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Amway-Quixtar Settles For 150 Million In The Face Of Accusations It Is Operating Pyramid Scheme

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Amway is the largest, oldest and best known representative of “multi-level marketing” (MLM). It is the most prominent member of the Direct Selling Association. This icon of “direct selling” just announced that it has agreed to pay restitution to consumers and reform costs estimated at over $150 million. The payments are in response to consumer accusations that Amway/Quixtar is operating an illegal pyramid scheme. The settlement is the largest in MLM history.

Source: Pyramid Scheme Alert

Direct Selling is a very familiar and popular pastime practiced by  many across the world and Barbados is no exception. Several prominent members in our society and some not so prominent have been accumulating significant wealth over the years by milking what some have always suspected to be a pyramid scheme.

It has come as no surprise to BU to read of a recent financial payment paid by Amway/Quixtar to allegedly quiet accusations by customers that it has been operating an illegal pyramid scheme. Although the matter was not ruled in a court, what other conclusion can one draw if a company felt compelled to offer the largest cash settlement in history for this type of business to its accusers?

Ordinarily consumers are encouraged to follow the legal doctrine of  caveat emptor. However when a company like Amway is allowed by the ‘system’ to become a trusted brand, the consumer is left exposed. It is interesting to note that in 1979 a Federal Trade Commission ruled that Amway did not* qualify to be a pyramid scheme. A read of the foregoing link suggest that Amway is ranked by Forbes as one of the largest private companies in the United States and by Deloitte as one of the largest retailers in the world. The fact that Amway has been able to operate under the radar for so long can be explained in the usual way, follow the money!

Amway is ranked as #68 in the 75 top corporate sponsors of Washington politicians, according to the investigative news magazine, Mother Jones. It ranks ahead of food giant Archer Daniels Midland, pharmaceutical behemoth Bristol Myers Squibb and just behind in ranking of Wal-mart, General Motors and oil magnate, Koch  Industries.

Laypersons will ask how is this company expected to operate business as usual. BU’s best advice to Barbadians is to follow the doctrine of ‘Let the buyer beware”.

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  1. David Avatar
    David

    A question which can be asked is how many companies are out there operating under the guise of respectability?

  2. Technician Avatar
    Technician

    *SMH*

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  4. iWatchya Avatar
    iWatchya

    Two Good Sites on MLM:
    http://www.mlmwatchdog.com/
    http://mlmsurvivor.com/

    A good book to read would be “Merchants of Deception”.

    These MLM schemes use sophisticated marketing techniques and group psychology to rope people in. The “diamond” members use the allure of having a so called “easy” life, with lots of wealth, as the hook to reel in the unsuspecting.

    I have been courted by many many MLM schemes in the past… even some ponzi schemes as well! All I can say is that information is power… don’t go to their meetings, because they have everything worked out to use group dynamics (peer pressure) to snare you.

    I hope that people will read this post and follow the links on MLM systems BEFORE they they ever get involved in them.

    I remember the last time that some MLM people came to my house… They used every psychological trick in the book (nearly had me), but I sat down and used a simple piece of paper to note everything that was said in the meeting and all that I wanted to ask them… When I called them back to ask simple business related questions, they suggested I come to a seminar / conference (which you had to pay for)…..

    All it is about it getting people onto that “hamster wheel”…

    Another point that people often miss is the destruction of relationships due to the pressure caused by MLM.

  5. David Avatar
    David

    @iWatchya

    The scary thing is that the so called big boys and girls are very active which has the effect of luring the ‘ordinary’ folks.

    BU is aware of some of the prominent people in Barbados involved , lawyers, doctors, accountants …

  6. 40acres and a mule.(formerly Zion) Avatar
    40acres and a mule.(formerly Zion)

    @David. In 2001 a friend of mine convince me to join Quixstar after a few meetings and promotion. I paid my fees and became an IBO( independent business owner) for the first few months I realised that this program was a big rip-off. I sold about $5000 dollars in two months and I got a royalty check of $12.oo. Mind you it takes a lot of work to sign people up and I also lost about $300 from one order. Every week these people have some convention in some cities and it is part of the whole scam for you to go and buy promotional materials. I cut my losses and run after 6 months.

