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Speaker 1: Welcome back, fellow conspiracy realist. It is time for us

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Speaker 1: to dive through our archives and discover a classic episode

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Speaker 1: that it gave us some amusement, some gallows humor, and

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Speaker 1: some rueful Facebook post. Actually, you guys remember this multi

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Speaker 1: level marketing episode. I don't know about you, but I

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Speaker 1: received some correspondence assuring me that their MLB was good.

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Speaker 1: Oh man, and it's a great pairing for our recent

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Speaker 1: episode about companies started by cults. Or we go quite

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Speaker 1: into the cult like nature.

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Speaker 2: Of MLMs, not to be confused with MMA, which is different,

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Speaker 2: different cult, different cult different. I'm in it, by the way.

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Speaker 2: I love it. I got a call from a friend

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Speaker 2: who did well in essential oils a very similar thing, Ben,

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Speaker 2: and had that call. That whole call about like.

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Speaker 1: Nah, man, the essential to them. So let's check it out.

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Speaker 1: From UFOs to psychic powers and government conspiracies, history is

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Speaker 1: riddled with unexplained events. You can turn back now or

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Speaker 1: learn this stuff they don't want you to know.

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Speaker 2: Welcome back to the show. My name is Matt, they

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Speaker 2: called me Ben.

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Speaker 1: We are joined with our super producer mister Paul Act

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Speaker 1: now decand and of course you are you friends and neighbors,

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Speaker 1: and that makes this stuff they don't want you to know. Matt, Matt, Matt.

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Speaker 1: This is something that's been on our mutual minds for

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Speaker 1: some time, is that correct.

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Speaker 2: Yeah. I've always wanted to, you know, start my own business,

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Speaker 2: really get out there and just be my own boss.

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Speaker 1: Yeah. Yeah, to bid ado to the endless drudgery of

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Speaker 1: working for some other schmoe or a company, and become

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Speaker 1: finally the captain of your own fate, the master of

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Speaker 1: your own soul, to paraphrase Invictus, which is a great poem.

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Speaker 2: It really is. So in light of that, let's let's see.

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Speaker 2: I think somebody has an offer for us. So let's

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Speaker 2: let's cut to him and let's see what he's got

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Speaker 2: to say.

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Speaker 1: Shoo, come on, man, the dreams you told me about,

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Speaker 1: we can actually do them now. We don't have to wait.

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Speaker 2: Man, it works, and I'm doing it, and I want

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Speaker 2: to help you do it because it's so good. Joe,

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Speaker 2: this is amazing.

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Speaker 1: We can we can have vacations and sailboats, and we

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Speaker 1: can have multiple homes, and you can give your wife

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Speaker 1: the jewelry that she deserves.

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Speaker 2: Then you're gonna be a hero.

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Speaker 1: Come on, Joe, let's do it.

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Speaker 2: Get up, Joel, get up before it's too let get up.

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Speaker 1: Wow, Joe is getting the hard sell.

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Speaker 2: Yeah, he really is. The part you can't see from

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Speaker 2: that is that this man is on stage in front

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Speaker 2: of hundreds of people, maybe a thousand people, and he's

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Speaker 2: yelling at a tombstone of this gentleman.

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Speaker 1: A tombstone that reads Joe nobody yep, born in what

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Speaker 1: nineteen fifty five.

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Speaker 2: Something like that.

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Speaker 1: So the voice you just heard is one of the

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Speaker 1: spokespeople for what's called a MLM or multi level marketing

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Speaker 1: based company, a direct sales company, and in his performance,

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Speaker 1: which is quite theatrical, he is gesticulating wildly in front

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Speaker 1: of this styrofoam tombstone and begging this tombstone or the

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Speaker 1: implied dead, worthless person beneath it, to rise up through

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Speaker 1: the power of multi level marketing and discover his dreams.

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Speaker 1: He names several things boats, multiple homes.

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Speaker 2: Yeah, all the jewelry your spouse or loved one could

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Speaker 2: ever want.

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Speaker 1: Right, because of course every spouse defines success through jewelry.

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Speaker 2: Of course.

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Speaker 1: But before we get too critical, we played this clip

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Speaker 1: which I think we all thoroughly enjoyed, and we ask you.

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Speaker 1: If you have time to, you can check it out

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Speaker 1: on YouTube. I think it's been featured in a number

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Speaker 1: of places, one of which was Last Week Tonight.

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Speaker 2: Yes, last Week Tonight with John Oliver. There's an entire

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Speaker 2: thirty five minute episode or thirty one minute episode we

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Speaker 2: however long it was, on this topic in particular.

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Speaker 1: Right because it's a gigantic industry, and today we're going

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Speaker 1: to learn just how enormous this industry is, how much

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Speaker 1: of it is transparent, how much of it is hidden

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Speaker 1: from the public, from the civilians, as well as from

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Speaker 1: the adherents. Dare I say, the disciples or the recruits

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Speaker 1: of these organizations. And the best way to start off is,

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Speaker 1: of course, with the American dream. What this guy is

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Speaker 1: doing when he's yelling at Joe. Nobody is tapping into

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Speaker 1: this concept that's familiar to anyone across the planet. You

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Speaker 1: don't have to be one of our listeners based in

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Speaker 1: the US to realize this. I think everybody recognizes the

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Speaker 1: idea two point five kids, a summer home and then

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Speaker 1: a non summer home, a boat and your own business,

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Speaker 1: or a Mercedes and a Mercedes, of course, an extra

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Speaker 1: slow Mercedes, because you don't have to hurry, right, not

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Speaker 1: at all. So this is an enormously appealing, if intimidating opportunity,

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Speaker 1: the idea of going out there on your own, without

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Speaker 1: a safety net and becoming your own means of income.

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Speaker 1: There are a multitude of various programs, organizations, and institutions

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Speaker 1: in the United States today that claim to assist people

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Speaker 1: in pursuit of this dream. Some may be government supported,

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Speaker 1: such as government loan programs that happen with would be

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Speaker 1: small business owners or even incubators for certain types of companies.

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Speaker 1: There might also be tax breaks, right.

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Speaker 2: Yeah. You can even get nonprofit consultation services or even

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Speaker 2: private companies that will just provide assistance in some other form.

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Speaker 2: Yeah right, some assistance will give it will help you out.

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Speaker 1: And today's episode centers on a genre of company in

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Speaker 1: that private sphere. Today's episode is examining one of the

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Speaker 1: more controversial types of phenomena in the world of entrepreneurship,

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Speaker 1: the practice known as multi level marketing. It's got some

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Speaker 1: other names.

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Speaker 2: Direct sales. A lot of times comes into it. I'm

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Speaker 2: trying to think there's one big one. It's it's like

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Speaker 2: triangle shaped, triangle plan triangle, Yeah, that's it.

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Speaker 1: Triangle scheme isasles strategy, Yeah, something to that effects on

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Speaker 1: may people are on the edge of their seats. What

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Speaker 1: are we really talking about, Matt.

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Speaker 2: We're talking about currently legally functioning pyramid schemes.

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Speaker 1: It's true, also sometimes called Ponzi's schemes. You might recognize

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Speaker 1: them if you tuned into the television or the radio

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Speaker 1: during the Made Off scandal. You may recognize various forms

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Speaker 1: of con jobs that have existed in the past, in

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Speaker 1: recent history and in older history. And you may wonder,

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Speaker 1: what's the difference between these multi level marketing things and

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Speaker 1: these pyramid schemes? Are they all the same? To answer

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Speaker 1: that question, first we have to ask ourselves what multi

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Speaker 1: level marketing or MLM. So that Matt and I don't

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Speaker 1: kill ourselves trying to always pronounce that tricky phrase, we

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Speaker 1: have to ask what these things are? How do we

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Speaker 1: define them? So here are the facts.

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Speaker 2: Yeah, So a multi level marketing company or an entity

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Speaker 2: that functions in that way. It's really a general term

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Speaker 2: and it describes these strategies for marketing that these companies use.

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Speaker 2: And they use these non salaried human beings. Their workforce

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Speaker 2: is all non salaried and they sell a product or

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Speaker 2: a service whatever the company is pedling, while the earnings

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Speaker 2: of the participants are derived from a commission system that

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Speaker 2: like most of the money that the people working for

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Speaker 2: the company are not drived from the sales, they're derived

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Speaker 2: from the commission that you get from the sales.

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Speaker 1: Yeah. Yeah, this is where you hear the allegations that's

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Speaker 1: something as a pyramid scheme. So specifically, a direct sale

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Speaker 1: company might use this strategy to encourage existing distributors to

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Speaker 1: recruit new distributors into this network, into this hierarchy, just

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Speaker 1: like you had established, Matt. So let's say, let's read

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Speaker 1: the room. We're gonna throw a look over at Paul.

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Speaker 1: May we use you as an example in this hypothetical.

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Speaker 2: Okay, he's nodding a little bit, just barely. Yep, there

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Speaker 2: it is.

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Speaker 1: Okay, he's he's so tired of these reindeer cakes. All right,

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Speaker 1: So let's say Paul ActNow Decant is an existing distributor

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Speaker 1: for we can make up any company.

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Speaker 2: Okay, how about vintage jelly beans? Right?

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Speaker 1: Sure, yes, they're aged vintage jelly beans. Are you tired

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Speaker 1: of new jelly beans?

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Speaker 2: Yeah? These are the ones you remember.

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Speaker 1: So let's say that Paul is pitched on this idea

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Speaker 1: of joining the Vintage Jelly Bean LLC or whatever it

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Speaker 1: calls itself. So we can buy product then from vintage

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Speaker 1: jelly beans from their factory and sell these jelly beans

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Speaker 1: to our hearts content. Paul can do that, and he

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Speaker 1: can make a profit of some sort based on the

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Speaker 1: volume of sales.

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Speaker 2: Okay, so how much he say, how much he sells,

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Speaker 2: he gets a tiny bill, little.

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Speaker 1: Piece, right right, he gets a bean. There you go,

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Speaker 1: there you go, all right, And Paul is also told

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Speaker 1: that he doesn't just have to sell jelly beans. He

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Speaker 1: can make additional income and possibly quite a bit by

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Speaker 1: recruiting his friends, his family members, his coworkers, and anyone

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Speaker 1: else he can find, making them distributors of jelly beans

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Speaker 1: as well.

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Speaker 2: So they do the same thing that Paul is doing.

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Speaker 1: But in the sense they work for him because in

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Speaker 1: addition to the small cut of every bean sale that

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Speaker 1: he makes, he also gets a cut of every jelly

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Speaker 1: bean sale that his people make.

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Speaker 2: WHOA okay, So that okay, So that means the people,

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Speaker 2: as you're going down, if distributors are getting money and

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Speaker 2: getting money and getting money and getting money on the

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Speaker 2: way up that. Oh oh, this is already feeling like

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Speaker 2: a pyramid scheme.

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Speaker 1: Guys, I don't know, because if Paul recruits us in

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Speaker 1: this story, then he stands to make more money than us,

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Speaker 1: for sure.

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Speaker 2: Yeah. And we recruit somebody and we get a little

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Speaker 2: bit of their piece, but then Paul still gets a

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Speaker 2: piece of our piece.

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Speaker 1: Yeah, yep, and so it does. It does go up.

