Breaking MLM News: Ireland Investigative Reportors Asking Same Old Questions About My Shopping Genie

In last week’s MLM Weekly News Report, I did a small piece on My Shopping Genie. This report was sent in from one of our reporters, and we tagged the video story to give distributors a balanced story. Our small mention of this story took off at FaceBook, so I decided to follow up and give more details on why so many critics have raised red flags internationally.

Here is the investigative report and the follow up article by Rory Egan:


My Shopping Genie Investigative Report

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23 thoughts on “Breaking MLM News: Ireland Investigative Reportors Asking Same Old Questions About My Shopping Genie”

  1. Andrew Burling and Bruce Bice both have a very checkered past. Mr. Bice is a convicted felon and Mr. Burling was plead guilty to a ponzi scheme in Wisconsin. (see below). With these two guys running the show, I would run in the other direction.

    Case No.: 96-2002

    Complete Title

    of Case:

    State of Wisconsin,

    Plaintiff-Appellant,

    v.

    Fortune in Motion, Inc., David Kalenuik,

    individually and as president of Fortune in

    Motion, Inc., Earl D. Boyles and Andrew W.

    Burling,

    Defendants-Respondents.

    Opinion Filed: October 8, 1997

    Oral Argument: July 22, 1997

    JUDGES: Snyder, P.J., Brown and Nettesheim, JJ.

    Concurred:

    Dissented:

    Appellant

    ATTORNEYS: On behalf of the plaintiff-appellant, the cause was submitted on the brief of James E. Doyle, attorney general, and Bruce A. Craig, assistant attorney general and oral argument by Bruce A. Craig.

    Respondent

    ATTORNEYS: On behalf of the defendant-respondent, the cause was submitted on the brief and oral argument of Earl D. Boyles, pro se.

    COURT OF APPEALS

    DECISION

    DATED AND FILED

    NOTICE

    October 8, 1997

    This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.

    Marilyn L. Graves

    Clerk, Court of Appeals

    of Wisconsin

    A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See § 808.10 and Rule 809.62, Stats.

    No. 96-2002

    STATE OF WISCONSIN

    IN COURT OF APPEALS

    DISTRICT II

    State of Wisconsin,

    Plaintiff-Appellant,

    v.

    Fortune in Motion, Inc., David Kalenuik,

    individually and as president of Fortune in

    Motion, Inc., Earl D. Boyles and Andrew W.

    Burling,

    Defendants-Respondents.

    Appeal from a judgment of the circuit court for Winnebago County: BRUCE SCHMIDT, Judge. Reversed and cause remanded.

    Before Snyder, P.J., Brown and Nettesheim, JJ.

    NETTESHEIM, J. The issue in this case is whether a marketing and promotion plan by Fortune in Motion, Inc., constituted an illegal chain distribution scheme pursuant to Wis. Adm. Code § ATCP 122.01. At summary judgment, the trial court ruled that the Fortune in Motion plan did not violate the administrative rule. Based on this holding, the court dismissed the State's forfeiture and injunction action against Fortune in Motion, Inc., its president, David Kalenuik, and two alleged primary Wisconsin promoters, Earl D. Boyles and Andrew W. Burling (Fortune in Motion). The State appeals.

    We hold that a material issue of fact exists as to whether the Fortune in Motion plan constitutes a "chain distributor scheme" as defined in Wis. Adm. Code § ATCP 122.02. We reverse the trial court's grant of summary judgment. We remand for further proceedings on the State's complaint.

    Background

    The Wisconsin Statutes and Administrative Code

    Section 100.20(1), Stats., prohibits unfair trade practices, and § 100.20(2) authorizes the Department of Agriculture to issue general orders forbidding certain trade practices. Pursuant to this authority, the Department enacted Wis. Adm. Code § ATCP 122.01 which makes the use of a chain distributor scheme "in connection with the solicitation of business investments from members of the public" an unfair trade practice. This rule also recites the public policy which underpins the prohibition of chain distribution schemes:

    [T]he scheme serves as a lure to improvident and uneconomical investment. Many small investors lack commercial expertise and anticipate unrealistic profits through use of the chance to further perpetuate a chain of distributors, without regard to actual market conditions affecting further distribution and sale of the property purchased by them or its market acceptance by final users or consumers. Substantial economic losses to participating distributors have occurred and will inevitably occur by reason of their reliance on perpetuation of the chain distributor scheme as a source of profit.

