Royal Raymond Rife Remotely

I received an email the other day from Joanne O’Brien, who according to her website is a Professional Organiser, Image Consultant and Health Coach. Now, I’m not going to deny that I am probably in need of all three of these services, but despite that I have no idea why I received this email from her (although I accept that I may well have signed up for a newsletter at some point). The email was advertising the health aspect of Joanne’s repertoire, promoting an “amazing treatment” called Rife Therapy. It said:

Rife Therapy came about through Royal Raymond Rife who developed the frequencies through his generators that he developed in the 1930’s. He began treating people and those he treated had their bodies balanced in a way that enabled them to heal themselves.

This claim is the first of several red flags in the email, mentioning “frequencies” (a favourite science buzzword for cranks) and enabling the body to heal itself (another frequently used claim).

Next we have two quotes from famous people – Tesla and Einstein:

Firstly, from Tesla, “If you wish to understand the universe, then think of Energy, Frequency and Vibration”. The only places online I can find this quote are places like new age spiritual websites and people’s LinkedIn business profiles – however hard I search I can’t find anywhere that authenticates this as being from Nikola Tesla.

The same can be said for the second quote “Future Medicine will be the Medicine of Frequencies”, supposedly from Einstein. Again there’s nothing online showing he ever said this.

Whenever I see quotes being used like this, I immediately become skeptical. I’ve seen misquotes used by many cranks, like David Icke. And it turns out in this case the quotes are being used in the email to try to justify Rife’s ideas. The email says:

“These guys were ahead of their time just as Royal Raymond Rife was ahead of his time.”

However Rife wasn’t ahead of his time – his ideas were pure pseudoscience, and these modern day Rife machines are useless. Their operators say they work using a kind of bioresonance – the idea that diseases have a frequency, and that the correct frequency transmitted to someone with a disease can kill that disease – up to and including cancer and HIV. In practice, not only have these machines never been shown to work, but dissected machines have been shown to consist of just a battery and a couple of components designed to give the patient a mild shock. According to Wikipedia, several people with advanced disease who have refused proper medical treatment and chosen Rife Therapy instead have died.

What’s worse with the email I received is that Joanne is offering remote Rife Therapy – another level of nonsense. The email says that this is done through quantum entanglement (another dodgy buzzword), and that all you need to do is send her a sample of your DNA – like a fingernail. This new idea doesn’t even fit with Raymond Rife’s own theories, so it appears Joanne has somehow figured out something Rife wasn’t able to.

She goes on to say that:

“I have been treating clients for 20 years and even the biggest skeptics or non-believers have been converted by results within their body after having Rife Frequency Therapy”

As a skeptic I’m having a hard time believing her, but I don’t want to have to pay her money to prove her wrong. And sadly this is just one of several useless therapies she offers on her website – she also sells Colloidal Silver, Oxygen Therapy, a Vitamin Scan, Bach Flower remedies and something called Stem Cell Nutrition. Some of that is so weird I’ve never heard of it before, so I’m going to have to do some reading.

Ken Ring is getting worse

Most of us will know Ken Ring both for his claim that he can predict the weather by looking at the moon, and his supposed ability to predict earthquakes. Here’s Ken talking about how you can supposedly also use rainbows to predict the weather:

In recent years Ken’s been slowly falling down the rabbit hole of misinformation, and a post on Facebook from the other day shows just how bad it’s gotten…

He starts with a warning: “do not read this if you are not openminded”. By this I think he means that he doesn’t want people to disagree with him, so he’s looking for people who will accept what he says without questioning it to read his post.

He then goes on to lay out his thoughts:

• The bible is missing 100 books that were taken out for nefarious reasons.
• There are lost lands of Atlantis, Lemuria, and Rama.
• 18 foot tall people used to roam the world, as depicted in Egyptian hieroglyphics. They may also have been aliens.
• There are giant underground labyrinths in both the Arctic and Antarctic, which rich people use to imprison child slaves. These may be where the aliens used to live.
• Stanley Kubrick faked the moon landings.
• Michelle Obama used to be a man.
• There are buildings on the moon, Mars and Uranus.

There’s even some local nonsense in there. Apparently the New Zealand election was rigged by voting machine companies, the government is bankrupting New Zealand so that our country can be sold to China, and Egyptians used to live here thousands of years ago.

In one way it’s nice to have local conspiracies mixed in with Ken’s other nonsense, but that last one just feels like a version of the usual racist garbage we often hear over here, arguing that Māori weren’t here first.

Ken ends by saying:

“one thing’s for sure. At one time there lived a race who were far more technologically advanced than we are… These people had electricity, nuclear capability, building techniques that were unsurpassed… they lived in huge societies in many different places.”

Having kept an eye on Ken for many years now, there’s an arrogance to a lot of what he says. He’s convinced that he knows better than the world’s experts, in many, many scientific fields. But he’s getting silly now – he appears to have fallen for some of the daftest ideas on the internet. From what I can tell he’s getting a lot of his ideas from people on YouTube such as Robert Deutsch and Ben Pellom – people with outlandish worldviews whose videos get very few views. It’s hard to believe, with all of these bad ideas being shared by Ken Ring, that some farmers still trust and buy his made-up weather almanac.

Amway

(or Scamway, if you are so inclined)

Bronwyn Rideout

Official Site | Wikipedia | Twitter | Facebook | Instagram | YouTube

Country of Origin: Michigan, United States

Year Founded: November 9, 1959

Founded by: Richard DeVos and Jay Van Andel

Year MLM established in New Zealand: December 21, 1971

Generally sells: Initially started with food supplements, and has since expanded to sell 450 products across health, beauty and homecare.

“Cult” products: Best known for LOC, a multipurpose cleaner, SA8 Laundry detergent, and a dishwashing liquid. Nutrilite, the health supplement product line, is its best seller.

Is there a buy-in?: 99 AUD/119 NZD minimum build-your-own registration pack, where you have to purchase a minimum of $119 NZD of Amway’s Top Products.

Name for workforce: Independent Business Owners (IBOs)

Compensation Plan?: Amway’s compensation plan is not clearly outlined or available for non IBOs to access directly from their website. However, here are a couple of YouTube videos, from both an Amway supporter and a detractor, that illuminate the mathematics a bit:

Elise Hewlett

Zachary Spear

I’ll go into this more when I talk about the mathematics behind the products but, as with all MLMs, the retail value of the product is NOT what is not relevant to the compensation scale, the PV and BV (see below) are. This is something that is not clear in the videos above; so when Hewlett talks about an $800 spend, what they mean is an $800 BV, whereas the actual amount paid to Amway is much more.

