Scamway to Close its Doors

By Rabbi Eli Teitelbaum

I must admit that I was caught by surprise when I recently read that one of the oldest and biggest MLM companies called Amway was finally going to close its doors. “Make an extra $2,000 or $3,000 a month just by working part-time with your friends and neighbors” was their deceptive claim to fame. They promised great wealth by selling consumer products to one’s friends and neighbors but made most of their money getting people to recruit new salespeople to work under them (their downline) and taking a commission or “bonus” from their sales. For many years they have been charged with running a pyramid scheme, in which the profit is made by luring ever increasing people into their system rather than from the sales of the actual product. Additional charges included “false and misleading advertisements,” since people never made anywhere close to the money they said that one could earn. Yet the courts have allowed it to operate because they only charged $40 for their sales kit and claimed that they were selling a product. Actually, Amway made its big money by luring people into buying their business kits, motivational tapes, and getting their salespeople to come to their seminars. Instead of making money, most people lost thousands of dollars by buying their worthless motivational products and attending their hyped up fraudulent seminars.

In an excellent book entitled “Behind the Smoke and Mirrors” by Ruth Carter, she reveals the delusion and deception of the entire bogus business.  Amway promised wealth, opportunity and freedom to all those who joined and were willing to put in significant time and effort. They tried to sell hope but all one got in return was lots of soap and heartaches. There are former distributors who claim to have lost their shirts, their marriages and their families because of their involvement in the Amway business. To understand how it worked, one must read Ruth Carter’s excellent book that tells her own life story in great detail since she herself went through it all.

Yet, as is almost always the case, these companies never give up. When one company closes up, two others take its place and there seems to be an endless supply of suckers that will be lured by their promise of easy wealth and riches that supposedly lie at the end of the rainbow. Some people will never learn.  As long as we wear green glasses one can never see red!