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

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

When a Facebook friend told Lindsay about a “genius” business opportunity in January 2015, the Manchester-based NHS laboratory assistant was already struggling for money. She had expended the last two years caring for her elderly father, and the stress meant she frequently missed switchings at work. Unwell with chronic fatigue syndrome and struggling to pay the household bills, Lindsay was instantly curious about 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 enough ,” Lindsay says now from the red brick terraced home where she lives alone with her puppy, Freya. The Facebook friend- who Lindsay has never satisfied, but added on social media because they were both fans of the musician Jean-Michel Jarre- told her she could earn between PS50 and PS500 a month if she signed up to a beauty sales business called Younique.

” I supposed even if I construct PS100 a month, that’s something … I don’t have a big craving, so my food merely costs PS20 a week at most, 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 grey hair. Her illness- which is characterised by extreme tiredness and joint ache- means she struggles to maintain her home. Paint is peeling from the walls, and an old mattress sits in the hallway.

After receiving her monthly paycheck, Lindsay clicked on the link sent over by her Facebook friend and signed up to become a “Younique presenter”. Founded in September 2012 by an American brother-and-sister squad, Younique is a direct sales beauty company. Presenters sign up via the website and buy products that they then sell on, earning a cut of the profits. Though there is no membership fee, members must regularly buy stock to retain presenter status. Lindsay paid PS69 for a starter kit, and then another PS125 to become a “yellow status” presenter. Younique has eight different presenter statuses- whites, the people at the bottom, earn a 20% committee from their sales, while ambers, the next up in the scale, earn 25%.

This commissions-based model is somewhat similar to Avon, the 133 -year-old company that recruits” Avon dames” to sell beauty products door-to-door. Yet unlike Avon dames, Younique presenters buy and sell through social media- usually Facebook.” We are the first direct sales company to market and sell almost exclusively through the use of social media ,” Younique’swebsite reads, adding that its founders, Derek Maxfield and Melanie Huscroft, generated the business to ” uplift ” their members.” Derek and Melanie firmly believe that all women[ the company targets girls] should feel valued, smart-alecky, and empowered through opportunities for personal growth and fiscal reward !” the website says. But in her three years as a Younique presenter, Lindsay lost approximately PS3, 000.

From 2015 to 2018, Lindsay expended PS40 to PS60 every month on stock to retain her yellow presenter status. Though she initially made some sales at research hospitals where she worked, Lindsay was let go from the NHS in springtime 2015 because of missed changes caused by stress. She had been caring for her parents since 2011- her mom passed away from cancer in 2012, while her parent had Parkinson’s and suffered from three strokes before his death in 2018. Though she stopped stimulating Younique marketings 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 sell to fellow students. Meanwhile, Younique kept promoting her to buy stock.

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

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

Over the last five years, MLMs have become increasingly popular in Britain. The Direct Selling Association( DSA ), the only recognised UK trade body for the sector, estimates that approximately 400,000 people 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 drinks, gels and beauty products; Arbonne consultants sell skincare; Herbalife representatives flog weight-loss products; Juice Plus reps sell diet drinkings; Nu Skin offers creams. Haircare MLM Monat is currently recruiting” EU Founders “.

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

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

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 read these chapters, the reader may wonderif it is appropriate to refer to MLM, with its inherent flaws, as a’ business’ at all ,” he wrote.” Some who are familiar 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 practice, Koehn says the model appeals to” people who have fewer opportunities “. Like Lindsay, many people who join MLMs have disabilities, or poor health, and are unable to work full-time. Those who sign up are taught to target new and single moms.” We were encouraged to pick on stay-at-home mums, people who had just lost a job ,” says Rachel( not her real name ), a former Forever Living” business owner” in her late 40 s. She was recruited to Forever Living in 2016 as” a freshly single mum very willing to try anything to make a living for my children”, who were seven and nine at the time.

Rachel’s upline, a “trusted friend”, told her to write a list of everyone she knew and “profile” them, listing their aspirations and weaknesses.” You’re encouraged to find out what it was they genuinely want in life and then use that to promise that[ Forever Living] would are meeting their want ,” she says. She was also given a recruiting script that included phrases such as” lifestyle-changing opportunity”,” control your own destiny”, and” earn in excess of PS40k a year “. She was told to avoid the word “job”, partly because 9-5 chores were presented as negative by the company, and partly, she believes, because Forever Living did not offer the consistent salary, paid holidays and sick pay that a traditional job would.

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

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

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

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

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

Rachel felt trapped:” they have you in this grip, this cultish grip ,” she says. “Cult” is a word that every woman I speak to for this piece uses to refer to their time in an MLM.Many sell” mindset develop” sessions to their presenters.” Never let anyone tell you that you won’t succeed ,” reads a slide from a presentation Rachel paid PS30 to stream.” The greatest comeback is to SHOW them your success .”

Fiona, a single mother of two from Merseyside, lost more than PS1, 000 selling Arbonne cosmetics in 2016. She says her upline, a local woman who she fulfilled while working as a teaching assistant in a school, pressured her to “prey” on new mothers in soft play regions; after she convinced another single mother to join, she was told to pressure her into buying more products.” It didn’t feel right ,” she says. Fiona’s upline also told her to take out a credit 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 6.40 am so she could listen to a motivational talk dedicated live by an upline.” It’s like indoctrinating ,” she says, explaining that, like Rachel, she was told to become a” product of the product” by buying Arbonne for herself.” It’s really easy to get drawn into it, especially because at the time, as a single mum, I wasn’t seeing an awful lot of other people .”

