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[benjipwns]

You realize that libertarianism as a philosophy is completely okay with these kinds of businesses existing with no government regulation, right

Huh? Libertarians want to get rid of the FTC and the like.
Right on the Libertarian website.

I thought libertarians were all about the market regulating itself etc. in which case wouldn't scams like this potentially be far more prevalent?

Most libertarians consider fraud to be a crime.

Interestingly, the FTC does not.

 

[Harpuia]

I had two buddies who nearly got themselves wrapped up in this. Luckily, they didn't get that far beyond the initial first meet-up they arrange. We were about 16-17 years, so it was pretty much out of a desire for quick buck or something. You get a letter in the mail claiming you can make $20 or whatever amount they were claiming an hour, and you don't ask too many questions lol.

 

[border]

The FTC's decision to let Herbalife off the hook was another powerful reminder of why I'm a libertarian. If you hire the right bureaucrats and spend enough on lobbying, I guess you can get away with robbing poor people blind.

How would laissez-faire libertarian policies prevent MLMs from fleecing people? By definition, they want less regulation of private business and less government oversight for companies.

Most libertarians consider fraud to be a crime.

Interestingly, the FTC does not.

Most Democrats/Republicans also consider fraud to be a crime. But don't consider MLMs to be fraudulent.

Unless the libertarian party explicitly takes a stance against MLM, I don't see how you can think they would do anything about it.

 

[benjipwns]

It's a little close

Who knew the U.S. in the 19th century was a literal state of anarchy? Or hell, the U.S. before the 1960s was half an anarchy.

How would laissez-faire libertarian policies prevent MLMs from fleecing people? By definition, they want less regulation of private business and less government oversight for companies.

Prison?

 

[Guess Who]

No. These business defraud people and brake the law. Libertarinism =/= anarchy.

The MLM industry is the quiesential example of regulatory capture. After Amway beat the FTC in 1979, they went to work infiltrating the government in an effort to sway regulators so as to avoid prosecution. Amway's clones (including Herbalife) worked in much the same way. They mostly donated to the Republican Party (DeVos even ran for governor of Michigan as a Republican). George W Bush appointed Tim Muris to lead the FTC in 2001. Murris had previously worked as MLM attorney. But it wasn't just Republicans -- check out the Direct Selling Congressional caucus.

Anyone with half a brain can watch a segment like this and ask "why aren't these people in jail"? Because they spend millions lobbying.

Most libertarians consider fraud to be a crime.

Interestingly, the FTC does not.

So, uh... what's the libertarian solution here? How would libertarianism stop any of this? Because as far as I can tell the argument here is that we need stricter and smarter regulatory bodies, which is kind of the opposite of libertarianism!

 

[Laughing Banana]

Are the laughs in his show real or not?

It seems so fake to me, but I don't know.

 

[benjipwns]

So, uh... what's the libertarian solution here? How would libertarianism stop any of this? Because as far as I can tell the argument here is that we need stricter and smarter regulatory bodies, which is kind of the opposite of libertarianism!

Arrested and charged with fraud among other things?

You don't need an agency that dispenses benefits and protections for favored corporations to do that. The FBI and local authorities could do it, like they already do in these cases.

 

[Guess Who]

Arrested and charged with fraud among other things?

You don't need an agency that dispenses benefits and protections for favored corporations to do that. The FBI could do it, like they already do.

So... if the FBI was in charge of enforcing such things, what is stopping these businesses from then paying off the FBI instead? Or is the FBI somehow more incorruptible than the FTC?

 

[border]

You don't need an agency that dispenses benefits and protections for favored corporations to do that. The FBI and local authorities could do it, like they already do in these cases.

So the currently-existing FBI has not prosecuted MLM companies, but under a libertarian regime they somehow would? What makes you reach that conclusion?

 

[benjipwns]

So... if the FBI was in charge of enforcing such things, what is stopping these businesses from then paying off the FBI instead? Or is the FBI somehow more incorruptible than the FTC?

You won't get much argument out of me that libertarians are silly for thinking they can control a corporation granted a monopoly on violence.

But I don't think increasing that corporations power will help much as seen by the current state of things.

So the currently-existing FBI has not prosecuted MLM companies, but under a libertarian regime they somehow would? What makes you reach that conclusion?