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Speaker 1: You are right about the cognitive geometry. Hold on, Okay,

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Speaker 1: so that's called a down.

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Speaker 2: Line, right down line?

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Speaker 1: Oh, the down line, not the down low, the down line,

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Speaker 1: got it. And the incentive here is that once you

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Speaker 1: or Paul or anyone has the new recruits hooked and

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Speaker 1: working to sell these beans, you are making money not

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Speaker 1: just off them, but off of everybody they recruit. As

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Speaker 1: each of the distributors under you recruit more people under them,

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Speaker 1: you get a percentage of those people's sales as well.

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Speaker 1: And as those people recruit new people, you get Do

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Speaker 1: you see how this is? This is exponentially growing?

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Speaker 2: Oh yeah, the exponential growth is pretty apparent, and it

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Speaker 2: feels like it could be quite a bit of cash

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Speaker 2: coming into me if I'm at the top, or at

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Speaker 2: least if I start in somewhere and get enough people.

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Speaker 1: Below me, and let's pause here just for a second.

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Speaker 1: I will I wanted to ask you this on air, Matt.

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Speaker 1: Have you ever been approached by something some entity like

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Speaker 1: this or do you know someone who has?

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Speaker 2: I would say most people, and this is conjecture, but

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Speaker 2: I would say most people who are on Facebook probably

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Speaker 2: have at least one friend that has maybe either approached

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Speaker 2: you or is consistently putting out feelers to be like anybody, anyone?

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Speaker 1: Oh wow, Paul's nodding too.

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Speaker 2: Yo, I got this essential oil. You got to get

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Speaker 2: this essential oil.

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Speaker 1: Work from home, change your life. Are you an active

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Speaker 1: parent on the go and you don't have time to

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Speaker 1: be locked down in a nine to five?

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Speaker 2: Check out my mary Kay products.

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Speaker 1: Saint John's wart, you know what I mean, various supplements.

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Speaker 1: So you have seen it on Facebook. That and I

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Speaker 1: have the dubious benefit of, at times in my college

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Speaker 1: days being approached by people with a sure fire idea.

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Speaker 1: And the weird thing was these would be people at

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Speaker 1: career fairs. Wow, so they would be they would have

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Speaker 1: you know, they would have a table or booth right

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Speaker 1: next to say, Coca Cola or something like that there's

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Speaker 1: an amway, etc. Right, And I'm not I don't know

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Speaker 1: for sure whether that continues in the modern day on

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Speaker 1: college campuses, but I know we would like to hear

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Speaker 1: from you listeners right in a conspiracy at HowStuffWorks dot

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Speaker 1: com and let us know if you have had direct

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Speaker 1: experience with these organizations.

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Speaker 2: Wait a minute, is that how how stuff works? Is

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Speaker 2: that how you got picked up? Because the whole thing

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Speaker 2: here is that if you come on and you start

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Speaker 2: a podcast, then you get three other people to start podcasts,

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Speaker 2: and then you get That's how it works here.

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Speaker 1: Right for our down line? Right? Yeah, yeah, thankfully that

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Speaker 1: is not the case so far as we are right.

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Speaker 1: Maybe we're not far enough up in the pyramid though.

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Speaker 1: That ohone man? All right, imagine just like the dark Tower,

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Speaker 1: what if there's a room the very top.

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Speaker 2: We got to climb this upline. We have to.

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Speaker 1: Climb this upline. Man, We've got to convert people, proselytize

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Speaker 1: and have them convert people, and then have those people

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Speaker 1: convert people. What could go wrong?

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Speaker 2: Yeah, there's definitely stuff that could go wrong, and we'll

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Speaker 2: hear about it right after a quick word from our sponsor.

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Speaker 1: Here's where it gets crazy. So much stuff can go wrong,

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Speaker 1: plenty of stuff, a cartoonish amount of stuff can and

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Speaker 1: does go wrong, so much so, in fact, that things

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Speaker 1: going wrong becomes more of the rule than the exception

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Speaker 1: in this industry, despite what its advocates may want you

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Speaker 1: to believe. Again, it's very, very important. We are not

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Speaker 1: saying that all of these things are bad. Multi level

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Speaker 1: marketing itself is a strategy employed by a company, right.

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Speaker 2: Yeah, And it really is marketing. I mean it's in

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Speaker 2: the name multi level marketing. You're marketing your product by

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Speaker 2: getting people to talk about it, mostly on social media.

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Speaker 1: And it doesn't matter what you're selling. That's the other thing.

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Speaker 1: It's product agnostic. Yes, it can be vintage jellybeans, it

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Speaker 1: can be Adidas wind.

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Speaker 2: Suits, skincare product.

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Speaker 1: Skincare products is by far the most realistic thing on

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Speaker 1: this list.

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Speaker 2: At this point.

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Speaker 1: So the place where it gets sticky is the definition

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Speaker 1: between MLM multi level marketing versus what you mentioned earlier,

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Speaker 1: a pyramid scheme, or, as it's been known in pejorative terms,

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Speaker 1: a Ponzi scheme. So MLM multi level marketing as a strategy,

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Speaker 1: a technique, or an approach is not in and of

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Speaker 1: itself inherently illegal. In fact, there are some companies that

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Speaker 1: practice strategies like this that quite well and are fairly reputable. Tupperware,

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Speaker 1: for instance, Yeah, right, they sell they tend to sell

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Speaker 1: products through parties and invite somebody over for a Tupperware party.

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Speaker 1: Very American thing, right. I don't know anyone who has

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Speaker 1: gone through a Tupperware party, but I'm reasonably certainly exist.

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Speaker 2: Yeah, they do exist. Have you seen that show F

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Speaker 2: is for Family? I have the Bill Burger Show. There's

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Speaker 2: a whole this is just my I'm channeling nols for this. Okay,

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Speaker 2: there's a whole side story where the main character spouse

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Speaker 2: joins a group like that that sells tupperware specifically, and

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Speaker 2: it's this way and her garage is just filled with tupperware.

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Speaker 1: Oh, I'm so glad you mentioned garages. Oh yes, we

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Speaker 1: have to get to that. So this strategy, while not

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Speaker 1: inherently illegal or dishonest, becomes disingenuous at the very least

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Speaker 1: when new recruits are promised scads of money only to

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Speaker 1: find that there are hidden expenses that they are required

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Speaker 1: to buy in as an investor, for instance, or that

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Speaker 1: they are required to purchase x amount of these products,

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Speaker 1: these jellybeans, skincare products, health supplements, what was Adidas tracksuits

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Speaker 1: or windsuits whatever.

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Speaker 2: And they're also extremely convoluted rules about what you have

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Speaker 2: to do in order to get the money that you're

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Speaker 2: allocated from all your other people, your downline or whatever.

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Speaker 2: It gets pretty crazy.

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Speaker 1: And it goes case by case. Yes, it is purposefullly

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Speaker 1: ub touse. Well maybe it's maybe it is unfair. Maybe

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Speaker 1: we are using a broad brush to paint these things.

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Speaker 1: Maybe the people who have built these very elaborate rules

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Speaker 1: for the distribution of money or products on the downline

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Speaker 1: or the upline, maybe they feel that they have found

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Speaker 1: the most efficient and most transparent way and perhaps the

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Speaker 1: most fair way to distribute the money. Maybe that is

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Speaker 1: clearly not true in every case, but maybe you have

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Speaker 1: to give people the benefit of the doubt, right. So

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Speaker 1: an additional issue with this is that let's say you're

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Speaker 1: required to buy one hundred pounds vintage jelly beans, or

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Speaker 1: x amount of cases cases cases x amount of cases

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Speaker 1: of a miracle water or a skin rejuvenator wrinkle remover.

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Speaker 1: What you may find is that the price you have

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Speaker 1: to buy it at is going to be higher than

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Speaker 1: it would have been if you went and bought X

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Speaker 1: amount of cases at Target or at a supermarket. Right,

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Speaker 1: and it may not be available in stores. That's another

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Speaker 1: big thing. There's a lot of proprietary branding. But then additionally,

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Speaker 1: you might find out these products are not what they're

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Speaker 1: cracked up to be, they're not quality, they break, or

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Speaker 1: the health claims, if they exist, are wildly optimistic and

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Speaker 1: not research, not proven by anything other than long anecdotes.

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Speaker 1: The Better Business Bureau describes several red flags that you

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Speaker 1: may find when you initially begin conversations with one of

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Speaker 1: these entities.

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Speaker 2: Yeah, the first one should be a red flag for

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Speaker 2: anyone at any time, and that's anytime someone is promising you, yes,

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Speaker 2: you high earnings, especially without having to do much at all,

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Speaker 2: just very little effort, very little time spent, or any

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Speaker 2: real serious commitment money wise or other.

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Speaker 1: The money just makes itself. It just frills in.

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Speaker 2: Yeah, I mean, come on, why do you think I

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Speaker 2: do this?

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Speaker 1: You did the majority of the work you needed to

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Speaker 1: do when you took this leap of faith, when you

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Speaker 1: recognize this opportunity.

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Speaker 2: Oh, Ben, have you ever thought about you could? I

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Speaker 2: think you could recruit a lot of people.

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Speaker 1: I think that I think that you and Paul and

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Speaker 1: Nolan could all do an equally good job.

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Speaker 2: What if we work together.

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Speaker 1: This is dangerous territory. This is dangerous territory, especially because,

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Speaker 1: as people will find out, we are ourselves already involved

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Speaker 1: in a type of mL. But it's not it's not well.

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Speaker 2: So let's get to the second thing. So the second

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Speaker 2: thing is you're gonna do this. You're gonna make money

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Speaker 2: super easy. You're not gonna have to do much. But

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Speaker 2: the one thing you do have to do. You know,

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Speaker 2: it takes money to make money. You gotta purchase a

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Speaker 2: whole hell of a lot of inventory, a lot of stuff.

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Speaker 2: You gotta buy it. That's just how you get started.

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Speaker 2: You gotta have that in your possession so you can

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Speaker 2: sell all the stuff.

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Speaker 1: And got a prime. The pump can't sell what you

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Speaker 1: don't have.

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Speaker 2: Oh yeah, and we're also here's the thing. Look, you're

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Speaker 2: you're on this. You're gonna make all this money. The

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Speaker 2: one thing we can't do is guarantee that we'll buy

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Speaker 2: back any unsold product that you have. Okay, we're just

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Speaker 2: gonna you know, well, we might buy it back for

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Speaker 2: like a percentage of what you bought it for. If

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Speaker 2: we have to like a restocking fee, sure, but we're

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Speaker 2: you know, we can't just we have faith in you

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Speaker 2: as a distributor, and we we don't think we need

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Speaker 2: to worry about it.

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Speaker 1: We also don't take checks. That's gonna be another red flag.

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Speaker 1: The money you're required to invest.

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Speaker 2: That's the term we like to use just to get started.

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Speaker 1: Yeah, that money must be paid in cash or a

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Speaker 1: wire transfer or a money order.

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Speaker 2: Hmm.

