BurnLounge MLM enjoined

"Buy 1 for yourself and get the chance to sell your friends and family 5 and get your downline started!" We examine the multi-level marketing industry, where only the people who come up with the ideas make any money, and everybody else is left unhappy, broke, and tired of reading scripts and selling overpriced vitamins and similarly worthless products. Includes Global Prosperity, Pinnacle Quest International, IRS Codebusters, Stratia, and other new Global Prosperity scams.

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BurnLounge MLM enjoined

Post by Lambkin » Sat Mar 31, 2012 2:41 pm

Court orders defendants to pay about $17m and forbids promotion of further scams.

http://www.ftc.gov/os/caselist/0623201/ ... eorder.pdf

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Re: BurnLounge MLM enjoined

Post by wserra » Sat Apr 21, 2012 1:14 pm

This order is another example of how the courts are ever more firmly insisting that sales figures can't include sales to distributors, rather than to ultimate non-distributor users. As the Court put it,
“sale of products or services to ultimate users” does not include sales to other participants or recruits or to the participants’ own accounts.
The rule was first established in Webster v. Omnitrition, 79 F.3d 776 (9th Cir. 1996), a case that MLM apologists fervently wish would disappear.

Why does this matter? In answer to the charge that, in joining an MLM, one is really paying for the "opportunity" to engage in endless-chain recruiting, MLMers will say, "Oh, no! Why, we sold 1.4 billion units of our SuperHyperJungleJuicer last year!" That figure is a little less impressive when you find out that distributors bought 1.39999999 billion units, of which 1.39999998 billion are still sitting in garages somewhere.
"A wise man proportions belief to the evidence."
- David Hume