Posted by & filed under Direct Sales FYI.



After doing some research online this evening, I came across some of the reports on travel scams that have been  going on, cheating consumers out of their hard earned money. When times are a bit tough, it seems these pyramid schemes, come out from under every rock. I personally, several years ago, was a victim of one of these travel pyramid schemes, and again, before the start of Bella Shaye Jewelry, was yet involved with another company,that was about as close to a pyramid scheme as you can get, legally.  The percentage of commissions paid out was higher for recruitment than the commissions for actual sales.  That is right, you made a higher commission percentage on the recruitment of others as opposed to your sales or the sales of your team members.  Only 1/4%-1/2 % (yea that is one quarter to one half percent) on your actual sales. Thankfully I got out right away!  Hmmm, I wonder why, they didn’t give me the paperwork on my sales commissions and that of my downline until after I had signed up and they had my $300.  I should have known better.


In this industry, some will rely on the company paid membership listings of the DSA, as to whether a company is legitimate.  Although the DSA boasts that all listed member companies adhere to the strict code of ethics of the DSA. I would assume the majority probably do. It appears the DSA has had some difficulties of its own, determining the legitimacy of a company and possibly following up on the membership company’s practices. The company mentioned above (the one that got my $300) is currently listed and a few of the others were previously listed with the DSA.   According to the DSA website,  approximately 200 companies are listed as members of the DSA.  Does this mean those who are not listed as paid members, are not legitimate?  Of course not!  There are hundreds of legitimate companies out there world wide and many more start up each year.  The DSA has only about 200 direct sales companies listed.  There are hundreds if not thousands of direct sales companies.

So what is a person who is looking into direct sales, MLM and party plan to do? Please do your research and please don’t rely solely on one organization for information on a company.  Check also with the BBB, Attorney General in your state, and other legitimate organizations, to see if  any “complaints” exist on the company and go with your gut instinct.  Remember most organizations will only list complaints- not “kudos”.  Party Plan companies, (using the term party plan to substitute for all direct sales, MLM and party plan itself) since they are nationwide companies, may not appear as a “member” of your local BBB. Membership of the BBB does not imply that a company has had no complaints. Google online for complaints, but please keep an open mind when doing so.  It appears that some, write complaints online when they just didn’t read or follow their signed contract with a company and are upset when the contract is enforced.  Others may have fallen victim to a bad sales representative.

Quoted by False;  The multi-level marketing scheme, Your Travel, which is now being sued by the California Attorney General as a “gigantic pyramid scheme,” won membership in the Direct Selling Association in 2007. DSA is the lobbying and trade group for multi-level marketing. It advertises its membership list like a Good Housekeeping Seal of Approval for MLMs.  In a Sept., 2007 press release when YTB was given membership, the DSA wrote:
“The members of the Direct Selling Association pride themselves in their commitment to the highest standards in business ethics,” said DSA’s President Neil Offen. “By applying for membership in the association and going through a rigorous approval process, these companies are saying they take their ethical obligations to their field salesforce and to the ultimate customer seriously and are willing to make a public pledge to that effect.” To read more of this article
or visit False Profits at

This does not by any means, mean that “all” MLM, Party Plan or direct sales companies are a Pyramid Scheme.  Legitimate MLM’s, Party Plans and Direct Sales companies will pay you on your sales and on the “sales” of your downline  team members, but recruiting will not be the main focus and there will be a tangible product which is sold.  You will also be required to make an investment of a business start up kit.

Here is the definition of a Pyramid Scheme:

Pyramid Scheme:

From Wikipedia, the free encyclopedia

The unsustainable exponential progression of a classic pyramid scheme

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public. [1][2]

The majority of party plan companies primarily base your earnings on a product to sell, which would exclude them from a pyramid scheme.

Quoted by the FTC (Federal Trade Commission) “Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”  View this article from the Federal Trade Commission

Great money can be made with legitimate direct sales, MLM and party plan companies, but if it sounds to good to be true it probably is.