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Speaker 1: Those are three red flags when yeah, when you see

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Speaker 1: them waving. The consensus from most financial experts is to run,

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Speaker 1: to leave, to remove yourself from the situation. And you

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Speaker 1: would you know, it's easy for us now, all of us,

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Speaker 1: all of us listening today, and for us exploring this

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Speaker 1: in the safety of a re phones, yeah, in the

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Speaker 1: safety of headphones in our Swell podcast studio, it's easy

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Speaker 1: for us to say, well, I would immediately leave. I

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Speaker 1: don't fall for that sort of flim flam, right. Yeah,

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Speaker 1: But as we will learn, there are tried and true

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Speaker 1: techniques that are used to make people feel obligated through

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Speaker 1: some sort of psychological manipulation to buy into these things.

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Speaker 1: It's similar to the way that somebody might win a vacation.

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Speaker 1: I know, Matt Paul, I know you guys have both

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Speaker 1: probably received those mailers that say, oh, it's a chance

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Speaker 1: to win a vacation.

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Speaker 2: Dude, No, you already won a cruise.

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Speaker 1: That's what it is. You've already won. All you have

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Speaker 1: to do is travel the book of Raton or something

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Speaker 1: like that, and what you what happens is that you

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Speaker 1: arrive at these places only to find that did win

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Speaker 1: the cruise. But first we want to give you a tour. Yeah,

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Speaker 1: of these condos.

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Speaker 2: Yep.

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Speaker 1: And you know, in the market today, real estate is

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Speaker 1: the best investment.

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Speaker 2: It really is. And can you imagine look here at

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Speaker 2: the Windham Resort in Boca Raton. I've actually been on

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Speaker 2: one of those recently. Yeah, yep, a.

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Speaker 1: Cruise or one of those switch try to sell you

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Speaker 1: a condo.

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Speaker 2: Let's see if I can do this the right way.

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Speaker 2: Some family members that I was with on a small

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Speaker 2: vacation saw that there was at this mall an opportunity

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Speaker 2: to have dinner paid for for our entire family. All

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Speaker 2: we had to do is take a trip over to

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Speaker 2: this condo and hang out for a while. Answer some questions,

404
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Speaker 2: talk to some people, watch some videos, we did it.

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Speaker 2: We had to like sit for a long time with somebody.

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Speaker 2: They split us up into groups, into like husband and

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Speaker 2: wife groups, and like my wife and I just had

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Speaker 2: to calmly say, no, we really don't think we can

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Speaker 2: afford it right now. Oh but what if you know,

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Speaker 2: we could give you this platinum package and I'm sorry

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Speaker 2: we can't. Oh but well, the double platinum I think

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Speaker 2: you can really afford and it's an investment for your future.

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Speaker 2: And it went on and on and on until we

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Speaker 2: finally got to leave with our visa check card.

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Speaker 1: Oh wow, so did you ultimately end up getting We.

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Speaker 2: Got dinner, but it was like two hours out of

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Speaker 2: our day, and if you calculate the money for all

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Speaker 2: of that, you go, wait a second, are you sure

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Speaker 2: we should have done this? Guys they're like, yeah, we

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Speaker 2: do this all the time.

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Speaker 1: And they all said no, no, they loved it.

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Speaker 2: Because they some members of my family do that kind

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Speaker 2: of thing a lot. Ah.

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Speaker 1: Okay, I've never heard this story. Kudos to you for

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Speaker 1: resisting the psychological pressure that might apply right.

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Speaker 2: Well, I mean, how are they going to apply pressure

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Speaker 2: if there's no money in my accounts? Ha ha? You think that.

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Speaker 1: Now I'm picturing that internet meme where the guy's leaning

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Speaker 1: in and touching his temple with his pointer figure. So

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Speaker 1: it's true. What can happen is that maybe you were

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Speaker 1: invited to a seminar for an MLM and you hear

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Speaker 1: these very theatrical, very motivational speeches, right, and it's difficult

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Speaker 1: to leave. It's sort of like standing up in the

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Speaker 1: middle of church if you're religious and walking.

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Speaker 2: Out the social pressure alone.

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Speaker 1: Yeah, it's not a good look, right, and this becomes

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Speaker 1: doubly powerful at the very least when you are there

438
00:25:38,080 --> 00:25:41,879
Speaker 1: with a family member who was already active in this organization.

439
00:25:42,000 --> 00:25:45,359
Speaker 1: You don't I mean, who wants to disappoint Aunt Linda

440
00:25:45,560 --> 00:25:49,320
Speaker 1: or uncle Greg right, yeah.

441
00:25:49,119 --> 00:25:50,640
Speaker 2: Or you know, yeah, your mother in law.

442
00:25:51,040 --> 00:25:57,159
Speaker 1: Anyway, Oh man, that off air. I gotta follow up

443
00:25:57,160 --> 00:26:01,200
Speaker 1: on this, okay. So another thing we find is that

444
00:26:02,800 --> 00:26:05,840
Speaker 1: this all means, in the case of multi level marketing

445
00:26:06,040 --> 00:26:11,000
Speaker 1: or PEERMID schemes, that initial recruits are essentially paying an

446
00:26:11,160 --> 00:26:17,560
Speaker 1: organization for the opportunity to work for them. Let's let's

447
00:26:17,640 --> 00:26:19,800
Speaker 1: sit in that just for a second, or think about it.

448
00:26:20,359 --> 00:26:24,640
Speaker 1: Everyone listening. Imagine your last job interview. Let's see went

449
00:26:24,680 --> 00:26:27,600
Speaker 1: to the job interview, you'd already submitted your resume or

450
00:26:27,600 --> 00:26:31,159
Speaker 1: something online. The management of the company sits down with

451
00:26:31,200 --> 00:26:35,080
Speaker 1: you and they say you're qualified. As a matter of fact,

452
00:26:35,080 --> 00:26:38,399
Speaker 1: you're not only qualified, you are superb. You're the perfect

453
00:26:38,440 --> 00:26:43,520
Speaker 1: person for this position. And for seven hundred dollars you

454
00:26:43,600 --> 00:26:49,359
Speaker 1: can start today. And you know, everybody's initial assumption would be, oh,

455
00:26:49,640 --> 00:26:52,840
Speaker 1: holy smokes, you're giving me seven hundred dollars to start today.

456
00:26:53,080 --> 00:26:55,840
Speaker 1: But no, no, no, no, no, no, no, no no, you

457
00:26:55,920 --> 00:26:59,240
Speaker 1: are paying this organization some amount of money.

458
00:26:59,520 --> 00:27:04,159
Speaker 2: Yeah, in any other place or time or organization or

459
00:27:04,280 --> 00:27:07,119
Speaker 2: job opportunity, that would be just ludicrous, that would be

460
00:27:07,680 --> 00:27:10,200
Speaker 2: absolutely not. I'm out of here, right.

461
00:27:10,359 --> 00:27:14,320
Speaker 1: And a multi level marketing strategy becomes an out and

462
00:27:14,320 --> 00:27:17,680
Speaker 1: out pyramid scheme when the bulk of the actual profit

463
00:27:17,760 --> 00:27:20,679
Speaker 1: you make comes not from selling your jelly beans. The

464
00:27:20,720 --> 00:27:24,560
Speaker 1: bulk of it comes from converting other people in your

465
00:27:24,600 --> 00:27:28,840
Speaker 1: social network to work for you, with the same carot

466
00:27:29,119 --> 00:27:33,760
Speaker 1: extending for them that they have to actively recruit other people.

467
00:27:34,680 --> 00:27:39,560
Speaker 1: This business model has several deeply disturbing aspects. And first

468
00:27:40,320 --> 00:27:43,240
Speaker 1: there's that inherent bait and switch. You're not selling an

469
00:27:43,240 --> 00:27:46,120
Speaker 1: herbal supplement, and those are very common in the world

470
00:27:46,160 --> 00:27:49,280
Speaker 1: of multi level marketing. You are selling your friends, the

471
00:27:49,359 --> 00:27:53,040
Speaker 1: idea of them selling their friends, on selling yet more friends.

472
00:27:53,600 --> 00:28:02,240
Speaker 1: You are selling a borderline and arguably exploitative type of communicability. Right,

473
00:28:02,640 --> 00:28:07,360
Speaker 1: so we should pause tumat and talk about herbal supplements.

474
00:28:07,800 --> 00:28:09,919
Speaker 2: Oh really, yeah, just for a little bit. Now.

475
00:28:10,720 --> 00:28:14,680
Speaker 1: I know this is controversial territory in many cases, and again,

476
00:28:15,760 --> 00:28:18,639
Speaker 1: we don't want to paint with a broad brush. We

477
00:28:18,680 --> 00:28:21,200
Speaker 1: don't want to paint with the wrong broad brush, which

478
00:28:21,240 --> 00:28:26,399
Speaker 1: we'll get to, okay, But it's a common type or

479
00:28:26,520 --> 00:28:30,000
Speaker 1: genre of product in the world of multi level marketing,

480
00:28:30,480 --> 00:28:34,960
Speaker 1: and herbal supplement could mean anything from vitamin B twelve

481
00:28:35,080 --> 00:28:41,040
Speaker 1: to a proprietary mix of vitamins to things that are

482
00:28:41,400 --> 00:28:48,760
Speaker 1: supposed to help certain medical conditions. These are not held to.

483
00:28:48,920 --> 00:28:52,680
Speaker 1: These claims. Erbal supplement claims are not held to the

484
00:28:52,720 --> 00:28:57,400
Speaker 1: same level of rigor and research that out and out

485
00:28:57,480 --> 00:29:01,160
Speaker 1: drugs are held to by the FDA. Absolutely, at least

486
00:29:01,160 --> 00:29:04,680
Speaker 1: in theory, the FDA is supposed to do that. Yeah,

487
00:29:04,720 --> 00:29:07,280
Speaker 1: we have an episode about the opio epidemic coming up

488
00:29:07,320 --> 00:29:10,600
Speaker 1: as well. God all right, yeah, but so with an

489
00:29:10,600 --> 00:29:15,479
Speaker 1: herbal supplement, the legal restrictions on what you can and

490
00:29:15,520 --> 00:29:20,040
Speaker 1: cannot claim about any given thing, any pill or juice

491
00:29:20,160 --> 00:29:27,080
Speaker 1: or paste, what have you. Those legal restrictions are much looser,

492
00:29:27,640 --> 00:29:30,360
Speaker 1: you know, and you can you can have people come

493
00:29:30,480 --> 00:29:34,640
Speaker 1: up and say all sorts of anecdotes all the livelong

494
00:29:34,760 --> 00:29:38,120
Speaker 1: day about how it changed their life. But what they

495
00:29:38,160 --> 00:29:41,160
Speaker 1: probably won't have, what they're much less likely to have,

496
00:29:41,680 --> 00:29:46,120
Speaker 1: is a peer reviewed, reproducible study proving what they said

497
00:29:46,160 --> 00:29:46,520
Speaker 1: is true.

498
00:29:46,680 --> 00:29:52,080
Speaker 2: Absolutely. I've recently watched one where a person said this

499
00:29:52,240 --> 00:29:56,480
Speaker 2: specific herbal supplement helped her to become pregnant when all

500
00:29:56,480 --> 00:29:59,200
Speaker 2: these other ways did not. She kept trying to get

501
00:29:59,240 --> 00:30:02,200
Speaker 2: pregny about this rble supplement helped get there. This one

502
00:30:02,240 --> 00:30:07,160
Speaker 2: person was recovering from a cancer because of this herbal supplement.

