I Asked An Ex-MLM Rep For Red Flags That An "Opportunity" Is An MLM And She Did NOT Hold Back

"Hey hun" messages are only the beginning.

Multi-level marketing companies (MLMs for short) are direct-selling businesses where independent distributors sell products to people in their networks — and often aggressively recruit others to join their "downline." These businesses lure in new members with promises of financial freedom, but the FTC states that most people who join these companies don't make much money. And some even lose money or end up in debt.

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MLMs as a whole aren't considered to be pyramid schemes, even though they're structured very similarly. This is because they involve selling actual products. However, the FTC has gone after several prominent MLM companies in the past for misleading distributors, including Herbalife. 

To learn more about how MLMs recruit new members and red flags to look out for, I reached out to Josie Naikoi. She's an ex-MLM distributor who now shares her story and the secrets of the MLM industry on her YouTube channel, Not the Good Girl.

Here are 13 shady MLM recruiting tactics to watch out for:

1. MLM recruiting doesn't always start with a sales pitch. Sometimes fun challenges and events can lead people into joining these companies.

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Most of us know to be on our guard when we get a "hey hun" message from a random acquaintance, but that's not always what MLM recruitment looks like. Describing what led her to get involved in an MLM in 2013, Josie says, "I joined a fitness challenge group that was led by my sponsor (the person I signed up under, aka upline). I had a lot of fun and really liked the products. That's when I asked her about the 'business opportunity.'" 

Activities like the fitness challenge that Josie joined highlight "the dream" of MLM success. Note how Josie asked about the "business opportunity" herself, rather than being aggressively sold on joining the team. The challenge worked as a sales pitch because it didn't look like one.

2. MLM distributors often frame the business as an unbelievable opportunity. So watch out for anyone making too-good-to-be-true claims about their business or product.

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MLM recruiting largely relies on aspirational messages, which Josie's experiences reflect. She says, "My sponsor had been a broke bartender with massive debt, and she was now a multi-millionaire; she completely changed her family's life and constantly spoke how 'God' put this opportunity in her life to help others; I was inspired. I was a hairstylist with an injured neck and shoulder and lots of medical debt; just a few hundred extra dollars a month would have significantly helped my situation."

3. And MLM distributors often target their recruiting efforts at people who they perceive as vulnerable.

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For decades, MLMs have targeted women, and particularly stay-at-home moms, to join in their direct-selling schemes. The MLM offers them a built-in community and, seemingly, a chance to earn more money while spending more time with family. During the pandemic, there have also been reports of MLMs targeting college students who are under financial pressure and may not know how to spot scams yet. 

Josie recalls, "I loved the women I worked with and truly believe most people who join MLM companies are good people; they get involved because they are struggling financially or are in vulnerable positions (i.e., they might be lonely and in need of friendship), and the 'mission' speaks to their ideology. Good people want to help others. It's just that when people sign up for an MLM company, they don't know the full extent of what they are getting involved in."

4. If there are no requirements or interviews to become a distributor, you're likely looking at an MLM.

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MLM distributors are under a lot of pressure to recruit new people for their downline, so they often onboard anyone who is interested, regardless of whether or not they're likely to become successful. Josie says, "My sponsor and every other successful distributor, along with the CEO of the company, constantly told us anyone could be successful in this business if they just worked really hard, stayed positive, and believed in the dream. What they don't tell you in the beginning, and what I didn't know until much later, is that it has nothing to do with any of that, and everything to do with the size of one's network." 

5. If your questions or concerns about the business are dismissed as "negativity," that can be another red flag of an MLM.

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In a normal, healthy business, there should be room to ask questions or voice concerns. But according to Josie and the accounts of many other former MLM distributors, dissent is often silenced in these companies. 

"There was also so much shame and toxic positivity; no one could ever complain about anything (not even in the private team Facebook groups) — your post would get deleted or you would be treated as an outcast and a 'toxic person.' Distributors had to appear happy and joyful at all times; it's a very 'fake it till you make it' mentality. Team members would stop speaking to you and shun you because we were taught what you put out, you attract — therefore if you are around 'toxic people' who 'don't want to succeed' in their business, you'll be attracting that to your business," Josie recalls.

6. And be especially wary if a business encourages you to cut ties with people you are close to who question their products or business model.

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Similar to how many cults encourage members to cut off people who question their teachings, some MLM distributors will tell their recruits to block people who don't believe in the business. 

