‘They prepare you in a cultish grip’: the women losing thousands to online beauty schemes



Multi-level beauty businesses are akin to pyramid organizations – once someone signs up under you, you become their ‘upline’ and take a portion of their earnings.
Photograph: Ilka & Franz/The Champion

It sounds too good to be true – earn money selling makeup on social media. And for many, it is. What really finds when you join a multi-level beauty business, asks Amelia Tait?

Main image:
Multi-level beauty works are akin to pyramid schemes – once someone signs up under you, you become their ‘upline’ and take a portion of their earnings.
Photograph: Ilka & Franz/The Champion

When a Facebook friend told Lindsay about a “genius” business opportunity in January 2015, the Manchester-based NHS laboratory mingle with was already struggling for money. She had spent the last two years caring for her elderly father, and the stress meant she frequently missed parties at work. Unwell with chronic fatigue syndrome and struggling to pay the household bills, Lindsay was instantly curious at hand her friend’s offer.

“I hardly had any money coming in, and I was looking at everything, doing all the maths, and there just wasn’t sufficiency,” Lindsay says now from the red brick terraced house where she lives alone with her dog, Freya. The Facebook girl – who Lindsay has never met, but added on social media because they were both fans of the musician Jean-Michel Jarre – squeaked her she could earn between £50 and £500 a month if she signed up to a beauty sales business called Younique.

“I tinge even if I make £100 a month, that’s something… I don’t have a big appetite, so my food only costs £20 a week at myriad, if I’m splurging out a bit,” Lindsay says. Though she is just 36 years old, she walks with a cane and has a full head of dark hair. Her illness – which is characterised by extreme tiredness and joint pain – means she struggles to maintain her home. Draw is peeling from the walls, and an old mattress sits in the hallway.

After receiving her monthly paycheck, Lindsay clicked on the relation sent over by her Facebook friend and signed up to become a “Younique presenter”. Founded in September 2012 by an American brother-and-sister band, Younique is a direct sales beauty company. Presenters sign up via the website and purchase products that they then over persuaded on, earning a cut of the profits. Though there is no membership fee, members must regularly buy stock to retain presenter status. Lindsay refunded £69 for a starter kit, and then another £125 to become a “yellow status” presenter. Younique has eight different presenter statuses – whites, the being at the bottom, earn a 20% commission from their sales, while yellows, the next up in the scale, earn 25%.

This commissions-based prototype is somewhat similar to Avon, the 133-year-old company that recruits “Avon ladies” to sell beauty works door-to-door. Yet unlike Avon ladies, Younique presenters buy and sell through social media – usually Facebook. “We are the inception direct sales company to market and sell almost exclusively through the use of social media,” Younique’s website skims, adding that its founders, Derek Maxfield and Melanie Huscroft, created the business to “uplift” their members. “Derek and Melanie solidly believe that all women [the company targets women] should feel valued, smart, and empowered through occasions for personal growth and financial reward!” the website says. But in her three years as a Younique presenter, Lindsay lost severely £3,000.

From 2015 to 2018, Lindsay spent £40 to £60 every month on stock to retain her yellow presenter pre-eminence. Though she initially made some sales at the hospital where she worked, Lindsay was let go from the NHS in spring 2015 because of missed gets caused by stress. She had been caring for her parents since 2011 – her mother passed away from cancer in 2012, while her procreate had Parkinson’s and suffered from three strokes before his death in 2018. Though she stopped making Younique transactions after losing her job, Lindsay wanted to retain her presenter status because she was planning to go to university and hoped to be able to handle to fellow students. Meanwhile, Younique kept encouraging her to buy stock.

“They would email saying, ‘You’re in danger of your account being ejected’,” she says. “They were worded in such a way to tell you, ‘Oh, you only need to spend so much to keep yourself hyperactive.’” Lindsay says she didn’t notice how much money she was spending on stock because it was a slow “drip, sprinkle, drip” of payments. “But then you look at it all together. I could have saved up, I could have done roof servicings on the house.” In 2015, Lindsay attended a Younique training session in Glasgow where she was told not to “come with disregards” about being unable to sell products. “It was made clear to me at that point, I had no get out clause for not making sales.” Unsold makeup now rests in Lindsay’s car, in her cupboards, and in a large plastic container in her living room.