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

Despite the social media scripts and many motivational conferences, Rachel says she never received any fiscal educate or advice from Forever Living. 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 manage your finances because if they did that, people would realise they weren’t making any money .”

A UK spokesperson for Forever Living says via email thatthe company offers fiscal training through an independent accountancy company intermittently throughout the year.” The Forever network has been constructed over 40 years through collaboration, support and family values ,” they said.

” Forever does not condone pressure of any description, misrepresentation of lifestyle, the business opportunity or promises of income levels, the company has clearly defined escalation procedures to deal with any such allegations .” An online company policy handbook lists prohibited activities for Forever members, and refers to the DSA’s dispute handling service. The spokesman adds that Forever representatives are” prohibited from placing orders until 75% of previous stock has been sold “. This is done on what the company call a ” self-certifying ” basis, ie the vendor tells them they have 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 scheme is” not a pyramid strategy; it is a standard, legal sales strategy “.” Arbonne upholds the highest standards of integrity and we do not condone deceptive, unethical or illegal practises of any kind ,” the spokesperson says.” Our Business Ethics Standards Team( BEST) conducts regular training sessions with Arbonne Independent Consultants, continuously monitors their business practices … and takes immediate 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 made aware of this reporting procedure.

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If Lindsay was at the bottom of the Younique pyramid, then Lisa was at the top. The mom of three lives 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 sleek long black hair and stylish, minimal makeup. She first heard about Younique in 2014.

” Because I have three children, I needed a chore that would accommodate around them ,” she says from her living room- there are professional portraits of the children on the walls, a bookcase full of athletics trophies, and, on the table, a felt pencil case her daughter recently made at school. Lisa joined Younique on the first day of its UK launch and went on to earn more than PS6 0,000 before she quit in 2018.

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

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

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

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

Kirsty, a 27 -year-old from London, tells me:” I get suckered in to Younique due to the promise of’ sisterhood’ being so strongly pushed on to me. I suffer with bipolar so I don’t really make a lot of friends that easily ,” she says by telephone. A Facebook friend told her she would have access to a group chat of 300 people who supported each other.” That was appealing ,” she tells me. Yet Kirsty quickly found the group chat “toxic”. ” One woman said her husband was telling her to get a regular undertaking because they were losing money, but the group was bizarre, telling her he was controlling and abusive ,” she alleges.” It also got truly bitchy- one daughter wasn’t building enough marketings and they stimulated her feel bad in front of everyone .”

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

But alliances constructed within the business are also fragile- often falling apart once girls cease.” Some people blocked me immediately ,” says Lisa of her decision 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 really got me in the end ,” she says.” I thought I’d construct friends and then when I did leave, I had nobody .”

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

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

Elsewhere online, hundreds of ordinary people are now campaigning against MLMs on social media.” I believe the authorities are doing an utterly embarrassing chore at governing MLMs ,” says John Evans, a 39 -year-old from Sussex who runs the 11,000 -member Facebook group MLM Lies Exposed. He was inspired to start the group after a friend tried to recruit 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 lots of psychology involved ,” Evans says.” The people who sign up lose money, but they’re not stupid. They’re victims .” Evans says he has seen countless horror narratives in the five years he has run his Facebook page.” Some people are thousands of pounds down from these companies and they end up in the sunk expense fallacy where they just keep plugging away, maintain desperately trying to dig themselves out of this financial hole ,” he says.

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

Evans and others would like to see MLMs better regulated to ensure companies are open and honest when recruiting presenters. A spokesperson for Younique said that Lindsay, Lisa, and Kirsty’s experiences” do not accurately reflect those of our hundreds of thousands of Younique presenters various regions of the world , nor our organisation’s values most fundamentally “. The company says it does not permit presenters to stimulate” improper asserts” about earnings or products, and has a team of compliance officers 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 safeguard our presenters’ financial security by enabling unused products purchased by them within the prior year to be returned for a full refund should they wish to terminate “the two countries relations” with the business .”

Younique, Arbonne, and Forever Living are all members of The Direct Selling Association( DSA ). I set the claims in this article to them, including accounts of uplines making false claims about earnings and pressuring downlines into buying stock, and the DSA says they are investigating the allegations. Susannah Schofield, director general of the DSA, warns that people should” beware of individuals making outlandish claims about direct selling being a chance to’ get rich quick’- anything that appears or sounds too good to be true probably is “. She adds 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 success. Most people working in direct selling are good at what they do, and find the extra few hundred pounds a few months they make an extremely useful addition to their family’s income. There are not many ways of earning that sort of money from home, on a highly flexible basis .”

Lisa now works for another MLM, but merely sells products and refuses to recruit 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 says.

Lindsay works at McDonald’s, though battles to get frequent switchings. She lost her Younique presenter status in July 2018 because she couldn’t afford 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 home.” I’m alleviated that I get out, but I’m angry that I still consider people recruiting ,” she says. She now sells handmade fabric cushions and lavender bags on online marketplace Etsy, and is currently applying for Personal Independence Payments.

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

* If you would like a comment to be considered for inclusion on Weekend magazine’s letters page in print, please email weekend @theguardian. com, including your name and address( not for publication ).

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