503
00:30:07,800 --> 00:30:09,840
Speaker 2: And that's when you get into that territory of like,

504
00:30:10,040 --> 00:30:12,840
Speaker 2: how dangerous is this to allow this kind of thing

505
00:30:13,160 --> 00:30:17,200
Speaker 2: to occur? But you know, the rules are the rules,

506
00:30:17,800 --> 00:30:19,240
Speaker 2: and in a way they're following them.

507
00:30:20,720 --> 00:30:23,480
Speaker 1: Yeah, it's the letter of the law and if not

508
00:30:23,600 --> 00:30:24,080
Speaker 1: the spirit.

509
00:30:24,240 --> 00:30:24,360
Speaker 2: Right.

510
00:30:25,880 --> 00:30:29,880
Speaker 1: Often, the hidden fees and the required buy ins of

511
00:30:29,920 --> 00:30:38,200
Speaker 1: these various products put already financially disadvantaged people into some

512
00:30:38,400 --> 00:30:42,000
Speaker 1: in some cases, life ruining debt, not to mention the

513
00:30:42,080 --> 00:30:46,040
Speaker 1: emotional trauma you might experience of discovering that your friend

514
00:30:46,360 --> 00:30:52,880
Speaker 1: either purposely deceived you or has misled both of you.

515
00:30:52,880 --> 00:30:54,640
Speaker 1: You know. Yeah, that's a painful thing.

516
00:30:56,000 --> 00:31:00,480
Speaker 2: Yeah yeah. And one of the biggest problems we see

517
00:31:00,480 --> 00:31:02,920
Speaker 2: here with all of these people trying to recruit everyone

518
00:31:02,960 --> 00:31:05,040
Speaker 2: else to get into this thing, whether they get hurt

519
00:31:05,040 --> 00:31:07,440
Speaker 2: in it or not, is that you run up on

520
00:31:08,840 --> 00:31:09,800
Speaker 2: a math problem.

521
00:31:09,920 --> 00:31:12,440
Speaker 1: Yes, that is true, and you don't need a calculator

522
00:31:12,480 --> 00:31:14,800
Speaker 1: for it. Let's do the math. The math comes to

523
00:31:14,880 --> 00:31:18,400
Speaker 1: us courtesy of a fellow named Robert Fitzpatrick, a former

524
00:31:18,480 --> 00:31:24,600
Speaker 1: business consultant and now a prominent opponent of pyramid schemes

525
00:31:24,720 --> 00:31:28,760
Speaker 1: and multi level marketing strategies, which he pretty much equates.

526
00:31:28,880 --> 00:31:31,600
Speaker 1: He says, they're the same thing, and it's a false dichotomy,

527
00:31:32,080 --> 00:31:37,760
Speaker 1: and he explains the unsustainable math in pretty simple terms.

528
00:31:37,760 --> 00:31:38,760
Speaker 1: We have a quote from it.

529
00:31:39,120 --> 00:31:42,360
Speaker 2: The math is a distortion, a manipulation of what they

530
00:31:42,400 --> 00:31:48,480
Speaker 2: call exponential expansion. Exponential expansion is two times two times

531
00:31:48,520 --> 00:31:52,240
Speaker 2: two times two. And almost all of these schemes tell

532
00:31:52,280 --> 00:31:54,720
Speaker 2: you that you can make money by just recruiting three

533
00:31:54,960 --> 00:31:58,320
Speaker 2: or four or five let's say five. Then you let

534
00:31:58,360 --> 00:32:02,040
Speaker 2: the five do their five, and that gives you twenty five.

535
00:32:02,320 --> 00:32:04,800
Speaker 2: There you go. This is out the side of the

536
00:32:04,840 --> 00:32:07,320
Speaker 2: quote right now. Yeah, we've got our twenty five people already.

537
00:32:07,400 --> 00:32:10,400
Speaker 2: Right yeah, let's get back into the quote that right

538
00:32:10,440 --> 00:32:14,200
Speaker 2: there is exponential expansion. That's the trick of the whole thing.

539
00:32:14,600 --> 00:32:16,440
Speaker 2: What they don't show you is that you can only

540
00:32:16,520 --> 00:32:21,320
Speaker 2: do that thirteen cycles, and then after that, he says,

541
00:32:21,640 --> 00:32:23,920
Speaker 2: you would exceed the population of the earth.

542
00:32:24,520 --> 00:32:31,440
Speaker 1: So thirteen iterations of this sort of growth will eventually

543
00:32:32,480 --> 00:32:36,000
Speaker 1: reach a point of saturation such that there are no

544
00:32:36,200 --> 00:32:39,080
Speaker 1: living people who are not part of this scheme.

545
00:32:39,400 --> 00:32:42,920
Speaker 2: Yes, and most of them will be on the most

546
00:32:42,960 --> 00:32:44,000
Speaker 2: bottom level.

547
00:32:44,080 --> 00:32:47,640
Speaker 1: Right right, still required to buy in, depending on the

548
00:32:47,720 --> 00:32:51,400
Speaker 1: specific case, still required to purchase a product or make

549
00:32:51,440 --> 00:32:52,680
Speaker 1: some sort of initial investment.

550
00:32:52,720 --> 00:32:54,280
Speaker 2: But at that point they literally have no one to

551
00:32:54,280 --> 00:32:56,240
Speaker 2: sell any of it too, because everyone has a garage

552
00:32:56,280 --> 00:32:57,160
Speaker 2: full of whatever it is.

553
00:32:57,360 --> 00:33:01,080
Speaker 1: Yes. Yeah. In the most fundamental terms, this means that

554
00:33:01,120 --> 00:33:04,760
Speaker 1: the business model as it is explained to new recruits

555
00:33:05,120 --> 00:33:10,480
Speaker 1: is not meant to work. It literally cannot if everything

556
00:33:10,800 --> 00:33:14,120
Speaker 1: goes well and every single member of this thing, or

557
00:33:14,160 --> 00:33:17,440
Speaker 1: even if you know what, honestly even if sixty percent

558
00:33:18,160 --> 00:33:22,520
Speaker 1: of the people are who are entering this sort of

559
00:33:23,280 --> 00:33:26,480
Speaker 1: this sort of business, even if sixty percent of them succeed,

560
00:33:27,480 --> 00:33:31,680
Speaker 1: then it still won't work over the long term. Additionally,

561
00:33:31,840 --> 00:33:35,400
Speaker 1: there are several other important points that new recruits are

562
00:33:35,440 --> 00:33:40,640
Speaker 1: not told. First is that, according to Fitzpatrick, something around

563
00:33:40,640 --> 00:33:43,320
Speaker 1: the order of ninety nine percent, at least more than

564
00:33:43,400 --> 00:33:47,520
Speaker 1: ninety percent of investors or distributors don't turn a profit

565
00:33:47,640 --> 00:33:51,880
Speaker 1: full stop at all, just won't just won't happen. And additionally,

566
00:33:51,920 --> 00:33:59,040
Speaker 1: there's no recognization that something will go wrong, that the

567
00:33:59,080 --> 00:34:03,000
Speaker 1: market will sat rate, that it will not forever grow unbound.

568
00:34:04,120 --> 00:34:05,720
Speaker 2: And that's kind of the problem we have with our

569
00:34:05,960 --> 00:34:07,520
Speaker 2: economy in general, isn't it.

570
00:34:08,040 --> 00:34:12,200
Speaker 1: Yeah, arguable, depending on which economic model we're talking.

571
00:34:11,960 --> 00:34:14,120
Speaker 2: About, just exponential, constant.

572
00:34:13,680 --> 00:34:19,440
Speaker 1: Growth, nothing will ever stop. The factories must expand yeah,

573
00:34:19,680 --> 00:34:22,920
Speaker 1: you know what, let's start a planet Hollywood on Mars.

574
00:34:23,640 --> 00:34:25,200
Speaker 2: Oh can we?

575
00:34:26,280 --> 00:34:28,920
Speaker 1: I don't know, I haven't. They're gonna need one eventually,

576
00:34:28,960 --> 00:34:32,920
Speaker 1: They've gone every every planet will need a planet Hollywood eventually.

577
00:34:32,640 --> 00:34:36,680
Speaker 2: And it'll be all like Mars based celebrities.

578
00:34:36,239 --> 00:34:41,279
Speaker 1: Right, and think of the food puns. Oh my god, Yeah,

579
00:34:41,320 --> 00:34:44,000
Speaker 1: we gotta get Jonathan on just to drop in some

580
00:34:44,040 --> 00:34:49,120
Speaker 1: food puns. That's Jonathan Strickland, the host of tech Stuff

581
00:34:49,160 --> 00:34:52,759
Speaker 1: and several other fascinating shows. He is also as an

582
00:34:52,800 --> 00:34:57,280
Speaker 1: active charity volunteer to be our complaint department if ever

583
00:34:57,440 --> 00:35:00,960
Speaker 1: you feel that there's something that needs to be corrected

584
00:35:01,000 --> 00:35:02,840
Speaker 1: on the show where if you have a complaint, please

585
00:35:02,880 --> 00:35:07,560
Speaker 1: do not hesitate right to Jonathan Dott Strickland at HowStuffWorks

586
00:35:07,600 --> 00:35:11,440
Speaker 1: dot com. But you know, joking aside, This shows us,

587
00:35:12,040 --> 00:35:16,200
Speaker 1: This shows us a little something about the potential size

588
00:35:16,200 --> 00:35:18,719
Speaker 1: of the problem. But what's the actual size.

589
00:35:18,880 --> 00:35:22,600
Speaker 2: Well, it's big and we're gonna get into it after

590
00:35:22,840 --> 00:35:26,160
Speaker 2: a word from our completely not multi level marketing sponsor.

591
00:35:30,680 --> 00:35:32,520
Speaker 1: Why do that? I can't help but notice that you're

592
00:35:32,520 --> 00:35:34,200
Speaker 1: panting with a skippy brush.

593
00:35:34,320 --> 00:35:36,919
Speaker 2: Well, this is the only brush I had. I've got

594
00:35:36,960 --> 00:35:39,160
Speaker 2: to do the fence and then the wall, and I

595
00:35:39,360 --> 00:35:40,680
Speaker 2: just have so much to do.

596
00:35:40,680 --> 00:35:43,560
Speaker 1: Don't waste time Like all, I'm in Macaroon rotting on

597
00:35:43,680 --> 00:35:45,840
Speaker 1: this on my friend. What you need is a better brush,

598
00:35:45,880 --> 00:35:47,720
Speaker 1: a bigger brush. I'll broad up brush.

599
00:35:47,960 --> 00:35:51,239
Speaker 2: A broader brush really would get this done faster, and

600
00:35:51,280 --> 00:35:53,000
Speaker 2: I could just paint the whole thing in one go.

601
00:35:53,120 --> 00:35:56,279
Speaker 1: Maybe, why simply buy broad brushes when you can sell them?

602
00:35:56,400 --> 00:35:59,400
Speaker 1: Why simply sell them when you can have your friends, neighbors,

603
00:35:59,440 --> 00:36:02,880
Speaker 1: loved ones, naives, strangers on the street sell the broadest

604
00:36:02,880 --> 00:36:04,279
Speaker 1: of brushes for you.

605
00:36:04,640 --> 00:36:06,400
Speaker 2: This sounds like a plan. What do I need to do?

606
00:36:06,520 --> 00:36:08,839
Speaker 1: Why You've already done the most important part, which has

607
00:36:08,840 --> 00:36:11,600
Speaker 1: opened your eyes to a new world of economic opportunity.

608
00:36:11,760 --> 00:36:15,319
Speaker 1: Your next steps are relatively small, easily handled, and we

609
00:36:15,360 --> 00:36:17,719
Speaker 1: can take care of them today. All we'll need is

610
00:36:17,760 --> 00:36:20,399
Speaker 1: a slight seed money investment. And of course you can't

611
00:36:20,400 --> 00:36:23,280
Speaker 1: sell what you don't have, So with a minimum purchase

612
00:36:23,320 --> 00:36:27,080
Speaker 1: of sixty eight broad brushes, you will be set to go.

613
00:36:27,200 --> 00:36:30,919
Speaker 2: My friend, okay, I guess you know I've been meaning

614
00:36:30,960 --> 00:36:32,919
Speaker 2: to sell my home so I could do that. I'm

615
00:36:32,960 --> 00:36:36,400
Speaker 2: not sure where I'll put the broad brushes. They probably

616
00:36:36,400 --> 00:36:39,319
Speaker 2: need a lot of space, don't they. All Right, well,

617
00:36:39,360 --> 00:36:41,720
Speaker 2: I guess let me go ahead and sell my house

618
00:36:41,880 --> 00:36:44,799
Speaker 2: and then I'll get back to you. I guess no.

619
00:36:44,800 --> 00:36:49,560
Speaker 1: No, Now, listen, this is a tremendous chance to change

620
00:36:49,560 --> 00:36:51,400
Speaker 1: the course of your life and the life of all

621
00:36:51,440 --> 00:36:55,279
Speaker 1: your loved ones forever. All you need to do is

622
00:36:55,360 --> 00:36:58,040
Speaker 1: imagine yourself ten years from now, would you rather be

623
00:36:58,160 --> 00:37:01,200
Speaker 1: living in a sumptuous, opulent man or will you be

624
00:37:01,239 --> 00:37:05,040
Speaker 1: a wash in mounting final notice bills, rotting in this dump,

625
00:37:05,239 --> 00:37:08,399
Speaker 1: lamenting the chance you could have taken to save your

626
00:37:08,520 --> 00:37:09,400
Speaker 1: own life.

627
00:37:09,760 --> 00:37:12,520
Speaker 2: I guess I'll take the mansion. This message for broad

628
00:37:12,560 --> 00:37:17,040
Speaker 2: Brushes International has been brought to you by Illumination Global Unlimited.

629
00:37:27,640 --> 00:37:33,120
Speaker 1: And we're back. Uh. You know what, Matt, that last

630
00:37:33,239 --> 00:37:36,000
Speaker 1: ad felt a little bit now. I don't want to

631
00:37:36,040 --> 00:37:38,560
Speaker 1: go out on a limb here. Yeah, that last ad

632
00:37:38,600 --> 00:37:43,120
Speaker 1: felt a little bit like a multi level marketing thing.

633
00:37:43,280 --> 00:37:45,960
Speaker 2: It was kind of pushy. I noticed that in the end,

634
00:37:46,040 --> 00:37:49,120
Speaker 2: the one guy really seemed to want the other guy

635
00:37:49,560 --> 00:37:52,400
Speaker 2: to do whatever he had to do to sell those things.

636
00:37:52,880 --> 00:37:56,279
Speaker 1: It's really, you know, it's eerily in line with what

637
00:37:56,360 --> 00:37:59,520
Speaker 1: we're talking about, but sometimes those strange coincidences happened.

638
00:38:00,040 --> 00:38:02,280
Speaker 2: I still have issues with the size of the brushes,

639
00:38:02,480 --> 00:38:05,480
Speaker 2: the way they were described, like, I don't understand. I

640
00:38:05,520 --> 00:38:09,600
Speaker 2: feel like that's more industrial strength brush situation. I'm not sure.

641
00:38:09,680 --> 00:38:13,480
Speaker 1: I did appreciate how the other guy in the ad

642
00:38:13,520 --> 00:38:18,640
Speaker 1: did ask how he would possibly wield these, But you know,

643
00:38:18,840 --> 00:38:22,400
Speaker 1: let us let us know if you have experience with

644
00:38:22,600 --> 00:38:27,440
Speaker 1: broad brushes, or of course our returning sponsor Illumination Global Unlimited.

645
00:38:28,000 --> 00:38:30,640
Speaker 1: Just let us know how those products shake out, because look,

646
00:38:30,680 --> 00:38:33,719
Speaker 1: we're not gonna knock a brush a broad brush.

647
00:38:33,480 --> 00:38:36,800
Speaker 2: If it works, right, Yeah, absolutely, speaking.

648
00:38:36,400 --> 00:38:41,000
Speaker 1: Of broad and expansive things, what's the size of the

649
00:38:41,040 --> 00:38:43,760
Speaker 1: problem when we're talking about multi level marketing.

650
00:38:44,360 --> 00:38:47,440
Speaker 2: Well, let's go back to mister Fitzpatrick. He has a

651
00:38:47,440 --> 00:38:52,279
Speaker 2: book called False Profits, Seeking Financial and Spiritual Deliverance in

652
00:38:52,360 --> 00:38:55,600
Speaker 2: Multi Level Marketing and Pyramid Schemes, And in this book

653
00:38:55,680 --> 00:39:00,200
Speaker 2: he speculates that the just the size, the full scope

654
00:39:00,280 --> 00:39:03,279
Speaker 2: of these various companies that make up this industry of

655
00:39:03,360 --> 00:39:08,720
Speaker 2: multi level marketing is currently unknown. Oh wow. There Essentially,

656
00:39:08,719 --> 00:39:11,879
Speaker 2: there are so many functioning right now that it may

657
00:39:11,880 --> 00:39:12,880
Speaker 2: be impossible to know.

658
00:39:14,239 --> 00:39:18,640
Speaker 1: And those entities certainly wouldn't want you to know the

659
00:39:19,040 --> 00:39:25,480
Speaker 1: full nature of their financial transactions or their techniques. So,

660
00:39:25,640 --> 00:39:32,120
Speaker 1: according to Fitzpatrick, this goes back into just the sheer

661
00:39:32,239 --> 00:39:36,200
Speaker 1: amount of money that is involved. So in this quotation,

662
00:39:36,239 --> 00:39:39,680
Speaker 1: he says made Off Bernie Madeoff cond a relatively small

663
00:39:39,760 --> 00:39:43,680
Speaker 1: number of people with investment money. Multi level marketing, he argues,

664
00:39:43,840 --> 00:39:47,120
Speaker 1: is using a different system instead of taking a million

665
00:39:47,200 --> 00:39:50,440
Speaker 1: dollars from ten people, you take ten dollars from a

666
00:39:50,520 --> 00:39:54,120
Speaker 1: million people. That is the way the system works. I'm

667
00:39:54,200 --> 00:39:57,399
Speaker 1: just using that as an analogy, but the numbers add

668
00:39:57,480 --> 00:40:01,040
Speaker 1: up to staggering amounts year upon year upon year, and

669
00:40:01,040 --> 00:40:03,760
Speaker 1: this leads Fitzpatrick and other experts to believe the amount

670
00:40:03,800 --> 00:40:07,279
Speaker 1: of money involved in this industry overall ranks in a

671
00:40:07,520 --> 00:40:10,040
Speaker 1: billions with a b wow.

672
00:40:11,080 --> 00:40:15,640
Speaker 2: And here's the thing there are it's not just the

673
00:40:15,680 --> 00:40:20,560
Speaker 2: problem of setting up something like this that ultimately benefits,

674
00:40:21,080 --> 00:40:23,960
Speaker 2: you know, the person that started it. Like in all

675
00:40:24,000 --> 00:40:26,040
Speaker 2: of these there is some group or a person at

676
00:40:26,040 --> 00:40:29,360
Speaker 2: the very top that gets all of the downline. Every

677
00:40:29,400 --> 00:40:32,359
Speaker 2: single person sends money up to that one person, right,

678
00:40:32,520 --> 00:40:36,920
Speaker 2: the founder, right right right, And in some cases there

679
00:40:36,960 --> 00:40:41,440
Speaker 2: are allegations of these people taking advantage just fully and knowingly,

680
00:40:41,560 --> 00:40:43,920
Speaker 2: taking advantage of everyone working for them.

681
00:40:44,160 --> 00:40:48,880
Speaker 1: So not making an honest mistake, not getting the accounting wrong,

682
00:40:49,320 --> 00:40:52,400
Speaker 1: or acting out of negligence.

683
00:40:53,000 --> 00:40:53,360
Speaker 2: Correct.

684
00:40:54,760 --> 00:40:58,480
Speaker 1: Yeah, Unfortunately, there are numerous multiple cases in which founders

685
00:40:58,480 --> 00:41:01,560
Speaker 1: are members of these types of companies have been found

686
00:41:01,560 --> 00:41:06,480
Speaker 1: guilty of fraud, of conspiracy to commit various financial crimes,

687
00:41:06,480 --> 00:41:10,000
Speaker 1: and more. For instance, there was a guy named Paul

688
00:41:10,200 --> 00:41:14,759
Speaker 1: Burks here in the US who was convicted of conspiracy

689
00:41:14,760 --> 00:41:18,000
Speaker 1: and fraud during his time heading up a company called

690
00:41:18,560 --> 00:41:23,200
Speaker 1: Zeke Rewards, and in the course of his trial it

691
00:41:23,320 --> 00:41:26,560
Speaker 1: was characterized as one of the largest Ponzi schemes in

692
00:41:26,760 --> 00:41:30,560
Speaker 1: US history, bilking more than one million investors across the

693
00:41:30,600 --> 00:41:33,880
Speaker 1: world out of eight hundred million dollars. Later that amounted

694
00:41:33,920 --> 00:41:35,840
Speaker 1: to be about nine hundred million dollars.

695
00:41:35,960 --> 00:41:36,560
Speaker 2: Wow.

696
00:41:36,960 --> 00:41:42,520
Speaker 1: He was sentenced to around fifteen years in jail, and

697
00:41:42,520 --> 00:41:46,520
Speaker 1: he got off relatively easy because going into trial his

698
00:41:46,640 --> 00:41:49,920
Speaker 1: penalty could have been as much as sixty five years

699
00:41:49,920 --> 00:41:53,239
Speaker 1: in jail, and he's an older man, so fifteen years

700
00:41:53,280 --> 00:41:57,080
Speaker 1: even maybe a death sentence. But what they did essentially

701
00:41:57,200 --> 00:42:00,840
Speaker 1: was old school Ponzi schemes. Stuff. They made extravagin promises

702
00:42:01,120 --> 00:42:04,440
Speaker 1: and they got people to invest money with the with

703
00:42:04,520 --> 00:42:08,080
Speaker 1: the assumption that that money would later be paid off.

