Multilevel Marketing

What is it?

Multilevel marketing (MLM) companies, which often operate as illegal pyramid schemes, typically attempt to persuade potential participants that they will earn large profits as a purportedly independent business. But, for most MLM recruits, the promised profits never materialize. Instead, MLMs frequently coerce recruits into spending their own money on setup costs, fees, and product purchases—while their compensation structure virtually ensures they can only make money by bringing new recruits into the scheme. Victims of MLM schemes can be trapped for years under extraordinary financial pressures, vulnerable to abusive practices, and without fair pay. MLMs financially devastate tens of thousands of Americans each year, with particularly harsh consequences for women and people of color.