Josie says, "Any friend or family member who didn't support your business (i.e., buy product from you or join your team) was seen as a negative person who was jealous and didn't want you to succeed. If any friend or family member raised critical points about the company, you were supposed to cut that person out of your life. It sounds extreme (because it is), but distributors are indoctrinated to believe their MLM company is literally changing the world."

7. Be on the lookout for MLM distributors making friendly comments in an effort to "FORM" you.

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"Everything an MLM distributor does is calculated, strategic, and done in an effort to recruit new members, as that is where the 'big money' is made. FORM is an acronym that stands for Family, Occupation, Recreation, Message," Josie explains. 

"MLM distributors are taught to friend request as many people as possible and pretend to be interested in them by asking about their family, their job, what their hobbies are, and then once a distributor has gathered said intel, they are supposed to message that prospect with the business opportunity. For example, 'You know, knowing how dedicated you are to your family, how hard you work at your job, and all the fun hobbies you love/we have in common, I think you'd be perfect for an opportunity that's changed my life. Are you interested in hearing a little more?/Are you interested in earning a little extra cash for the holidays?/Have you heard about ____ (insert the company's flagship product)?'" 

8. And FORM-ing can quickly turn into love bombing.

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Love bombing is a form of manipulation that involves overwhelming the recipient with positive attention. An MLM distributor might love bomb you by liking and commenting on all of your posts, giving you free product, and bombarding you with compliments. But it's all done to get you to lower your guard and get you on their side. Josie says, "In the moment, it's easy to think that person is just really nice and wants to get to know you; but there's always an ulterior motive to love bombing. Love bombing is nothing more than a manipulation technique." 

9. You might see MLM distributors posting their favorite products without naming them to create a curiosity gap and get you to start the conversation.

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Josie explains, **"Many times, MLM distributors will take a picture with their favorite MLM product but won't show the name of it or say it in the caption. This is meant to ****_build curiosity _**so people have to ask what it is; then the distributor is supposed to let them know they will message them more info. Then they FORM you."

10. And some MLM distributors avoid naming their products in their posts so you can't look them up and see the bad reviews.

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"Distributors also don't say the name of their company/products often for fear that a prospect will search said names and see the negative reviews left by 'bitter, angry ex-distributors who failed at their businesses' (or so we were told)," Josie says. 

"Another red flag is somebody who looks like a lifestyle influencer and talks about changing the world/helping others but is extremely vague in their posts. They are usually in an MLM, but once again, trying not to say the name for fear of turning away prospects."

11. MLM distributors are also encouraged to be pushy and disregard the word "no."

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Josie says, "Consent is not a thing in the MLM industry. When somebody tells you they're not interested, distributors are taught, 'A no is never a no — it's just a 'not right now.' Distributors are supposed to go back and ask their prospects to join/try the product at least seven times in hopes of 'wearing them down.' Distributors believe once a prospect gets a glimpse into the product and business opportunity (aka 'the dream') they'll see how great it is, and all that pressure will have been worth it."

12. And if you join an MLM, this boundary-pushing behavior may escalate.

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Josie describes how soon after she agreed to join the MLM, she was added to a private Facebook group where her sponsor encouraged her to ignore her inner discomfort. "In this private group, we were immediately taught to ignore our feelings and get out of our comfort zones. The message was always, 'You want to do something every day that's uncomfortable. Being uncomfortable is how you grow' (later this is used to guilt-trip distributors, as a sponsor might say something like, 'Don't you want to build your business? You need to recruit — get out of your comfort zone, and go message everyone in your friends list and tell them about the opportunity!')."

13. Finally, if you have a friend who often jumps from selling one product to another, it's pretty likely that they're involved in MLMs.

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"MLM success doesn't last long because building an MLM business is like building a house of cards. There might be a lot of momentum in the beginning or during what they call the 'momentum phase,' but the attrition rate is high, and that momentum never lasts (it's why many top distributors hop around to different companies every couple of years — they need that momentum to keep their income sustained)," Josie explains. 

"Only the people at the very top of the pyramid (usually those who get in super early) are able to make the income last longer, but after being around those people and peeking behind the curtain of the 1%, I saw a lot of ugly, cutthroat and cult-like behavior."

Thanks again to Josie for sharing her experiences! Follow her on YouTube to see her full story and learn more MLM secrets.