Did you miss the part where MLM is not considered a crime currently? They're not pyramid schemes because pyramid schemes are illegal.

I'm not going to watch the entire 30 minutes again just to see, but if Oliver openly called one of them a pyramid scheme he can be sued for it. He wouldn't be the first person sued for accurately depicting their business model.

That's why the Bullshit! episode only strongly suggests it while showing pictures of pyramids without ever directly stating it.

 

[benjipwns]

http://www.dsa.org/advocacy/caucus

On September 29, 2015, U.S. Representatives Marsha Blackburn (R-TN) and Marc Veasey (D-TX) announced a new Direct Selling Caucus in Congress, a bipartisan forum to build greater awareness about direct selling and discuss policy issues relevant to the channel and the 20 million Americans involved in direct selling. The event drew more than 50 people, including DSA member company executives, and also included remarks from Representative Tony Cardenas (D-CA), David Holl, Mary Kay President & CEO and DSA Board Chair, and Joseph Mariano, President of DSA. The Caucus is comprised of more than 35 founding members.

http://www.slate.com/articles/busin...n_on_herbalife_herbalife_will_fight_back.html

Aside from Herbalife investors, insiders, and its paid supporters, most people can see that the company is engaged in unsavory practices, whether they’re deemed illegal or not. Even Charles Munger, the vice chairman of Warren Buffett’s Berkshire Hathaway, which owns the MLM Pampered Chef, said this week on Fox Business News that Ackman is “totally right” about Herbalife. “It’s a disgusting company that lures poor people into buying product with too much hope it’ll pay off,” he said.

The Los Angeles company, now loaded with political operatives including a former chief of staff to Joe Biden and heavy-hitting attorneys from Boies Schiller and Gibson Dunn, has already spent more than $100 million defending itself while running attack ads on Ackman. It is also laying the groundwork to fight back against any action the FTC takes, whether through the courts or in Congress. There, the MLM industry has lined up 43 members to support its cause and, according to two individuals close to the situation, is quietly preparing legislation that, if it were to become law, would make it virtually impossible for the FTC to protect the public against most MLMs.

It is perhaps no surprise that several of the Republican candidates for president this year—Donald Trump, Ted Cruz, Jeb Bush, and Ben Carson—have had ties to MLM companies. In the Democratic camp, Hillary Clinton has several high-profile supporters (Madeleine Albright, Hilary Rosen) who are advisers to Herbalife.

Today there is more at stake than ever for MLMs, which have mushroomed into a $34 billion a year industry in the U.S. after a 1979 administrative judge gave the green light to Amway, which the FTC had charged was a pyramid scheme in 1975. While no federal law defines a pyramid scheme, over the years, the courts and the FTC have concluded that a pyramid is a company whose salespeople make more money recruiting other salespeople than selling products to consumers, even if the recruiting is disguised as the sale of a product. The much-debated question has come down to what constitutes a consumer. The FTC and decades of case law say that people who have signed up as salespeople may well consume products, but that so-called internal consumption doesn’t count when it comes to the recruitment-compensation calculation. MLM attorneys disagree and say that by that standard, few MLMs, if any, would be legal, if tested by regulators. But they seldom are. To try to get around the issue after Ackman came along, Herbalife simply renamed its distributor salespeople “members,” claiming that most people who sign complex agreements to join Herbalife (which include giving up the right to sue the company) have no interest in running a Herbalife business and just want to buy the outrageously expensive products at a discount. The company even commissioned a survey that drew the same conclusion.

In fact, an attempt by the Food and Drug Administration to shutter Herbalife in the early 1980s was stopped by Utah Sen. Orrin Hatch, who headed the committee responsible for the FDA’s budget, according to the oral exit interview by the agency’s former enforcement head. In 1986, Herbalife signed a consent decree with the state of California that mandated it provide a system for detailing retail selling if asked, but the terms do not appear to ever have been enforced. Then, the Direct Selling Association convinced the FTC to exempt MLMs from a new “business opportunity rule” by arguing somewhat incredibly that it would put too big of a strain on the companies to comply. MLM critic Bill Keep, the dean of the School of Business at the College of New Jersey, called the FTC’s decision an “erroneous conclusion” that was “naïve.” The rule was adopted in 2011 to protect individuals from unscrupulous work-at-home businesses. Timothy Muris, who was head of the FTC during the Bush era, along with J. Howard Beales, the director of the FTC’s Bureau of Consumer Protection during the same period, lobbied for the exclusion as representatives for Primerica Financial, an MLM that sells insurance.

examples from the first page of google results:
http://behindmlm.com/companies/le-vel/le-vel-sue-blogger-demand-review-be-taken-down/

Le-Vel evidently aren’t too happy about the exposure Lazy Man’s review has been getting, with a cease and desist sent to the blog on January 18th.

