Multi-level marketing (MLM) scams have been around for decades, preying on individuals looking to start their own businesses or make some money.
These scams often promise great financial rewards and the opportunity to work from home, but the reality is that most individuals end up losing money. MLM scams can be pyramid schemes and ponzi schemes, where the people at the top make all the money, while other left with nothing.
They encourage individuals to buy the overpriced products and then sell them to friends and family. In addition, they offer commissions to those who recruit others to join the company.
In this article, we will take a closer look at the top 5 worst MLM scams currently operating in the world. So, whether you are considering joining an MLM or are just curious about these scams, check this post till the end.
Worst MLM Companies
Note that, not all MLM companies are scams, but it’s crucial to do research before joining one. MLM is legal in most countries and various money-circulation scams pretend to be MLM, as they have similar compensation plans.
One can inspect MLMs by checking product quality and looking for red flags such as high recruitment costs, lack of transparency, and false claims.
Now lets us look for the Worst MLM companies that are active and deceiving people.
Amway, an MLM company is now under investigation by the Enforcement Directorate (ED) of India for operating a multi-level marketing scam. The ED has seized assets worth INR 757 crore belonging to Amway India Enterprises Pvt Ltd under the Prevention of Money Laundering Act (PMLA). These assets include land, factories, machinery, bank accounts, fixed deposits, and vehicles.
According to the statement by ED, Amway was falsely promoting itself as a direct-selling company, but in reality, it was operating a pyramid scheme. The company was luring individuals into joining the company and purchasing its products at inflated prices with the promise of becoming a member.
The ED claims that the main goal of Amway was not to sell products but to add more and more members to the pyramid. The company was using the commissions earned by the upline members to hike the prices of their products.
Amway has faced such backslash across the globe and various scams are named on Amway.
2. iX Global
iX Global is a multi-level marketing (MLM) scam that operates under the guise of a financial services company. The company is registered as LLC in Bountiful, Utah, USA. Its founder, Joseph Anthony Martinez, is the only known person behind it.
Martinez has been a promoter of a money-circulation scheme, Kuvera Global, which is now rebooted as iGenius, another MLM scam. The company and its operators do not provide enough information about their backgrounds and address.
iX Global has no permission to provide financial services. It is also promising guaranteed 5-20% returns, which is not possible in the real world.
iX Global Academy Pvt Ltd is a company that has been accused of operating a Multi-Level Marketing (MLM) pyramid scheme and violating several laws and regulations.
Furthermore, the company is accused of dealing in monetary deposits, investments, trading in commodities, live stocks, forex, cryptocurrencies, sports betting, discount coupon vouchers, etc., which is illegal. It is not registered with any government financial regulators and does not have permission to provide such services.
3. Success Factory
Success Factory is an MLM company that claims to provide financial services such as forex tips and online services through its products like BANK Connect, Forex Insiders and The View.
However, these products are worth nothing and members are required to pay hundreds of euros as monthly subscription costs. Success Factory is not an authorized financial institution, so the forex tips from its supposed experts and AI system can cause financial trouble for investors.
The company’s founder, Nils Grossberg, is also a top promoter of the 4 Billion Ponzi scam OneCoin. OneCoin, which promoted itself as a cryptocurrency, was widely popularized and millions of people became part of it before it was caught by government authorities.
The co-founder of OneCoin, Konstantin Ignatov, was sentenced to 90 years in jail in November 2019.
Success Factory heavily encourages members to invest in DagCoin, a useless cryptocurrency that is not listed on any popular exchanges or crypto listing sites. DagCoin operates as a ponzi scheme and locks members’ money for a few years with the promise of a fixed return.
Already warning has been issued by Central bank of Russia, Central bank of Oman and Bermuda Police Service that Success Factory is a pyramid scheme. They advise citizens and investors to stay away from such schemes and not invest in them.
4. Omega Pro
OmegaPro, a Ponzi scheme that was based out of Dubai, has recently collapsed and completed its exit scam. The company had informed its investors in an “urgent client communication” that it had sold its investor database to Broker Group.
The company disabled withdrawals in November 2022 and this was followed by a failed XPL token launch. They gave an excuse saying that “we got hacked!”
The company had received securities fraud warnings from countries such as Peru, Congo Republic (multiple arrests), Spain (two fraud warnings), Mauritius, Argentina, Colombia, Chile, Nicaragua, France (added to fraud blacklist twice) and Belgium.
The company was run by Andreas Szakacs (Sweden), Mike Sims (US) and Dilawar Singh (Germany).
Dubai is known as the MLM scam capital of the world and is home to many pyramid schemes and ponzi scammers.
iGenius is a company that claims to offer financial freedom through its various membership tiers, training, and virtual services. However, a closer examination of the company reveals that it operates as a pyramid scheme, preying on unsuspecting individuals.
The parent company of iGenius is Investview, which is a publicly-traded company with a market capitalization of over $90 million.
The founder and president of iGenius, Chad Garner, has a history of involvement in questionable business practices.
He was part of the founding team for Daily Bread, a direct sales company that went out of business in 2017 after a judgment against them for illegally offering forex and finance options.
The iGenius business model is a pyramid scheme. The company offers a $25 referral fee for signing up other members and various upgrades, fees, and bonuses for pressuring customers into handing over more money.
The SEC urges investors to exercise caution and to thoroughly research any investment opportunity before handing over any funds. If you have information about iGenius or other potential securities frauds, you should contact the SEC’s Office of Investor Education and Advocacy.
Above 5 worst MLM scams such as Amway, iX Global, and iGenius, are known for operating pyramid schemes, false advertising, and lack of transparency.
These companies have been under investigation by various government agencies for their illegal activities. We have provided just a few names, but the list is large.
They falsely promote themselves as a direct-selling company, but in reality, they are money circulations.
It is a suggestion for individuals to do proper research before joining any MLM company and to be aware of the red flags.