As with other MLMs, the compensation structure is not a strict commission-based model where one gets a set percentage of each sale made. Instead, it is a convoluted model whereby each product has a personal volume (PV) to it which is at a lower value than the product being sold, with a secondary business volume (BV) which is used to calculate the percentage of bonus one will receive on the total PV of the IBO and their downline. The PV to BV ratio is currently 1 PV : 3.97 BV, which seems generous, but when you get the calculator out, it turns out it isn’t all that great. As Hewlett demonstrates, an $800 gross monthly spend will only get you $72 commission, while a downline of 4 other IBOs also dropping $800 per month can earn you nearly 3 times that amount, $192, for a total of $264/month. 

You can play with this Amway calculator to see how much you’d have to sell, or how many people you would need to recruit, in order to match your current annual salary. It also includes the differential calculation that determines how much of a bonus the upline can earn from the downline.

While you are not required to purchase products for yourself, it does help with bolstering your PV and BV, which in turn helps you to climb the reward ranks listed here. Similar to other MLMs, once your downline starts to out-earn you, they can breakaway from being your downline and you cannot earn BV based on them and their downline, so it is beneficial to constantly recruit mid-level achievers who will bring in sales, but not too many sales.

Complicating the PV/BV divide are the partnerships Amway has with companies like Tower Insurance, Spark, and Hertz, which allow distributors to earn PV and BV on insurance policies and car rentals, while Spark offers device subsidies and account credits on 24 month plans.

Income Disclosure Statement?: There is one for the United States, but not for Australia or New Zealand. As usual, there is no disclosure on the number of distributors in Amway. In 2021, it appears that 33% of IBOs had no sales, earned any compensation, or did any recruiting. Of the IBOs that did receive payment, the top 1% earned $87,901 USD per annum average, while the top 10% earned $14,537 average and the top 50% earned an average of $3,414. This is income calculated on sale, and does not include any voluntary or mandatory business expenses incurred during the running of an Amway business. The average income over all IBOs at the rank of Founders Platinum and below were $766 USD. In 2016, this was as low as $206 USD.

Has a reputation for:  Being one of the O.G. MLMs, that through good luck and success in the courts paved the way for other MLMs to thrive. Their products are acknowledged as being of good to excellent quality but even then, the prices are excessively inflated. Long seen by detractors and ex-distributors as cult-like in its operations.

Should you be worried?: A common recruitment tactic is for a couple involved in Amway to invite another couple for dinner, drinks etc. What seems like a fun night out becomes a long recruitment pitch, which sadly works more often than it should; many a swinger has been disappointed, but jokes aside this is a predatory tactic that takes advantage of the eagerness of many couples to make new connections.
 

The Amway Primer

Amway (American Way) was founded by long-time friends Jay Van Andel and Richard DeVos in 1959. Prior to that, both had been business partners in a series of ventures including being distributors for another MLM, Nutrilite Products, which Amway eventually bought out fully in 1992.

As one of the big name MLMs to have survived into the 21st century, Amway has been a pioneer on the legal scene in the US, Canada, and China. In a 1979 ruling, the US Federal Trade Commission ruled that Amway was not a pyramid scheme, but was still guilty of false income claims and price fixing. In 1982, DeVos, Andel, and executive vice president William Discher were indicted on several charges, such as the underreporting of imports and defrauding the Canadian government of $28 million between 1965 and 1980.

Amway launched in China in 1995, but in 1998 it was faced with a crisis there when the Chinese government banned all forms of direct marketing (on April 21st, 1998). U.S. trade officials tried to claim that the business of Amway, Avon, and Mary Kay was legitimate, whereas the Chinese government claimed that the ban was really targeted at Chinese and Taiwanese firms. At the time, Amway had invested $100 million with 80,000 active distributors. If you have read the Mary Kay instalment of this series, then you might recall what a growth market China is for the booming middle-class in the areas of the Health and Beauty sectors. Amway appears to have weathered this storm, with the Asia market keeping it afloat in leaner times, and direct selling being legal since 2005 – though with serious restrictions on recruiting.

Here are some great videos and resources on Amway from the usual suspects
 

• Illuminaughti -Amway: The MLM that ruined it all Part 1, Part 2
• The Antibot – The documentary Amway doesn’t want you to see
• Cruel World Happy Mind – The original MLM | Analysis of AMway and Political Power
• Not the good girl – She lost $40,000 in Amway
• The Skeptic’s Dictionary – Amway

Product Math

MLM product maths is always a challenge, but at the back of the April 2022 Amway catalogue there is a helpful guide.

Here, we’ll look at whitening toothpaste (all skeptics can breathe a little easier, since Amway is not advertising a fluoride-free formulation). For a standard sized tube, the consumer will pay $11.20. The PV will be 2.23, and your BV is 8.85. Without a downline, an IBO would need to purchase/sell 45 tubes ($504) of toothpaste to get onto the first level of the commission scale discussed in Hewlett’s and Spears’ videos. Your BV from the toothpaste alone is $398.25, but since you are only at the bottom rung, your payout is only going to be about $12. To move to the next tier in the compensation scale, an IBO would need a downline of at least 3 people selling $100 PV. The commission from this downline would be $35, meaning the IBO would make a total amount of $60, which wouldn’t quite cover the cost of the annual renewal fee of $69 AUD.

With distributors encouraged to purchase Amway products for their own use, plus other business expenses, $12 to $60 is a pretty paltry rebate on a $504 spend. Obviously, a distributor will not spend/sell $504 on toothpaste alone; if they purchase for themselves or a VIP customer is buying, then they pay the wholesale price of $10.18.

Or, you could go to Countdown and just buy a tube of Colgate for $8.49:
 

Amway has incentive trips and awards programmes to bolster sales for certain product lines. It is within the qualifying criteria for these trips that one can see that achievement is not just based on pure sales numbers, but also on increasing targeted sales of certain products, as well as attendance in specific training courses. For example, in this current programme that is boosting sales in the health and beauty lines, it is not just MORE sales, it is an exponential increase in sales with attendance in at least 2 training programmes. Programmes like this cast some suspicion over claims made by Amway distributors regarding these products; are they best-selling because they are good, or because they were just the easiest products for distributors to move in order to qualify.
 

Is it a cult?

Amway is not only about selling overpriced homewares and recruiting. Amway is invested in the ongoing “improvement” of its distributors, and offers free training and seminars. Amway currently claims that the most anyone will have to pay for an online seminar is $10, however third-parties may charge a “fee”. In the days before the internet, of course, Amway had a reputation for pushing motivational books, tapes, CDs and videos which would cost $$ to purchase, not including the costs incurred with travel, accommodation, and food/drink required to host your own recruitment or teaching session.

