’re just not true. The truth is that the structure of MLMs ensures that the vast majority of people will fail to turn a profit.

Other similar programs: MyPowerMall initially looks like a better option than ShoptoEarn because there is no sign-up fee. However, there is a catch, of course. You must buy at least one thing a month to keep your store with MyPowerMall. They cleverly call this program “One Thing.” If you don’t make a purchase during a month, you lose your store. (Well, the owner of the company gets your store and anyone who thought they were shopping with you is now shopping with her!)

Team National uses a similar concept as Shop To Earn and My Power Mall, but it is much more expensive to sign up. Depending on who you believe, the TN membership costs between $795 and $2,195. They call what you’re “buying” a “benefits package.” Apparently jewelry and insurance are some of the more prominent offerings of TeamNational, but there are other things available as well.

It’s going to take a lot of recruiting and buying to earn your money back with Team National. And as with the other shopping sites, consumers often find that they can get better deals elsewhere on their purchases, so they’d actually be losing money if they bought via TeamNational.

What’s the bottom line? In my opinion, ShopToEarn, MyPowerMall, and TeamNational are a waste of time and money. You’re not really building a business with them, you’re just participating in a grand scheme to recruit as many new victims as possible. The amount of money you’ll save by shopping through these sites is questionable at best, and in many cases, I think you’ll actually lose money. Avoid these companies like the plague.

Weekenders Leaders Trying to Move Their Teams to New Companies

Written by TRACY on . Posted in Other MLMs

 

Predators don't just exist in Mary Kay. The Weekenders women who find themselves without a downline since the company has closed its doors are looking to get more money out of those downlines. What better way than to re-recruit your downline into a new company??? 

Dear Weekenders Friends,

 

Super managers Nancy L, Debb K, Maryjane R & Andrea N have been working tirelessly to strike a tremendous deal with some incredible direct sale companies.

 

Team Leaders of those four Units will be receiving the final details of the offers this evening.

 

 

There is a clothing company, a bedding and bath company and a jewelry company involved in this offer.  These three companies were chosen with you and your customers in mind.

 

If you were a part of Nancy, Debb, Maryjane or Andrea's Unit, please e-mail your Team Leader to let her know you are interested in learning about these offers.  If your Team Leader is choosing to take another direction, please contact your appropriate Manager.

 

If you were a part of another fine Unit, I would suggest you contact your former Manager and/or Team Leader and ask if they are interested in knowing about this offer or if they have anything they are suggesting for the Coordinators in your former units.

 

If you would like, please e-mail me with your name, e-mail & phone along with the best time to contact you and I would be happy to share with you the offerings that you would not be able to receive elsewhere.

 

I apologize for being so cryptic, but in fairness to all of us, the specific information is to be released simultaneously after the Team Leader call this evening.

 

Please share this information with your other Weekenders friends!

I guess trying to move your whole team under you is a logical step. They sure don't want to lose these women all together. It just all seems so predatory to me.