On behalf of Le-Vel, their attorneys accused Lazy Man of ‘making disparaging, false, and defamatory statements about Le-Vel and its THRIVE product line‘.

Le-Vel’s attorneys went on to reduce a decade of Lazy Man blog posts to a

business model of using the name of a well-known network marketing company next to the word “scam” in order to drive internet traffic.

Indeed, it appears Le-Vel objected to the title of Lazy Man’s review, which literally raised the question of whether Le-Vel was a scam.

Specifically, that Lazy Man made

statements or assertions that Le-Vel: incentivizes its Promoters to make misrepresentations; is violating FTC guidelines and regulations; is illegally violating FDA marketing restrictions; is an illegal pyramid scheme; is a scam; is not a legitimate business; supports Promoters who do not perform any function other than pyramid scheme recruiting; sets up its Promoters for failure as “a [m]athematical [c]ertainty”; is overcharging people by fifty times, for hundreds of dollars per year; sells THRIVE patches that are placebos with no ingredients; and sells THRIVE M supplements that are incomplete multivitamins.

These statements, Le-Vel contends, have ‘prejudice(d) and injure(d) Le-Vel’s business, are defamatory per se under both Texas and Massachusetts law‘.

http://www.lazymanandmoney.com/one24-threatens-to-sue-me-for-defamation/

Stop me if you've read this one before. I write about a multi-level marketing (MLM) scheme and their lawyers send me an email that I'm going to be in trouble. This happened with MonaVie twice. Yesterday, a lawyer claiming to represent One24 contacted me about my article: One24 Scam.

https://www.techdirt.com/articles/20080716/0055561696.shtml

Yes, of course, Shop to Earn got upset and sent Everyday Finance a legal nasty-gram demanding the posts get taken down. As Everyday Finance notes, it's likely this had something to do with the fact that the posts had made it up the Google search results list. The blogger at Everyday Finance tried to adjust the post, taking out things like the phrase "fatal flaw," but Shop to Earn said that wasn't good enough and Everyday Finance needed to take down the entire site. This is, quite clearly, bullying through cease-and-desist. It's about trying to shut up a negative review of their business model because they didn't like what it said.

And, it appears that Shop to Earn isn't just focused on the blogger at Everyday Finance. The company has also sent cease-and-desist letters to other blogs, which were also extremely critical of Shop to Earn's program

http://www.gazette.net/stories/03052010/businew182519_32550.php

But company executives had little to say about their $270 million defamation lawsuit filed in U.S. District Court against Barry Minkow, co-founder of the Fraud Discovery Institute of San Diego, Minkow's institute and others.

"As many of you are aware, the company has filed a lawsuit against a number of individuals who made false and misleading statements against the company," said CEO Michael S. McDevitt. "The company intends to pursue all available legal remedies to protect our employees, life coaches ... and brand."

For a year, the Fraud Discovery Institute had claimed on blog posts and elsewhere that Medifast's business model of using "life coaches" to sell products to people seeking to lose weight amounted to a pyramid scheme.

On Feb. 16, Minkow announced the institute was dropping its investigation into Medifast. The next day, shares of Medifast's stock jumped 17 percent and the company filed its federal lawsuit claiming that Minkow and the institute had defamed the company to drive down the company's stock prices.

