Cult News

Some say Amway should be called “ScAmway” and that the organization has a “cult-like” following.

But Steve Van Andel, a dynastic heir of the multi level marketing (MLM) empire claims that he is “not in the business of making a fast buck by just recruiting people,” reports India’s Economic Times.

However, a legacy of lawsuits seems to present a very different picture.

Amway appears to have largely run out of gas and leveled off within the United States. Its name, rather than representing trademark cache, seemingly is a PR liability—so it was essentially changed.

Amway is now controlled by its parent company called “Alticor” and it sells products through the Internet under the name “Qwixtar.”

But this effort has not been that successful. So what’s an MLM’s ambitious heirs to do?

Apparently Amway’s answer is expansion into international markets overseas, where details about its troubled history remain largely unknown.

The MLM giant has moved into China, Africa, Malaysia and India.

The Economic Times asked Alticor’s chairman, son of Amway co-founder Jay Van Andel, “What percentage of people who join [MLMs]…become really successful? Is it too miniscule a percentage?”

Steve Van Andel never really answered the question.

His closest response was, “Success is relative to the goals people set for themselves.”

Right.

India is a developing country and many of its people are struggling to get by. The Times seemed obliged to point out, “Direct marketing is often looked at with skepticism by the world at large…get-rich-quick schemes are what first springs to mind.”

Some seem to feel that this description is analogous to Amway.

Rather than primarily focusing on the “great products” touted by Van Andel, the real emphasis at Amway many claim is actually recruiting others into the “plan” or “dream”—as ardent participants often call it.

Specifically, for many Amway distributors the organization becomes a way of life and joining the MLM represents the equivalent of an almost religious conversion experience.

Amway’s faithful fellowship at constant meetings and conferences. They also listen to sales sermons through teaching tapes, which are often called “tools.”

Conferences, “tools” and the commissions paid from “starter kits,” frequently represent a large portion of the profits made by some MLM “uplines.”

There is no question that Amway has made a “miniscule percentage” “really successful.”

Jay Van Andel is worth $1.5 billion dollars and owns a luxury resort island, reports Forbes.

Amway co-founder Richard DeVos weighs in with $200 million more at $1.7 billion.

These two men are like whales within the MLM ocean.

But it looks like the “little fish” “downline” in Amway have little hope of joining the elite and “miniscule…percentage” that make it really big.

Interestingly, right now there is proposed legislation that could weaken existing laws in the US, which protect the public from MLM “get rich quick schemes.”

One former Amway distributor recently said, “I lost all I had, great job, my financial future, my wife, children, and soul.”

But with seeming ambivalence he still claims, “With all that, there were moments where the future was mine for the taking and will never forget some of the special people and moments I had while in Amway.”

Indeed, who could ever forget the people met in an experience that ended like that?

All charges previously filed against Amway by the Economic Offences Wing (EOW) in India have now been dropped, reports Chandigarh Newsline.

Charges were filed in December that claimed Amway somehow was involved in a purported “money circulation scheme.”

The 10th U.S. Court of Appeals upheld the dismissal of Amway as a defendant in Proctor & Gamble’s lawsuit, which alleged the multi level marketer and its distributors spread rumors that the products giant promoted “Satanism,” reports the Detroit Free Press.

Lawsuits in Texas against individual Amway distributors will continue, but the Amway Corp. itself is out.

Many “Diamonds,” key major distributors within Amway, are Christian fundamentalists and some seem to promote a strange mix of religion and sales that often appears to make their business seem “sanctified.” Maybe some within Amway see the competition as “Satanic”?

However, according to a Proctor & Gamble spokesperson, “Since these lawsuits were filed, the rumors have essentially stopped.”

Amway has a troubled history of lawsuits, complaints and bad press. Could this be Satan’s work?

A multi level marketing scheme called “Pre Paid Legal” suffered a setback. Its stock crashed Monday losing 23% of its value, reports The Street.com.

One short-seller said, “It’s only a matter of time before a pyramid based on misleading people begins to collapse.”

Pre Paid Legal reportedly used an “Amway strategy” of multi level marketing to fuel its growth.

However, according to the Detroit Free Press “Multilevel marketing — practiced by such well-established companies as Alticor’s Amway unit — is a legitimate form of business.”

In Michigan Amway is a major employer and perhaps the Detroit Free Press is reluctant to discuss Amway’s own troubled history within a recent article about “get-rich-quick” schemes.

Multi level marketing (MLM) companies such as Amway and Pre Paid Legal seem to frequently focus more on the pitch than their products. That is, slick sales hype and high-pressure meetings where potential distributors or sellers are persuaded to become involved.

Many former MLM distributors have likened such high-pressure approaches to coercive persuasion. And the mindset produced by some MLM companies has been called “cult-like.”

This MLM mindset is often evident by the participant’s willingness to accept whatever the company and/or his “upline” says, rather than objectively examine such claims through an independent and careful process of critical analysis and/or due diligence.

A kind of false euphoria, or “dream” of success often replaces the common sense of many MLM distributors. And anyone who offers criticism of the MLM plan, is apt to be labeled as a “dream killer.”

What is the MLM industry based upon? Is it about offering viable and competitive products, or selling dreams, which are unlikely to be fulfilled? Is the profit for MLM founders through primarily achieved by product sales, or feeding off layers of distributors, who have become “true believers.”

Pre Paid Legal’s current problems seem to indicate the inherent fragility of many MLMs.

Historically, the collapse of Equinox, a recent court ordered shut down of Trek Alliance and a pending class action lawsuit against “New Way to Wealth” seem to indicate the more sinister side of some MLMs.

Many people are losing money in MLMs and they remain essentially an unregulated industry.

The Reserve Bank of India has notified the police that Amway in India may be violating certain laws regarding a “money circulation scheme,” reports Siffy News.

Amway denies its actions are in violation of Indian law. An investigation will take place.

Historically, many Amway distributors in the United States have lost money or barely made minimum wage for their time. Some say that Amway is really more about making money from recruiting people to become distributors, as opposed to selling products.

The organization, which is a multi-level marketing scheme, has drawn frequent complaints, bad press and often-contentious litigation.

Nevertheless, Amway has made its two ruling families, the Devos and Van Andel clans, billionaires.

In recent years sales and recruitment for the company have slowed in the United States. In an apparent effort to improve its sagging situation Amway launched Quixtar on the Internet and also moved into international markets.

However, Amway has encountered resistance in China and Quixtar doesn’t seem to be doing that well.

If Amway is exploiting the citizens of India in some way, which is certainly not an affluent country, the company may have hit a new low.