    Wisconsin Adm. Code § ATCP 122.01.

    Wisconsin Adm. Code § ATCP 122.02 defines a "chain distributor scheme" as follows:

    (1) "Chain distributor scheme" is a sales device whereby a person, upon a condition that the person make an investment, is granted a license or right to recruit for profit one or more additional persons who also are granted such license or right upon condition of making an investment and may further perpetuate the chain of persons who are granted such license or right upon such condition. A limitation as to the number of persons who may participate, or the presence of additional conditions affecting eligibility for the above license or right to recruit or the receipt of profits therefrom, does not change the identity of the scheme as a chain distributor scheme.

    (2) "Investment" is any acquisition, for a consideration other than personal services, of personal property, tangible or intangible, for profit or business purposes .

    The Fortune in Motion Marketing Plan

    The structure of the Fortune in Motion marketing plan is set out in its promotional materials.(1) The plan consists of four color-coded concentric circles with Red as the outer circle, then Orange, Yellow and finally Green as the inner circle. The participants in the marketing plan occupy positions on these circles. The Red outer circle has eight positions, the Orange circle four positions, the Yellow Circle two positions, and the Green inner circle one position. The participants are called "active brokers," which the promotional materials define as "[a]n individual that has earned a position beginning on the Red Circle by either a personal purchase or sale of product." An individual enters the marketing program through the Red Circle and then seeks to progress through the Orange and Yellow Circles, ultimately reaching the Green Circle.

    In order to enter the Red Circle, the applicant must be sponsored by someone who is already an active broker. In addition, the applicant must also purchase or sell $500 worth of travel vouchers which can be purchased only from the Green Circle broker who receives all payments for the vouchers.(2) Thus, the incentive to enter the Fortune in Motion plan lies in the opportunity to become a Green Circle broker, the only level at which a participant receives any money.

    Once admitted to the Red Circle, the new Red Circle broker, together with other brokers already in the circle or those who arrive thereafter, solicit and sponsor other persons as prospective Red Circle brokers. Once the eight positions on the Red Circle are filled, the circles divide and the eight Red Circle members become members of separate Orange Circles comprised of four brokers each. Likewise, the four members of the Orange Circle become members of separate Yellow Circles comprised of two brokers each; and the two members of the Yellow Circle each become a sole broker in separate Green Circles, replacing the existing Green Circle brokers who must then depart the plan. However, the departed Green Circle broker may rejoin the plan by entering a new Red Circle.

    Thus, the completion of a Red Circle team repeatedly triggers a division and multiplication of the circles. It also triggers the advancement of a participant to the next circle. Reaching the Green Circle represents the payoff since the Green Circle broker sells all of the vouchers and receives the $500 payment made by each of the eight new entrants to the Red Circle. Thus, the Green Circle broker receives a total payment of $4000. The Green Circle broker buys the eight vouchers from Fortune in Motion, Inc., for $62.50, representing an expense of $500. Less the initial $500 entrance payment, the Green Circle broker will have netted $3000 upon departing the plan.

    the trial court proceedings

    In October 1995, the State filed a complaint against Fortune in Motion seeking an injunction and civil forfeitures. The complaint alleged that Fortune in Motion, Inc., was a Canadian corporation and that Kalenuik, its president, was the principal proponent of the Fortune in Motion marketing plan which "promotes, offers and grants participation to interested recruits the opportunity to participate in a chain distributor scheme ." The complaint additionally identified Boyles and Burling as principal promoters of the Fortune in Motion distribution scheme in Wisconsin. The State also filed a motion seeking a temporary injunction against the plan. The trial court denied the motion.

    Fortune in Motion then brought the motion for summary judgment which is the subject of this appeal. Fortune in Motion argued that its marketing plan was not a "chain distributor scheme" under the definition set forth in Wis. Adm. Code § ATCP 122.02(1) because it did not require an individual to make an investment in order to gain entry into the program. The State responded with its own motion for partial summary judgment contending that the Fortune in Motion marketing plan was in violation of § ATCP 122.01. The State's motion reserved the issues of the appropriate forfeiture amount and the culpability of the individual defendants.