"Medifast is no Ponzi scheme and by likening me and the company to the massive fraud perpetrated by Bernie Madoff, Minkow and his associates have gone too far," said Brad MacDonald, Medifast chairman, in a statement announcing the lawsuit.

https://www.facebook.com/jrridinger/posts/10153875841043279
(this is the guy with the awesome presentation in Oliver's piece)

It is time to stand strong and protect the Unfranchise System that has helped produce and sustain billions in residual income to average people who have become successful UFO entrepreneurs. If you will not stand for something you will fall for anything. To allow renegades, and people or companies that can not build anything on their own attack something that was build on Loyalty, Integrity, Respect and Belief (heart and Love) is taking for granted the power of and purity of what one has. When we take for granted what we have and value is when we are in jeopardy of losing it. They are viciously attacking your Market America family out of self serving selfish motive, greed and avarice. They are doing it unethically and immorally in violation of agreements and commitments that allow for business to be conducted fairly in a civil world. They are predators and you have to protect yourself and your teams. It is an organized, systematic, well orchestrated attack funded and supported by the deviant companies.

Eventually we will prevail through the legal system but they work in the shadows and under cover in disguises, alter egos, efforts and alias names, third parties names and use social media tactics to contact and lure people into a conversation. They think that this avoids solicitation but in reality they are broadcasting and advertising which is worse! It is easy to see who is involved or connected by befriending them or liking their bike post - it immediately tells you if someone on your team has been infected by the virus and you had better deal with it before the cancer spreads! By the time we win in court, unfortunately the damage is already done. They use insinuations and lies to get people’s attention. Often what they say is slander, libel, or defamation of character so if you simply document it or report it we can sue them and get injunctive relief. But you must get documentation with names and signed statements or recordings . Hear say is a wast of out time as we get hundreds of calls. Team up with your senior partners and become the private eye.

 

[J-Tier]

I sat through a meeting for one before. My mom was invited by a "friend" who she met for the first time earlier that day that invited her to lunch--after which she invited my mom to their special opportunity meeting the next day. I decided to sit in with her to make sure she wasn't getting roped into some kind of MLM. Lo and behold, it was one.

It's super bizarre, every person that attends any of the meetings feel "fake". They're all putting on airs, trying to come off as someone important. They talk about their ranks and brags about knowing or being associated with some other random person of a high rank. The entire room was full of minorities awkwardly talking to each other about how much money they make with way-too upbeat music blaring off to the side, while two white guys in suits walked about the room shaking hands and getting the celebrity treatment (apparently the CEO and COOs of the company). The whole thing was fucking surreal. After my curiosity waned, I got out of there as quickly as possible with my mom, leaving behind false contact info.

 

[Morrigan Stark]

Prison?

How would you make MLMs illegal under a libertarian regime, without additional FTC-like regulations? Be specific.

So, uh... what's the libertarian solution here? How would libertarianism stop any of this? Because as far as I can tell the argument here is that we need stricter and smarter regulatory bodies, which is kind of the opposite of libertarianism!

Yup

 

[border]

Did you miss the part where MLM is not considered a crime currently? They're not pyramid schemes because pyramid schemes are illegal.

I'm not going to watch the entire 30 minutes again just to see, but if Oliver openly called one of them a pyramid scheme he can be sued for it. He wouldn't be the first person sued for accurately depicting their business model.

That's why the Bullshit! episode only strongly suggests it while showing pictures of pyramids without ever directly stating it.

You can pretty much sue anyone over anything, if you have the money to pay your lawyers....but those would all be civil suits. Are MLM operations going to be criminally liable under the Libertarians? Is that a part of their platform at all?

What is it that makes you think a libertarian Congress or President wouldn't be equally as susceptible to lobbyists or huge donations from MLM interests? As far as I can tell the Libertarian party is not running on a platform of campaign finance reform.

It's easy to sit back and say "If my party were in power, we wouldn't have these problems!" But at the same time I think it is hard to imagine them not falling prey to special interests, if they had seats in Congress they wanted to protect.

 

[benjipwns]

How would you make MLMs illegal under a libertarian regime, without additional FTC-like regulations? Be specific.

Pyramid schemes are currently illegal, it's FTC regulations that make MLM's technically not pyramid schemes under administrative law rulings. They've enacted their own hurdles to prosecuting under existing law. The Madoff affair was a perfect example of this, the SEC was being given definitive proof for decades that it was a ponzi scheme and instead investigators were leaving their resumes with Madoff while in the process of accepting his impossible numbers because opening an actual criminal case would have been too messy.

Remove the government protections and it's a crime again.

