Hardly a week goes by without several people writing to ask if I can recommend a network marketing company for them that’s more honest and ethical than the one they’re with, or have just left.

They’re tired, disillusioned, cynical and sick at heart. They still have a little bit of faith left in the concept of network marketing, but they’re beginning to fear that they’ll never find a company with real integrity… one that actually “walks the talk” instead of just spouting noble sentiments in order to suck them in and take their money.

They’re tired of deceptive compensation plans that only reward the heavy hitters and mega-recruiters — and the company. They’re sick to death of high group volume qualifications and high downline rank qualifications that create breakage that robs them of income and siphons unclaimable bonus income from their efforts straight back to the company in secret, windfall profits.

They’ve had it with abusive upline “leaders” who pressure them into signing up for expensive standing orders for books and tools every month, over-priced seminars and rallies to keep them hyped-up, high personal product purchases every month, and who use emotional blackmail and manipulation to keep them involved and buying.

They’re fed up of being labelled “losers”, “quitters”, “negative” and worse whenever they question what they’re experiencing in reality, instead of the Dream they were sold initially.

And they’ve finally had it with companies and upline organisations that blatantly lie, cheat and steal from them — and the failure of government regulators to take any action against the scams and rip-offs until it’s too late, and tens or even hundreds of thousands of people like themselves have been fleeced. Again.

Why does it happen? And why is so little done to fix it until it’s too late?

The answers are reasonably simple to identify. They may not be easy to accept, however. Especially if you live in the USA. So let me preface the following material like this…

Since I originally wrote this article in 2001, the USA has suffered the trauma of September 11, 2001 and has invaded both Afghanistan and Iraq for the purpose of overthrowing regimes that supported terrorism. One of its stated aims in all this is to export democracy to the Middle East.

One of the more frustrating aspects of US culture is its insularity, especially in education and the media, and the ignorance and arrogance that this breeds. There’s an assumption widely held by Americans that democracy originated in the USA, and that its particular brand of democracy and freedom is the only version. Americans are constantly bewildered, when confronted by hostility toward this assumption by the very people they see themselves trying to help and enlighten, and can’t undertand that hostility.

Democracy, as a formal political system, has been around for at least 3,000 years. Yours is just one of the most recent and extreme forms of democracy and, while it may be enlightened and inspired in principle, in practice it leaves a lot to be desired. So please… understand why, when your leaders tell other nations that America is “exporting democracy”, that it may not be a particularly welcome prospect, given the degree of corruption and abuse of authority we see constantly in the US system of government.

When people in the USA complain that regulators are slow to respond, if at all, to abuses, it’s basically down to your system of democracy. When all responsible government and public offices are made accountable through election to those offices, please understand that it’s that very fact that makes your elected officials subject to undue political patronage, pressure and interference.

Abraham Lincoln described democracy as “government of the people, by the people, for the people.” It’s a wonderful concept. But in the 21st century, the reality of democracy in America has become “government of the people, by the lobbyists, for the vested interests.“

When you consider the alarming reality that the big pharmaceutical companies maintain a ratio of something like 28 professional lobbyists for each member of Congress and the Senate, you begin to understand why whatever the drug companies want, they tend to get. And why, despite FDA-approved, doctor-prescribed pharmaceuticals made by those same drug companies being the fourth largest cause of unnatural death in the USA after vehicles, alcohol and tobacco — waaaaay ahead of illicit drug abuse — nothing is ever mentioned about it in mainstream media and there are few (if any) government-funded programs to eradicate it.

In Victoria, Australia, where I live, over the past three decades we’ve slashed the road toll by 80%, drink driving by a similar amount, and tobacco use by almost half. I’ve actually been involved in the development and implementation of some of those campaigns, so I have some insights behind the scenes. The Victorian government receives delegations from US federal and state governments and agencies regularly, wanting to learn how they can implement those same strategies in the USA. In every instance I know of, those delegations returned home in dismay, astonished by the boldness and ingenuity of our solutions, but defeated before they start because, as they put it so succinctly, “the vested interests at home will never allow it.”

And you thought I was exaggerating (or joking) about democracy in the USA now being “government of the people, by the lobbyists, for the vested interests“?

For more insight into this kind of corruption of the system in America, read my article about the FDA — a rogue bureaucracy that threatens not only the health and very lives of US citizens, but their civil rights and freedoms of speech and information. Learn more…

How does all this apply to network marketing?

I could quote example after example if I had the space and time. Instead, check out some of the MLMTruth Coalition archives at http://MLMTruth.info. But let me quote you one example, briefly, without actually naming names. (I’m only establishing a point here, not scoring them.)

In the 1990s a high-profile, glamour nutrition company was established by a person who, at the time, had at least FIVE court orders in force against him in the USA, ordering him not to make any more false or fraudulent scientific and medical claims for his products. Yep… he’d done it five times in a row, yet had never been hauled back into court to face a single charge of contempt of court for failing to comply.

No sooner was the company up and running, with exponential growth and a dazzling array of impressive scientific and medical claims for its products by a high-profile medical researcher, leading medical schools and national health agencies, than some of its senior executives began dumping stock in order to cash in while the going was good. Then it was revealed that the medical and scientific claims made by the medical researcher had been falsified and repudiated by those leading medical schools and national health agencies.