The accusation that Amway is a cult has been attached to it for almost as long as it has been in operation. Stephen Butterfield, author of Amway: The Cult of Free Enterprise, and other commentators agree with this assessment; not so much in the religious sense, but in their shared tactics. A Huffpost article from 2019 explores how MLMs like Amway employ cult-like tactics to isolate their distributors and increase their reliance on the MLM.

The Skeptic’s Dictionary briefly explores why Amway may be seen as a cult, particularly when it leans into toxic positivity, but prefers to see it more as a shell game where victims are distracted from the truth that the real earnings are from recruitment.
 

The DeVos connection to the religious/conservative right

This isn’t to say that there is no connection to religion in Amway. Again, similar to other MLMs, Amway is associated with religion – although rather than having roots in Utah and Mormonism, Amway is very embedded in both conservative Christianity and the Republican Party. Amway was a major contributor to the GOP throughout the 90s, and even used its voice-mail system to rally voters for some campaigns. A private foundation of president Doug DeVos donated money to an anti-gay marriage organisation in 2012. Unlike, say, Young Living, the religious leanings of Amway’s leaders is not embedded in its advertising or products.

If the DeVos name sounds familiar, well, Richard DeVos is the late father-in-law of Betsy DeVos, whose term as the Secretary of Education under the Trump administration was drenched in controversy from the moment the announcement was made.
 

THAT Queenstown incentive trip, and the implications for government stance on MLMs

From a Western/New Zealand perspective, I always see incentive trips being to other places. As in, the American MLMs love going to Las Vegas or the Caribbean, while in Australasia, Australia is a popular destination.

In 2016, John Key announced that Destination Queenstown and Tourism New Zealand were successful in their bid to bring nearly 10,000 Amway distributors from China to Queenstown for their incentive trip. It was seen to be a potential economic boon to the region, with an estimated $50 million to be earned. It was also presented as a reason to push for a full convention centre as, at the time, there were no facilities with a capacity beyond 500 people. From April 2nd to May 16th, 2018, over 6000 Amway distributors from China travelled to Queenstown in groups of 600 to cruise the Milford Sound, Bungy Jump, see some sheep shearing, and have a Gala dinner. It was expected that nearly 10,000 visitors would visit over several years, bringing $50 million to the local economy. 

Tourism New Zealand is the organisation responsible for marketing New Zealand as a tourist destination, but also has government ministers sitting on its board. During the initial announcement John Key was quoted as saying: “This is by far the biggest incentive business New Zealand has ever won, and it sends a strong message that New Zealand is a serious contender in the global incentive market. China is now our second largest and fastest growing tourism market, contributing nearly NZ$1.7 billion (£800m) to the economy in 2015. And Chinese tourists have the highest daily spend of any of our visitors.”

In response to a OIA request made in May 2021, Tourism New Zealand still saw a future for further collaborations with Amway China, while a Commerce Commission response to a 2019 OIA request about Amway in general states that it has not investigated Amway as a pyramid-scheme.

The message is clear, at least for Amway, that the New Zealand government is A-Okay with MLM operations in this country.
 

What’s a skeptic to do?

The one thing that is missing for New Zealand consumers when it comes to most MLMs is a proper Income Disclosure statement. These are not required here or in the States. However, most MLMs provide an income disclosure statement for the US market, likely as a precautionary measure in the event of a lawsuit or anti-MLM media blitz; in fact the US Federal Trade Commission actually exempts MLMs from this requirement. While it is nice when an MLM does provide one for New Zealand, as per the above nasdaq article, MLMs take advantage of the exemption to construct the disclosure to their advantage. The absence of certain facts and figures, i.e. the number of distributors actually working for the organisation, is glaringly obvious but has stood up to legal scrutiny thus far.

If the New Zealand Government continues to take a permissive stance on MLM operations, then as a community we should be pushing back on them to ensure that New Zealand consumers have appropriate information about actual income projections.

The Pfizer COVID vaccine is safe for almost everyone

Late last year Dr Nikki Turner appeared on TVNZ’s Seven Sharp current affairs program to talk about the number of people who would be expected to have medical problems from being given the Pfizer COVID vaccine. 

She did a great job of describing the vaccine’s ingredients simply, and was even able to estimate the number of kiwis who would be unable to be vaccinated – because of a severe allergic reaction – at around 100. She makes some really good points about just how safe the vaccine is for almost everyone. 

There’s a group of doctors we’ve talked about numerous times, (mostly now ex-doctors), who call themselves NZDSOS – New Zealand Doctors Speaking out with Science. They believe the vaccine is either ineffective, dangerous or a government conspiracy to inject everyone with a microchip to control them. It’s mind-boggling that there are well-educated and highly trained doctors in New Zealand who have such a misunderstanding of science, and distrust of the government, that they think this last one is happening. And they’re deadly serious about that last point. There’s an article on their site claiming they’ve found what they think are self-assembling electronic components in the vaccine.

When we last checked the list of 71 named NZDSOS doctors a couple of months ago, fewer than half of them were actually practising doctors, registered with the Medical Council – although at the beginning of April 2022 several of these doctors won an appeal that saw them reinstated. Either way, they are dwarfed by the nearly 7,000 doctors in NZ who are supportive of the COVID vaccine.

This small group of anti-vaccine doctors took exception to what Dr Turner said on Seven Sharp and, as is their right, they complained to the Broadcasting Standards Authority about the segment. They argued that Dr Turner:

• failed to state the key components in the vaccine

• made misleading claims that the vaccine is safe for almost everybody

• incorrectly stated that the vaccine was completely safe for pregnant people

• completely misleads the audience with her simplistic comments

• took the position that the risks associated with infection with COVID outweigh the risks associated with vaccination

They also argued that expert opinion like that from Dr Turner is the “lowest tier of evidence”, and is not as reliable as RCTs (Randomised Controlled Trials) and meta-analyses (studies that combine the results of multiple studies statistically).

The BSA appears to have given the NZDSOS doctors a fair hearing, and seriously considered all of their points. However, they found that none of the anti-vaccine doctors’ arguments were persuasive. They said that:

• Dr Turner is a credible expert so there was no reason for Seven Sharp to doubt the accuracy of her statements

• Dr Turner did not claim that the vaccine does not cause side effects

• The safety and efficacy of the vaccine has been well established

• Dr Turner summarised the ingredients of the vaccine in simplified terms for viewers without specialist expertise

There are a lot of serious sounding articles on the NZDSOS website warning of the dangers of modern medicine, and promoting unproven alternatives – but a lot of what is written on their website is simple scaremongering, and people shouldn’t pay attention to it. 

To me, it seems that NZDSOS are pretending to use science when they are simply pushing an agenda which is ideologically opposed to vaccines and the pharmaceutical companies that supply them. 