    The trial court granted Fortune in Motion's summary judgment motion and denied the State's concurrent motion. The court stated:

    Participation in the multi-level marketing program of the Defendant Fortune in Motion is not conditioned upon an investment by its distributors who are permitted to participate by making sales to third parties. Such sales activities constitute personal services which the Administrative Code excludes from the definition of investment at Wisconsin Administrative Code ATCP Sec. 122.02(2). Fortune in Motion's program [is] outside the scope of the Wisconsin Administrative Code Chapter ATCP 122.

    On June 14, 1996, the trial court entered a judgment dismissing the State's complaint. The State appeals the court's grant of summary judgment to Fortune in Motion. However, the State does not appeal the trial court's further ruling denying its motion for partial summary judgment.

    Discussion

    Procedural History on Appeal

    Before we address the appellate issue on the merits, we recite some of the procedural history regarding this appeal. Previously, counsel for Fortune in Motion, Inc., and Kalenuik requested permission to withdraw. Counsel represented that his clients "[do] not wish to defend in this appeal and are not willing to expend any funds for attorneys to do so." Counsel also represented that "[d]efendant Fortune In Motion, Inc. no longer conducts any business within the State of Wisconsin." We granted this motion to withdraw.

    In addition, separate counsel for Burling and Boyles also previously asked this court for permission to withdraw. This motion was based upon the clients' failure to cooperate with counsel and pay attorney's fees. We also granted this withdrawal request.

    Following these orders, this court advised and warned all the respondents that they risked the sanction of summary reversal if they did not file respondents' briefs. Despite these warnings, Fortune in Motion, Inc., Kalenuik and Burling failed to file briefs. Therefore, as a sanction, we previously summarily reversed the judgments in favor of these parties. Boyles, however, has filed a pro se respondents' brief and he also appeared pro se at the oral argument in this case. While we appreciate Boyles' brief and oral argument presentations, they speak to his claim of an innocent intent and not to the legal issues before us.(3)

    Thus, we do not have any respondents' appellate brief which meaningfully defends the trial court's ruling or addresses the issues raised by the State. However, the appellate record does include the extensive and well-stated trial court brief on behalf of Fortune in Motion, Inc., and Kalenuik in support of their motion for summary judgment. This brief was adopted by Burling and Boyles in support of their separate motion for summary judgment. We have considered this brief in reaching our decision in this matter.

    The Merits

    We review a summary judgment de novo, using the same standards and methodology applied by the trial court. See Voss v. City of Middleton, 162 Wis.2d 737, 748, 470 N.W.2d 625, 629 (1991). "If the moving party has made a prima facie case for summary judgment, the court must examine the affidavits and other proof of the opposing party to determine whether there exist disputed material facts, or undisputed material facts from which reasonable alternative inferences may be drawn, sufficient to entitle the opposing party to a trial." Grams v. Boss, 97 Wis.2d 332, 338, 294 N.W.2d 473, 477 (1980). The court must grant summary judgment if the pleadings, depositions, answers, admissions and affidavits show that there is no genuine issue of material fact and, as a matter of law, the moving party is entitled to judgment. See Voss, 162 Wis.2d at 748, 470 N.W.2d at 629.

    The parties' cross-motions for summary judgment raised the same issue: whether the Fortune in Motion marketing program is a "chain distributor scheme." Wisconsin Adm. Code § ATCP 122.02(1) defines a "chain distributor scheme" as follows:

    [a] sales device whereby a person, upon a condition that the person make an investment, is granted a license or right to recruit for profit one or more additional persons who also are granted such license or right upon condition of making an investment and may further perpetuate the chain of persons who are granted such license or right upon such condition.

    The case law from the supreme court has broken this administrative rule out into five elements: "(1) A person must be granted a license or right, (2) in return for an investment, (3) which gives [the person] the right to recruit for profit, (4) persons to whom similar licenses are granted, and (5) in return for an investment." HM Distribs. of Milwaukee, Inc. v. Department of Agric., 55 Wis.2d 261, 270, 198 N.W.2d 598, 604 (1972).

    The trial court ruled that the Fortune in Motion marketing program did not satisfy the definition of a chain distribution scheme under Wis. Adm. Code § ATCP 122.02(1) because it did not require that an investment be made. The court rested its ruling on the definition of "investment" set out in Wis. Adm. Code § ACTP 122.02(2):

    "Investment" is any acquisition, for a consideration other than personal services, of personal property, tangible or intangible, for profit or business purposes, and includes, without limitation, franchises, business opportunities and services." [Emphasis added.]