704
00:42:08,239 --> 00:42:13,320
Speaker 1: As these as these schemes, this penny auction site began

705
00:42:13,440 --> 00:42:17,680
Speaker 1: to deliver the mail, deliver the goods yea. And for

706
00:42:17,760 --> 00:42:20,600
Speaker 1: a while, for the earlier investors it seemed like this

707
00:42:20,760 --> 00:42:22,520
Speaker 1: was happening because of what they were doing is they

708
00:42:22,520 --> 00:42:26,160
Speaker 1: were taking the money that later investors put in and

709
00:42:26,280 --> 00:42:27,920
Speaker 1: using that to pay off their old investors.

710
00:42:28,000 --> 00:42:28,600
Speaker 2: Oh wow.

711
00:42:28,680 --> 00:42:31,600
Speaker 1: So it just kept growing, passing the buck, passing the buck,

712
00:42:31,840 --> 00:42:36,640
Speaker 1: and then eventually it created under its own numerical success,

713
00:42:36,760 --> 00:42:39,319
Speaker 1: not financial, but just the sheer amount of people who

714
00:42:39,360 --> 00:42:39,919
Speaker 1: bought in.

715
00:42:40,520 --> 00:42:42,880
Speaker 2: Dang. So that was Zeke rewards.

716
00:42:43,239 --> 00:42:44,279
Speaker 1: Zeke rewards.

717
00:42:44,440 --> 00:42:46,799
Speaker 2: All right, I need Yeah, that's a whole thing. I'm

718
00:42:46,800 --> 00:42:48,759
Speaker 2: just going to go down that rabbit hole later. Thanks Ben,

719
00:42:49,840 --> 00:42:50,279
Speaker 2: thank you.

720
00:42:51,400 --> 00:42:55,800
Speaker 1: So what what next? What's another example?

721
00:42:56,040 --> 00:42:59,239
Speaker 2: Oh, another huge issue that some of these founders have

722
00:42:59,280 --> 00:43:04,400
Speaker 2: come into is tax evasion. And that's specifically when these

723
00:43:04,520 --> 00:43:08,840
Speaker 2: multi level marketing companies expand into various countries. So like,

724
00:43:08,880 --> 00:43:12,200
Speaker 2: you're not just starting out in the US or wherever else, Malaysia,

725
00:43:12,239 --> 00:43:15,799
Speaker 2: maybe Australia. Now you're in all of these countries and

726
00:43:15,880 --> 00:43:19,120
Speaker 2: all these people are paying money to you, but you're

727
00:43:19,160 --> 00:43:23,120
Speaker 2: in one location and now you've got a whole lot

728
00:43:23,160 --> 00:43:26,800
Speaker 2: of taxes you got to pay. And this one couple,

729
00:43:26,880 --> 00:43:30,280
Speaker 2: Thomas E. Moher and his former wife Leslie D. Mower,

730
00:43:30,960 --> 00:43:34,920
Speaker 2: they founded a company in what Springville, I believe it

731
00:43:34,960 --> 00:43:41,480
Speaker 2: was called New Ways or Knee Ways Nways, And yeah,

732
00:43:41,520 --> 00:43:44,960
Speaker 2: they didn't pay personal income tax to the tune of

733
00:43:45,000 --> 00:43:50,240
Speaker 2: about three point two million dollars. And it's it's money

734
00:43:50,280 --> 00:43:52,840
Speaker 2: that they owed for their companies, for this new A's

735
00:43:52,920 --> 00:43:58,160
Speaker 2: company in several in several countries Malaysia, Australia, and in

736
00:43:58,160 --> 00:44:03,360
Speaker 2: the United States. I mean, that's that isn't necessarily a

737
00:44:03,520 --> 00:44:08,920
Speaker 2: big problem specifically for multi level marketing companies, like not

738
00:44:08,920 --> 00:44:13,080
Speaker 2: paying taxes. That's just something that this couple decided to.

739
00:44:13,440 --> 00:44:18,160
Speaker 1: Do, right. That is not a necessarily multi level marketing

740
00:44:18,840 --> 00:44:22,799
Speaker 1: only crime. Yes, and we can provide more examples you

741
00:44:23,160 --> 00:44:27,319
Speaker 1: very well. Fellow conspiracy realists may have some examples of

742
00:44:27,360 --> 00:44:32,640
Speaker 1: your own that you remember, and a simple cursory search

743
00:44:32,680 --> 00:44:36,319
Speaker 1: online will turn up dozens and dozens and dozens of

744
00:44:36,360 --> 00:44:40,359
Speaker 1: things like this. But let's you know, we should also

745
00:44:40,440 --> 00:44:45,840
Speaker 1: mention that the inner workings of these organizations can also

746
00:44:45,880 --> 00:44:48,640
Speaker 1: get very weird. We talked a little bit about the

747
00:44:48,680 --> 00:44:53,279
Speaker 1: psychological manipulation involved in making people feel obligated to do

748
00:44:53,320 --> 00:44:59,640
Speaker 1: something which is not restricted to time shares or Amway

749
00:44:59,760 --> 00:45:02,520
Speaker 1: or anything like that. A lot of advertising is built

750
00:45:02,560 --> 00:45:05,200
Speaker 1: on the idea that it is possible to make people

751
00:45:05,239 --> 00:45:09,040
Speaker 1: feel obligated to do something, they have to do it right.

752
00:45:09,400 --> 00:45:12,319
Speaker 1: Not your life will be better, but your life.

753
00:45:12,400 --> 00:45:13,400
Speaker 2: Depends on it.

754
00:45:13,239 --> 00:45:18,320
Speaker 1: It depends on this. Yeah, and we did a video

755
00:45:18,800 --> 00:45:21,440
Speaker 1: that you and I were thinking about off air as

756
00:45:21,480 --> 00:45:24,000
Speaker 1: we were working on this episode. We did a video

757
00:45:24,000 --> 00:45:27,640
Speaker 1: that had some eerie parallels. It's our old YouTube video

758
00:45:27,760 --> 00:45:31,920
Speaker 1: about the techniques that colts use. Yeah, so there's isolation.

759
00:45:32,760 --> 00:45:38,080
Speaker 1: There are long speeches you're forced to listen to. There's

760
00:45:38,239 --> 00:45:42,279
Speaker 1: a lot of jargon. Right, A specific type of lexicon

761
00:45:42,480 --> 00:45:45,239
Speaker 1: or terminology arises such.

762
00:45:45,040 --> 00:45:48,040
Speaker 2: That only you can talk about this with other people

763
00:45:48,040 --> 00:45:50,120
Speaker 2: that know what you're talking about, or else it's just

764
00:45:50,160 --> 00:45:51,680
Speaker 2: gobbledegook coming out of your mouth.

765
00:45:52,360 --> 00:45:54,880
Speaker 1: You can find this, for instance, in the ranks or

766
00:45:54,920 --> 00:45:58,759
Speaker 1: the names that are given to levels. Right. There may

767
00:45:58,840 --> 00:46:03,320
Speaker 1: be there may be a hierarchy of sales or position

768
00:46:03,400 --> 00:46:06,560
Speaker 1: in the pyramid that is described by any number of

769
00:46:06,600 --> 00:46:12,239
Speaker 1: imaginative phrases. Yes, specifically, I think we're both thinking of

770
00:46:12,360 --> 00:46:20,080
Speaker 1: a company called Youngevity, Yes, that has levels based on

771
00:46:20,400 --> 00:46:21,400
Speaker 1: precious stones.

772
00:46:22,080 --> 00:46:24,359
Speaker 2: Yeah, it's pretty awesome. But some of the other ones

773
00:46:24,400 --> 00:46:28,759
Speaker 2: are even more abstract and strange than that, and you

774
00:46:28,960 --> 00:46:31,600
Speaker 2: just kind of gotta look through them. There is one

775
00:46:31,640 --> 00:46:36,000
Speaker 2: in that John Oliver episode that we played where this

776
00:46:36,040 --> 00:46:40,760
Speaker 2: guy is discussing its specifics about how you get paid

777
00:46:41,280 --> 00:46:44,239
Speaker 2: for people on your down line and the things the

778
00:46:44,280 --> 00:46:48,640
Speaker 2: requirements you have to meet on your upline, and just

779
00:46:49,120 --> 00:46:52,000
Speaker 2: I just it made my brain want to explode.

780
00:46:52,320 --> 00:46:56,200
Speaker 1: Yeah, it's something along the well, maybe saying along the

781
00:46:56,239 --> 00:46:58,600
Speaker 1: lines is a poor phrase here, but it's something to

782
00:46:58,800 --> 00:47:05,960
Speaker 1: the tune of a vertical series of dots labeled A

783
00:47:06,360 --> 00:47:11,080
Speaker 1: two G going down. And then the guy is attempting

784
00:47:11,120 --> 00:47:14,439
Speaker 1: to or appears to be attempting to helpfully explain how

785
00:47:14,520 --> 00:47:18,000
Speaker 1: one actually gets cash in your pockets or in your

786
00:47:18,000 --> 00:47:21,600
Speaker 1: wallet or your purse or the empty mannaise jar in

787
00:47:21,640 --> 00:47:24,800
Speaker 1: your backyard by the body, you know, like wherever you

788
00:47:24,840 --> 00:47:28,320
Speaker 1: store money. What he does is the following. He says, Okay,

789
00:47:28,480 --> 00:47:33,719
Speaker 1: you're a So let's say that B buys four thousand

790
00:47:34,560 --> 00:47:36,560
Speaker 1: points at forty two percent.

791
00:47:36,320 --> 00:47:38,919
Speaker 2: Yeah, value point levels, and.

792
00:47:38,840 --> 00:47:42,520
Speaker 1: That goes that would go up to count as your

793
00:47:42,800 --> 00:47:46,360
Speaker 1: qualified commission. But it's under it's an encumbered line, and

794
00:47:46,360 --> 00:47:51,279
Speaker 1: that's remember you need one thousand unencumbered point value points. Right.

795
00:47:52,040 --> 00:47:57,600
Speaker 1: And this this may again to be completely fair. This

796
00:47:57,760 --> 00:48:03,400
Speaker 1: may be that specific word organization's best good faith attempt

797
00:48:03,600 --> 00:48:08,520
Speaker 1: to simplify the distribution process. It sure does not sound

798
00:48:08,600 --> 00:48:15,120
Speaker 1: like it. It sounds our kine. And that's just one example.

799
00:48:15,320 --> 00:48:17,480
Speaker 2: Well, yeah, and one of the like we said, one

800
00:48:17,560 --> 00:48:20,719
Speaker 2: of the effects of having something like that, is that

801
00:48:20,800 --> 00:48:22,440
Speaker 2: you have a more insular.

802
00:48:22,040 --> 00:48:28,120
Speaker 1: Group, right, right, they're outsiders and insiders, And just like

803
00:48:28,280 --> 00:48:32,319
Speaker 1: some some cults do you know, it's a sensitive word,

804
00:48:32,400 --> 00:48:35,840
Speaker 1: but just like some cults, you may also be taught

805
00:48:35,880 --> 00:48:42,360
Speaker 1: that you have a mission beyond a financial goal. You

806
00:48:42,520 --> 00:48:47,600
Speaker 1: have a mission to free people that you care about or.

807
00:48:47,560 --> 00:48:49,799
Speaker 2: To save them with this supplement. They need this.

