A Kiwi woman who was a seller for a major multi-level marketing company says it was 'toxic', 'cult like' and left her feeling worthless.
Lucy* who asked to hide her real name out of fear of bullying and harassment, said she joined the MLM when she was a new mum and wanted to spend more time with her children.
Multi-level marketing, network marketing or direct selling rely on a business model where representatives earn money by promoting and selling products, and often receive a cut by recruiting others to sell the same stock. The more products sold and more people recruited, the more money you make.
The former supplier told Newshub about her experience, issuing a warning to others that it's just not worth it.
It was awful.
Sitting at home pregnant, Lucy was scrolling through social media when she saw a woman posting lavish pictures at business conferences. Her interest was piqued and she messaged the woman to find out more.
The photos and the promise of more time with her baby convinced her to sign up, but little did she know her experience would be far from glamorous and exciting.
Things started out well, she joined the MLM when it was new and soon found financial success and while she wasn't making a lot of money, she hung onto the hope that one day she would.
But things started to unravel and the relentless pressure to sell coupled with the "toxic as f**k" work culture started to take its toll.
"It was awful, absolutely awful," she told Newshub.
"We were expected to be on all these calls… my upline [manager] lived in Australia so all our training calls were on Australian time, so they were really late at night."
"We were expected to get up every morning at 5am and do a personal power hour, so you're getting up and reading from a self-help book, you're sending out messages to 10 people and we would get checked in on."
The woman said it was like a cult and if you weren't constantly working you weren't seen as a team player.
"One night I messaged my upline and said, 'Look I'm not going to be on tonight I'm so tired and my baby had a really bad night last night' and she literally messaged me back word for word and said, 'Oh so you want to fail?'."
"It f***s with your self worth so much. And they tell you that you're only a failure if you stop," she said.
To meet her monthly quota she would 'bug' her family to buy from her which damaged her relationships with them.
"At the end of the month, I would be bugging them to buy stuff to make sure that I was maintaining the level that I was at. It was just awful."
Her friendships also suffered. The worst moment came when she missed one of her best friends' engagement party because she was at a conference in Australia. That friend cut contact with her and the relationship was only repaired after she left the MLM.
"She didn't talk to me after that for three years and fair enough too."
I didn't even feel good about doing it.
The isolation left her completely reliant on the relationships she had built within the MLM. That coupled with her desire not to disappoint her family only added to the pressure not to "fail".'
But she became increasingly uncomfortable with the selling techniques she was told to use, including deliberately targeting vulnerable new mums.
"We used to get told on our team calls, 'go on your friends list and see who is pregnant and who has a new baby, they're the ones you need to offer the business to, they're the ones that don't want to go back to work, they're the ones that want to stay home with their children'."
"It's awful, they are easy targets because they're new mums and they're tired, they love their babies and they don't want to go back to work but they need the money and then we ask them to put their families into more debt to start this business that is most likely not going to work."
"I started feeling guilty about it. When I was asking people to invest a couple of grand but knowing, actually knowing, that it probably wasn't going to work, that sucked."
I can't keep doing this.
That realisation was the final straw and she decided she was done. She never officially told her manager instead she just "stopped jumping on calls'' and eventually phased herself out.
"I just felt that I can't keep doing this, I can't keep messaging people, I can't keep trying to sell this ridiculously expensive product to earn an income, it shouldn't have to be this hard."
"I never had the conversation of, 'I'm not doing this anymore', I just slowly backed away."
When she left she was cut off. No one from the company would interact with her and she was left "with no one".
"I came out an absolute mess, I didn't know who I was, I felt so unworthy, I felt like such a failure and suddenly this community that I had, when I was actually really vulnerable after having my baby, was gone."
Her husband was incredibly supportive but the financial loss impacted their relationship for a long time.
Despite leaving two years ago, she is still thousands of dollars in debt.
"It's a $5000 overdraft and I am just chipping away at it because I can't afford to do more than that."
Her story isn't unusual. Tom, 29, isn't involved in an MLM, but his friend is. Tom told Newshub his friend has spent thousands of dollars on the company's products.
He said his friend pours money into self-help books, conferences and seminars that all promise a way out of the 9-5 grind.
"They told them that they can build their own business and retire young if they are mentored by them."
"They go to meetings and seminars quite often, which costs money. From what I can tell they never give any advice on how to run a business, it's all just very generic self-help content," he said.
While his friend doesn't sell for the group he regularly buys their products and Tom said their selling methods and culture look similar to a cult.
"From an outside perspective, it seems to run just like a cult. They have charismatic leaders, and if you don't participate fully then you're shamed and outcast. You're also not allowed to question the methods you're being taught."
Tom said his friend is kind and naive and has been preyed on specifically because of those attributes.
"He had a rough upbringing, and his partner is religious, and a similar personality. They prey on these kinds of people."
He said watching his friend spend so much money is difficult.
"I've only talked around the subject with him; I'm afraid that having a serious chat with him about it all would break his heart."
A spokesperson for the Commerce Commission told Newshub multi-level marketing schemes are not illegal, but pyramid schemes are.
"Pyramid schemes are illegal under the Fair Trading Act and they are a current priority for the Commission. The schemes require constant recruitment of new members to buy in and inevitably people lose out financially as recruitment dries up," the spokesperson said.
"However, multi-level marketing schemes (MLMs) are not illegal. In MLMs, participants earn a commission from selling products, whereas pyramid selling involves participants earning money solely or primarily by introducing other people into the scheme."
"We are currently investigating three possible pyramid schemes, including Lion’s Share and its promoter Shelly Cullen. However, we note that schemes and scheme names can change rapidly.
"In May last year the Commission and the Financial Markets Authority (FMA) launched a campaign to raise awareness of investment scams and pyramid schemes targeting the Pacific community. The Commission is currently developing new resources on pyramid schemes."