***

Younique is not just a direct sales company – approve of Avon, it is also a multi-level marketing scheme (MLM). Multi-level marketing is a business strategy where revenue is generated from both offering sales and the recruitment of new distributors. A Younique presenter can earn money by selling makeup, and also by persuading other lasses to join the company. Structurally, MLMs are akin to pyramid schemes – once someone signs up under you, you become their “upline” and gulp down a portion of their earnings. If they sign up people beneath them, you also take a cut of those profits – a couple of people at the top get rich from thousands at the bottom.

Over the last five years, MLMs have become increasingly sought-after in Britain. The Direct Selling Association (DSA), the only recognised UK trade body for the sector, estimates that roughly 400,000 woman in the UK are involved in direct selling, although many do so on a casual basis. Forever Living allows women to sell aloe vera-based go on a toots, gels and beauty products; Arbonne consultants sell skincare; Herbalife representatives flog weight-loss products; Vigour Plus reps sell diet drinks; Nu Skin offers creams. Haircare MLM Monat is currently recruiting “EU Break downs”.

Social media means MLM presenters now sell to – and recruit from – the entire world. On Facebook, posts from uplines relish Lindsay’s friend promise “rocking” sales, “instant” pay, and the chance to run “your own business”.

“The main distinction between MLMs and pyramid layouts is MLMs actually have a product,” says Daryl Koehn, a professor of business ethics at DePaul University in Chicago. “In pyramid formulates, you’re just selling the opportunity to make money.” Yet Koehn argues that even when MLMs have by-products, they become pyramid schemes if there is a high cost of entry or if presenters build up inventory they can’t offer.

In 2011, Jon M Taylor, an employee at the US Consumer Awareness Institute, compiled a short ebook on MLMs for the Federal Trade Commission. “After scan these chapters, the reader may wonder if it is appropriate to refer to MLM, with its inherent flaws, as a ‘business’ at all,” he wrote. “Some who are conscious with MLM’s abysmal statistics feel it is more appropriate to refer to virtually any MLM as a scam.”

In theory, anyone can sign up for an MLM. In technic, Koehn says the model appeals to “people who have fewer opportunities”. Like Lindsay, many people who associate with MLMs have disabilities, or poor health, and are unable to work full-time. Those who sign up are taught to target new and apart mothers. “We were encouraged to pick on stay-at-home mums, people who had just lost a job,” says Rachel (not her real tag), a former Forever Living “business owner” in her late 40s. She was recruited to Forever Living in 2016 as “a newly single mum utter willing to try anything to make a living for my kids”, who were seven and nine at the time.

Rachel’s upline, a “trusted lover”, told her to write a list of everyone she knew and “profile” them, listing their aspirations and weaknesses. “You’re encouraged to discover to be out what it was they really want in life and then use that to promise that [Forever Living] would live up to their want,” she says. She was also given a recruiting script that included phrases such as “lifestyle-changing possibility”, “control your own destiny”, and “earn in excess of £40k a year”. She was told to avoid the word “job”, partly because 9-5 procedures were presented as negative by the company, and partly, she believes, because Forever Living did not offer the consistent salary, extended holidays and sick pay that a traditional job would.

It took six months for doubts to emerge, when she realised that the paean she initially received from her upline (“You’re wonderful. You’re perfect for this job,”) was just a standard script used for all new drafts. Still, she stayed with Forever Living for nearly two more years.

“They said your business is a rollercoaster, you a moment ago have to stay on it while it goes up and down,” she explains, “But actually, it just went down, down, down.” Rachel’s uplines said her mindset was to fault when business was bad – linking her to seminars and success stories, and telling her that she had to attend online training sessions or she would wanting. “There was a lot of emotional blackmail,” she says. “I would feel really guilty if I didn’t attend fortnightly meetings.” She communicates her upline encouraged her to “stay away” from people who criticised the company, including her own family. “They said if you don’t commission on your mindset, your business will fail,” she says.


