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BBB Tip of the Week: 150 complaints filed over business 30 Day Success Formula

By Tyler Russell BBB Northwest and Pacific

“Want to make thousands from your own home? Want to do it in 30 days? Come work for us!”

Sounds like a dream, sign me up! Whoa, whoa, whoa. Not so fast. These claims of overnight success are empty promises made by businesses like 30 Day Success Formula. More than 150 complainants reported to the Better Business Bureau that the company promised them they could earn thousands of dollars when they sign up and pay to become a member.

However, the dream is short-lived when the only “product” they receive are flyers to help them recruit others into the program. The victims said the company also told them if they didn’t make back their initial investment within 90 days, they would receive a refund. But promises continued to fall short when flyers weren’t sent on their behalf and promised refunds were never issued.

In total, consumers all over the country report losing $150,000, including Idahoans who put their full faith and hard-earned money into the company. Currently, the company is being investigated as a pyramid scheme and has been issued an F-rating by BBB.

But it’s important to understand the difference between multilevel marketing, or MLM, and illegal pyramid schemes.

MLM is a business structure in which consumer products are sold by independent salespeople. The earnings are determined by effort and the ability to sell consumer products that are supplied by the company. According to the Federal Trade Commission, typically, distributors earn commissions, not only for their own sales but also for sales made by the people they recruit. MLM companies also encourage distributors to build their own sales teams by recruiting, motivating and training others to sell products.

On the other hand, pyramid schemes focus on making quick profits that are earned by selling the right to recruit others. The entire purpose of the scheme is to get your money up front. There is no real product to be sold.

BBB suggests asking these questions to help recognize a pyramid scheme:

  • Are you required to “invest” a large amount of money up front to become a distributor? Legitimate MLM businesses do not require a large startup cost.
  • If you do have to pay for inventory, will the company buy back unsold inventory? Legitimate MLM companies will offer and stick to promises to buy back inventory – usually at 80% of initial cost.
  • Is there any market demand for the product or service? MLM depends on establishing a market for the company’s products. If the company doesn’t seem to have any interest in consumer demand for its products, don’t sign up.
  • Is there more emphasis on recruitment than on selling the product or service? If recruitment seems to be the focus of the plan, don’t sign up.
  • Is the plan designed so that you make more money by recruiting new members rather than through sales that you make yourself? This is the signature of a pyramid scheme operation.

If you’ve been targeted by one of these scams, report it to BBB Scam Tracker at bbb.org/scamtracker. This free resource provides a place to research and submit scam-related information so BBB can investigate further and educate others.