    The court noted that the evidence adduced at the hearing on the temporary injunction(4) together with the other summary judgment evidence revealed that a person could obtain entry to the Red Circle by selling the travel vouchers to third parties, rather than by making a direct purchase of the vouchers from the Green Circle broker. The court concluded that such sales activity constituted "personal services," which is recognized as an exception to the definition of an "investment" under Wis. Adm. Code § ATCP 122.02(2).

    We fully accept that the sales efforts of a person seeking admission to the Red Circle represent "personal services" generally. However, we must focus on the meaning to be given "personal services" for purposes of Wis. Adm. Code § ATCP 122.02(2). While no cases have defined "personal services" as used in this provision of the administrative code, our supreme court has defined the phrase in a different setting as follows:

    human labor such as is commonly rendered in return for a salary or a wage in the case of an employee and for "other compensation" in the case of an independent contractor or one not in an employee relationship. Such human labor must be in the nature of a service as distinguished from the end product or the fruit of the service.

    State v. Vodnik, 35 Wis.2d 741, 749, 151 N.W.2d 721, 725 (1967).(5) Although uttered in a different context, we conclude that this definition of "personal services" represents a commonly accepted meaning of the phrase. We adopt it for purposes of Wis. Adm. Code § ATCP 122.02(2).

    The summary judgment record here raises a serious question as to whether the sales efforts of a Red Circle applicant qualify under the "personal services" exception to an investment pursuant to Wis. Adm. Code § ATCP 122.02(2). In fact, a Red Circle applicant's ability to enter the plan does not even depend upon the rendering of any personal services to Fortune in Motion. Instead, the applicant may simply pay the $500 investment to the Green Circle broker without seeking a purchaser for the travel vouchers. Indeed, a witness who had been a Wisconsin promoter for Fortune in Motion testified at the temporary injunction hearing that she could not recall any instance in which a person had gained admittance to the Red Circle through the sales activity option.

    The summary judgment record also reveals that it makes no difference to Fortune in Motion or the applicant whether the applicant gains admission to the plan by direct investment or by a sale of the vouchers to a third party. From the standpoint of Fortune in Motion, the profit motive lies in the repeated admission of new persons to the marketing plan so that the Green Circle broker is paid funds, a portion of which must be used to purchase the travel vouchers from Fortune in Motion. From the standpoint of the applicant, the profit motive lies in the hope of attaining Green Circle broker status. Neither of these goals is directly linked to the rendering of personal services to Fortune in Motion.

    We also observe that the interplay between the applicant and Fortune in Motion under this particular plan is not akin to the relationship which traditionally exists in a personal services arrangement between an employer and employee, a principal and agent, or the parties to an independent contractor relationship. As we have noted, Vodnik holds that, regardless of the relationship, "[the] human labor must in the nature of a service as distinguished from the end product or the fruit of the service." Vodnik, 35 Wis.2d at 749, 151 N.W.2d at 725. Here, the summary judgment record allows for a conclusion that the end product–the payment of the $500 from the standpoint of Fortune in Motion, Inc., and the lure of the Green Circle from the standpoint of the applicant–not the rendering of personal services, drives this marketing plan.

    In the trial court, Fortune in Motion likened itself to direct sales marketing companies such as Amway, Mary Kay Cosmetics and Shaklee which also depend on the recruitment efforts of its distributors as part of their distributors' sales activities. However, this record contains precious little of the specifics regarding the marketing plans of these entities. We properly base our decision on the facts pertinent to this case and the applicable law. Moreover, if this argument is correct, then the "personal services" exception subsumes the general rule barring recruitment. That result would obviously be unreasonable. In construing a statute, we must interpret it in such a way as to avoid absurd or unreasonable results. See State v. Moore, 167 Wis.2d 491, 496, 481 N.W.2d 633, 635 (1992).

