Research
http://www.mlmwatchdog.com/mlm_scams_minkow_prepaid_legal.html
http://www.nytimes.com/2006/11/13/business/13short.html?_r=0
http://ethanvanderbuilt.com/2014/08/16/legalshield-prepaid-legal-scam-opinion/

Richard Speights

writer / fine art photographer / editor

20 May 2015

 “ ‘If companies have to tell recruits that the average income is only $1,400 instead of the $50,000 advertised on their website, or that the average salesman only lasts two months, a lot fewer people are going to sign up,’ said Mimi Sokolowski, an analyst with Sidoti & Company who follows Tupperware Brands, Nu Skin Enterprises and other publicly traded multilevel marketing companies. She said that if the proposed rules pass without modification, recruitment in the United States could fall by as much as 40 percent.” (New York Times, Nov 13, 2006)

Gold-Plated Counterfeit 


by


Richard Speights

INSIDE:

Richard speights


Writing to Innocence

Rich

“In April, citing hundreds of fraud investigations, the [Federal Trade Commission] proposed new rules for multilevel marketing companies and related businesses. They would require companies to tell potential recruits how many sales representatives have failed to earn more than their start-up costs and how many customers have filed lawsuits for deceptive practices.” (New York Times, Nov 13, 2006, emphasis mine)

Pre-Paid Legal / Legal Shield

Multilevel Marketing / Network Marketing 

Down Long, Winding Logging Roads


Schotze and I love driving the old pickup high into the mountains around the Nine Mile Valley. Deep down some narrow, winding logging road, we often find the most interesting places to photograph. One time, atop a ridge I call Electric Mountain, because power lines come up from the valley over its top, I found some interesting trees along a small creek in a darkly enclosed clearing.

As I stepped over the tiny stream, I noticed something sparkle in the water. I thought it was gold, so I came back the next day with some panning gear to strike it rich. I sloshed the achingly cold water around in my pan until my hands were numb, but the sparkly stuff just wouldn’t act right. I soon realized I had wasted my time mining iron pyrite, fool’s gold.

Real gold in the raw has a somewhat dull color. Fool’s gold sparkles beautifully as the sun shines down into the crystal clear rushing water. Many tinhorns have hauled many bags of fool’s gold out of Montana’s mountains only to discover they had not struck it rich but wasted their time and energy for a metal worth pennies to the pound.

Before searching the mountains for gold, a gold hound must know which is real and which is fraud.

Gold-Plated Counterfeit

In 2008, BBC reported Ethiopian banks had discovered they were not holding millions of dollars in gold bullion but gold-plated steel blanks.

Gold is actually heavier than lead. Gold-plated lead bars have heft, but they do not weigh as much as pure gold. In that steel is so much lighter than lead or gold, everyone was shocked nobody at the bank had noticed the weight discrepancy. They came to believe the thief or thieves may have swapped the fakes for the real after the gold bars had been deposited in the vault, maybe smuggling one fake in and one real out once a day.

Real gold bars make a heavy clunk when stuck against a hard object. Gold-plated lead bars also make a fairly heavy clunk. Gold-plated steel bars make a brighter sounding clink. Checking authenticity is often a simple matter of sound and weight.

Still, drilling into the gold bar is the only verifiable way to check for authenticity. Gold-plated tungsten blanks, which weigh almost as much as gold and make a similar sound when struck, are difficult to detect.

On the surface, though, gold-platted steel, gold-plated lead, and gold-plated tungsten look as beautiful and valuable as the real thing. An unsuspecting buyer’s first subjective glance can fool the eye. So, the buyer must not make a snap decision and buy a gold bar from any ‘ol motivated seller just because the seller speaks with charming words through an appealing smile. Vigilance prevents loss and embarrassment. The buyer of any item, tangible or intangible, must view the situation objectively, verifying before purchasing.

Greed is a powerful motivator, driving men of all types to steal. These men are sometimes hard to spot, for they are so very charming. They use charisma like a fishing lure, setting the hook and hauling in the unwary. These appealing con artists in their greed can be as difficult to spot as gold-plated tungsten, so one must drill into the matter for verification. It is the only certainty.

They only reason con artists do so well in the world is because the world is full of people who allow emotions to dictate actions. They see the sparkly metal in the bottom of the stream and dig until the icy water numbs their hands. Sooner or later, they realize the sparkly metal isn’t acting right, and then they realize they’ve been had. If they had spent a little more time investigating, if they had been a little more skeptical, they could have saved themselves so much sorrow.

