Kevin Thompson (an MLM attorney) records a short YouTube commentary responding to Frank van der Sloot’s public statement distancing Melaleuca from the MLM industry. Thompson argues Melaleuca meets common definitions of multi-level marketing, citing membership in the Direct Selling Association (DSA), use of a matrix pay plan, recruitable genealogies, product-driven commissions, and occasional litigation against competing MLMs (e.g., a 2010 TRO involving Max International). He challenges van der Sloot’s framing that Melaleuca is unlike Amway or Herbalife and invites further discussion.
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Hi, everyone here. Kevin Thompson from themlmatorney.com and I wanted to get a discussion about Frank van der Sloot's statement with the media recently. It's sort of a stream of consciousness. You're going to have to bear with me. There's a lot of information here. But van der Sloot got called into question because he, or maybe an entity that he controls, contributed to one of Mitt Romney's super pacs. And the media went after him. They called him out on some conduct that he's done in the past or allegedly done. Whatever they said, it prompted him to issue a statement, very lengthy statement. And part of that statement, he really tries to distance himself from the MLM world, arguing that, well, quote it right here, and it's actually in the article beneath this video. But he says, it's unfortunate that someone would suggest that Melaleuca is something like Amway. It's not. And he further goes on to say, I challenge anyone. Well, first he says, contrary to those who do not know us, our business model is nothing like Amway or Herbalife, Nothing like those two companies. I challenge anyone to find any similarity whatsoever. So this is me sort of answering that challenge and kind of pointing out some pretty obvious facts about the Melaleuca model. Now, first, he starts off by saying, we started 26 years ago to market environmentally responsible products and to provide a business opportunity for folks who weren't successful in climbing the corporate ladder. We try to be champions of the little guy. That sounds a whole lot like the founders of Amway 50 years ago and sort of the reasons why they started Amway. But that set aside, here's some basic reasons why I would put Melaleuca in the MLM category. Number one, they're part of the dsa, which is an association that I'm a member of. They're a member of the direct sales association, which is a trade association that largely represents MLMs, most notably Amway, Herbalife, Avon, Mary Kay Shackley, and a whole bunch of other companies. And that trade association is primarily designed to protect the MLM industry. That's obvious. That was easy. Some of the early attorneys with Vander Sloot in the early 90s were Kevin Grimes and Spencer Reese. Those guys went on to become MLM attorneys. And it wasn't a coincidence. They were familiar with MLM law because of their association with Meluca. That's anecdotal. There might be other reasons why they chose to be MLM attorneys, But I'm just trying to connect the obvious dots here. Number three, they Operate a matrix pay plan. And in my opinion, that makes them an mlm. Now, the ftc in a case has defined a multi level marketing program as. I'm going to read the notes here, and you can read it in full below. And I'm going to try to summarize it and go fast. But it's a program where people pay money to join in exchange for the right to recruit other participants. In malaleuca, you can recruit participants or have additional participants place underneath you. Basically, you can create a genealogy. In melaleuca, you can do that. You can also sell goods or services. So I think the second element is also met with melaleuca. You can join their business, recruit people, and you can sell their products, which are good products. Number three, you can receive commissions, Provided that the payments come from basically product sales, product driven commissions. And I think the third element is pretty clearly met with melaleuca's model. They've been doing it for a long time. So another reason is that melaleuca, on occasion sues distributors, or they sue companies. And largely because when distributors leave melaleuca, they join a competing company like max international. There's a case out there, 2010, I think, where melaleuca actually won a temporary restraining order against max international. Because max was considered a competing business. Why are they competing business? Because max international is a multi level marketing company. And they compete directly with melaleuca. Just more kind of obvious dots why melaleuca is a network marketing company. So those are the obvious reasons. And I'm thinking to myself, maybe he has a good reason to do this. Maybe it was a bad day, or it's a bad press release, or somebody else wrote it. There could be an explanation, and if there is one, I welcome a response on the site. But he goes to great lengths to kind of throw the industry under the bus, which I personally have a problem with. He says it's nothing like a amway or herbalife. And then he goes on to say, there's no investment of any kind. Unless you want to call a $29 membership fee an investment. We don't have to invest in amway to join. And they have a very small enrollment fee. He says, we do offer a home based business opportunity, but it is no pyramid scheme. So is he sort of saying that amway and herbalife are pyramid schemes? And he says, we have long been critical of the many mlm pyramid schemes operating in this country. Now. The mass media is confused enough as it is. Distinguishing good MLMs from pyramid schemes. In this one statement, he lumps the two together. And there is a difference. Right? A legitimate mlm is not a pyramid scheme. But based on how I read this sentence, he's sort of combining the two. We've been critical of mlm pyramid schemes. We, Melaleuca. We're not an mlm, and we're not a pyramid scheme. I think that was kind of inappropriate to do that, because melaleuca really benefits from the collective efforts of the mlm community. Melaleuca is a very prominent member in the dsa, and the dsa has done a lot to protect the industry on a nationwide basis, and melaleuca has helped in that effort. So collectively, these companies come together through this trade association, and it protects the industry. They fly under the blanket of that protection. And at the signs of trouble, Van der sloot is sort of saying, well, we're not a pyramid scheme like amway and herbalife. Well, amway's done a lot to protect the space, but which is very beneficial to melaleuca. So I think that was poor strategy on his part. And, yeah, those are my thoughts. And it might be controversial, but I think it's pretty clear that melaleuca is an mlm. So with all that said, I hope you found it interesting again. Kevin Thompson, the mlm attorney. And please leave a comment or hit the one button above if you really like the article or the video. You take care. Bye. Bye.
