- 11,475
MLM misrepresentation is a very different issue than operating a pyramid scheme. Both are illegal but they are not the same violations of the law.
Can some one aware me on Primerica
- Thread starter InsurancePimp_
- Start date
MLM misrepresentation is a very different issue than operating a pyramid scheme. Both are illegal but they are not the same violations of the law.
And yet the FTC lists misrepresentation as a classic pyramid scheme red flag under their MLM webpage. Without misrepresentation, the supply of victims dries up. Unfortunately, the FTC places the onus on the public to make the final determination, while allowing self-regulation of the MLM industry. They are essentially a police force that warns the public that there may be an active shooter in a building while allowing you entry.
- 11,475
Yes, I am. They are a publicly traded company. By definition they are not an illegally operating pyramid scheme considering that they are subject to SEC, FINRA, and other oversight.
Now, their INDEPENDENT AGENTS... that's a different story, particularly in how they are representing themselves.
Just like I (and I'd recommend every agent out there to) delineate between the insurance COMPANY and the CULTURE of that company... there is a difference between operating a PYRAMID SCHEME and misrepresentation of their legitimate business.
It often comes down to the individual reps conduct in the marketplace.
The FTC sent out warning letters instructing MLMs that they will be held corporately responsible for any misrepresentations made by their distributors, to the tune of $43,792 per violation. These claims are not made by a few rogue reps, they're systemic. But again, the FTC allows self-regulation and only responds when a significant number of complaints are filed. https://www.ftc.gov/news-events/new...-money-making-claims-could-lead-big-penalties
Enron was publicly traded for a number of years. As is Herbalife ($200M fine/7 years operating probation).
SEC, FINRA, and other oversight.....but the business model, MLM, has no direct government oversight......re: Self-regulation. SEC monitors public trading of stock/financial reporting. FINRA regulates the products but does not regulate the value of those products. I can sell you a $1 face value term policy for $1M a year in premiums.....legally.
Advocare operated for 29 years, totally legally, before the FTC declared them an illegal pyramid scheme in 2019. They continue to operate today. You're suggesting they only became a pyramid scheme in 2019 but were totally legit prior to that. I'm suggesting they were legal until the FTC launched an investigation, not because it was part of regularly scheduled oversight, but because of public complaints filed. Had the public not complained, Advocare would be business as usual.
- 11,475
Not from an insurance company. You can forge the documents and steal the premiums, but no insurance company will issue a policy on those terms.
This is your pet subject matter, so I'll defer to your subject matter expertise. I just know the mechanics of a pyramid scheme, not the history.
Let me guess? They have a product so they can't be a pyramid scheme??? Herbalife....Vemma.....Advocare....etc all had products. The FTC's website has a list of red flags to watch for under their Multi-Level Marketing tab. I defer to their judgement, which completely differs from yours. Making money from recruiting is illegal. Making money from anything a recruit buys is legal. Do you see any distinction?
- 11,475
Apparently you do. I also know that Primerica reps can and do sell to people OTHER than those they recruit. Otherwise 100% of their policyholders would also have been reps. Ran into too many people who have Primerica policies who were never agents.
Again, company vs rep behaviors are two different things.
Even then... I enjoy this video clip:
Similar threads