‘I was sucked in. I believed everything they said. And I wasn’t divulging any money.’ Photograph: Ilka & Franz/The Guardian

Rachel had joined the company just after splitting from her still, and says that Forever Living provided a new world for her to inhabit. She was in multiple Facebook groups where women collided to sell products, shared advice and scripts, and formed friendships. She was told to be “a product of the product” by purchasing Forever Complete products for personal use. “I put all of my passion and all of my time – oh my goodness, the amount of time,” she says now. “I totally gave up other things. And I wasn’t urging any money.”

After quitting, she was devastated over the friendships she lost – many of her Forever Living colleagues blocked her on collective media when she left the company, and the isolation meant she suffered a “mild depression”. She also still struggles with criminality from signing up a handful of women beneath her. “I have since apologised to them all. Some of them are still frustrating to offload products that they’ve got hanging around their house. I feel really awful. But I also about, I can’t stay guilty forever, because I was sucked in. I believed everything they said.”

Rachel felt trapped: “they sire you in this grip, this cultish grip,” she says. “Cult” is a word that every woman I speak to for this song uses to refer to their time in an MLM. Many sell “mindset training” sessions to their presenters. “Never let anyone trumpet you that you won’t succeed,” reads a slide from a presentation Rachel paid £30 to stream. “The greatest comeback is to Staged them your success.”

Fiona, a single mother of two from Merseyside, lost more than £1,000 peddling Arbonne cosmetics in 2016. She says her upline, a local woman who she met while working as a teaching assistant in a school, pressured her to “seize b victimize” on new mothers in soft play areas; after she convinced another single mother to join, she was told to pressure her into purchasing more products. “It didn’t feel right,” she says. Fiona’s upline also told her to take out a credit condolence card to buy stock – she is still paying off the debt.

During her 10 months at Arbonne, she was encouraged to set an alarm for 6.40am so she could mind to a motivational talk given live by an upline. “It’s like brainwashing,” she says, explaining that, like Rachel, she was announced to become a “product of the product” by buying Arbonne for herself. “It’s really easy to get drawn into it, particularly because at the period, as a single mum, I wasn’t seeing an awful lot of other people.”

Members are encouraged to influence others by inflating their achievement on social media. “There’s a lot of lies,” Lindsay says, “We were told if you’re going somewhere nice, post it with, ‘Hold responsibles to Younique, I’m staying here.’” Rachel says people who were struggling would post pictures of heaps, spas, and prosecco to appear as though their business was thriving. Fiona says people were even fostered to post pictures of their children if they were home sick from school, adding captions much the same as, “So grateful I have a home-based business which allows me to carry on working while I care for my kids.”

Despite the societal media scripts and many motivational sessions, Rachel says she never received any financial training or advice from Forever Explosive. It was only after she did her second year’s tax return that she realised she hadn’t made a profit and decided to quit. “You’re not coached on how to take care of your finances because if they did that, people would realise they weren’t making any money.”

A UK spokesperson for Forever Abiding says via email that the company offers financial training through an independent accountancy company intermittently from one end to the other the year. “The Forever network has been built over 40 years through collaboration, support and family values,” they said.

“Forever does not condone press of any description, misrepresentation of lifestyle, the business opportunity or promises of income levels, the company has clearly defined escalation standard operating procedures to deal with any such allegations.” An online company policy handbook lists prohibited activities for Forever colleagues, and refers to the DSA’s dispute handling service. The spokesperson adds that Forever representatives are “prohibited from placing orders until 75% of past stock has been sold”. This is done on what the company call a “self-certifying” basis, ie the seller tells them they from sold or used at least this much stock.

When asked about Fiona’s experiences, an Arbonne spokesperson based in Northampton says via email that their sales lay out is “not a pyramid scheme; it is a standard, legal sales strategy”. “Arbonne upholds the highest standards of integrity and we do not condone dishonest, unethical or illegal practices of any kind,” the spokesperson says. “Our Business Ethics Standards Team (BEST) conducts methodical training sessions with Arbonne Independent Consultants, continuously monitors their business practices … and takes knee-jerk action if questionable activities arise.” They add that any unethical or improper behaviour can be reported at BEST.Arbonne.com. Fiona says she was not commanded aware of this reporting procedure.