When it comes to vaccination, we should trust the experts and not the outliers who are telling you there’s a grand conspiracy. It was good to see the ruling from the BSA support this position.

Sheriffs Invade ANZAC Service

Recently there’s been a flurry of activity from a group in New Zealand who believe that they are Sovereign Citizens – that they have disconnected themselves legally from the laws of our country. Sovereign Citizens believe that the government is an illegitimate corporation with which they have no contract – that they can therefore exempt themselves from our country’s laws, and pick and choose which laws they want to obey, which they describe as common law.

And to an extent, we all live under a social contract – of living in a society – and having to live by the laws that the government sets. Laws need to be just, and there are processes for changing those laws, but you can’t just declare yourself as exempt from them. If you commit a serious crime, the police are going to show up and arrest you – claiming to be a sovereign citizen isn’t going to help you out.

We saw some of this playing out at the occupation at parliament earlier this year. These people believed that by saying some special phrases such as “I do not consent”, when arrested, that police had to let them go, because they’d not entered into a contract with the government “corporation”.

The most recent nonsense from this movement is that they have been making themselves “sheriffs”. It started just over a month ago when, from what I can tell from the news, a couple of sovereign citizens conned or even coerced Justices of the Peace to sign an official-looking document declaring them head New Zealand sheriffs. 

The purpose of these “sheriffs”, it seems, is to be able to arrest individuals who they think have breached “common law” and should be arrested and punished. 

Now that these people consider themselves to be in power, they think that they have the ability to deputise other sheriffs. There’s a short clip of somebody being deputised here.

I can’t help but giggle at the mispronunciation of some of the words in that reading, and it boggles my mind (again!) that people think they can become an official with legal powers just by reading a declaration. 

Last Monday, several Sheriffs turned up at an ANZAC service in Kapiti, near Wellington. They asked if they could speak during the event, along with the others who were speaking. The organisers decided that there would be less disruption if they were allowed a few minutes at the podium. Unsurprisingly, their talk rapidly descended into conspiracy nonsense and they were asked to stop – which thankfully they did.

If you have the misfortune to find yourself entangled with one of these “sheriffs”, it’s important to realise that they have no actual power. However, I would consider them potentially dangerous – these people seem to have some serious delusions – and would back away from any altercation if you can. And if they’re causing a scene, phone the police – I’m sure the police would be happy to come and let these sheriffs know that they’re not welcome, and have no jurisdiction.

MLM Series: Arbonne

Bronwyn Rideout

Wikipedia Site | NZ website | Australia & NZ Facebook

Country of Origin: Orem, Utah, United States

Year Founded: 1980

Founded by: Petter Mørck

Year MLM established in New Zealand: June 7, 2016

Generally sells: Skincare, cosmetics, and nutrition

“Cult” products: Fizz sticks, 30 days to Healthy Living supplement programme

Is there a buy-in?: $75 NZD Welcome Kit with an annual renewal fee of $45 NZD

Name for workforce:  No silly rank names here, you are an Independent Consultant. Then it’s District Manager, Area Manager, Regional Vice President, and National Vice President

Compensation Plan?: Here. Commission is earned from your personal sales, “overrides” or commission from product sales by your team, and additional awards based on team performance. 

Client commissions are 35% of the recommended retail price and commission from sales to preferred clients is 15%; the consultant earns no commission from products that they purchase for themselves or that other consultants may purchase from them. Preferred clients are customers who pay an annual fee of $29 to get discounted prices on products, flat-rate or free shipping, and the occasional gift. 

Each product has a QV or qualifying volume attached to it and consultants get the full QV volume attached to the product. However, the QV tends to be about 60% – 70% of the recommended retail price and despite New Zealand prices being higher, the QV points are the same as Australian consultants.

Each level has a personal qualifying volume (PQV) to be achieved in order to maintain that rank, earn rewards, or be promoted. Not all products are eligible to be counted towards a consultant’s qualifying volumes; welcome packs and sample packs are such ineligible products while also being the ones that consultants are likely to sell the most of. Renewal fees also are not counted towards PQV. There is some indication on external sites that the consultants’ purchases for themselves also count towards PQV, but this isn’t entirely clear. However, this does indicate that while consultants can’t earn commission from one another, they can help each other maintain or buy ranks.

You can start building a downline as soon as you sign-up but you need to accumulate 500 PQV each month in order to earn the 6% of the Override Volume (OV, which is 65% of the retail volume) from your downline. On top of that, you can only claim Override volume/commission form the consultants you directly recruit (aka the 1st generation); you cannot earn commission on anyone your recruits recruit for themselves.

For example, say you sold only Ginseng Fizz sticks to your clients. They are $93 NZD per box with a QV of 65 and a consultant would need to sell 8 boxes $744 to get the 500PQV needed to earn commission.

A consultant can also earn a $145 consultant achiever award if they personally register at least 2 new consultants or preferred clients who accumulate at least 150 PQV WHILE the consultant themselves also accumulates 150 PQV and a little something extra called 2,500 SuccessLine Qualifying Volume (SLQV). SLQV is the total amount of your QV and the total QV of your downline.

Using the fizz sticks again, your new recruits can each buy 3 boxes to surpass the 150PQV minimum (195QV or $279 spend), then you do the same (195 PQV/$279). Presuming that the recruits PQV and your PQV needed to be eligible are also included in the 2,500 SLQV, an additional 2,110 PQV or 33 boxes of Fizz sticks or $3,019 worth of fizz sticks have to be bought in order to earn a reward of $145.

Calculating a potential commission for an entry level independent consultant. My presumptions are there are no preferred clients dragging down your profits and the consultant is going about this honestly and not requiring other consultants to boost the PQV but relying totally on the first generation of recruits to help them out here. To earn the 6% commission, the consultant has personally sold $744 and accounts for 500 of the 2,500 PQV to get the bonus $145, and gets the commission on that at 35% which is $260.40. On the remaining 2000 PQV which comes from the direct downline, $2861.50 is sold but the commission is 6%, so $171.69 is made. The total amount earned from this scheme alone could be $577.09. 

Your ability to promote to higher ranks and draw on commission and QV from your downline’s downline, however, is dependent on your multi-month achievement of higher PQV (1000 PQV) and SLQV (6000-7500 SLQV) total amounts. If members of your downline are promoted to the same level as your or leap-frog ahead of you, you can claim a one-off credit. However, it appears that this can only be claimed 1 time per rank regardless of how many in your downline are promoted ahead of you. Furthermore, anyone that said downline has recruited are no longer eligible to be counted towards your commissions; this seems like it could disincentivise helping one’s downline develop or at least reinforce the need to keep recruiting a direct downline of newbies. 