What is it that makes you think a libertarian Congress or President wouldn't be equally as susceptible to lobbyists or huge donations from MLM interests? As far as I can tell the Libertarian party is not running on a platform of campaign finance reform.

It's easy to sit back and say "If my party were in power, we wouldn't have these problems!" But at the same time I think it is hard to imagine them not falling prey to special interests, if they had seats in Congress they wanted to protect.

What is it that makes you think I support the Libertarian Party?

The Party does have campaign finance reform in the platform xxracerxx posted. Though the latter part of it is unconstitutional and I'd argue rather unlibertarian.

 

[border]

What is it that makes you think I support the Libertarian Party?

Probably because you have been arguing in favor of replacing the current parties and their positions. I mean, if you don't like the Libertarian Party that is fine, but I generally don't see how replacing Democrats and/or Republicans with a different party is going to change things. Every group with power is going to cater to the special interests that bankroll them.

The Madoff affair was a perfect example of this, the SEC was being given definitive proof for decades that it was a pyramid scheme and instead investigators were leaving their resumes with Madoff while in the process of accepting his impossible numbers because opening an actual criminal case would have been too messy.

The questions worth asking then are -- What defines a pyramid scheme? How is the Madoff case demonstrably different than a multi-level marketing campaign?

 

[Renekton]

Wasn't Madoff case a Ponzi scheme instead of Pyramid?

 

[DoctorManhattan]

Madoff was a ponzi scheme not a pyramid scheme.

 

[benjipwns]

Probably because you have been arguing in favor of replacing the current parties and their positions. I mean, if you don't like the Libertarian Party that is fine, but I generally don't see how replacing Democrats and/or Republicans with a different party is going to change things.

Where did I argue this as a solution?

The questions worth asking then are -- What defines a pyramid scheme? How is the Madoff case demonstrably different than a multi-level marketing campaign?

It's not, they're both fraud. Protection from being prosecuted for running a pyramid or ponzi scheme only lasts until it doesn't in a system that's arbitrary and capricious.

Wasn't Madoff case a Ponzi scheme instead of Pyramid?

Madoff was a ponzi scheme not a pyramid scheme.

Right of course, my error. Also, another reason he lasted longer.

 

[border]

Where did I argue this as a solution?

Well then what solution do you propose then? You claim these operations are committing fraud, but it seems that they pretty clearly walk the line between fraud and a speculative investment. What changes to government are going to give a team of federal investigators the power to prosecute them successfully?

 

[benjipwns]

You claim these operations are committing fraud, but it seems that they pretty clearly walk the line between fraud and a speculative investment.

Not really, requiring more than the population of the galaxy to become members to remain sustainable even for the owners would not make it a very good long term investment.

That's why you short them*, not join them. Or start them I suppose.

Spoiler

*And then get arrested for shorting them because it's insider knowledge to know that a company is running a pyramid or ponzi scheme.

 

[Prototype Viktor]

Penn and Teller take down on POM and the likes was betta, weird they still can't say pyramid scheme


The libertarian solution to MLM is to let the dumb people lose their money and it's finite

 

[jellies_two]

I feel sorry (almost) for that activist billionaire who keeps going after herbalife, and keeps getting burned, as another layer of the pyramid arrives at the bottom.

Oh turns out there is a film on his battle to make a fortune proving it is a scam:

http://www.bloomberg.com/news/artic...istribution-deal-iv866nib?cmpid=yhoo.headline

 

[uceenk]

i actually fall into MLM around 10 years ago

i am shy person, it's kinda amusing that their conferense/brainwash actually can make your "shyness" away

i managed to meet stranger or even demonstrate product to not so close relatives

the reason i finally give up were (joined only 4 months)

1. it's actually very hard to make money out of this
2. the practice is unethical, they even train you how to force people to join

it's so embarrasing if i remember this moment

 

[solomon]

God the people who join these companies are all over Miami.

