As with any
investment, advise your Clients to carefully evaluate any
prospect promising unusually high returns and/or a multilevel
marketing opportunity and:
Avoid any program they must pay to join where they are
promised a commission based upon their success in recruiting
investors or a “downline.”
Avoid plans requiring the purchase of expensive products
and marketing materials (often called tools).
Be highly skeptical of plans involving miracle products
or promising enormous earnings at no, or low, risk.
Beware of shills - "decoy" references paid by
a plan's promoter to lie about their earnings through
Decline to pay for anything, or sign any contracts, in
pressure-filled situations. If they have already committed,
have them send the promoter a written notice of their
intent to cancel as soon as possible.
Be diligent in checking claims, backgrounds, references
and use the governmental resources available to potential
investors like the State Office of the Attorney General,
the State Division of Securities, the NASD and the Better
Business Bureau wherever they are based.
Always get information about the investment in writing
before investing. Any legitimate investment opportunity
should have an offering circular with specific, detailed
information about the company and the investment.
If the promoter claims that the information is too complicated
to understand, or that time is of the essence, pick another
Do not believe in “secret” strategies, proprietary
programs, or any other mysterious offering – nobody
should ever invest in anything they do not understand.
Never, ever, attempt to get clever with the IRS –
by all means, they should protect their assets, but it
is insane to entrust their future to some Internet huckster
promising tax relief. The mere appearance of criminality
may result in a federal prosecution that will ruin them,
whether they are ultimately convicted or not.
Remember that no matter how good a product, and how solid
a multilevel marketing plan may appear to be, there is
no, “free lunch.”
questions and suggestions.