Income Disclosure/Earnings Statement?: For 2020, Yes. For 47% of independent consultants, average annual earnings were $229 with the bottom 25% making $5 and the top 25% make $1,801; for many, making $577.09 per month would be a dream but also not enough to retire your husband as it only adds up to $6,925.08 per year.

A 2018 Spinoff article estimated that there were 3500 consultants in NZ with just 12 at the level of Regional Vice President, a rank which does garner more liveable income with the bottom 25% earning $47,177 and the Top 25% earning $72,670 on average. Still, not great numbers.

Is there a “free car”?: Yes. The care of choice is a white Mercedes-Benz. Consultants who reach the Vice President level are eligible for the VP success award, which is an allowance that starts at $385/month to go towards the purchase or lease of the Mercedes-Benz and you also have to affix the Arbonne car emblem to that vehicle. Less than 2% of Independent Consultants earn this award and the award is provided, as per the compensation plan, when the consultant has provided documentation that they have purchased or leased that specific colour and model.

Has a reputation for: Early proponents of vegan and petroleum-free products. Being one of the MLMs specifically named by the FTC due to false claims made by representatives related to COVID-19 as well as misleading income claims. 

Should you be worried?

While Arbonne is thriving now, it did file for chapter 11 bankruptcy in the US in 2009, so it may be on the radar for awhile.  Also, the high number of recalls due to products having unacceptable levels of bacteria, including Salmonella and those of the Staphylococcus variety, should put anyone off but unlike the oil MLMs, most of Arbonne’s products are meant to be ingested.

So, I don’t know what’s worse.

In 2018, Arbonne was frequently named-dropped in mainstream and independent NZ media as both a newish MLM in the NZ market and for some of the recruitment tactics of its employees. The SpinOff had two pieces in 2018 and 2019, Sauce Mag, NZ Herald, all had a go alongside the usual YouTube Anti-MLM channels, which focused more on the false health claims.

There is little to say about Arbonne that hasn’t already been explored previously in this series with Mary Kay and the car rebate or Young Living/doTERRA and their poor health claims and excessive prices. That to make the meagre commission, consultants spend money on products, resources, advertising, and their unpaid time which brings their profit into the negative.

All of it applies to Arbonne too. For $413, you can buy a 30 day detox kit. Thoses fizz sticks that everyone loves can cost over $90 for a pack of 30 and contain the same amount of caffeine as a 250ml can of Coke, which would make your wallet feeling much nicer.

But in view of the spotlight on Megachurches in New Zealand at the moment, I thought 

Arbonne was a good selection for this week due to the close links between the MLM and Destiny Church. Ainsley D reports that Brian Tamaki’s daughter-in-law, Kiri, co-leads the Brisbane campus with her husband Samuel. Kiri’s twitter and instagram accounts still list her as a National Vice President, which places her at the top of the company and was the star of a few YouTube videos on behalf of the Australia/NZ branch here and here. In the posts that Ainsley screenshots, Tamaki makes a connection between her faith and her success in business, integrating the language of the prosperity gospel, with a dash of The Secret.

As always, I highly recommend the videos below.

Kiki Chanel: Arbonne MLM Scam…Consultants make crazy False Health Claims

Cruel World Happy Mind: MLM Mean Girls | Arbonne Consultants | #AntiMLM

Iiluminaughtii: Arbonne, Mediocre at Best

CC Suarez: Joining Arbonne? Watch this first

CC Suarez: Interview with ex-Arbonne Distributor | She was in the top 2%

Taking a BITE out of Mormonism

Last week I had a couple of Latter Day Saints (Mormon) Missionaries visit me. They called me a few days in advance to ask if it was okay to come round, and then I totally forgot about our meeting until I received a call saying they were having problems finding my house on the street.

I usually welcome religious visitors in my home. I figure that, although it’s not the right place for me to question someone’s religion when I visit their places of worship, when they’re the ones reaching out to try to convert me it’s fair game to give a bit of pushback. I’m still never rude or argumentative, but I’m happy to ask some uncomfortable questions about their beliefs, especially when it comes down to the treatment of minorities. There aren’t many religious groups that score well in that regard!

We talked for an hour or more, and of the two missionaries one was almost at the end of her 18 month mission, and the other was just starting. In fact, this was the very first house visit of her mission. Normally a Mormon mission is a two year event (18 months for women) in another country, but with the advent of COVID international travel has been cancelled and Mormons are finding themselves sent to a destination within their own country. From what I can tell, though, this is often still an exciting occurrence for these domestic missionaries as many of them have never really travelled much – I assume dedicated Mormon families have very little time or money to spend on frivolous activities like holidays.

I know enough about Mormons that when I invited them in I didn’t offer them tea or coffee. Instead we sat down and started chatting about their religion, with me asking questions and them seemingly working through a set of pre-ordained steps that a mission visit is supposed to entail. We had prayers, testimony, the quoting of scripture, a description of what sets Mormons apart from other Christians, and veneration of the current “prophet”, their leader – a man called Russell Nelson. Unsurprisingly, this happens to be an old, white man, and I was shown a printed picture of him as if it was something precious.
 

One of the points I bought up was that their God seems to have always chosen old, white men as the prophet, with nobody of colour ever having been chosen for the top job. In fact, the church didn’t allow anyone of colour to hold a leadership role at all until 1978. And it’ll be no surprise to skeptics to hear that this God also doesn’t want women in leadership roles.

At the end of the meeting (closed with a prayer, of course) I was left with a copy of the Book of Mormon. I said I didn’t need one, as I already have a copy – so now I have two. If you’re interested in learning about the inception of the Mormon church, although this sounds silly, I highly recommend the classic South Park episode about Joseph Smith. Sadly, us in NZ can’t watch the free online version – but if you have a VPN, or own a copy of the Season 7 DVDs, or you’re a pirate, enjoy!

A few days after our chat, I was watching a video from the Genetically Modified Skeptic about the Multi Level Marketing (MLM) scheme his family had been involved with – Young Living essential oils. He mentioned an idea that intrigued me – that under the BITE model, it could be considered that MLMs like Young Living are a form of cult.

Okay, so let’s back up a little. The BITE model is a way of analysing the behaviours of groups to see if they’re likely to be a cult. The model was created by Steven Hassan, who was once a member of the Unification Church (better known as the Moonies) and since leaving the church has been tirelessly helping people who want to leave high control groups like cults.

Steven’s BITE Model breaks down the controlling tendency of cult groups into four areas – Behaviour, Information, Thought and Emotions. Under each of these categories, Steven’s BITE model lists a set of ways that these four aspects can be controlled. For example, under Behaviour Control there’s punishment for disobedience, control over sexual activity, and financial exploitation (among many others). The Information control has six main areas – deception, restricting access to outside info, compartmentalising, spying, internal propaganda, and the use of confession. Thought control includes getting people to change their name, having them reject critical thinking, and pushing an us vs them mentality. Finally, the Emotional control section includes the use of fear, alternating between extremes of affection and rejection, and shunning.

