Coffeezilla explains MLM scams to Lex Fridman

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GUEST BIO:
Coffeezilla is a journalist and investigator on YouTube who exposes financial frauds, scams, and fake gurus.

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[LexClips]

Guest bio: Coffeezilla is a journalist and investigator on YouTube who exposes financial frauds, scams, and fake gurus.

[ebutuoyotwen]

Coffeezilla explains this well, but he should have expressed everyone gets scammed at least once in life. Don't be embarrassed, learn from it and educate others. Cheers, did this for the algorithm, this is a great clip.

[AlligatorAli]

A scam has to be
1. charismatic enough, that it attracts prey.
2. It has to be convincing enough that the prey attempts it.
3. It has to have the perpetual hanging carrot on the stick, so that the prey is under illusion of that dream that is "by inches unachievable goal".
A scam is simply all these three things in a package.

[joseroshe]

MLM really has the best compensation structure. With the blockchain and affiliate marketing all sales and marketing will end up that way. The issue is more so with how they market it.

[jessicarobinson]

I remember this company said they didn’t have to pay me because I was on trial basis. They had us walking around selling cable, door to door. We worked from 8 till 8 pm. Truly thought I had found a great job. It was MLM, and they opened offices all around Philadelphia. Never got paid for the “training “ called it a lost and moved on. Truly wonder how they get away w it

[julianbell]

I was in that Cutco Vector Marketing thing where you sell knives for like 4 days before my dad told that this sounds like a giant scam. Then I got out. They prey on college aged kids. Every scam has their demographic

[cobracommander]

People like to victim blame and say "how can someone be such a fool and fall for that scam I would never fall for it." These companies go after people when they are at their most vulnerable. Similar to the way fortune tellers and people that say they speak to the dead go after people when they are at their weakest when they lost a loved one, when they have a missing child. MLM's are constantly going after different demographics that might not be too aware of MLM's. MLM's go after immigrants with little skills, desperate for work, and don't know about these scams. Stay at home mom's that don't have much of a social life they become their support network until they bleed them dry.

[bk]

First learned of MLM very early age (like 18). I commented on a guys car and he said "if you want one of these, show up to this place this weekend" and gave me his card which looked like a $100 bill (first red flag). My friend went with me and it was in this hotel convention room. People were there drinking champagne talking about how great this company was and that we would need to sell phone plans to our family members and pay a one time $90 to join. Thank god my friend was a wise ass and tried to negotiate the $90 fee off the deal and called it a tribute 🤣

[katerynagore]

Not a lot of ppl know that Patrick Bet David made his fortune from a sleezy MLM insurance scheme

[MNKeyHeart]

There's a co-worker who's having financial problems and yet it's trying to help his sister with one of these companies in which you have to join more people to make more money. He has to spend at least 300 dollars a month to get his 2% cash back and help whoever got him into this business. He told me that he sister was about to make 5k a month but she got banned from this business because she was accused of trying to steal an associate from somebody else, so she was banned for 6 months and now it's trying to get back on her feet doing the same thing. The dude has already bought some products from this company and honestly they're below average but he keeps telling me about how good and convenient this is. Honestly sometimes I consider helping him by at least buying some stuffs from him so that he can at least reach the 300 dollars goal. But honestly I don't think it would do him any good as I'm not always going to be willing to spend money on low-quality products at a higher price just to help out somebody and I think that at the end of the day he is just going to end up spending more than what he makes off this company.

[HelloHelloHellobby]

This stuff heavily preys on stay at home moms, too. I’ve seen it happen. A lot of the woman are older and are unaware about mlms.

It preys on peoples genuine desires and ambitions. It feels so slimy to me,

[cobracommander]

MLM's use the product to cover their scam. Everyone is familiar with selling a product and getting a commission. In MLM's most of your commission goes to the 1% above you and very little to you. If you are lucky you can get your initial required investment into the company back. You make money scamming people into the business the way you were scammed. And even then most of the money when a new member joins goes to the top 1%. Besides being a terrible business it is unethical.

[makyeah]

05:05 This is the same reason people don’t leave cults - which have many similarities to MLMs

[BaysideKitten]

Vector marketing + Cutco are essentially the same, vector owns cutco. You are an employee of vector, selling cutco products. I joined for a couple of days, and immediately they want you shilling their products to friends and family. It was really slimy.

[hmammal]

The MLM company Lex couldn’t recall was cutco / vector marketing

[djrx]

VECTOR!!!! This is the company that sells knives 😂. When I emigrated to the US over 20 years ago, someone tried recruiting me to be a vector sales person. I thought it was the craziest thing to do then. Going door to door selling knives.

[wildchild_]

Back in college, I was looking for a part time job and the knife people called me telling me it was for a forklift driving position and when I got there, they hit me with the sales pitch.

I got out of there!

Another time, I was invited to a presentation for "Man Cave". I went because I heard there would be free beer and BBQ.

I ended up buying a bottle opener for $10 only because I felt bad for the dude.

[slouischarlesYT]

Anyone remember Cutco knives?

Edit: lol they mention Cutco and Vector in this clip.

[LucaChuck]

Someone try to recruit me for a MLM a few years ago. Forgot the name, but it was affiliated with Amway (I live in Quebec, if anyone happens to know what im talking about).

The highlights of the pitch:
"My mom didnt believe me at first, but now she's part of the team" I dont know your mom, can't trust the judgement of someone I don't know.
Literally drew a pyramid on the pamphlet.

I was told it was a job opportunity by a friend, who came along with the salesman to pitch me at my house. At no point did he ever mention what the actual work would be. Just that I would make money from recruiting people. Im highly introverted with few friends, there was no way I was recruiting anyone for anything 😅

[robertwoodard]

“The best salesmen play on true narratives that you already believe“ this was well said.