  7. David Avatar
    David

    @40acres

    Good to hear you got out relatively unscathed, a fool and his money are soon parted. We live in a world where get rich schemes will become more and more attractive given our inclination to be materialistic. The thing about Amway is the solid reputation the company has garnered on Wall Street. Then again what can we say about Wall Street!

    Caveat Emptor!

  8. David Avatar
    David

    Ran a check using Google to see if Barbadians have been alerted to the Amway settlement which is actually old news.

    Came up with a negative.

    Amway has a big following in Barbados and in the interest of disclosure local media, in the business of disseminating news- should not feel inhibited to bring these kinds of stories, it is not sub judice!

  9. Anon Avatar
    Anon

    “Ran a check using Google to see if Barbadians have been alerted to the Amway settlement which is actually old news.”

    I also ran a search, and I don’t think this was reported NBC’s, the Faux’s, nor the CNN’s of this world.

    Interesting.

  10. David Avatar
    David

    @Anon

    Would Bloombery BusinessWeek do for you? Most of the other ‘leading’ wire services seem to have left the story alone.

  11. Bush Tea Avatar
    Bush Tea

    @ David

    Boss man, you see the world starting to fall apart and you worried ’bout some idiots who fall for obvious scams like Amway?
    You should be worried about the clear signs that we are at a watershed point in human history -where the scale of unfolding events portends to be of such biblical proportions as to make all of the regular issues on BU meaningless.

    Have you any idea what impact the new wave of political upheavals across the middle east will have on fuel prices? On Israel’s very existence? on global tensions? on the use of nuclear weapons? ….THIS YEAR??

    Have you any idea on the inevitable impact of the unprecedented flooding in the world’s flat-lands on food availability – far less prices? …..JUST NOW???

    ….man David don’t you feel that we need to hear from GP and those boys? The Bushman really want to hear from MME about his solutions from the scientists….

  12. David Avatar
    David

    Bush Tea

    You have had many asking about your whereabouts. GP is busy working on a project but assured the BU he has not resigned from his position…lol.

    Indeed BT these are troubling times.

  13. Bush Tea Avatar
    Bush Tea

    @ David
    LOL ..”many asking about your whereabouts…” what was that about David? a lynch mob led by the usual suspects I would guess….. LOL

    The Bush man was working on a big project too – related to the “troubling times”…..
    You must know by now that this definition of ‘the times’ is a matter of perspective.

    …Lets roll out the welcome mat….

  14. David Avatar
    David

    @BT

    With Egypt in the midst of a civil war their border has now become the proverbial sieve. Interesting times indeed.

  15. Mash Up & Buy Back Avatar
    Mash Up & Buy Back

    David

    Do you realise that they changed their name from Amway to Quiktar to fool those persons who were turned away from the Amway reputation back in the 80’s.

    I know sellers who denied it was Amway.

    This thing is a big sham.The cost of their products are higher than any similar products and the hard sell they pressure persons to join is disgusting.

  16. Hants Avatar
    Hants

    Glad you are back Bush Tea.

    The events unfolding around the world are very serious and could create another recession or even a “depression”.

    The golf courses may have to become farm land again and rab land turned into Orchards.

  17. David Avatar
    David

    @Mash up

    The puzzle is the prominent and upright citizens who have been educated ‘free’ with tax dollars who should be leading on this issue, instead they have surrendered to become part of the dupe.

  18. Bush Tea Avatar
    Bush Tea

    @ Hants

    Thanks.
    …not sure the bushman is ‘back’. Passing through maybe. …the times are too serious for ol’ talking…

  19. Hants Avatar
    Hants

    Bush Tea “times are too serious for ol’ talking”.

    Passing through is good enough.

    All my work is done on a computer so I have time to ole talk when I take a “work break”.
    BU is good therapy.lol

  20. BDs Hot Sauce Avatar
    BDs Hot Sauce

    Hm.

  21. maat Avatar
    maat

    Have you caught the relationship between the unfolding scams in capitalism and the “new” outlook on life and revolutions coming out of North Africa.

    What strikes me is the hypocrisy of the West, who have long supported regimes that are not democratic and then will turn against those regimes when the peoples stand up against them. America has been sending military aid to the Egyptian regime for a long time.

    People are not only becoming more aware of the corporate/government scams and brainwashing, they are also showing their displeasure through demonstrations.