Multilevel Marketing Sales

Multilevel marketing schemes never live up to the promised big paydays and easy living except for the one’s selling the idea of selling. Recruiters make money, the motivational speakers makes money, and the company makes money—but the poor saps sitting wide-eyed in the audience will most usually profit nothing.

Certainly, someone in the audience may work his or her way up the company food chain and reap financial benefits; but out of the hundreds herded through the process, only the occasional does well. This is a problem, because the schmuck motivational speaker on stage never provides this important tidbit of truth.

According to the New York Times, 13 Nov 2006:










The truth would save future recruits hours of fruitless effort, but it will do the multilevel marketing companies no good:









 

I think 40 percent drop in recruitment is too light a number; I believe the real numbers would be from 60 to 80 percent reduction in recruitment. Nonetheless, the multilevel recruitment schmucks are topnotch grafters, so they will find a way to sucker the masses and fleece their pockets. They are highly motivated, because they love money more than people. If they didn’t, they wouldn’t sell worthlessness as worthy.

Instead of hiring a small professional sales force to vend many policies, multilevel sales companies hire a small army of inexperienced salespeople to vend a few policies each. The company saves money on overhead: benefits, office space, and whatnot. They also save the hassle of dealing with demanding employees. Casual, work-at-home employees are in no position to make demands.

Coming into Pre-Paid Legal / Legal Shield, each recruit buys a policy and then, according to the New York Times 2005, the majority sells only one additional policy (New York Times). Moreover, each recruit gives the company about two hundred fifty dollars upfront money. All these recruits paying upfront money and selling one or two polices each makes the company a tidy profit. So, the company and the recruiters win while the person at the other end of the multilevel sales farce loses.

On paper, multilevel marketing looks great. In reality, it never really works; and those promoting it must exaggerate poetical income to lure people into becoming involved. Exaggerated claims and high excitement drive a hungry audience into signing up before any can verify for truth.

To move the crowd quickly into action is the role of the motivational speaker. He knows what he is doing, even if the crowd does not.

Motivational Speakers

Some years ago in Orlando, I was witness to the afterglow produced by many motivational speeches. These speeches play an important role in a company’s health, as does the entire convention experience. Employers and employees alike leave the experience riding inspiration’s bubble, energized to reengage the next year’s business routine.

However, the motivational speakers connected to companies like Pre-Paid Legal / Legal Shield are nothing like the speakers a company hires to inspire the work force. The motivational speakers at multilevel marking recruitment seminars work for the company itself as part of the recruitment team.

True motivational speakers inspire the work force. Pseudo motivational speakers inspire unsuspecting audiences into forking over money to become involved in a problematic opportunity. The Pre-Paid Legal / Legal Shield motivational speaker is, in the end, a sales man, selling a work-at-home opportunity. He plays the role of the closer, tickling people’s emotions to drive them into making a commitment.

True motivational speakers are good guys. Pseudo motivational speakers, such as those working for Pre-Paid Legal / Legal Shield are con artists and schmucks, and they are schmucks, no matter what lies they tell themselves in the mirror.

Them And Us

For con artists do not see themselves as bad guys. Nonetheless, they hold the world in contempt, for according to the thinking: if a mark is too stupid to keep from getting ripped off then he deserves to lose his money.

These guys selling unbeneficial opportunities, such as the multilevel marketing schemes of Pre-Paid Legal / Legal Shield, must also hold people in contempt. They must, because a good conscious would prevent their selling such worthless endeavors.

Conclusion

This essay is not necessarily an indictment of the service Pre-Paid Legal / Legal Shield provides. Your correspondent does not yet have enough information to say it is good or bad. Notwithstanding, this essay is a condemnation of multilevel marketing sales recruitment practices and the companies for using them.

In the end, these multilevel marketing recruiters are selling the equivalent of gold-plated steel. Like the thief switching fake gold bars for real, the multilevel marking recruiters know the worthlessness of their product, and they sell it anyway in a rush of high emotions. 

Beware of the exciting young man, wearing the nice suit and bright smile, for he wants your wealth. We’ve all heard, “The love of money is the root of all kinds of evil.” This is as true for recruiters in multilevel marking schemes as for con artists in back allies duping tourists with pigeon drops.

It takes a while for the buyer to realize the shiny metal bar is worthless, and said buyer tends to blame himself for being deceived. Although the buyer shares a little responsibility for not verifying value, the lion’s share belongs to the charlatan taking advantage of innocence.