Are My Wife and Friend in a Pyramid Scheme?

“Help me, Obi-Wan Consumerist. You’re my only hope.”

That’s the opening cry of J Rob’s letter to us. He thinks his friend and wife are involved in a multi-level marketing scam aka pyramid scheme.

The company contends that you can add bio pills to your gas tank to increase fuel efficiency.

Searching for the company “+bioperformance +scam” we came across this discussion on Quatloos! where a biopill defender tries to push the pill and gets totally owned in the forums.

Help Rob and his wife decide, after the jump…

J Rob writes:

    “Seriously, any assistance you can provide would be most appreciated. First allow me to hit you with some backgroud, and then my request.

    My wife is a regular purchaser of cleaning products and vitamins from a mail-order company called Melaleuca. She signed up to be a part of this during a “party” at a friend’s house and we enjoy using their products. We’ve been ordering Melaleuca for about a year now with no problems to speak of.

    A few days ago, I was handed a business card from a friend of mine claiming 25% savings at any gas pump
    for any vehicle, anytime. I visited the website (www.sheltonfuel.com), and immediately began to get creeped out. It turns out my friend is involved in a MLM (Multi-Level Marketing) scheme for “BioPerformance,” a company selling pills and powders to improve the gas mileage of a vehicle. A simple Google of “bioperformance scam” shows tons of sites boasting improved fuel efficiency all from popping the pill, and a few comment threads
    from reasonable-sounding folks urging readers to stay far away from warranty-busting fuel additives and especially from MLM schemes. Following the trail, I ended up reading about someone involved in Amway for
    10 years who kept searching for the illusive “money for nothing” secret success formula and ended up broke
    and forsaken by “the system.”

    Here’s my deal: I know there ought to be some way to convince my friend that being involved in the gas pill
    deal is bad news. And I’d like to check on Melaleuca to see just how dirty their little secrets are. If they’re half as bad as the Amway tale I read, I’m going to need more than anecdotal evidence to persuade my wife that they don’t need any more of our money.

    Thanks for the help.

    J Rob”

Comments

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  1. Fairytale of Los Angeles says:

    Corporate Narc would seem to have some harsh words for Melaleuca, although a quick Google for “Melaleuca scam” comes up with a great deal of related MLM-watch sites as well. (A lot of these immediately have harsh followups from Melaleuca sales folk, which suggests to me that they’re certainly trying to conceal *something.*) In addition, they continually assert that they *aren’t* MLM, which is something legit companies generally don’t have to do. On top of that, I keep finding them under different names– MomsWIN, Mom Team, etc.– the more I poke around. It’s also bloody hard to find a central BBB listing for the home office, which makes me wary.

    As far as BioPerformance goes, that’s easier– RipoffReport has some inside information from former “employees.” (They also have Melaleuca information, looks like.)

    Good luck with finding more; a lot of Internet MLM research is a huge pain in the ass, with “watchdog” sites run by folks trying to play down the illegality of their favorite operations.

  2. Kat2 says:

    Google broken at your house?
    http://www.google.com/search?sourceid=navclient-ff&ie=UTF-
    From the first result:

    MomsWIN is the main marketer and seller of Melaleuca’s products. The WIN stands for women in net marketing. The MomsWIN group is not allowed to refer to themselves as affiliated with Melaleuca. This is likely do to the many claims against the momsWIN group for practicing in a multilevel marketing (MLM) scandal.

  3. Dude. Seriously.

    Gasoline pills?

    OK, they’re not quite the same thing as the classic water-to-petroleum pills, but just the same…

    “Melaleuca”, by the way, is the name of a genus of plants here in Australia, some of which are often referred to as “tea trees”, because some early settlers were so hard up for tea that they tried using the similar looking, but utterly horrible tasting, leaves from those trees.

    Tea tree oil, like various other pungent plant oils, kills germs really well (in vitro – eating it in any quantity is a Bad Idea). It also, arguably, smells nice. Various quacks decided on the strength of this evidence that it was Good For What Ails You, and it can still be found in umpteen herbal remedies that generally don’t do much.

    Presumably this company started out selling tea tree oil stuff, then moved onto fresh new scams.

  4. Paul D says:

    Uh oh.

    My mom buys Melaleuca products all the time. She’s not involved in the business side of it (though she has been taken in by MLM scams in the past), but she says their products are really good. I think I used some Melaleuca shampoo once when I was visiting for the holidays. I wondered why I felt stupider that day…

    *shrug*

  5. airship says:

    Is she ‘encouraged’ to sign up others to sell their crap? Does she get a percentage of her ‘downline’ sales? Do her ‘downlines’ have to pay for a ‘sales kit’ or pay a membership fee? Are the only people making money the ones who got in early, while everyone else is bleeding cash to fill the early adopters’ pockets? If the answers are yes, yes, yes, and yes, then she’s in a MLM scam. If not, then she’s just involved in a regular scam. Fuel pills don’t work. Fuel pills CAN’T work. Period.

  6. halfawake says:

    J Rob here.

    Thanks for the assistance, everyone. And yes, Kat2, Google was broken at my house. But I gave my PC a pill, and it got better!

    Tony here has some excellent info on the impossibility of fuel pills working, as airship mentioned.

    http://www.fuelsaving.info/bioperformance.htm

  7. don_mynack says:

    Agree with airship above. Another thing you’ll find in the vast majority of MLM’s is that the only way to make money, the only way, is by signing up new people to generate “membership fees” and whatnot. Most of the time (not all the time), the products that use the MLM model to sell are either totally overpriced, or total crap, or both. It’s much easier to sell fraudulent crap with this because there is no way to comparison shop , and there is no retailer to call bullshit on the supplier when everybody starts wanting their money back.