    A chain or pyramid scheme rests on its ability to lure participants with an exponential return on their investment as long as new participants are recruited to fund the payoff to those already in the plan. Such a plan becomes illegal when it "contemplates an endless chain of purchasers, or a series of constantly multiplying endless chains, with nothing but fading rainbows as the reward of those who are unfortunate enough to become purchasers the moment before the collapse of the scheme." Twentieth Century Co. v. Quilling, 130 Wis. 318, 324, 110 N.W. 174, 176 (1907). Here, one reasonable reading of the summary judgment record allows for the conclusion that those awaiting the ultimate payoff will find an ever dwindling, or perhaps nonexistent, source from which to reap their reward. By outlawing chain distribution schemes, Wis. Adm. Code § ATCP 122.02 seeks to avoid that situation. (6)

    We reverse the trial court's grant of summary judgment to Fortune in Motion, and we remand for further proceedings on the State's complaint.(7)

    By the Court.–Judgment reversed and cause remanded.

    1 We have reviewed all of these materials including the Fortune in Motion, Inc., promotional video tape.

    2 Fortune in Motion, Inc., also deals in other products. However, for purposes of the particular plan at issue in this case, the product utilized was travel vouchers.

    3 At oral argument, the State represented that it would be dismissing the complaint as to Boyles.

    4 During the summary judgment proceedings, the parties cited abundantly to the evidentiary record made at the earlier hearing on the State's motion for a temporary injunction. The trial court did likewise in its ruling. We therefore consider that record as part of the summary judgment evidence.

    5 In State v. Vodnik, 35 Wis.2d 741, 748-50, 151 N.W.2d 721, 724-25 (1967), the supreme court was construing the phrase "personal services" as used in a statute of limitations.

    6 Fortune in Motion also argues that other aspects of its sales activities do not violate the law. For instance, a person can become a distributor of Fortune in Motion's various product lines by simply purchasing a sales kit without joining the particular plan at issue in this case. However, as already noted, we properly limit our consideration in this case to the conduct which is alleged to violate the law. The fact that Fortune in Motion engages in other legal marketing plans does not per se immunize the conduct alleged in this case.

    7 Although our previous reversals of the summary judgment in favor Fortune in Motion, Inc., Kalenuik and Burling were sanction based, our opinion in this case now represents the law of the case as against these parties as well.

    © 2011, State Bar of Wisconsin

    P.O. Box 7158, Madison WI 53707-7158. Customer service, (800) 728-7788.

  2. http://pa.courts.state.mn.us/default.aspx

    Try this…doubt you'll find it as "positive"

    I won't mention what we call those that protect criminals and wife-beaters (like you) in the US, either. I have a life, thank you…you, however, should get some integrity.

  3. In the know

    I did a google search of Andrew Burling and it was all very positive – as I thought.

    Mate – get a life – I won't mention what we call people like you in Australia.

  4. How do I know? It is PUBLIC RECORD. Anyone with a computer has acccess to ALL of this information and much more. Further, it is not "crap" but rather FACT. Why are you concerned? Is he so necessary to your finances that you would protect a dead-beat Dad? Andrew was also brought uf on charges in the state of WI in 1996 for running an illegal pyramid business. He was found guilty.

    Did you know that in 2000 Mr. Burling was found guilty of terroristic threats after beating his then wife? Did you know he PLED guilty to this?…and it wasn't the first time he had done it, only the first time he stated he would come back to kill her that the police happend to hear him state. Repeatedly. Thus the ability to press charges and incarcerate him.

    AS to my "vendetta"…nice use of sematics, but not so much a "vendetta" as preventative measures to ensure Mr. Burling does not continue to take advantage of innocent and hopeful people as he has done for the past 20 plus years in the industry. You right on one point…he has been VERY successful in doing this.

    Don't beleive me? A quick google search is all it requires to confirm these items as FACTS!

    In FACT Mr. Burling's recent court appearance was published in the Sawyer County, WI paper only a few days ago…detailing his arrears in child support. In FACT he doesn't have a valid drivers lisence in the US anymore as a result. In FACT he has been jailed for non-payment before in the state of MN.

    Shall I detail more facts? There are a myriad of sorrid FACTS about Andrew Burling that I have yet to write about….

  5. In the Know,

    How would you have access to such information?

    Do you know Andrew personally?

    What is your vendetta against him?

    Andrew is a great person and very successful businessman.

    Don't spread crap about others mate – get a life and do something for yourself.

    Chris.

  6. "Andrew Burling spoke to us – the top distributor worldwide – and he showed us page after page after page of the pay per click income of people in his group – this is without any recruiting."