This is far from the only attempt to define what makes a cult. I regularly listen to the Let’s Talk About Sects podcast from Sarah Steel (she’s Australian, so the podcast regularly features content relevant to New Zealand, such as a great couple of episodes on Gloriavale), and quite like the definition she often uses. According to Sarah, a cult is a group:
 

1. Dominated by a charismatic leader, or leadership, that closely controls its members, particularly with regards to their exercising their free will to disengage with the group and its ideology,

2. Who believes that they exclusively have access to the truth, and the rest of the world is wrong, and

3. Who are largely secretive of the workings of their society to outsiders.

The BITE model has been received well by cult researchers, I think because of how well respected Steven is for his deep knowledge of cults, his long time dedication to the subject, and because of the academic work he’s applied to his model – including it being the topic of his recent PhD thesis titled “The BITE Model of Authoritarian Control: Undue Influence, Thought Reform, Brainwashing, Mind Control, Trafficking and the Law”.

And so, having heard the idea that some of the more nefarious MLMs appear to align well with Steven’s BITE model, and with my recent visit from the Mormons still on my mind, I wondered if anyone had tried to apply the BITE model to the Mormon church. Sure enough, when I typed “BITE Model” into the Google search box, before I’d even had a chance to start writing the word Mormon, up popped Google’s suggestions. And there, at the top of the list, was the suggested search phrase “BITE Model Mormonism”.

I clicked on this suggestion, and immediately found a great article where the author had colour coded all the bullet points of each of the four categories – Behavioural, Information, Thought and Emotional Control – according to whether the church of the Latter Day Saints was known to use those techniques to control their members. Red was for regular use, orange for occasional use and green marked techniques that the church was not known to use. Although there were a few green and orange lines (such as sleep deprivation and speaking in tongues), most of the points were coloured red, suggesting that the Mormon church uses a lot of the control techniques that are the hallmarks of a cult.

This got me thinking – what else might the BITE model be relevant to? It seems to be good for assessing fringe religious groups we often consider to be cults, and may also be good at figuring out which of the larger religious groups are using cult techniques for control. But it sounds like it might also be good at assessing how dangerous Multi Level Marketing schemes can be. We’ll hear some more about this from Bronwyn, in her article in this newsletter about MLMs, and possibly also some more details at a later date.

Given my recent crusade against NFTs, I wondered if maybe the insular communities who promote and invest in cryptocurrencies and NFTs – people sometimes called Crypto Bros – would also score highly under the BITE model. But, although there does seem to be some effort to control what information people consume, and there’s talk about outsiders “not understanding crypto” and “spreading FUD” (Fear, Uncertainty and Doubt), it’s obvious that this fad hasn’t risen to the point of being cult-like. At least, it isn’t that bad yet!

Does Finland exist?

Bronwyn Rideout

While current geopolitical matters might have some Finns wishing they were a tad more invisible, at first pass this is hardly a skeptical topic. But this modern conspiracy is worth a chuckle, especially given the exasperated sighs you’ll get from that one friend who has more than a passing knowledge of statistics.

A popular version of the Finland conspiracy is geographical in nature, claiming that instead of landmass, Finland is just an empty blot of sea. Fuelling this was Reddit user Rarega, who was taking the mickey out of the fluctuating relationship between Japan and Russia through the 20th and 21st centuries, particularly around fishing rights. Because the “Fin” in Finland refers to the fins on a fish, right? Get it?

Another common argument in support of Finland being non-existent is that the so-called Finns don’t even live in Finland, but reside in the bordering countries of Russia, Sweden, and Estonia. This subreddit, r/finlandConspiracy, gives a decent run down as well as this Youtube video by Good Mythical Morning.

If you are a person who likes to bring math into already complicated diplomatic matters, this calculating version of the meme goes like this:

There’s approximately 5.4 million Finnish people in the world, right? That’s out of 7.125 billion humans. That means Finns make up 0.0729% of the planet.

Now the best government censuses have a margin of error about 1%. So, Finns make up 0.0729% of the planet, plus or minus 1%. In conclusion: There’s a 50/50 chance Finland does not exist

If you really know your memes, you won’t be surprised to learn that this is one of the oldest jokes on the internet, with various towns and regions with even smaller populations being deemed as being fictional.

As of 2020, “Finland’s” population is just over 5.5 million. However, The world’s population that same year was 7.9 billion. Even if we were to believe that anyone lives in Finland, this would still only account for just over 0.07% of the world’s population, meaning it is less likely to exist than it ever was before.

NESARA and GESARA

I’ve recently been seeing mentions of NESARA and GESARA online, in conspiracy groups, and also on a badly painted sign at at least one local protest. So I did a little bit of reading to find out what it’s all about. So, if you’ve seen these terms being used and, like me, have no idea what they mean, here’s a quick description of their real world meaning and what the conspiracy theorists wrongly think they’re all about.

In reality NESARA was the National Economic Security and Recovery Act, a set of economic reforms for the United States that were proposed by Harvey Francis Barnard, an engineering consultant. Barnard wrote a proposal titled “Draining the Swamp: Monetary and Fiscal Policy Reform” in the 1990s, and in it he promoted the idea of his NESARA Act. He sent copies to members of Congress, hoping that they’d see his genius and vote in his new rules. Barnard’s plan was to overhaul large parts of the US economy, with ideas like scrapping income tax (and replacing it with a sales tax), abolishing compound interest on loans, and returning to the Gold Standard (well, technically a “bimetallic currency” of both gold and silver). The bill, unsurprisingly, went nowhere.

In conspiracy circles NESARA (often erroneously called the National Economic Security and Reformation Act or the National Economic Stabilization and Recovery Act) is an Act that not only introduces the Gold Standard and the removal of income tax, but also abolishes the Internal Revenue Service, cancels all personal debt and declares world peace! The Act was apparently successfully voted on back in March 2000, and was then signed into law by Bill Clinton. But just as the law was due to come into force, on September the 11th, 2001, a major terrorist attack put a stop to its implementation. Since then, military officials have been trying in vain to enact this new law. Shaini Goodwin from Ramtha’s School of Enlightenment, operating under the name “Dove of Oneness”, appears to have been the genesis of this conspiracy theory, although familiar names such as Sherry Shriner (whose story is documented in a podcast called The Opportunist) also seem to be involved in its spread. UFOs, aliens, Jesus, reptilians and fake wars have all been woven into the story.