 

[Pakoe]

I was lifting weights, when a friend that I've known for a long time came up to talk. Now, normally I don't like to talk when I'm training, but since I've known him for such a long time, I took off my headphones to have a normal conversation. I thought.
He began asking if I wanted to make some money, at first I thought he meant selling drugs or worse, my own ass. But no, "It's legal, and fast!".
Then he continued telling me about how the marketing worked, and how he made such big amount of money, that he was able to buy this brand new car! He had tons of clients, some even family. Wow, I'd be crazy to let this opportunity go! He told me that I could get in contact with the leaders of the group, he was so high up that he could make this happen. That special snow flake.
Now, this had been going on for a couple minutes and I started to get annoyed, so I asked some questions. "What is it? And if it isn't a product, what service are you providing?". I kept getting these vague answers back. "You have to join our team, we're having a meeting soon and i can get you in", he said. "You'll get all the answers you want!".
Now I don't have all the time in the world, so I politely refused the offer, but was open to do some research back home. "Who, or what do you work for?", I asked. "I am my own boss", he said back. At that time I just started laughing. "Do I look like a clown? You think I'm gonna fall for this shit?". He attempted some damage control by giving me a 'bro' talk, but in the end I shook his hand and kindly told him to fuck off.
Back home I started doing some research, by asking people in the gym and friends. Apparently, I wasn't the only one that had received this amazing opportunity. He basically went to the gym, just to ask people if they wanted to join him.
I don't remember what company he was 'working' for anymore, but it had something to with electricity. It came down to the same thing. He's supposed to get money, by making other people sign up through him.
Shameful thing is, he has basically fucked over family and close friends by having them accept this offer.
That was the last time I really spoke to him, I don't feel the need to have him as a friend either. I'm guessing things didn't work out that well for him, because I haven't heard much of his accomplishments ever since.

 

[Shaneus]

Best I can tell, MLM is basically Scientology. Or vice versa.

 

[Lkr]

I watched this last night and couldn't help but notice the Herbalife people at the gym tonight. I wonder if they got scammed or got lucky and just got themselves a free shirt. Interesting how he said they are targeting hispanics primarily now because the few people I've seen at my gym with Herbalife shit have been hispanic

 

[Familienoberhauptvogel]

If the stuff in the hidden camera video doesn't ring your alarm bells that's frightening. It's obviously a ponzi scheme.

Also libertarian makes no sense.

 

[Stormwatch]

I have few friends on Facebook currently doing Beachbody/Shakeology. The funny thing I've noticed is that they suddenly started liking and commenting on everyone's posts more than usual to fool Facebook's algorithms into showing their marketing posts more often.

 

[atomsk]

Had one of those "group interviews" with Vector when I was 19, they had contacted me off my resume on Monster.com

As soon as I realized it wasn't a real job with a salary, I got the fuck out of there. Told the guy I was looking for "real work"

He goes "oh... so you ONLY want to make 40k a year" (keep in mind I was working a minimum wage supermarket job at the time)

I responded "that would be fucking amazing" and walked out.

 

[Commanche Raisin Toast]

I was invited to a "money making opportunity" last month by a few friends I rarely hang out with, and it turned out to be a Kyani presentation.

I had to feign mild interest the remainder of the night because they had free beer and food and a hot tub.

 

[jett]

I don't understand how are these companies allowed to exist.

 

[gnexus]

I've seen many, many people I know get involved with this crap. I've also had to piss off many of those people by not getting involved in the dimaryp scheme with them. A couple years later, nearly all of them are still spinning their wheels right where they started. Only one person seems to be doing ok for herself. She's always posting pictures from these ridiculous conferences and her "team". It's basically her and a lot of very, very young people who are straight out of high school that don't know any better. She's always blasting crap on Facebook on how we should be entrepreneurs and achieve to be double black diamonds.


The whole industry is just predatory and very gross.

 

[Zaru]

I don't understand how are these companies allowed to exist.

But it was already explained.
Lobbying. Paying off the right people and getting the right people into the right positions. It's easy when you make that much money.

 

[Conkerkid11]

Wow, great piece.

A company called Cutco tried to pick off Juniors and Seniors at my high school. I think they're still doing it too.

Fortunately I'm not sure anybody got too deep into it before getting out.

Though now I've got a friend I think I should be concerned about who told me a couple years back that he was was making a bunch of money importing goods who just the other day I saw working at Costco.

 

[collige]

Pyramid schemes are currently illegal, it's FTC regulations that make MLM's technically not pyramid schemes under administrative law rulings. They've enacted their own hurdles to prosecuting under existing law. The Madoff affair was a perfect example of this, the SEC was being given definitive proof for decades that it was a ponzi scheme and instead investigators were leaving their resumes with Madoff while in the process of accepting his impossible numbers because opening an actual criminal case would have been too messy.

