Ep. 151: Robert FitzPatrick - How "Ponzinomics" Explains the Big Lie Behind Multi-Level Marketing

Imagine a fantasy world in which there is endless abundance, a world in which risk and uncertainty don’t exist and a world in which all you have to do is think positive thoughts, do what you’re told, and – provided you do it – all your dreams will come true. You might be surprised to hear that millions of grown adults believe or have believed in this fantasy world – and in the process have lost fortunes, friends, marriages and in some cases, even their own lives as the fantasy crumbles and reality sets in.

This is exactly what happens to many people who get involved in multi-level marketing schemes (MLMs) or their cousins, ‘gifting’ schemes. And yet, the purveyors of these fantasies are legal, billion-dollar companies like Amway, Herbalife, Nu Skin, Arbonne, and others. Why does that happen how is this legal and possible?

Meet this episode’s guest, Robert FitzPatrick. Robert is a world-renowned expert in examining and revealing deception and fraud in bogus, home-based businesses. He is a recognised authority in MLMs and pyramid scheme fraud and has been featured in the programme 60 minutes, ABC World News and NBC Dateline in the USA, the BBC in the UK and the CBC in Canada. Robert’s latest book is called Ponzinomics – The Untold Story of Multi-Level Marketing.

The book describes how MLMs were created in the USA, escaped criminal and civil prosecution and spread all over the world. It explains how the legitimate business of direct selling was turned into pyramid selling, and how a business can become a delusional belief. We get into all of that in the episode, discuss why only a fraction of a fraction of 1% ever make any money in an MLM (hint – unless you started the scheme, then it’s not you), what you can do if a friend or loved one is involved in an MLM, and much more.

Show notes:

Ponzinomics

Pyramid Scheme Alert

False Profits – Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes

Pyramid and Gifting Schemes

Schitt’s Creek MLM episode

Anti-MLM Reddit