GESARA is an extension of the conspiracy side of NESARA, with the G standing for Global instead of the National in NESARA. I guess conspiracy theorists outside of the US were feeling left out, and so an expanded version of this law that would restructure the global financial system was imagined and added to the conspiracy.

So, there we have it. The reality is that NESARA was a crackpot economic idea from someone who didn’t understand economics, and unsurprisingly the US government just ignored it. Conspiracy theorists have taken that idea and run with it, imagining secrets and lies, subterfuge, and a global battle between the forces of good and evil. I can imagine this conspiracy probably appeals to many people, because most of us have some kind of debt in our lives, and it would certainly be nice to wake up one day and have that yoke of debt lifted from our shoulders. But, alas, this idea of our debts being suddenly wiped out one day is not reality – it looked cool when it happened at the end of the movie Fight Club, but it’s just a case of wishful thinking, and a total lack of critical thinking to boot.

MLMs and the promise of wealth from your dining room table

Bronwyn Rideout

What do Avon, Tupperware, Doterra, and Arbonne have in common? They are all businesses in New Zealand that utilise multi-level marketing (MLM) strategies. If you aren’t familiar with the names or the products, ranging from hair care and makeup to herbal supplements, you might at least have come across the sales and recruitment gimmicks they employ. Maybe your Mom was a frequent invitee or hostess for a friend’s sex toy party (Pure Romance) or cooking utensil business (Pampered Chef); maybe your favourite Uncle loved to talk about the conventions and seminars he was attending (Amway). Regardless, the fact remains that they are a controversial marketing model that exploits millions of people worldwide with promises of financial freedom that are only available to those who are placed at the tippy top of the MLMs’ pyramid-like structures.

The core of these operations is a non-salaried workforce (called Independent contractors or distributors) who earn commissions through two revenue streams: one being the products they sell themselves to customers, and the second from bonuses accrued from products purchased/sold by their recruits (often called their “downline”). The latter, for the majority of MLMs, will be the bigger income stream of the two – and it’s where one will find the most controversial practices. A common practice is front- or inventory-loading, whereby the independent contractor pays up front for inventory or “start-up kits” as a means to buy into the MLM’s ranking scheme. However, these products are often overpriced compared to market value, so the real earning power is getting members into your downline to buy those products and start-up kits to rank-up, thereby artificially bolstering your own commissions and rank. Another tactic is auto-shipping, where a customer is enrolled into a subscription programme to receive regular product deliveries and credit card charges; these enrolments may be further incentivised for the contractor to increase their rank, but it is not uncommon for customers to be subscribed without their knowledge or permission.

If the flow of money here sounds a bit pyramidal in its shape, you wouldn’t be far off the mark. While not all MLMs are pyramid schemes, the United States Federal Trade Commission’s (FTC) position means there are decidedly few that fall in that category: If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors.

A common argument is that MLMs are not pyramid schemes because they sell products; pyramid schemes only promise money in exchange for recruiting others, but have no product to sell. The FTC takes a dim view of this. To wit:

“The promoters of a pyramid scheme may try to recruit you with pitches about what you’ll earn. They may say you can change your life — quit your job and even get rich — by selling the company’s products. That’s a lie. Your income would be based mostly on how many people you recruit, not how much product you sell. Pyramid schemes are set up to encourage everyone to keep recruiting people to keep a constant stream of new distributors — and their money — flowing into the business.”

The NZ Commerce Commission appears to be considerably more flexible, stating:

No, there are a number of multi-level marketing schemes operating in New Zealand which are not pyramid selling schemes. With multi-level marketing schemes salespeople are expected to sell products directly to consumers. They are separately incentivised to recruit others as fellow salespeople. Participants earn commission from selling products, whereas pyramid selling involves participants earning money solely or primarily by introducing other people into the scheme.

In a multi-level marketing scheme, income expectation is limited by the number of sales, not by the number of new sales representatives. Customers of multi-level marketing companies can buy the goods or services they offer without joining the scheme. Multi-level marketing also usually involves commercially viable products (for example clothing, jewellery, cosmetics, health products, cleaning products and cookware) which present genuine business and income-earning opportunities through sales to clients.

So, why do MLMs still proliferate and prosper?

This is a complex question that ties in the legal permissiveness of the MLM model, the ramifications of the pandemic, the populations that MLMs target, and the strategies used to keep them there.

In the United States, an MLM can be considered legitimate and not a pyramid scheme if at least 70% of all goods sold are purchased by non-distributors. However, this can be difficult to investigate due to the inventory-loading discussed earlier. Some distributors also utilise dummy accounts registered under the name of naive family or friends, thereby falsely presenting them as customers while artificially maintaining their ranks on their MLM’s compensation plan.

In NZ, MLMs are not prohibited by the Fair Trade Act, but there are protections for some MLM customers through the Consumer Guarantees act. If you purchase an MLM item that is not as advertised, especially from a party plan MLM, you do have recourse.

One would think that the pandemic would be the death knell of MLMs, but that would only be true if you thought MLMs were stuck in the dark ages of catalogues and door-to-door sales. But, at least for the successful distributors, the pandemic has been a boon time on multiple levels. Distributors for MLMs like Arbonne and doTerra make health claims that their products are effective in protecting or boosting immunity against the coronavirus, pulling in a consumer base that is scared of the unknown. Others are attracted to the promise of a guaranteed income from working from home in a time where jobs in many industries are disappearing or being furloughed. Social media has also been a boon for the more tech-savvy MLMs as Facebook, Instagram, and TikTok allowed devotees unfettered and uninterrupted bandwidth to talk up the benefits of their business and show-off all the wealth and consumer goods they have courtesy of their essential oils or buttery-soft leggings. Influencers with pre-existing and large followings were desirable recruits themselves, due to their wide reach; even with a modest goal of converting 1% of their following into their downline, influences with followings in the 10s or 100s of thousands could start earning sizable commissions on the basis of a selfie or two. The hipness of MLMs is further embedded by some crafty evasion of the MLM label through terms such as direct-selling, influencer-marketing or affiliate-marketing.

A representative’s sphere of influence is no longer limited to a couple of neighbourhood blocks, but instead can be global in scope.

However, there is a dark side to this pandemic gold rush. The fact remains that a large portion of distributors will only earn annual incomes in the double or triple digits. The key document to look for with any MLM is the Income Disclosure statement. Consider this one published by Arbonne for the NZ market. 47% of independent consultants at the lowest rank in the compensation scheme earned an average of $229 per year, with the Top 25 average being $1,801 per annum and the lowest 25 being $5 per annum. Even the next level up is hardly enticing, with an average annual earnings of $2,037 per year.

In the United States, however, loyalty to an MLM has been fatal for many. Attendees at a Paparazzi Accessories (jewellery MLM) convention fell victim to a super spreader event – something that the company itself has not fully addressed to this day.