It reads to me like the longer term solution to this and similar issues would be to limit lobbyist influence on regulatory agencies which I would imagine goes against libertarian principles of free association, no?

 

[AbsolutBro]

The FTC's decision to let Herbalife off the hook was another powerful reminder of why I'm a libertarian. If you hire the right bureaucrats and spend enough on lobbying, I guess you can get away with robbing poor people blind.

Most libertarians consider fraud to be a crime.

Interestingly, the FTC does not.

Arrested and charged with fraud among other things?

You don't need an agency that dispenses benefits and protections for favored corporations to do that. The FBI and local authorities could do it, like they already do in these cases.

You all do realize that the FTC is NOT a law enforcement agency right? The FTC has NO arrest power what so ever, and exists to protect consumers through civil statutes and law.

Herbalife was not "let off the hook". The FTC forced some pretty substantial changes to their business model that even Bill Ackman (who filed the initial suit) is good with. I mean, you are basically taking the Herbalife CEO's word that nothing will change.

The FTC DOES obviously consider fraud to be a crime, given the FTC has filed cases against Herbalife, Vemma (also mentioned in the video), Volkswagen, most of the for-profit colleges like DeVry and ITTech, all kinds of real estate flipping, tax lien groups and all other kinds of shit. They recently got a $1.3BILLION settlement against a payday lending group.

"Dispenses benefits and protections for favored corporations"? The FTC gets money back from these assholes to give BACK to consumers who have been robbed or cheated. The vast majority of FTC cases stem from consumer complaints.

 

[awesome_pants]

My best friend's sister got wrapped up in the Cutco scheme. It was a chore explaining to her that it was a pyramid scheme and basically had to draw her explanation of the company's operations in which, lo and behold, it created a perfect pyramid.

Luckily she quit a month into the program.

Another great piece by John Oliver. Whatever we can do to get people out of these 'make money quick' cults.

 

[jett]

But it was already explained.
Lobbying. Paying off the right people and getting the right people into the right positions. It's easy when you make that much money.

Yeah I posted before getting to that part in the video.

Lobbying is pretty much legal corruption, huh.

 

[AbsolutBro]

Lobbying is pretty much legal corruptionprotected speech, huh.

Yup! Thanks SCOTUS!

Spoiler

fuckin citizen united bullshit

 

[razgriz417]

My grandma and family were all suckered into the Amway thing growing up. Had a ton of vitamins to take everyday and grew up on their shitty orange powder drink, ugh...

 

[paskowitz]

The worst part about these schemes is that when people "pitch" them to you at college, they "try" to be your friend. If they are smart and don't let on right away, you actually think, "Hey, this person seems cool." Then they drop this shit on you and you are like, "Oh fuck, no no no... you are one of them. So that girl you introduced me to, she was also one of them? And that beer pong match we won... oh god. That millionaire you want to introduce me to... All of that was for this shit." Not to be overly dramatic, but it is violating. True story.

 

[Conkerkid11]

My best friend's sister got wrapped up in the Cutco scheme. It was a chore explaining to her that it was a pyramid scheme and basically had to draw her explanation of the company's operations in which, lo and behold, it created a perfect pyramid.

Luckily she quit a month into the program.

Another great piece by John Oliver. Whatever we can do to get people out of these 'make money quick' cults.

The worst part about these schemes is that when people "pitch" them to you at college, they "try" to be your friend. If they are smart and don't let on right away, you actually think, "Hey, this person seems cool." Then they drop this shit on you and you are like, "Oh fuck, no no no... you are one of them. So that girl you introduced me to, she was also one of them? And that beer pong match we won... oh god. That millionaire you want to introduce me to... All of that was for this shit." Not to be overly dramatic, but it is violating. True story.

If you're a person who's literally just constantly trying to get people to join in on the pyramid scheme you're in, that's actually kind of scary to think about.

Like hey, this guy wants to be my friend. He's really nice. Oh no. He's one of them. I thought we had something special.

 

[Lolo11225]

I have a ton of family members and friends that got sucked into Primerica. They're convinced it's not a pyramid scheme because their not buying tangible goods.It sucks watching them pay hundreds of dollars for fake finance certifications and find out that the only way to make some sort of money is to recruit people to do the same.

