AS STUDENTS adapt to online classes, some have received messages on their social media accounts from individuals promising passive income from the confines of one’s home. These messages occasionally come from multi-level marketing companies (MLM) such as Usana Health Sciences, Inc. (USANA) and Herbalife as they have boosted recruitment efforts in hiring students to be part of their sales network.
Although operations of MLM companies are legal under Republic Act 7394 or the Consumer Act, these companies have been criticized locally and internationally for allegedly operating akin to illegal pyramid schemes. As the COVID-19 pandemic continues to push many Filipinos out of work, operations like this may pose a risk to students’ careers and financial security as economic conditions remain unstable.
Inner workings
Despite the flak MLM companies have received over the years, recruiters still manage to freely operate and recruit associates into their own sales network. Marketing and Law Lecturer Atty. Eugene Kaw attributes their continued operations to their supply of legitimate products that they can sell through networking. This contrasts typical pyramid schemes, which only require people to give money as investors without any exchange involved.
Kaw also notes that young adults engage in this scheme because of the prospect of high returns for recruiting people into their sales network. “That’s why those on top of the network or pyramid make the most money. A lot of people get enticed or encouraged by that prospect of profit because they only spend once, then they bank on their network of friends and people they know after,” he explains.
Iggy Franco, an Atenean who was nearly recruited by USANA mentions that associates tend to operate at a net loss unless they hire enough people to their sales network.
Aside from this, companies’ recruitment processes have strict workflow and guidelines to ensure that they can recruit new employees. Former USANA recruiter and Atenean Mark Tuason states that recruiters prospect for people who are open-minded to business. “[Recruiters] try to be as vague as possible, not bring up USANA. I wasn’t told beforehand that it was USANA,” Tuason expounds.
However, Franco notes that the COVID-19 pandemic has affected how associates sell their products within a given amount of time. He says that recruiters are now unable to sell products physically, pushing them to recruit online.
Franco also claimed that messages have not only been sent through social media platforms such as Facebook, but also popular video games like League of Legends. “You can see that they’re becoming more desperate because they want to maintain their job while still satisfying the MLM despite the dangerous crisis we’re having right now,” Franco adds.
Student casualties
In addition to financial risks amid a pandemic, there could also be psychological and social effects on associates. The mental conditioning MLMs allegedly use to lure and keep people in the business begins on the first approach, with Tuason noting that skilled recruiters are adept at feigning sincerity.
Similarly, Franco believes that the most successful recruiters are extremely perceptive and can easily reframe their pitch to suit the context of the individual being scouted. “They try to go for hopeful narratives yet realistic ones. They don’t want to exaggerate the benefits [of joining] but they want [you to] see it as a good opportunity,” he says.
As Tuason became more engrossed with the job, a growing sense of social alienation gnawed at him. “I realized how much time I’ve wasted, how much I’ve lost, and how many people I’ve affected in a negative way,” he recalls.
Tuason divulges that he often did his presentations in secret since his family and friends disapproved of his involvement with USANA. This, coupled with his mounting disillusionment with the MLM model, led him to sever ties with USANA through a now-deleted Facebook post. “Most of the time, you’re not gonna win. And if ever you do win, other people will end up losing in the process,” he says, explaining his decision to quit.
“When I made the post, people were telling me to delete [it] and [that] it [hurt] them emotionally,” he says. He also expressed that people who come from unsupportive family backgrounds may be more prone to embracing the scheme due to the skewed sense of community within it.
Tuason recalls his fellow associates cheering him on whenever he struggled with the business. He eventually realized that these courtesies were all part of an elaborate psychological game to keep recruiters loyal. “They don’t care about you. They only care about the business and how it concerns them,” Tuason shares.
Course of action
Tuason’s experience is not isolated. The Facebook group MLM Pyramidposting is a budding community of people who have similar experiences with such schemes. Group administrators Angel Chan and Matthew Taningco stated that they were compelled to create MLM Pyramidposting as a secure space for discussion about MLMs.
“We really do wanna bring in different kinds of people who were affected by MLMs,” Chan says, emphasizing the group’s willingness to accept former recruiters. There have been incidents, however, of moles from MLMs infiltrating the group to reach out to refute the allegations made about their companies to the administrators themselves.
Chan further explained that access to the group has since been restricted in order to protect the members from counterattacks from MLM affiliates. “We want to do our best to make sure that we’re not gonna have any legal suit against us for just trying to communicate and gather,” Taningco adds.
While the group’s range remains limited, others believe that it enriches the discourse surrounding MLMs. “I think more groups like [MLM Pyramidposting] will be useful for [exposing pyramid] schemes,” Franco says, expressing that the group can help steer young individuals from committing to a predatory line of work.
Other groups catered to young adults have also taken action to prevent recruiters from expanding their network. Andrew Cua, an administrator of Facebook group Ateneo Jobs and Internships, states that instead of manually screening each job posting, they prioritize “ensuring that the right stakeholders, both recruiters and Atenean job seekers, get invited to the group.”
As graduating Ateneans seek job opportunities, the University also strives to link them with legitimate and trustworthy employers. Loyola Schools Office of Placement and Career Services (LSOPCS) Director Ronald Rodriguez remarks that companies interested in posting job openings for currently enrolled Ateneans must meet certain requirements. “We require several documents [such as] company profile [and] an SEC registration,” says Rodriguez. They also conduct additional investigations to “confirm the nature of the business, the products they offer, [and] the type of employment that they are offering to our students,” he adds.
Meanwhile, Kaw urges students to closely scrutinize the offers they receive. “Do a comprehensive and thorough background check on the company. Conduct or perform due diligence,” he advised. While individual vigilance is certainly needed, Kaw also stresses the University’s assistance in training students to be more discerning of MLMs through “continuous information campaigns.”
“Don’t be blinded by the money, by the opportunity of financial freedom. You can get that from better things than ripping people off and cheating their gullible minds of their hard-earned money,” Tuason says.
