Norwegian consumer protection laws are based on “EU Unfair Commercial Practice Directive” from 2004/2005, which means the laws are almost simular in all European countries. Most western countries have similar laws, and similar definitions of “promotional pyramids” or “pyramid-like sales scheme” – the recruit-driven sales model.

All “customers” of Wealth Masters International are distributors themselves. They didn’t have any “real customers” in Norway. All “customers” bought the income opportunity instead of the products/services. The “real product” is the income opportunity, and the other products are only attached to the income opportunity. You can easily replace or change the products without changing the scheme.

Legal MLM always have a number of “real customers” or “end users”, people who buy the products / services instead of the opportunity. Income are primarily created from sales, instead of recruiting or selling “positions” / “commission levels”. This applies both to the consultants and to the company itself.

The DSA (Direct Sales Association) in Norway probably supports the decision. At least they have been very quiet so far.

“When you have a close look at the above points you can see that its a stacked deck. No MLM company could hope to beat an accusation of pyramid selling based on the above criteria”

If this is the case, then ALL MLM-companies (which fulfills the listed criteria), without exception, are Pyramid-schemes.

Thanks for the confirmation.

What about a MLM company with nutritional products? They have products which are good and people want to buy them. However, if they join as an independent partner in the company where they buy products and they promote the products and business opportunity to other people, they will earn commision on the sale in the organisation they build up. They do a job ( promoting) and they sell products for the company. They also help other people to do this, teach them and follow up with the reps. They teach other peole to do the same. Should this not be allow? What is wrong with that?

Products are moved all the time, but the way the company is marketing and selling their products is not simmilar to the tradistionell stores… are they doing something wrong?

And if you mean yes, why is this wrong? Is it because it`s only the rich people and companies that shall become richer with not getting any competition from the MLM companies where everybody who want it can start and run a business? Who is it that want to have the control here?

What about stock traiding? What about the incurance companies who promis and seldom payout money when you have the rights for a payment? In these companies huge amounts of money are cheated from people. In a MLM people can get an opportunity to make money to live a good life. Is this so wrong?
And who have the right to decide people are not allow to partisipate in a business like this? It`s not gaming! However gaming which distroys many peoples life is allow…something is very wrong in the way some people and the goverment in EU and Norway think!

I agree that the criterias are a stacked deck. Point 2 and 3 looks very similar

The 4 criteria:
1. Pyramid structure. This applies to the recruitment system, where consultants recruit new consultants in an endless stream. They don’t handle “centralized” recruitment schemes like Ponzi-schemes, where all participants are recruited by the company itself. Ponzi-schemes are handled by the police. Gaming Board is only an administrative department.
2. Payment. This means that you pay to participate, either directly or indirectly (overprized products or services). It looks very similar to point 3, so it seems to be unnecessary?
3. Payment. The payment is necessary to earn commissions. It’s a close relation between payment and commission level. You simply pay for the opportunity to earn income, by recruiting others into the scheme.
4. Enrollment vs. retail sale. WMI had no retail sale at all, except for some copies of “The Conspiracy Against Your Money”. All their “sales” were recruitment of new consultants, and recruitment of existing consultants into higher commission levels. They basically sell an income opportunity, with som products or services attached to the opportunity.

Recruitment:
They need recruitment in all kinds of business, both in MLM and “brick and mortar”. In a promotional pyramid the recruitment will be the main source of income. In network marketing like a bookclub the books are the main reason to participate, and the participants usually gets paid in books if they recruit friends. You usually join a bookclub because you are interested in the books.

You join an income opportunity because you’re interested in the income, and the products are only attached to the opportunity. You can easily replace the products (with almost any product) without changing the scheme. The products make the scheme LOOK more legal, but they don’t make it more legal.

WMI teach consultants to recruit other consultants, not to sell products or services. They basically market themselves as “income opportunity” or “business opportunity”. They corrected the marketing in 2010, with stricter marketing rules – but without changing the business model. The business model still relies on recruitment.

What about … ?
Insurance companies sells insurance, they don’t sell “the right to sell the right to sell insurance”. They sell a service, not an income opportunity.
McDonald’s sells fastfood, not the right to sell fastfood, or the right to sell the right to sell fastfood in an endless chain.

NOTE: WMI hasn’t lost any court case in Norway. The Gaming Board is only an administrative department, not some kind of court. WMI has also appealed the decision in late April 2011, to the independent “Gaming Appeals Board”.

I don´t know if WMI is legal or not. However I can`t see anything wrong in a MLM business, no matter if it`s physical products or online products. I can`t see the problem with paying a downline neither. Why can`t people make money this way?
I can understand the problem though if the products WMI sells don`t have the value people pay for, at least if it`s a huge difference. However I think I have paid too much many times in the stores too for a product.
I can`t see any problem with making money from MLM. Why can`t people pay for the product + the business opportunity. They know there are no garantie for making money and that they have to do a job to build their business organisation. And if it is customers or partners/ customers should not make any difference. If people know what they pay for, it`s their money and their desition. So many people lose big amount of money with gameing, In a mlm business they don`t lose so much money.

“Promotional pyramid” is not a sustainable business model. It will eventually collapse if it is successful, or some other type of collapse if it’s less successful. The majority of participants are guaranteed to lose money. It is the business model itself that fails, not the participants. If you join a succesful pyramid late you’re almost guaranteed to lose money.

You may recruit a few new participants, but then THEY are almost guaranteed to lose their money, instead of you. You may earn some money for a short period of time, but you lose most of your existing downline (if you had one). Even the top earners lose money at this stage, but usually they have left the company a few months before this stage.

Most sustainable business models need “end users” or “normal customers” to survive. Most will need at least 50 percent “end users” or more. WMI had close to none “end users” in Norway. How do you plan to build a business if the company itself is banned? Continue to recruit even if it’s illegal? Meet your customers in secret places? “Pay in cash, so that the money can not be traced.”? Then it’s not a business opportunity anymore, it clearly looks like some sort of scam. How do you plan to build your own successful business under these circumstances?

Take a look at WMI’s marketing policies (August 2010)? You’re not allowed to mention the company or their products anywhere in your marketing efforts. Why are they trying to “hide” the company if it’s legal?
* behindmlm.com/companies/wealth-masters-international/5-wmi-policies-you-should-be-be-familiar-with/

Many of the similar business models have already failed. Liberty League International collapsed in Australia in 2009. LifePath Unlimited seems to be a sinking ship, sinking very fast. Avant and GiveOpp failed. Carbon Copy Pro lost most of their members in 2010, but have tried to “rebrand” their image with a new product line. They too would have been banned in Norway if they had continued as a marketing system for WMI.

It’s a tough world out there if you run this kind of business, or even if you participate in one of them. Successful work will bring you closer to a failure, not closer to a success. This also applies to other people’s succesful work, it will bring you closer to a failure. You will also be affected by other people’s unsuccessful work, usually in a negative way. WMI have worked themselves closer and closer to this kind of failure.

Yes, it is correct that Norwegian DSA have been quiet, but already in january 2010 the leader Jan-Fredrik Torgersen made this statement about Carbon Copy Pro and Wealth Masters International:
“They hide behind the term MLM (network marketing), call it direct sales, and promise gold and green forests. They are a disaster for the MLM branch, and I can’t believe that the Gaming Board accept these companies”
Source in Norwegian: http://www.aftenposten.no/nyheter/iriks/article3460010.ece

It is clear that these people wanted to stop WMI.