 

[benjipwns]

You all do realize that the FTC is NOT a law enforcement agency right? The FTC has NO arrest power what so ever, and exists to protect consumers through civil statutes and law.

I know, that's why I mentioned the FBI and Justice. Anyway, I am arguing that there are crimes being committed so there would be criminal prosecutions in a hypothetical libertarian fantasy world, not complete ignoring of it. And that would be a policy perfectly consistent with standard libertarian views. Which is what was asked. I already expressed that a libertarian solution would not necessarily be mine or that I approve of libertarians being so naive, instead I was explaining how they would still be crimes as they are now.

The Justice Department and States regularly engage in criminal fraud prosecutions, so it's not like it's some crazy pipe dream. It's just usually against individuals or small fish or people who have already gone belly up. Plus, civil cases by the government in general are stat padding. (In the case you linked, most of the defendants settled out for under $40 million combined. And the ones who just got the settlement against them were criminally charged by Justice and arrested separately earlier this year for a whole bunch of shit.) Even violations of civil settlements don't bring the hammer down that often if you're big enough. Just larger settlements.

In this case however, we can fault the FTC (and Congress) because they wrote the exemption for "legal" pyramid schemes into the law and haven't reversed it. (Nor has Congress.)

It reads to me like the longer term solution to this and similar issues would be to limit lobbyist influence on regulatory agencies which I would imagine goes against libertarian principles of free association, no?

More relevant would be that it's not possible to prevent regulatory capture with more regulations. Unless you intend on staffing agencies with people who know nothing about what they're regulating. Knowledge of the industry and knowledge of the regulations makes them valuable to those in the industry as well as the agencies.

Especially if they're of a status where just their name makes things happen so you can hire them just to talk to old friends rather than have to actually employ them in the details of your business.

 

[Empyrean Heaven]

When I was unemployed in 2009, during my job search, I had MLMs throwing themselves at me to try and get me to sign up with them. Mostly, though, it was insurance, mortgage companies, and door to door sales. And it has always been an issue throughout my job hunting career. One of my favorites was when TruGreen called me to set up an interview for a door-to-door sales job, completely commission based, no included benefits. When I told them I wasn't interested, the phone rep basically badgered me into going to the interview, asking me "How are you going to provide for your wife and family?" and telling me that I was forgoing a great opportunity and should just swallow my pride and take it. I hung up immediately and contacted their main office to file a complaint.

Also, around here, Primerica (an MLM that basically just helps people budget their money, which any idiot with a calculator can do already) has a huge presence, and when I worked retail they'd frequently canvass our stores trying to hand out coupons to sign up and were super aggressive.

 

[benjipwns]

I don't think TruGreen is a MLM, it's just a horribly run company with absurd and incoherent sales goals and methods. Kinda like GameStop for lawns, without the profitable used business. Unless they've expanded into that field. MLM, I mean, not used lawns.

Although...

 

[kiunchbb]

When I was unemployed in 2009, during my job search, I had MLMs throwing themselves at me to try and get me to sign up with them. Mostly, though, it was insurance, mortgage companies, and door to door sales. And it has always been an issue throughout my job hunting career. One of my favorites was when TruGreen called me to set up an interview for a door-to-door sales job, completely commission based, no included benefits. When I told them I wasn't interested, the phone rep basically badgered me into going to the interview, asking me "How are you going to provide for your wife and family?" and telling me that I was forgoing a great opportunity and should just swallow my pride and take it. I hung up immediately and contacted their main office to file a complaint.

Also, around here, Primerica (an MLM that basically just helps people budget their money, which any idiot with a calculator can do already) has a huge presence, and when I worked retail they'd frequently canvass our stores trying to hand out coupons to sign up and were super aggressive.

I had one that pretending to be real job interview, then after the fake interview is over, they took me to a MLM conference right next door. What a waste of time.

 

[benjipwns]

I had one that pretending to be real job interview, then after the fake interview is over, they took me to a MLM conference right next door. What a waste of time.

I believe this is one of Vector's best known tactics. The pre-interview is actually to try and weed out people who might bring down the mood of the conference with their questions like "wait, this doesn't make sense?" and "isn't this a pyramid scheme?"