    Really? Andrew Burling is currently over $14,500 dollars behind in child support in the US…his driving rights have been suspended as a result, he has liens against personal property for it and he was in court for a contempt hearing just last week regarding his debt where he stated he "couldn't afford" to make an additional $1000 a month payment to catch up on his back support. If he is the "top" distributor and doesn't have the money, it would seem this opportunity isn't very lucrative after all. IF he does in fact have the money, what kind of man refuses to support his own child and goes to the lengths of lying to the courts, hiding income, hiding accounts and so forth to avoid it?!?!?

    This is PUBLIC record and quite easy to access.

  7. Thanks Troy for putting the report on the site.

    At least you are fair – a lot of blogs have an agenda – you don't appear to have one.

    I understand what you are saying about – affiliate marketing /network marketing – but we are in the technology age – and in the technology age we are going to see more electronic products in network marketing. the prehistoric network marketing companies who are are still on the band wagon of nutritionals will gradually disappear. Only my opinion – i may be wrong.

    It seems the only people making money from Xango, Yoli and others are the founders and a few top distributors worldwide – everyone else is a foot soldier.

    At least with the Genie – anyone can come into it – and if they really put the effort in – they can make a considerable income – as it explodes around the world.

    2 months ago i was in a room with the Australian power distributors ( yes i'm an Aussie) and their were lawyers, financial advisors, franchisees, teachers, policeman – people from all walks of life – all very excited about the Genie.

    Andrew Burling spoke to us – the top distributor worldwide – and he showed us page after page after page of the pay per click income of people in his group – this is without any recruiting. this is an incredible opportunity – and what we need Troy is people like you to endorse it. We don't need to be in the high risk category. Whats high risk about paying $199 lifetime license fee – and then a $1 per day to keep your business going?

    With unlimited income potential.

    regards

    Chris.

  8. Chris,

    Just a few thoughts on your well written comment.

    1. The laws are very clear, there must be a product/service available at fair market value for sale to folks outside the compensation plan. If the fair market value is "FREE" then regulatory organizations may very well wait until they feel the company has deep pockets, and then file legal actions against the company.

    2. Over the last three decades in which have been active in direct sales, some very well-meaning "Revolutionary" companies have come and gone. Not because the product and service was not marketable. But because they added a compensation plan which would not work long term, and caused the company to violate specific federal and state laws.

    3. I would challenge the statement "combination of affiliate marketing and network marketing. I understand where you are coming from, and on the surface it is a solid statement. From a legal standpoint I think it would be challenged in a big way.

    4. Lawyers are paid to defend their opinions. Prime example… Bush's attorney's stated "water-boarding is legal" Obama's attorney's state "water-boarding is illegal."

    The response will go live today. I can say after reading it, that this opinion he doesn't address the issue of 100% internal consumption of the Genie software. This is the issue in every country. Only time will tell, but it is a huge concern.

  9. Hi Troy, thanks once again for your reply.

    I think the confusion with the Genie is exactly what you are saying. People don't believe their is a real product.

    The Genie is the product outside the compensation plan – it's just in this instance we give it away – and then make affiliate income when people use it and benefit from it.

    It's revolutionary – as its a combination of affiliate marketing and network marketing – very smart.

    The company has been around for nearly 4 years – they have had lawyers check it out. Companies don't proceed these days – unless they have had the compensation plan checked out.

    The videos by the investigative reporter are one sided – who typically has an agenda against this company.

    When you put the report on the site – this will soon show the legitimacy of this business model.

    Maybe this journalist could go and interview Ted Turner's ( CNN) best friend and ex business partner Bill Shaw who is a director of the Genie.

    But I'm sure this won't happen – he only wants to report the negative.

    thanks Troy.

  10. I'll get that up this next news report.

    I want to be clear from my standpoint. I am not negtive on the "Genie" software or concept. I am concerned on the type of compensation plan used.

    Case study has shown when a product or service is not being sold to an end user outside of the compensation plan, that sooner or later some regulatory organization will come in and shut things down.

    So, my concern is for distributors who do not fully understand he current laws, and the risk involved.

    Of all the companies you mentioned above, they sell products to the end user outside of the compensation plan. Especially Mary Kay. To date I have yet to see any product owned by MSG sold to end users outside of the compensation plan.