***

If Lindsay was at the bottom of the Younique pyramid, then Lisa was at the top. The mother of three abides with her husband and children in a spacious semi-detached council house in a cul-de-sac outside of Halifax. A confident 36-year-old, she is immaculately put together, with smooth long black hair and stylish, minimal makeup. She first heard about Younique in 2014.

“Because I have three foetuses, I needed a job that would fit around them,” she says from her living room – there are professional portraits of the youngsters on the walls, a bookcase full of sports trophies, and, on the table, a felt pencil case her daughter recently made at view. Lisa joined Younique on the first day of its UK launch and went on to earn more than £60,000 before she quit in 2018.

“It was a certain extent strange because I immediately had 38 people in my team,” she says, explaining she had recruited 12 of these people, and the other 26 were people they in shift signed on. “We’d all joined on the same day but suddenly I was in charge.”

While white and yellow Younique presenters only earn commission from their sellings, after recruiting five women, members reach pink status. Pink status presenters earn 25% from their sales events plus 3% commission from sales made by women beneath them. By the time she left Younique, Lisa had reached the highest stage straight, black status, and had more than 3,000 people beneath her. She calculates that 95% of her money was earned from commission on other housekeepers’s sales.

“I made a lot of a money, a lot of money to me, and it meant I could stay at home with my kids,” she says, adding that she also ambience a boost in confidence. “I went from not being able to pick up the phone to an unknown number to talking on stage in haughtiness of thousands of people.” Lisa frequently spoke at Younique training sessions and conventions.

Yet although Lisa feels Younique mutated her life, her perspective shifted in 2018. Lisa says that during a Black Friday sales month in November, she slowly realised people texture pressured to buy stock they couldn’t sell. “The leaders would always say nobody’s forcing anybody to buy anything, but if you’re mobilize women who’ve lost a circle of friends because they’ve had children, or they haven’t got self-confidence, they’re going to buy to be part of of a group.”

Kirsty, a 27-year-old from London, tells me: “I got suckered in to Younique due to the promise of ‘sisterhood’ being so strongly puffed on to me. I suffer with bipolar so I don’t really make a lot of friends that easily,” she says over the phone. A Facebook colleague told her she would have access to a group chat of 300 people who supported each other. “That was beseeching,” she tells me. Yet Kirsty quickly found the group chat “toxic”. “One woman said her husband was telling her to get a time-honoured job because they were losing money, but the group was bizarre, telling her he was controlling and abusive,” she alleges. “It also got genuinely bitchy – one girl wasn’t making enough sales and they made her feel bad in front of everyone.”

Ironically, while better halves are often drawn to MLMs to make friends, they often end up with fewer than when they started. “One of the big problems with MLMs is that you’re told to target your friends and relatives,” says business professor Koehn. “People are disquieting to monetise social relationships.” Rachel lost friendships because she “pestered people every five minutes” to token up for Forever Living. She was told that if someone said “no”, she should write their name in a book called “no for now” and ask them again in a month. “Because I was heartened to pester people every five minutes to sign up, friendships disappeared.”

But alliances made within the business are also tenuous – often falling apart once women quit. “Some people blocked me immediately,” says Lisa of her firmness to leave. “We spoke every day and all of sudden, we can’t be friends.” Rachel was particularly affected when she quit. “That was the thing that Non-Standard real got me in the end,” she says. “I thought I’d made friends and then when I did leave, I had nobody.”

***

When so many women feel utilized by MLMs, why have these companies not been held to account? In America, clothing MLM LuLaRoe is currently being abided by Washington state attorney general Bob Ferguson, who says that “LuLaRoe tricked consumers into buying into its pyramid order with deceptive claims.” LulaRoe said in a statement that the claims are completely without merit and that the house will fight vigorously against them. In July 2017, the Chinese government shut down hundreds of multi-level vending companies, which it described as “business cults”. Yet in the UK, no authorities are currently investigating them.