808
00:48:50,080 --> 00:48:54,719
Speaker 1: So not only are you helping yourself out financially, you

809
00:48:54,760 --> 00:48:57,719
Speaker 1: are helping these other people out medically. You're helping them

810
00:48:57,760 --> 00:49:00,759
Speaker 1: out by providing them opportunity because you care about them.

811
00:49:00,880 --> 00:49:02,960
Speaker 2: Yeah, and if they won't join up, then there's something

812
00:49:03,000 --> 00:49:03,680
Speaker 2: wrong with them.

813
00:49:04,000 --> 00:49:09,440
Speaker 1: What gives? What gives? Right, So we're being a little dramatic,

814
00:49:09,480 --> 00:49:12,719
Speaker 1: but there is a lot of truth in those statements.

815
00:49:13,600 --> 00:49:16,319
Speaker 1: Here are some examples of companies currently being accused of

816
00:49:16,360 --> 00:49:21,680
Speaker 1: functioning as pyramid schemes. Amway probably all heard about. Amway

817
00:49:21,840 --> 00:49:25,399
Speaker 1: was big in what the eighties maybe, Oh yeah, And

818
00:49:25,800 --> 00:49:28,799
Speaker 1: my only encounter with it was hearing it referenced in

819
00:49:28,960 --> 00:49:32,080
Speaker 1: comedy and for a long time, is it. Yeah, for

820
00:49:32,080 --> 00:49:35,880
Speaker 1: a long time as a kid, I think I confused

821
00:49:35,960 --> 00:49:39,319
Speaker 1: Amway and Amtrak. Oh, and they kept wondering, why are

822
00:49:39,360 --> 00:49:43,359
Speaker 1: people making fun of Amtrak for things I don't understand?

823
00:49:43,719 --> 00:49:46,160
Speaker 1: Is Amtrak so broke that the people have to also

824
00:49:46,280 --> 00:49:47,960
Speaker 1: sell like dish detergent.

825
00:49:49,480 --> 00:49:52,160
Speaker 2: It's been around for so long that I honestly don't

826
00:49:52,200 --> 00:49:55,959
Speaker 2: even know what Amway sells. Do they It's like bath

827
00:49:56,000 --> 00:49:59,000
Speaker 2: and body stuff, beauty products, oh and nutrition?

828
00:49:59,360 --> 00:50:02,240
Speaker 1: Uh huh, so this is like activated water.

829
00:50:03,239 --> 00:50:06,040
Speaker 2: This is a shipping company. Essentially, it's like an Amazon,

830
00:50:06,200 --> 00:50:11,120
Speaker 2: but it's an MLM. Yeah, this is wow.

831
00:50:11,520 --> 00:50:15,360
Speaker 1: Now again, neither of us and Paul and Noell also

832
00:50:15,640 --> 00:50:18,400
Speaker 1: none of us have actively participated in this stuff. So

833
00:50:19,080 --> 00:50:23,960
Speaker 1: it is quite possible that there's something to it, you know,

834
00:50:24,239 --> 00:50:27,239
Speaker 1: that we have missed. But these are the facts. These

835
00:50:27,239 --> 00:50:31,880
Speaker 1: are the legal cases we found, and these companies are

836
00:50:32,560 --> 00:50:36,480
Speaker 1: for their part, they say that they're very transparent with

837
00:50:36,560 --> 00:50:41,759
Speaker 1: the claims they're making and they are pretty pretty responsive,

838
00:50:42,320 --> 00:50:44,960
Speaker 1: you know, if mass media reaches out to them and stuff.

839
00:50:45,000 --> 00:50:48,480
Speaker 1: But that doesn't mean problems still on't occur. Next to Amway,

840
00:50:48,520 --> 00:50:53,719
Speaker 1: another really popular or well known company employing the strategy

841
00:50:53,760 --> 00:50:54,880
Speaker 1: would be erbal Life.

842
00:50:55,440 --> 00:51:00,000
Speaker 2: Yes, this is erbal Life, the supplements, right like herbal Life.

843
00:51:00,120 --> 00:51:01,680
Speaker 2: Almost with its Herbal Life.

844
00:51:02,239 --> 00:51:05,600
Speaker 1: In twenty seventeen, they were forced by the FTC to

845
00:51:05,800 --> 00:51:11,799
Speaker 1: pay nearly three hundred and fifty thousand people back some

846
00:51:12,120 --> 00:51:13,520
Speaker 1: amount of money.

847
00:51:13,680 --> 00:51:16,720
Speaker 2: And the final settlement that they came to was Herbal

848
00:51:16,719 --> 00:51:19,880
Speaker 2: Life had to pay two hundred million dollars. And then

849
00:51:20,440 --> 00:51:23,520
Speaker 2: not just pay that fine, which is generally what happens

850
00:51:23,520 --> 00:51:25,720
Speaker 2: with a company. You get your handslapped, you pay a fine,

851
00:51:25,840 --> 00:51:28,360
Speaker 2: it becomes a cost of business. Well, in this case,

852
00:51:29,320 --> 00:51:33,280
Speaker 2: they had to fundamentally this is a quote, fundamentally restructure

853
00:51:33,320 --> 00:51:34,000
Speaker 2: its business.

854
00:51:34,719 --> 00:51:38,919
Speaker 1: Right, that's a quote from the FTC itself, specifically from

855
00:51:39,080 --> 00:51:41,520
Speaker 1: Jessica Rich, who at the time was the director of

856
00:51:41,560 --> 00:51:45,120
Speaker 1: the agency's Bureau of Consumer Protection. And that sounds like

857
00:51:45,280 --> 00:51:50,400
Speaker 1: a good thing. Yeah, And so the company continues. The company,

858
00:51:50,520 --> 00:51:54,640
Speaker 1: for their own parts, said that they had not done

859
00:51:54,680 --> 00:51:58,080
Speaker 1: anything wrong and that they didn't need to make any

860
00:51:58,120 --> 00:52:02,279
Speaker 1: substantial business change. And there were also some people who

861
00:52:03,719 --> 00:52:08,520
Speaker 1: said that this company was being unfairly targeted, Yes, from

862
00:52:08,560 --> 00:52:12,759
Speaker 1: from some other entity or individual who had an ax

863
00:52:12,840 --> 00:52:16,080
Speaker 1: to grind. So you'll hear from both sides. We'll hear

864
00:52:16,120 --> 00:52:20,080
Speaker 1: the government side and you'll hear the company side, and

865
00:52:20,080 --> 00:52:23,759
Speaker 1: those those sides just aren't going to agree. Yeah, it's

866
00:52:23,800 --> 00:52:26,319
Speaker 1: really it's up to you to decide what what you

867
00:52:26,440 --> 00:52:31,799
Speaker 1: think is the the straight poop, the genuine article. There's

868
00:52:31,840 --> 00:52:35,239
Speaker 1: also Avon, that's one of the more famous ones, right.

869
00:52:36,080 --> 00:52:38,320
Speaker 1: There's also young Jevity.

870
00:52:38,120 --> 00:52:41,919
Speaker 2: Yes, Youngevity, one of the companies that I was gonna

871
00:52:41,960 --> 00:52:46,040
Speaker 2: say pedals. They sorry, that's not right. They sell products

872
00:52:46,040 --> 00:52:49,440
Speaker 2: that will help people feel and look younger. There are there.

873
00:52:49,440 --> 00:52:53,160
Speaker 2: That's another big theme that occurs in a lot of these.

874
00:52:54,280 --> 00:52:58,080
Speaker 1: And in each of these cases, the organizations mentioned will

875
00:52:58,120 --> 00:53:01,600
Speaker 1: typically prefer a description. They don't want to just be

876
00:53:01,680 --> 00:53:04,960
Speaker 1: called MLMs. They certainly don't want to be called pyramid schemes.

877
00:53:05,160 --> 00:53:09,480
Speaker 1: Who prefer a term like direct sales. There's something similar.

878
00:53:09,480 --> 00:53:12,200
Speaker 1: It's what you said at the top of the show.

879
00:53:12,719 --> 00:53:16,640
Speaker 1: And you know, Avon has been around long enough for

880
00:53:16,760 --> 00:53:19,239
Speaker 1: the idea of the Avon lady quote unquote to be

881
00:53:19,280 --> 00:53:23,120
Speaker 1: a cultural trope, you know, and that means that on

882
00:53:23,200 --> 00:53:27,280
Speaker 1: some level people have succeeded working with or for Avon.

883
00:53:27,600 --> 00:53:31,719
Speaker 1: Same thing with Tupperware. So we can't say that in

884
00:53:31,840 --> 00:53:34,080
Speaker 1: every case this has been terrible for people.

885
00:53:34,160 --> 00:53:36,040
Speaker 2: Yeah, it's not all bad, and you could be really

886
00:53:36,040 --> 00:53:39,000
Speaker 2: good at it. If you're an amazing salesperson, then maybe

887
00:53:39,000 --> 00:53:40,880
Speaker 2: this is the you know, a way for you to

888
00:53:40,920 --> 00:53:41,560
Speaker 2: make some money.

889
00:53:42,040 --> 00:53:43,960
Speaker 1: I guess it just all depends on when you get

890
00:53:43,960 --> 00:53:50,200
Speaker 1: in at the pyramid. Right. And despite the massive controversies

891
00:53:50,280 --> 00:53:57,600
Speaker 1: and the various convictions for conspiracy, literally for conspiracy, these companies,

892
00:53:57,640 --> 00:54:00,560
Speaker 1: many of them thrive in the modern day people who

893
00:54:00,560 --> 00:54:04,160
Speaker 1: are opponents of these practices or techniques. The biggest question

894
00:54:04,440 --> 00:54:09,960
Speaker 1: is this, why is this still legal? How? According to Fitzpatrick,

895
00:54:10,000 --> 00:54:13,000
Speaker 1: we have no law in the US explicitly defining a

896
00:54:13,040 --> 00:54:19,480
Speaker 1: pyramid scheme or explicitly defining multi level marketing. They didn't

897
00:54:19,880 --> 00:54:24,560
Speaker 1: as of twenty thirteen. But there is one thing that

898
00:54:24,680 --> 00:54:28,080
Speaker 1: might help us out, and it is an article from Skeptoid.

899
00:54:28,680 --> 00:54:32,560
Speaker 1: According to Brian Dunning over at Skeptoid.

900
00:54:32,040 --> 00:54:34,359
Speaker 2: I always love reading what he has to say about

901
00:54:34,400 --> 00:54:35,200
Speaker 2: these topics.

902
00:54:35,920 --> 00:54:40,399
Speaker 1: According to him, he says that network marketing plans, which

903
00:54:40,480 --> 00:54:44,399
Speaker 1: is another euphemism or synonym for this, they differ from

904
00:54:44,520 --> 00:54:49,879
Speaker 1: illegal pyramid schemes in one important way. Commissions can only

905
00:54:50,000 --> 00:54:53,960
Speaker 1: legally be paid on sales of a physical product. If

906
00:54:53,960 --> 00:54:57,839
Speaker 1: commissions are offered on recruitment of new distributors, then it's

907
00:54:57,880 --> 00:55:01,200
Speaker 1: defined as an illegal pyramid scheme. But the out and

908
00:55:01,200 --> 00:55:05,600
Speaker 1: out illegal plans are pretty rare, according to Dunning. Instead,

909
00:55:05,680 --> 00:55:08,640
Speaker 1: most companies are smart enough to stay just on the

910
00:55:08,719 --> 00:55:09,600
Speaker 1: right side of the law.

