I voted, but it was a return I prepared for a few years as a friend, not for compensation. I did not see any MLM activity in the returns I prepared via OldJob.
Loss was less than $10K, but that is NOT slight for this friend. I would guess friend lost a significant fraction of total assets.
For the friend:
First, she got into Mary Kay when just out of college. This was going to be a side-gig during slow times of her RealJob. She tells me of the new venture. I wince.
Year 1 of her return, after a REALLY difficult time getting any kind of statement of sales from MK corporate and an explanation of it, she had a loss of somewhere around a grand? But, she is just getting started, so surely things will improve.
Year 2, hope is waning. There is another loss of similar size. Friend tells me she is giving up selling and will stay in it "just for the discounts."
Year 3, she made a couple more sales. Still a loss. *sigh* But, she tells me, wait, now she and hubby are selling an alternative electricity supplier, Ambit! Their rates are definitely better than your local supplier! But, it turns out that she and hubby paid $500 to be able to sell this. (Was it maybe for a seminar? I don't know. There certainly weren't samples of electricity to stock.) And they were recruited by a close relative. They get $100 commission for each new seller they sign up and maybe little "residual commissions" from new buyers.
Me: "So, you are selling this energy plan."
Friend: "Yes."
Me: "And you paid $500 to join."
Friend: "Yes."
Me: "And for every person you sign up to be a seller you get $100."
Friend: "Yes! It's great."
Me: "It's a pyramid scheme."
Friend: "No it isn't!"
Me: "You make money by getting other people to sell. That's what a pyramid scheme is. The people at the top need to pull in many times more people underneath them to keep the money coming in."
Friend: "It's not a pyramid scheme! People really save money on electricity!"
[Note that, after just researching a little online about what has happened with Ambit, it looks like the payment structure is different by state and possibly in other ways as well. Friend paid $500 and was to get $100 for each seller recruited. Various Ambit-related websites are offering $399 to start plus $25/month, or a "limited-time offer!" of $75 to start and $XX per month to keep selling. I could not find this info a couple years ago when this conversation took place.]That went well. Yes, people do save money on electricity...
until they are misled about rates, and then they file class action lawsuits.
Year 4, friend decided to start preparing her own return (YAY!), so I never saw the electric MLM loss (though she told me they only got back $300 of the $500).
Now friend is selling ridiculously overpriced bags for yet another MLM. This is just not going to end well.