One woman was struggling after the death of her father and she was searching for a sense of belonging and community. She ended up in a pyramid scheme that sucked over $100,000 from her family.
Jenny (not her real name) first became an Amway seller in 2004 with her husband. She was just searching for a way to make a little extra money on the side. At the time, it sounded too good to be true, the Daily Beast reported.
“I was young, I was in a not great place emotionally,” she said about the death of her father. “When I heard what Amway could offer and I saw a group of people that were offering not just money but a family and community it really appealed to me.”
Amway — which was founded by the wealthy conservative DeVos family — is known for selling non-perishable household products like detergent, mouthwash and other things through direct sales and a “multilevel marketing” operation. The term is similar to another plot: a pyramid scheme. The difference is MLMs are legal and pyramid schemes are not. The only difference between the two is that an MLM focuses on selling the products first and then recruiting new sellers, while pyramid schemes promote recruitment first and selling products second.
According to Investopedia, "MLMs have little or no startup costs, where pyramid schemes often have expensive memberships and charge you for sales training and materials."
The pitch was that Jenny and her husband would become "small business owners." What happened, however, is the couple began with a few thousand dollars to get started — remarkably similar to the description Investopedia uses for a pyramid scheme.
They ended up losing over $10,000 a year, so they threw more money in, drained their retirement savings, broke their lease and sacrificed nearly every non-essential cost in their life. Still, their money was drained. Ten years later, they'd lost over $100,000.
The couple finally gave up and Jenny discovered a Facebook group that was less than a year old and included over 40,000 people, who were the victims of such "multi-level marketing" schemes.
The group is flooded with women talking about how they were duped by such companies. According to one woman, a clothing-related MLM which infiltrated her group of friends and pressured her into selling. She was thousands of dollars in debt after a few years.
“I will tell to any parent who thinks an MLM will help their families,” another woman said of growing up in a house where her parents were both Amway reps. She explained that it tore her family apart, with vacations cut short to account for Amway meetings. she was left alone at home alone, even on holidays like Christmas and New Year's Eve to go to Amway rallies.
“I will tell any kid who loses a parent to these schemes, in the hopes that they know they are not alone,” she said.
But for some Amway has spelled success. Secretary of Education Betsy DeVos married into the family that founded Amway, and she and her husband have used their wealth to influence Republican politics at the state and national level.
What began as nothing more than a soap company from Richard DeVos, Betsy's father-in-law, grew into a multinational corporation with $9.5 billion in annual sales, Politico explained days before President Donald Trump was inaugurated.
Her father-in-law enlisted his children to run and grow the company manage and expand the company including the education secretary's husband Dick. Betsy came from another family with a small manufacturing company that grew to over $1 billion. She married Dick in 1980, bringing together their fortune together to become the 88th-wealthiest people in the United States, Forbes listed.
Read the rest of the scheme stories at the Daily Beast.