911
00:55:09,840 --> 00:55:12,000
Speaker 2: Wow, literally on the edge.

912
00:55:12,960 --> 00:55:20,240
Speaker 1: Living on the edge of the law. There we go. Yeah,

913
00:55:20,280 --> 00:55:24,799
Speaker 1: and he's got some really interesting statistics about this stuff too.

914
00:55:24,960 --> 00:55:30,279
Speaker 1: It's illuminating, it's not particularly inspiring. According to the rather

915
00:55:30,400 --> 00:55:35,200
Speaker 1: poultry financial records that have been released. Newsweek, for instance,

916
00:55:35,200 --> 00:55:38,080
Speaker 1: found that fewer than one percent of distributors for an

917
00:55:38,160 --> 00:55:42,359
Speaker 1: outfit called Mona VI ever qualify for any commission at all.

918
00:55:42,520 --> 00:55:44,879
Speaker 1: Un Less than one in one thousand recovered the cost

919
00:55:44,960 --> 00:55:47,920
Speaker 1: of their required monthly purchases. Oh weish you put that in.

920
00:55:48,239 --> 00:55:50,959
Speaker 1: It's not a one time purchase. Yeah, you gotta keep buying.

921
00:55:51,120 --> 00:55:53,120
Speaker 2: Yeah, you gotta keep buying because you got to keep selling.

922
00:55:53,120 --> 00:55:54,920
Speaker 2: That's the whole point. And again, like I said, if

923
00:55:54,960 --> 00:56:00,480
Speaker 2: you're a great salesperson, right and somehow you're just unloading Mona,

924
00:56:00,600 --> 00:56:04,240
Speaker 2: then you are that one percent, that one in one thousand.

925
00:56:04,640 --> 00:56:13,080
Speaker 1: And so the FTC is still working to create policy

926
00:56:13,200 --> 00:56:18,040
Speaker 1: or business guidance concerning these MLMs as we record, and

927
00:56:19,600 --> 00:56:23,360
Speaker 1: you can find their various fact sheets. They have a

928
00:56:23,360 --> 00:56:27,640
Speaker 1: great thing available on tips and trick well, I don't

929
00:56:27,680 --> 00:56:32,280
Speaker 1: want to say tricks, tips and advice, okay for MLMs,

930
00:56:32,320 --> 00:56:36,360
Speaker 1: And if you're considering one, we do we do ask

931
00:56:36,440 --> 00:56:41,840
Speaker 1: you to read that in conclusion. For us, at least,

932
00:56:42,040 --> 00:56:44,560
Speaker 1: if something sounds too good to be true, well, there's

933
00:56:44,600 --> 00:56:48,760
Speaker 1: a reason we call them cliches. Yep. And the reason

934
00:56:48,960 --> 00:56:51,719
Speaker 1: you've heard that phrase so many times is because if

935
00:56:51,760 --> 00:56:54,640
Speaker 1: something sounds too good to be true, there is usually

936
00:56:54,680 --> 00:56:58,520
Speaker 1: something hidden behind the curtain. And this isn't to say

937
00:56:58,560 --> 00:57:02,160
Speaker 1: that these MLMs have no ever worked for anyone. It's

938
00:57:02,239 --> 00:57:04,960
Speaker 1: just in most cases, the majority of people lose much

939
00:57:04,960 --> 00:57:09,000
Speaker 1: more money than they make, and they lose much more

940
00:57:09,080 --> 00:57:12,200
Speaker 1: than they were led to believe was possible.

941
00:57:12,440 --> 00:57:14,759
Speaker 2: Yeah, but they made so many friends in a whole

942
00:57:14,800 --> 00:57:16,280
Speaker 2: new family while they were doing it.

943
00:57:16,360 --> 00:57:20,360
Speaker 1: No, boy, are you saving that one. And the people

944
00:57:20,360 --> 00:57:24,000
Speaker 1: who make the cat the most cash, overwhelmingly are going

945
00:57:24,080 --> 00:57:26,560
Speaker 1: to be the same people who founded the company.

946
00:57:26,760 --> 00:57:27,040
Speaker 2: Yep.

947
00:57:27,560 --> 00:57:30,360
Speaker 1: So please please please be extremely careful when you were

948
00:57:30,360 --> 00:57:33,080
Speaker 1: approached by MLMs and when you hear a pitch from

949
00:57:33,120 --> 00:57:37,960
Speaker 1: your friend's family or innocent strangers. Remember, there's probably something

950
00:57:38,080 --> 00:57:40,920
Speaker 1: that company doesn't want you to know, and it's probably

951
00:57:40,960 --> 00:57:44,000
Speaker 1: something that they don't want the person who's talking.

952
00:57:43,640 --> 00:57:47,240
Speaker 2: To you to know either, or the people you're talking to.

953
00:57:48,160 --> 00:57:51,000
Speaker 1: The people you were talking to, or the people that

954
00:57:51,080 --> 00:57:53,680
Speaker 1: you convinced to talk to other people. Kind goes on.

955
00:57:53,880 --> 00:57:55,840
Speaker 1: It's like two mirrors facing each other.

956
00:57:56,080 --> 00:57:59,640
Speaker 2: Yeah, if you are facing one of those mirrors and

957
00:57:59,720 --> 00:58:03,320
Speaker 2: you find yourself in that position, all we can say

958
00:58:03,560 --> 00:58:07,400
Speaker 2: is we hope you get out if you can. If

959
00:58:07,440 --> 00:58:09,880
Speaker 2: it's a problem, if you're in some kind of debt

960
00:58:10,080 --> 00:58:12,160
Speaker 2: due to this and it becomes a cycle, there are

961
00:58:12,760 --> 00:58:15,720
Speaker 2: places you can go online to start getting some help,

962
00:58:16,160 --> 00:58:19,800
Speaker 2: and hopefully maybe you can go the way of the

963
00:58:19,880 --> 00:58:23,640
Speaker 2: Herbal Life lawsuit and get your money back at some point.

964
00:58:23,720 --> 00:58:26,480
Speaker 2: Just knowing that that lawsuit occurred or at least was

965
00:58:26,520 --> 00:58:30,120
Speaker 2: finalized in twenty seventeen, that gives, I think, or should

966
00:58:30,200 --> 00:58:31,120
Speaker 2: give everyone hope.

967
00:58:31,320 --> 00:58:35,320
Speaker 1: And if you have an example of a positive experience

968
00:58:35,320 --> 00:58:38,000
Speaker 1: that you have had with one of these companies or

969
00:58:38,080 --> 00:58:41,320
Speaker 1: these types of entities, we would like to hear that too.

970
00:58:41,360 --> 00:58:45,720
Speaker 1: We want to see, we want to see provable positive stuff.

971
00:58:45,920 --> 00:58:46,560
Speaker 2: Absolutely.

972
00:58:47,240 --> 00:58:51,400
Speaker 1: In the meantime, we are going to head out. It

973
00:58:51,440 --> 00:58:55,400
Speaker 1: looks like we've been getting blown up with emails from

974
00:58:55,600 --> 00:59:00,160
Speaker 1: this broad brush LLC act Now, folks.

975
00:59:00,000 --> 00:59:02,480
Speaker 2: I believe they're coming in already. We just put this

976
00:59:02,520 --> 00:59:04,240
Speaker 2: episode out right right.

977
00:59:05,200 --> 00:59:09,680
Speaker 1: It's Illumination Global Unlimited works and mysterious ways really dog

978
00:59:09,880 --> 00:59:14,800
Speaker 1: just like the rules of cricket. Yep, no, that's terrible.

979
00:59:15,000 --> 00:59:18,120
Speaker 1: I should just try to learn how cricket works yet

980
00:59:18,200 --> 00:59:19,080
Speaker 1: of lamenting it.

981
00:59:19,600 --> 00:59:21,600
Speaker 2: If you if you know how cricket works, you can

982
00:59:21,680 --> 00:59:24,640
Speaker 2: find us on Facebook and Twitter where we're conspiracy Stuff

983
00:59:24,880 --> 00:59:28,360
Speaker 2: on Instagram where Conspiracy Stuff show. You can call our

984
00:59:28,480 --> 00:59:31,920
Speaker 2: number right now, stop what you're doing, pullover call one

985
00:59:32,080 --> 00:59:37,400
Speaker 2: eight three three std WYTK tell us a story about anything.

986
00:59:37,960 --> 00:59:39,440
Speaker 2: We want to hear it. We just want to hear

987
00:59:39,480 --> 00:59:40,040
Speaker 2: your voice.

988
00:59:40,120 --> 00:59:43,160
Speaker 1: And our compatriot Nol will be returning. He's f on

989
00:59:43,240 --> 00:59:46,880
Speaker 1: an adventure. A lot of us wear many different hats

990
00:59:46,920 --> 00:59:49,720
Speaker 1: and disguises. We're kind of like the people in that

991
00:59:49,800 --> 00:59:54,080
Speaker 1: show the Americans, except we don't work for the KGB.

992
00:59:54,440 --> 00:59:58,360
Speaker 2: No, we work for Illumination Global Unlimited. So if you

993
00:59:58,360 --> 01:00:00,560
Speaker 2: don't want to do any of those things, oh.

994
01:00:00,440 --> 01:00:03,040
Speaker 1: No, wait, wait, oh, what why the Americans didn't work

995
01:00:03,080 --> 01:00:05,920
Speaker 1: for the KGB necessarily the USSR.

996
01:00:06,840 --> 01:00:07,480
Speaker 2: But did they?

997
01:00:07,520 --> 01:00:09,120
Speaker 1: Though we but did they?

998
01:00:09,400 --> 01:00:09,920
Speaker 2: I don't know.

999
01:00:10,720 --> 01:00:13,840
Speaker 1: Oh, let us know, let us know. We want to.

1000
01:00:14,080 --> 01:00:17,080
Speaker 2: And that's the end of this classic episode. If you

1001
01:00:17,160 --> 01:00:21,240
Speaker 2: have any thoughts or questions about this episode, you can

1002
01:00:21,240 --> 01:00:23,840
Speaker 2: get into contact with us in a number of different ways.

1003
01:00:24,040 --> 01:00:25,600
Speaker 2: One of the best is to give us a call.

1004
01:00:25,640 --> 01:00:30,400
Speaker 2: Our number is one eight three three stdwy TK. If

1005
01:00:30,440 --> 01:00:32,240
Speaker 2: you don't want to do that, you can send us

1006
01:00:32,280 --> 01:00:33,560
Speaker 2: a good old fashioned email.

1007
01:00:33,800 --> 01:00:37,920
Speaker 1: We are conspiracy at iHeartRadio dot com.

1008
01:00:38,120 --> 01:00:40,160
Speaker 2: Stuff they Don't want you to Know is a production

1009
01:00:40,280 --> 01:00:44,800
Speaker 2: of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,

1010
01:00:44,880 --> 01:00:47,760
Speaker 2: Apple Podcasts, or wherever you listen to your favorite shows.