The Disturbing Rise Of MLM Pyramid Schemes On Instagram

By Gwen Farrell
·  6 min read
The Disturbing Rise Of MLM Pyramid Schemes On Instagram

Be careful out there, #bossbabes. MLM schemes are on the rise on Instagram.

Ever since the social media app announced it was no longer just a “photo sharing app,” many have speculated as to what that means for influencers, average users, and the e-commerce aspect of the platform. One thing is clear though – multi-level marketing networks have noticed that much of their market has moved to social media, and they’re taking advantage of it.

Let’s Call a Spade a Spade

For anyone about to “actually though” or “what if” me, let’s be honest. Multi-level marketing schemes, or MLMs, are basically pyramid schemes which have been re-packaged into sexy networking “opportunities” that merely skate by the fine print of basic legality. 

If you’re wondering whether it’s a multi-level marketing situation, or even a pyramid scheme, ask yourself these questions: Are you required to put up a large investment or sum of money to become part of the organization? Is there an emphasis on recruitment rather than selling the products? Do you have to pay for inventory, and if so, will the company refund you or buy it back? Are you offered commissions for recruiting new people to work for the company? You can probably guess what it means if your answers to each of these questions is yes.

Before you argue or protest that MLM outfits are a great way to make money from home, especially if you’re a stay-at-home mom, in the military, or part of the Church of Latter Day Saints (three groups of women which are notoriously targeted by these schemes), think about what buying into that narrative says about you. MLMs target moms on the basis that they need something more to be empowered, that raising kids or being a homemaker isn’t enough to be fulfilled or satisfied with your life. Sure, these are valid feelings moms may have from time to time, but that doesn’t mean you have to buy into selling essential oils to satisfy that emotion.

MLMs target moms on the basis that they need something more to be empowered.

Not to mention, MLMs are peak “girl boss” or “boss babe” aesthetic (which I’ve actually written about before). Here’s the thing, ladies: You don’t need to become a fitness coach or sell hideous leggings to be empowered, start your own business, make your own money, or find new friends, and anyone who’s telling you that you do is probably the one selling something. (You can read more about sketchy, shady MLM tactics and horror stories here.)

How MLMs Are Using Instagram

Your favorite social media app might not be aggressively motivating you to sink $5,000 into a LuLaRoe starter kit (no really, it’s $5,000), but that doesn’t mean influencers and other users aren’t using the platform to further advance their MLM agendas. They’re just being less obvious about it.

With all of us inside during lockdown throughout the past year, social media use skyrocketed, opening the doors for influencers to add participants to their downline. 

Take the Hyundai SUV campaign in May of last year, where 16 influencers created a looped giveaway (which goes against the app’s spam criteria). Everyone wants to win a free car – and all you have to do is follow these 16 influencers, thereby increasing their followers and opening them up to bigger brand deal partnerships and ad revenue.

Then there’s the Beautycounter craze. If the majority of content you follow is momfluencers (as I do), you can’t throw a proverbial rock without hitting one who’s a rep for Beautycounter, which prides itself on being an elite (and expensive) chemical-free, toxin-free, safe-for-kids brand of skincare and makeup. Beautycounter doesn’t really look like your typical MLM, but the hard financial facts on the page don’t lie. 82% of people earn only $46 a month with the brand, and there’s also a buy-in fee. While Beautycounter seems to focus more on selling and not as much on recruitment, if it looks like a duck and sounds like a get the idea.

82% of Beautycounter reps earn only $46 a month.

Personal finance schemes are also popping up like crazy on Instagram, and these are becoming harder to spot because they don’t look like your typical scam. These accounts tout inherently meaningless concepts like “financial freedom” and “taking control of your life,” and although these accounts usually operate as individuals, they’re either working for a larger company or selling their own workshops, trainings, or courses. Additionally, these courses often cost thousands of dollars, and more often than not, the “super secret” key to success in a multi-paragraph caption is a bunch of words that take up space but don’t really say anything.

Recognizing Predatory Tactics Online

The MLM grift isn’t just limited to Instagram, though, and if you’re a frequenter of Facebook or TikTok, you might be bombarded with more of this content.

So, how do we protect ourselves and our hard-earned money?

Beware of someone’s personal success story, especially if the key to that success was buying into selling a product or becoming part of a group. Be careful especially if they make grandiose claims as part of their success, like buying their dream home or car or paying off all of their debt in six months. 

Be aware of your own vulnerability. If you’re a newly postpartum mom, you just got laid off, or you’re struggling with weight loss and finances (and posting about those struggles on social media), you could potentially be taken advantage of. You don’t need to lose your baby weight four weeks after having a baby, and you don’t need anyone in your life telling you you’ll be a better mom if you buy essential oils or if you look a certain way. Not only is this unrealistic, it’s just predatory and gross.

Be aware of your own vulnerability.

Pay attention to language. There’s no one secret to becoming wealthy beyond your wildest dreams, and there’s no shortcut or easy path to personal fulfillment and success, especially if the way to achieving that success requires your credit card information.

Closing Thoughts

Why am I passionate about helping others notice the predatory and exploitative tactics of multi-level marketing schemes? Because I have many people close to me (and you probably do too) who have been victimized – whether they know it or not – by these scams.

I have friends and family who’ve invested time, money, and even their health and wellbeing into the MLMs we know and hate, and even the sneakier ones that aren’t quite on our radar yet.

That doesn’t have to be you, and if you’re struggling with health, finances, or being a homemaker or a mom, don’t let anyone tell you they know how to “fix” your life better than you do, or that they know what will make you happy. Only you can know something like that, and having abs or a garage full of supplements or detox tea isn’t going to be as satisfying as others would lead you to believe.

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