    This is indeed the dawning of a new age

    Peace

  22. Straight talk Avatar
    Straight talk

    This unrest, starting proper in Greece, then Tunisia now Egypt, Gabon, Ivory Coast next maybe Portugal, Spain, Lithuania and Estonia, perhaps even Ireland and Italy.

    It seems reminiscent of 1789 Europe, and the people are now finally waking up to the inequitable reality an unregulated capitalist democracy has brought about.

    Although designed initially to give power to the people, it has gradually been traduced by corrupt politicians and has inevitably turned the full revolution whereas the power again lies with the moneyed class and the rabble suck salt.

    We have even fatter bankers and ever thinner voters.

    The defenders of the free world are exposed as their crooked placemen are ousted, democracy or corporatism who can they pretend to back.

    Their constitution or the corrupt reality.

    Where is the moral justification for regime change when the masses on the street are denied their voice.

    Obama’s “We are change” will be sorely tested as his feet are held to the fire, with his puppets falling and the people demanding real change which will probably not meet with his, or his backers’ approval.

    This grassfire blazing in the Africa has the possibility of inflaming the whole world as the true implications of the financial crimes impact globally.

  23. Terence M Blackett Avatar
    Terence M Blackett

    @ BUSHMAN

    You should be worried about the clear signs that we are at a watershed point in human history -where the scale of unfolding events portends to be of such biblical proportions as to make all of the regular issues on BU meaningless…Have you any idea what impact the new wave of political upheavals across the middle east will have on fuel prices? On Israel’s very existence? on global tensions? on the use of nuclear weapons? ….THIS YEAR? Have you any idea on the inevitable impact of the unprecedented flooding in the world’s flat-lands on food availability – far less prices? …..JUST NOW???

    MAN BUSHTEA, STOP DRINKIN’ MA KOOLAID…

  24. Terence M Blackett Avatar
    Terence M Blackett

    @ DAVID

    I know half dozen Bajans PERSONALLY* who have made vast sums of money out of Network Marketing and still swear by it…You can tell who they are by the cars they drive and the houses they live in and there is no clear correlation that money was earned in BIM*…

    My wife & I were involved in AMWAY as far back as the early 1980’s…

    Since then, we have jumped from one program to another to ONE* of the most recent being (a program that was also big in Barbados which my wife & I were partly responsible for circulating around the country) Traverus Travel & Triunity International….

    There are to date some [20] different programs operating on the island where some of them are TRUE* Ponzi schemes where you maximize and leverage Cash US$$$ every month through online investment clubs and other dodgy (almost illegal) business practices…

    One prominent Bajan MLMer who have been in this vein since the 1980 is still banking his money offshore where not a penny is seen by the Barbados government tax system… So for those who feel to trade in foreign exchange is the domain of DRUG-DEALERS & CONTRABANDS PROFITEERS, they are sadly misguided and deluded…

    There’s so much I could share but for the sake of privacy, confidentiality and the protection of specific interests, I would desist at this time less privileged info falls into the wrong hands….

    Things happen right up under the noses of law enforcement entities and other institutions and they are CLUELESS* about the power of the INTERNET* and how computers have changed all our lives…

    @ BUSHMAN

    Yes my dear brother – you are so RIGHT!!!

    AS THE WORLD TURNS – we welcome the dawn of a new day as societies crumble and fall to be reborn in new and challenging ways…

    All this BRUV* has been as a result of this NEW INFORMATION AGE!!!

    As state sovereignty disappears down the abyss – enter the “BRAVE NEW WORLD” of our own making which I am not sure we are gonna’ like too much – but you know the ‘ole cliche: “how you make your bed up, is how you lay down in it”…

    However it pans out – it’s a great time to be alive!!!

  25. BAFBFP Avatar
    BAFBFP

    My only concern is the acute nature in which my money is losing value EVERY DAY and the ridiculous reasons that are being thrown up to explain it all away …!

  26. Barbadians Affected By The Collaspe Of Another Ponzi Scam, CLUB ASTERIA |

    […] January 2011 BU exposed that Amway-Quixtar had Settled for 150 Million in the face of accusations it operated a pyramid scheme. It is no secret Barbadians from across the social spectrum participate in these Multi-level […]

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