Last week I had no idea what a MLM is this week I can’t stand MLMs. What are those? Multi-Level-Marketing companies. They come across as reputable companies that profit off of recruiting members for a fee. MLMs are everywhere in almost every industry, it’s just a matter of time before they pop and get exposed for what they truly are – fraudsters.

AdvoCare International, a multi-level marketing company known for endorsements by professional athletes and other celebrities of diet supplements and energy drinks, now has to pay the government $150 million to settle claims it's an illegal pyramid scheme where most of those selling its products earned nothing or lost money.

This company was running around telling consumers that they could “earn unlimited income, attain financial freedom, and quit their regular job," according to the FTC. But instead, AdvoCare pressured sellers to bring in new distributors to purchase large amounts of the supplement products.

This is typical MLM scheme, recruit recruit recruit. These new recruits were charged $59 to become AdvoCare distributors, at which point they could potentially earn more if they became "advisers" by spending $1,200 to $2,400 on its products, the FTC said. These defendants weren’t even making $1,000 a year, more like $250 a year!

Legitimate businesses make money by selling products and services, but it's an illegal pyramid when it "depends on recruitments to payout" and involves overblown income claims, Andrew Smith, the FTC's consumer protection bureau director, said in a news conference. AdvoCare denies it’s a pyramid scheme. No surprise there.

Have you been duped by an MLM or Pyramid Scheme? Know the signs early!

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