    I will get the report up this week.

  11. Hi Troy,

    Thank you for showing both sides – this is important.

    Another thing I would like to say about My Shopping Genie is – they have some very experienced and creditable people on their board of directors.

    One being William Shaw who worked along side and is best friends with Ted Turner (CNN).

    Ted Turner is very much behind the idea of network marketing and The Genie.

    Too be honest I'm not sure why their is so much negative about the Genie. It saves the end consumer money – as a free search application.

    As a network marketing business – we are able to build teams – who also build teams – and all of your team also give away a free Genie – it's called leverage.

    This is why people build networking marketing businesses – leverage

    It doesn't matter if you are selling Yoli, Xango, Monavie, Mary Kay – you name it – they all have elements of recruiting involved – otherwise if they didn't – you may as well start a shop – stand there for 100 hours and flog the product retail with no leverage.

  12. Chris, I will revoew the report. Although, I am not a fan of the compensation structure, I do beleive in presenting both sides fairly.

    Living An Epic Adventure,

    Troy

  13. The European regulators investigated My Net Universe – the owners of My Shopping Genie – after the very one sided documentary in Ireland. The gentleman conducting the report was very aggressive and really had a hatred towards Network marketing. Even with this negative publicity in Ireland – My Shopping Genie doubled it's volume in Ireland and many leaders have come through. it just goes to show when people have a dream and believe in something they don't let naysayers and doomsdayers get in their road.

    Troy I emailed you a copy of the European regulators summary of My Shopping Genie – so can you please post that on the site. It clearly states that My Shopping Genie is a legitimate business opportunity.

    If people are saying My Shopping Genie is not legit – then they are saying 80% of MLM companies are scams aren't they? The Genie is a binary. 80% of MLM companies are binary's. Come on get real people.

    The Genie happens to have an electronic product that the end user can use for free – and it saves them money – as it helps the customer shop online for the best prices. It's an app. Apps are huge – the new apple I phone has apps.

    It's a great business model – don't listen to the uneducated people – go out and build a big business with the Genie – as it will become the biggest network marketing company in the world.

    No more lotions, potions, and pills, just a free product that saves people money.

    By the way – the ratio of distributors to customers is the best in the industry. 40,000 distributors – 1.5 million customers.

    Go for it.

    Chris.

  14. God help you sad individuals if you had half a brain you would be dangerous. Can someone tell me please how can a person joining any orginisation using credit card facilities loose their money. I suggest you clear the cobwebs from your thick head and do your homework before posting crap.

    Get a life

    Thomas

  15. Socratesk – There is an MLM that might interest you. It meets the attorney general's criteria for being a legitimate business and might meet your criteria of being something you might be passionate about and receiving fair return for your efforts. Before this company, I never had any interest at all in doing network marketing/MLM. Let me know if you want more info with no obligation.

  16. Troy, that would be great. So many new people are joining our industry and getting sucked in to the hype of some of these companies without knowing what criteria they should use to evaluate a company before putting their money and reputation on the line.

  17. Bob,

    Excellent post. Thank you for taking time out of your schedule to post.

    I am also going to take your advice and do a new article or maybe a few articles on what to really look for to determine if a company is legit or running a high-risk of being a pyramid.

  18. The State Attorney Generals in the United States apply two tests to determine if an "opportunity" is legitimate.

    1. Would the consumer continue to buy the product or service at the suggested retail price if there was no income opportunity?

    2. Are commissions paid from the fair-market sales of goods and services, rather than distributor fees.

    The regulators will eventually shut down any company that cannot pass these two test questions. The fact that a company has not been shut down yet is not proof that it is legitimate. It just means the regulators haven't caught up with them yet.

    Selling a "license" does not constitute a product. That is a fascade for a pyramid scheme. Many companies have tried it and have been shut down including Sky Biz that sold websites and YTB (California law suit) that sold travel agent portals.

    In examining the Shopping Genie presentation and listening to the testimonials from successful distributors, it is very obvious that they are making almost all their money from distributor fees, not from affiliate fees from the purchase of products from the affiliate websites like Amazon, Walmart or eBay.

    Shopping Genie will be shut down eventually as an illegal pyramid and many people will make a lot of money in the process, but many more people will be hurt and lose their money. That's how illegal pyramids work. If you're involved you probably won't go to jail like the owner has before. You'll just have to start looking for your next income opportunity.