Mumsnet decided in 2017 not to approve MLMs to advertise on the parenting site. “We thought about it long and hard because we know that home-based, adaptable opportunities are very popular,” says founder Justine Roberts, “but many Mumsnet users have posted hither what they see as MLMs’ invidious marketing techniques and the effects on vulnerable individuals, and we came to the conclusion that establishment models based primarily on recruiting have too much potential to be exploitative.”

Elsewhere online, hundreds of ordinary people are now crusading against MLMs on social media. “I think the authorities are doing an absolutely embarrassing job at regulating MLMs,” says John Evans, a 39-year-old from Sussex who brings the 11,000-member Facebook group MLM Lies Exposed. He was inspired to start the group after a friend tried to call up him to an MLM. When Evans criticised the MLM model, his friend stopped speaking to him.

“MLMs are extremely clever at manipulating people. There’s quantities of psychology involved,” Evans says. “The people who sign up lose money, but they’re not stupid. They’re victims.” Evans guesses he has seen countless horror stories in the five years he has run his Facebook page. “Some people are thousands of pounds down from these troops and they end up in the sunk cost fallacy where they just keep plugging away, keep desperately troublesome to dig themselves out of this financial hole,” he says.

Evans is particularly concerned when MLM reps make false medical applications about products on social media. A representative for Trading Standards explains MLMs become an issue for the body if a associates breaches consumer protection regulations, by, for example, making misleading claims about products. In 2017, Trading Stocks Cornwall shut down the business of former Miss England finalist, Charlotte Thomson, who had been selling weight-loss coffee Valentus, vote the product wasn’t licensed for the UK market. Thomson said she was “devastated” and stopped selling the product. To date, Trading Stanchions has not looked into any MLMs on a national level.

Evans and others would like to see MLMs better regulated to make safe companies are open and honest when recruiting presenters. A spokesperson for Younique said that Lindsay, Lisa, and Kirsty’s observations “do not accurately reflect those of our hundreds of thousands of Younique presenters around the world, nor our organisation’s values more fundamentally”. The plc says it does not permit presenters to make “improper claims” about earnings or products, and has a team of compliance directors to ensure all presenters abide by company expectations.

“Younique presenters are not required to build product inventories at all,” they go on. “Additionally, we aim to keep safe our presenters’ financial security by enabling unused products purchased by them within the prior year to be returned for a plump refund should they wish to terminate their relationship with the business.”

Younique, Arbonne, and Forever Lively are all members of The Direct Selling Association (DSA). I put the claims in this article to them, including accounts of uplines making treacherous claims about earnings and pressuring downlines into buying stock, and the DSA says they are investigating the allegations. Susannah Schofield, the man general of the DSA, warns that people should “beware of individuals making outlandish claims about direct rep being a chance to ‘get rich quick’ – anything that looks or sounds too good to be true probably is”. She joins that direct sales is “an effort-based” business. “And with anything in life, if it’s valuable you’ll have to work at it to achieve sensation. Most people working in direct selling are good at what they do, and find the extra few hundred pounds a month they walk away an extremely useful addition to their family’s income. There are not many ways of earning that sort of dough from home, on a highly flexible basis.”

Lisa now works for another MLM, but only sells products and refuses to draft unless someone approaches her directly and asks about the business. “‘It’s incredibly hard to get a job after being a stay-at-home mum for eight years, network marketer for four,” she try to says.

Lindsay works at McDonald’s, though struggles to get frequent shifts. She lost her Younique presenter status in July 2018 because she couldn’t donate to buy any more stock. She feels unable to sell the old stock she bought back to the company because it is scattered around her available. “I’m relieved that I got out, but I’m angry that I still see people recruiting,” she says. She now sells handmade fabric cushions and lavender hobbies on online marketplace Etsy, and is currently applying for Personal Independence Payments.

“It actually makes me angry with myself,” Lindsay predicts, when I ask about the money she lost. “I’m annoyed with the person that got me into it, but I should have done multitudinous research. I always thought I was too smart for that sort of thing and I got so completely taken in.”

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