I am a Judgment Broker that writes often. In my job, I communicate with many judgment owners around the country. I see countless judgments against MLMs that were sued, by the people they scammed.
Most of the judgments I have seen against MLMs will never be recovered. Many were served by publication (the weakest way to serve a lawsuit) because the MLMs hid their real locations. Also, many MLMs were sued only by their company name, that disappeared or folded right after they were sued.
In this article, I list ten simple tests you can do, to research a MLM, before you sign up with them. While not foolproof, these ten tests are easy, and may help predict if a MLM is likely to be a scam:
1) First, many MLMs are scams in one way or another. The best of them scams you by encouraging you to think it will be easy money working or selling a MLM’s product or service. The worst MLMs rip you off. No matter how good a MLM is, everything really depends on you and your ability to sell (often shoddy goods or services).
2) Is their product or service in any way unique, real, needed, a bargain, or what customers want? Not many MLMs can pass this test. A small percentage of people can succeed even when a MLM fails this test, however most people will have little or no success, unless a MLM passes this test.
3) Can you earn money without recruiting others to sell for you? If a MLM pays you only for recruiting others, that can be a warning sign they do not have a real product.
4) Does the MLM charge you too much to sign up? If their signup fee does not include anything of value, beware.
5) Another warning sign is, do they promise that you will become rich quickly?
6) Do they tell you what their products are? If a MLM’s only products are brochures, videos, presentations, and web sites, beware.
7) Do they tell you anyone can succeed? In the real world, a combination of luck, funding, skill, and hard work, is usually required.
8) Does a web search for the MLM show only good reviews? If so, beware of fake reviews from shills. If there are bad reviews, read them, and be aware that there are two sides to most stories.
9) Do they have a street address, a phone number to call, and do they respond to emails? There are many good companies that do all three. It is a good sign if they have at least two out of three.
10) How secretive are they? Is their domain name ownership (whois: domainname.com) private, or by a proxy service? Are they based in Florida? Do they have any mailing address at all? The more secretive a MLM or any company is, the more careful you should be when dealing with them.