Hmmm….

And guess what? Our much-prosecuted man at the top is still there. Why? Because the State in which the company is based is notorious for not enforcing court orders — even for fraud. Especially against local movers and shakers who create employment, wealth (and pay taxes) in that State!

Are you getting the picture here? When there are no consequences, or the consequences are delayed, the perpetrators think there are NO consequences. And besides… any fines are likely to be a drop in the ocean compared to the millions they rip off from their gullible victims.

Does that mean that all US-owned MLM companies are rogues, frauds, swindles or scams?

Not at all. But it does mean that there’s a disproportionate number of “black hats” compared to the “white hats” in network marketing.

And when those same scam artists are able to bounce back with impunity, with the same scams and rip-offs, is it any wonder that the ordinary citizen begins to suspect that ALL network marketing companies are scams?

Two recent examples

SkyBiz2000 was the world’s biggest pyramid scam. But it was the THIRD incarnation of the exact same scam, by the exact same people, in just three short years. The first, AdMax, was shut down by authorities in Oklahoma. Within 12 months, WebSiCom had opened for business before being shut down again by Okalhoma authorities. Within THREE WEEKS, SkyBiz2000 launched from its offices in Bermuda (at least these guys were slow learners — it took them three tries before they were cunning enough to go offshore, where jurisdiction was difficult to establish).

PRSI was another internet-based scam. And, like SkyBiz2000, it was the THIRD version of the exact same scam by the same person. The difference here was that it was based in Florida, where the Attorney General was determined to keep his state free of such scams. But it still managed to rip off $30 million for the owner before he went to jail, $6 million of which is still unaccounted for.

The MLMTruth Coalition was instrumental in the downfall of all of these scams. (I’m the only Advisory Board member outside the USA and Canada.) But you can imagine our frustration when they just kept bobbing up, again and again, while the authorities wrung their hands and whined that they had no jurisdiction. The Australian government finally had the bright idea — six months after a suggested step-by-step strategy from me in my column in a national business magazine — to prosecute a local promoter of SkyBiz2000 rather than waste time and resources trying to pursue the scam owners in another country. People bailed out so fast that SkyBiz2000 was dead within a week, world-wide. The owners eventually went to jail, but not before socking away untold millions in ill-gotten riches

How does all this relate to Australian companies?

We’re fortunate, in Australia, to have two things:

• a culture that promotes a “fair go” and
• governments that aren’t hog-tied by vested interests to anything like the same extent as America.

(I’m not naive enough to think that there are no vested interests here. But the Australian system isn’t anywhere near as open to abuse as the US system.)

So our regulatory agencies are independent of political patronage and influence, as are our judges and law enforcement agencies. Our consumer protection laws, competition laws, unconscionable corporate conduct laws and corporate governance laws have real teeth, and the regulators can pursue Australian-owned companies for illegal activities under Australian law anywhere in the world.

So if an Australian company tries to rip off US consumers, while keeping its nose clean at home, it could still face harsh penalties in Australia for its US misbehaviour. Even James Hardie, the Australian-owned, global building materials manufacturer, couldn’t escape justice, the media spotlight, public odium and plummeting share prices when it tried to relocate to the Netherlands to escape liability for claims by workers in its asbestos mines and manufacturing plants over more than 40 years. The CEO and CFO at the time are facing long jail terms for their part in engineering the attempted flight to Europe. And this was after Enron, whose master-minds are still playing legal games in the courts.

Even something as mundane as spamming has been effectively wiped out in Australia. Sure, we all receive it, mostly from US-based spammers operating with impunity in the face of the Can-Spam Act (a sick joke, its original intent foiled, yet again, by powerful vested interests!), but there are effectively no Australian-based spammers since passage of the anti-spam laws, which impose fines of $1.1 MILLION per message per day on anyone convicted of sending spam to or from Australia. (The first conviction involved a fine of $4.5 million and put the spammer out of business permanently. Can you imagine how quickly the others shut their doors?)

Action against rogue Australian companies and their managers is swift and relentless. No mercy is shown to those proven to be blatant crooks, and they are pursued around the world — in some cases until they die, quite literally!

Can you imagine belonging to a solid, Australian-owned network marketing company with a ‘fair-go’ culture and tough regulatory oversight like that? Can you imagine the appeal of such a clean, transparent, fair-dinkum operation to jaded, disillusioned, badly-burned American network marketers?

Can you see why, in a very real sense, it’s possible that Australian-owned companies, subject to Australian consumer and corporate laws, even in America, could become industry leaders?

It’s no pipe dream. It’s already under way, right now. It’s the best kept secret in network marketing, but it won’t stay that way for long. Not just one Australian company, either… several are now making inroads into the US market… and the Americans involved are absolutely loving them! No hype, no rah-rah, no emotional blackmail, no deception, no rip-offs… just what they’ve always dreamed of in network marketing companies.

Yes, I can tell you the names of the companies, but you’ll need to write to me privately for details. (It’s not appropriate to discuss them here.)

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Author Profile  Consults to managements of direct selling companies, small business and home business owners. Writes regular columns and feature articles for various business media, online and offline. Author of several best-selling business books. Presents seminars and workshops, webinars and other training programs. Creator of Fourth Generation Thinking, Selling, Business Systems. Read more from this author