  8. dancemonkey says:

    Melaluca or however it’s spelled is not strictly speaking multi-level marketing. There is a cap on the number of people you can sign up and receive any benefit from, and you don’t just receive money for nothing: the people you sign up have to actually sell product or you get zilch.

    My wife was involved for awhile, and now we just buy the products from friends who are still involved. I hated being signed up because you have a minimum amount you have to purchase each month when you’re a member, but that’s about as insidious as it gets. Their products are actually pretty quality, and supposedly healthier than over the counter cleaning and health products.

    Some of their items have dubious claims (the vitamins claim to be the only brand to employ “fructose compounding.” WTF?!?!?!), but for the most part they’re fine. If you know someone who deals they can be just as irritating as an amway salesperson, but my wife has never experienced any problem cancelling (she’s been enrolled several times in her life, most from before I knew her).

  9. dancemonkey says:

    Oops, what I meant was that Melaleuca is not a pyramid scheme, but a legitimate MLM business. There’s a difference. MLM schemes don’t generate much revenue from sign-ups, you have to actually sell something. Pyramid schemes are purely sign-up driven, and as such obviously only generate revenue for those at the top.

  10. Kat2 says:

    Glad to hear, halfawake. ;)

    Didn’t mean to step on Fairytale of LA’s toes… that post was not showing when I replied.

  11. OkiMike says:

    Halfawake, thanks for the link. Very informative.

  12. sstephens says:

    Some of you guys are full of it on the Melaleuca subject. But if you don’t have any thing negative to say, then you would probably be boring.

    You don’t have only a certain number you sign up and it is what it say it is. Healtier and cheaper on cost comparsion. Yes, you can find bad rap on any company. But you can also do a report on the happy clients.

    In reality, there isn’t a business out here that one of you couldn’t find something wrong, I am sure.

  13. raylene says:

    I have researched mlm companies and Melaleuca is not one. I love the products, they are less expensive that store name brands, safer for your home, and eviromentally safe. People can make money if they choose to, it’s all about work – no get rich quick schemes! I beleive everyone should use safer products, come on, cancer is on the rise, heart disease, new “disorders”, think about it! We are being poisoned in our own homes by the garbage we buy from big money making corporations that I certainly hear no complaints about!!!! I’d like to know how many of you gripers have actually been customers!!

  14. irishnativegirl says:

    I used to work for Melaleuca a few years ago, was looking for something to do while my kids were still at home full-time. I left the company about 5 months later because I couldn’t afford the products any longer.

    I do have some problems with the company, it is a pyramid based program, downlines and all. I got paid around $2.50 a month for each of my downline “associates”. Poor innocent souls like myself.

    If I forgot to order my products for a certain month they would charge my bank account $75.00 and send me a gift certificate for that amount in the mail. You had to order a certain amount of product each month. Like if I only needed hand soap, too bad, I would still have to order more things. I have a small house and it took a long time to use up that much product.

    You have to pay a memebership fee every year and I have never really like some of their products, I have sensitive skin and a lot of the products made me break out in severe rashes, unlike what I was told.

    Also the products cost quite a bit more than what I could get similar at Walmart or my local grocery store.

    All in all it was too expensive, didn’t work properly and did really net me any money whatsoever. I do regret that I joined Melaleuca, but I am glad I learned to not sign up for work at home jobs any longer.

    …one more thing, Melaleuca is looking to take over our choice as people of this world, their goal is to have any man, woman and child using their products. That is a frightening thought.

  15. Anonymous says:

    Melaleuca is absolutely a pyramid/MLM/scam whatever you want to call it. I had a friend who used to “sell” it – actually they just require you to purchase a certain amount of products every month. Irishnativegirl’s post is 100% accurate.

    Anyone who says Melaleuca’s products are wonderful and a good value is a company shill. Melaleuca’s products are not all natural and organic either, as many of their “distributors” claim.

    Check out this great article on MLMs, including Melaleuca:

    http://www.falseprofits.com/MLM%20Lies.html

  16. Tony says:

    Fraud, Scam or whatever people say really doesn’t matter. Or maybe, people don’t read the “out clause” or terms and conditions before signing their name on the dotted line. It does not matter. Here are the Facts about Melaleuca, they sold over a BILLION DOLLARS worth of products, and people must like their products, right?

    Pyramid systems have been outlawed in the US a long time ago and they don’t sell any products. We are paid just for referring people to Melaleuca and helping them register and that’s it! No inventory control, no billing, no carrying of products. We are paid on immediate commissions with several tiers of bonuses and handsome residual income, how GREAT is that!

    They have paid out over 2.8 Billion in commissions to regular people out there in the past 27 yrs. What is really great about Melaleuca is they genuinely want to HELP. This is Very Rare for a corporate identity. Helping people better their health; getting them out of debt; having a good personal life, so too in preserving our environment, is that a BAD goal to have?

    This is more than a business for most of us. You would really have to experience Melaleuca, and when you do, you too would have fallen in love with them just it like the more than 850 thousand families that have joined them. Sorry, but it’s hard to find sad story’s telling lies here. What you will find are people’s experiences in how lives have changed because of Melaleuca.

    A Successful Melaleuca breeds successful people and it’s not too late to join us. If you want to succeed and willing to work at it and if you think you are coachable, “We Will Help” because Melaleuca wants us to.

    We are just starting; more questions, give me a call, Tony 408-771-0296.
    If NOT, then, Good Luck on your travels and I hope you find contentment!