Saturday, December 1, 2007

NEWS: Amway admits that the FTC is soft on multi-level marketing ethics

Original Source

Amway admits that the FTC is soft on multi-level marketing ethics
Posted Dec 1st 2007 3:40PM by Zac Bissonnette

Back in July, I wrote about network marketing giant Amway/Quixtar's self-imposed 120-day moratorium on recruiting in the United Kingdom, a response to a Department of Trade and Industry complaint against the company. Many critics charge that Amway is operating a thinly-veiled pyramid scheme, based on the same principles as the chain letter.

Well earlier in November, Amway blogged about its plans to return to the region, posting a memo that had been sent to directors and employees, and also forwarded to many of the company's United Kingdom distributors.

Here's where it gets interesting. Many people, myself included, have charged that the FTC is not doing enough to crack down on multi-level marketing companies using false and misleading recruiting tactics. based on the text of the memo, Amway seems to agree:

"The fact is, in the wake of this sobering experience, every one of us -- employees, IBOs, and others -- should renew our commitment to hold ourselves to the highest standards of behavior. The marketplace -- and in the UK, the government -- has made it clear that they expect no less. And when falling short of those standards exposes our company to such grave risk, there can no longer be any such thing as 'business as usual.'" (emphasis added)

In other words, the government of United Kingdom has made it clear that it will hold Amway to the highest standards of behavior -- but the United States has not followed the lead.

Perhaps Amway's massive political contributions have had something to do with that. it's a shame that our elected officials are putting the interests of special interest groups ahead of those of consumers. That's just business as usual in the land of the free, home of the brave.


Anonymous said...

Regarding the UK scene - The Scriven site has some great info:

..."In the old plan you could earn a bonus based on your group activity. That was the reward for building a network. But now you have to retail 200PV to 5 retail customers each month to receive a bonus. Your own personal volume based on self-use cannot be counted. Amway’s response to low sales due to over-priced products is to force ABOs to sell products to get a bonus on their group’s volume. The effect is a lot of people who have earned bonus for years (based on years of work) won’t get a bonus. How will this improve ABO profitability? And what happens to the unpaid bonus? Does it pass upline to the next person who qualifies for it? No, Amway keeps it!"

Anonymous said...
New post from Ron