    The real question is "Will your integrity allow you to hurt a whole lot of people just to make a quick buck?".

  19. Troy,

    Thanks for your commentary. I was on the phone yesterday with a distributor from MyShoppoingGenie. According to him, the company has over 30,000 active reps paying $30 per month to be a distributor and that the company is expecting $400,000 in revenue this month from PPC (pay-per-click).

    With 30,000 reps paying $30 per month ($900,000), this means that the income from the monthly distributor dues is more than twice that of the PPC income.

    My understanding of the FTC's stance on pyramid schemes is that a company has to bring in at least 51% of its revenue from the sale of the product or service in order to avoid being considered a pyramid.

    If everything above is true, then as of this moment, MyShoppingGenie is a pyramid scheme according to the FTC.

    Like you said, it is unfortunate that things like this happen. Hopefully, the company will find a way to restructure and thrive without leaving a bad taste in their distributor's mouth's.

    Sometimes, even people with great intentions make mistakes (like the founders of a company). It's important to know what you're getting into before you put your credibility on the line with any company.

    It'll be interesting to see what happens.

    Pat

  20. Socratesk,

    Good comment and I know how you feel. I felt the same way, but what I found after years of studying compensation plans vs traditional business is that compensation plans win most of the time for the average person. Now before you blow a gasket (or anyone else), we know historically that most people fail at mlm's. Why? They don't educate themselves prior and jump in with pure emotion and not logic. Troy is doing a fine job at educating people but each individual has to do their due diligence and not get caught up in the hype/emotion. Now traditional business as you call it, can get pretty expensive even before you open the door and the average person does not have that kind of capital sitting around, especially in these lean times. Mlm's are a viable option to traditional business IF people educate themselves. Your friend that made Gold level, can he/she explain the different types of compensation plans, the breakage in each and how to maximize each? People should know these questions and educate themselves about network marketing/mlm as a whole before the specific company/opportunity they plan to enter. As you see, this one point in itself will save people time, money and added frustration during these uncertain times. You my friend are one of the selected few that have reached financial freedom with the traditional business structure. The question is now, how many people can help reach with that same traditional business model? My friend network marketing is a bridge to wealth for an individual and the masses. I believe we are in great times, no matter how unstable financially most people are. In times like these people are forced to educate themselves and think outside of the box. Continue to watch network marketing, there are some awesome things that are about to happen. The great compensation plans, companies and leadership are beginning to be separated from the "just good and high risk companies." Yes, most companies comp plan benefits the parent company more than the distributors, but the tide is shifting, it's already begun. Your waiting for a product to jump in? That's a mistake my friend, those potential business owners that didn't like McDonalds fries missed out on a once in a lifetime opportunity. Ray Kroc wasn't selling them fries, he was offering an opportunity. People move products, products don't move people…..emotion always wanes before logic. Know the WHY. Know what RESULTS you which to achieve then look for the vehicle to get you those results.

    A recommended read for you and your friend; "The Business of the 21st Century"

    by Robert Kiyosaki.

    As I consider myself a part of Troy's community I value your comment and input. I wish you continued success.

  21. Troy:

    Thanks for the brilliant, well presented, balanced report on MSG. I was doing some research for a friend on this MLM and was thrilled to discover your site. In the future will definitely be one of my go to places. To be frank with you, I'm not a fan of MLM, in my view the compensation systems, in particular the Binary, are flawed, with a strong bias to the benefit of the company and the cost of the distributor. I consider it unethical for a company to be making thousands of the hard work of a distributor, and the distributor receiving nothing, or next to nothing, simply because the majority of the income is one leg, not the other. My very good friend worked his heart out, getting to Gold level, with one company, and the nigh impossible task of balancing legs, meant very unequal reward, compared with the huge income he produced for the MLM company on a monthly basis. Until an MLM comes along that provides me with the opportunity to sell a product I can be passionate about, while receiving fair return for my efforts, none of this gamble balancing legs etc., then I'll stick to traditional business thanks, which has resulted in financial freedom for me, not some kind of indentured servitude. I think that MLM has the potential to truly be something great, but not until a fair and ethical compensation system is developed. Thanks again for those great reports, I look forward to watching more in the near future.

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