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The fundamental question that MLM cannot answer is: If this product or service is so great, then why isn't it being sold through the customary marketing system that has proven to work for thousands of years? Why does it need to resort to a "special marketing" scheme like an MLM? Why does everyone need to be so inexperienced at marketing this? Is the product just a thin cover for what is really a pyramid scheme of exploiting others?
CFR cannot tell you whether a particular multilevel marketing plan is legal. Nor can it give you advice about whether to join such a plan. You must make that decision yourself. However, the Federal Trade Commission (FTC) suggests that you use common sense, and consider these seven tips (below) when you make your decision.
It is hoped that by clearly pointing out what is wrong with Multi-Level Marketing, that many might be spared the inherent and associative pitfalls by avoiding the practice.
As well, for those who insist on practicing MLM, it is hoped that this analysis will serve as a handy framework of problem areas to be avoided if and where this is possible.
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a FTC Fraud Reporting or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.