Bad news for multilevel marketing (MLM) companies: In an update to its community guidelines, TikTok is banning users from sharing MLM content and other “get rich quick” schemes and removing any posts that promote these direct marketing products.
TikTok told Buzzfeed News that they will be cracking down on “misleading content, including content that aims to deceive people for financial gain.”
The social media platform added more comprehensive guidelines to their site, specifically noting that they will ban “content that depicts or promotes Ponzi, multi-level marketing, or pyramid schemes.”
Despite the fact that 73% of salsepeople for MLM companies like doTerra and Scentsy never make a profit — or even wind up losing money — many people are still fooled by the promises of easy cash and the ability to work from home or from their phones. Many of these sellers are women who need income but also flexibility and the ability to work and watch their children at the same time.
“They prey on women that have full plates — women that need to earn a living while caring for a family,” says ex-MLMer Deb Seher, who told the Washington Post she learned her lesson about these companies the hard way.
“These MLMs encourage women to market heavily to their existing social networks, under the guise of female empowerment. That makes it hard for others to say no to an invitation to join the team,'” Kathryn Hawkins, founder of Eucalypt Media, told Huffington Post. “And because most friends are likely to purchase a product or two as a show of support, it gives women false hope about their business’ potential. They exploit social etiquette.”
TikTok’s new guidelines mean that multilevel marketing companies will be less able to recruit users and hawk their wares on the app. Experts warn that MLM salespeople will still try to find a way around this ban, but it’s still a step in the right direction.
And, luckily, some people are using TikTok to help reveal how dangerous and fraudulent these companies can be. Just check out this explainer from @heather.elise.rainbow on getting a “free” car:
@heather.elise.rainbowwhat’s up with the arbonne not free car? 😼 ##arbonne ##antimlm ##pyramidscheme ##multilevelmarketing♬ original sound – heather elise
She’s just one of many users who are blasting MLMs for being predatory and dangerous:
@heather.elise.rainbowwatch this satisfying cleaning video while I tell you why MLMs are bad ##antimlm ##multilevelmarketing ##pyramidscheme♬ Ice Dance (From “Edward Scissorhands”) – Ashton Gleckman
This is not the first time this year that multilevel marketing companies have come under fire. Back in April, the FTC sent warning letters to companies such as doTerra that were using COVID-19 related hashtags in order to promote their products on social media, such as sellers claiming that their essential oils can boost immunity and help protect people from the virus.
To learn more about why MLMs are a risky investment, watch the below video: