As you probably know, Amway , Britt WorldWide , and Network 21 are currently involved in a dispute with the Department of Trade and Industry in the United Kingdom (see other posts on the situation here)
In order to gain more understanding of the issues, I’ve been studying the United Kingdom law about what they give the unfortunate name of “pyramid selling”. The relevant legislation is Statutory Instrument 1997 No. 3. Now, like most legislation, it’s not written in such a way as to make it easy for untrained folk to understand, however a “plain english” warning that is included in the legislation is quite straightforward. You’ll find this warning on the Amway Europe and Amway UK & Ireland websites as well as Amway literature and the literature and websites of virtually every MLM company with operations in the UK. It says –
1. It is illegal for a promoter or a participant in a trading scheme to persuade anyone to make a payment by promising benefits from getting others to join a scheme. Continue reading Amway UK & Ireland – Is this the problem?
Many critics like to claim that Amway and other MLMs are a “product based illegal pyramid scheme”. The claim is that they are illegal pyramid schemes because the majority of products are consumed by “members of the scheme” and not retail customers. It’s quite common for them to also claim that in the FTC vs Amway, the FTC declared Amway not an illegal pyramid scheme because of these retail customers. Continue reading MYTH: It’s a pyramid if most products are bought by IBOs
Is it dishonesty or just ignorance? If you search around the posts of critics of Amway and Quixtar on the internet, something you’ll see regularly is reference to something like “The 70% Retail Sales Rule”.
Here for example, on Pyramid Scheme Alert, the claim is made –
A 70% retail requirement level has been applied in various agreements between state Attorneys General offices and multi-level marketing companies charged with violating pyramid scheme statutes.
At least 70% of product must be sold at retail to consumers who are not also Amway distributors.
Continue reading MYTH: 70% Retail Sales Rule