On the cultural side of things, MLMs and their products are heavily marketed to women. In NZ, the Direct Selling Association of NZ reports that at least 71.5% of the MLM salesforce in NZ is female, while a strong male presence is observed internationally. This is not accidental. Again, the promise of flexible work arrangements and a sisterhood strongly appeals to women, often mothers, who are isolated socially or restricted from re-entering the workforce due to costs of childcare, etc.

As we talked about in Episode 4 of the Yeah…Nah podcast, a strong presence of MLMs in Utah can be attributed to both the lax legal requirements as well as a captive market of connected, educated women with large families who aren’t able to take on traditional careers at this time in their life, but still want to financially contribute. Gimmicks like parties (i.e. Tupperware), conventions (Amway), or some combination of the two (LulaRoe) lean on those insecurities with the promise of a new sisterhood of ambitious women who are cheering on your success. And, if you read Mark’s contribution about the BITE model, that sisterhood will be all too ready to step in to replace the nay-sayers in your life who don’t support your new business.

Over the next few weeks, I’ll be looking at several MLMs that are active in NZ and abroad. I will be deconstructing their compensation plans, their products, their social media presence, and what happens to the distributors that don’t succeed, or who decided to turn away from the business. Hopefully, this project can arm New Zealand Skeptics with information that they can use to dissuade friends and family from signing-up with these money pits.

Taking a BITE out of Mormonism

Last week I had a couple of Latter Day Saints (Mormon) Missionaries visit me. They called me a few days in advance to ask if it was okay to come round, and then I totally forgot about our meeting until I received a call saying they were having problems finding my house on the street.

I usually welcome religious visitors in my home. I figure that, although it’s not the right place for me to question someone’s religion when I visit their places of worship, when they’re the ones reaching out to try to convert me it’s fair game to give a bit of pushback. I’m still never rude or argumentative, but I’m happy to ask some uncomfortable questions about their beliefs, especially when it comes down to the treatment of minorities. There aren’t many religious groups that score well in that regard!

We talked for an hour or more, and of the two missionaries one was almost at the end of her 18 month mission, and the other was just starting. In fact, this was the very first house visit of her mission. Normally a Mormon mission is a two year event (18 months for women) in another country, but with the advent of COVID international travel has been cancelled and Mormons are finding themselves sent to a destination within their own country. From what I can tell, though, this is often still an exciting occurrence for these domestic missionaries as many of them have never really travelled much – I assume dedicated Mormon families have very little time or money to spend on frivolous activities like holidays.

I know enough about Mormons that when I invited them in I didn’t offer them tea or coffee. Instead we sat down and started chatting about their religion, with me asking questions and them seemingly working through a set of pre-ordained steps that a mission visit is supposed to entail. We had prayers, testimony, the quoting of scripture, a description of what sets Mormons apart from other Christians, and veneration of the current “prophet”, their leader – a man called Russell Nelson. Unsurprisingly, this happens to be an old, white man, and I was shown a printed picture of him as if it was something precious.
 

One of the points I bought up was that their God seems to have always chosen old, white men as the prophet, with nobody of colour ever having been chosen for the top job. In fact, the church didn’t allow anyone of colour to hold a leadership role at all until 1978. And it’ll be no surprise to skeptics to hear that this God also doesn’t want women in leadership roles.

At the end of the meeting (closed with a prayer, of course) I was left with a copy of the Book of Mormon. I said I didn’t need one, as I already have a copy – so now I have two. If you’re interested in learning about the inception of the Mormon church, although this sounds silly, I highly recommend the classic South Park episode about Joseph Smith. Sadly, us in NZ can’t watch the free online version – but if you have a VPN, or own a copy of the Season 7 DVDs, or you’re a pirate, enjoy!

A few days after our chat, I was watching a video from the Genetically Modified Skeptic about the Multi Level Marketing (MLM) scheme his family had been involved with – Young Living essential oils. He mentioned an idea that intrigued me – that under the BITE model, it could be considered that MLMs like Young Living are a form of cult.

Okay, so let’s back up a little. The BITE model is a way of analysing the behaviours of groups to see if they’re likely to be a cult. The model was created by Steven Hassan, who was once a member of the Unification Church (better known as the Moonies) and since leaving the church has been tirelessly helping people who want to leave high control groups like cults.

Steven’s BITE Model breaks down the controlling tendency of cult groups into four areas – Behaviour, Information, Thought and Emotions. Under each of these categories, Steven’s BITE model lists a set of ways that these four aspects can be controlled. For example, under Behaviour Control there’s punishment for disobedience, control over sexual activity, and financial exploitation (among many others). The Information control has six main areas – deception, restricting access to outside info, compartmentalising, spying, internal propaganda, and the use of confession. Thought control includes getting people to change their name, having them reject critical thinking, and pushing an us vs them mentality. Finally, the Emotional control section includes the use of fear, alternating between extremes of affection and rejection, and shunning.

This is far from the only attempt to define what makes a cult. I regularly listen to the Let’s Talk About Sects podcast from Sarah Steel (she’s Australian, so the podcast regularly features content relevant to New Zealand, such as a great couple of episodes on Gloriavale), and quite like the definition she often uses. According to Sarah, a cult is a group:
 

1. Dominated by a charismatic leader, or leadership, that closely controls its members, particularly with regards to their exercising their free will to disengage with the group and its ideology,

2. Who believes that they exclusively have access to the truth, and the rest of the world is wrong, and

3. Who are largely secretive of the workings of their society to outsiders.

The BITE model has been received well by cult researchers, I think because of how well respected Steven is for his deep knowledge of cults, his long time dedication to the subject, and because of the academic work he’s applied to his model – including it being the topic of his recent PhD thesis titled “The BITE Model of Authoritarian Control: Undue Influence, Thought Reform, Brainwashing, Mind Control, Trafficking and the Law”.

And so, having heard the idea that some of the more nefarious MLMs appear to align well with Steven’s BITE model, and with my recent visit from the Mormons still on my mind, I wondered if anyone had tried to apply the BITE model to the Mormon church. Sure enough, when I typed “BITE Model” into the Google search box, before I’d even had a chance to start writing the word Mormon, up popped Google’s suggestions. And there, at the top of the list, was the suggested search phrase “BITE Model Mormonism”.

I clicked on this suggestion, and immediately found a great article where the author had colour coded all the bullet points of each of the four categories – Behavioural, Information, Thought and Emotional Control – according to whether the church of the Latter Day Saints was known to use those techniques to control their members. Red was for regular use, orange for occasional use and green marked techniques that the church was not known to use. Although there were a few green and orange lines (such as sleep deprivation and speaking in tongues), most of the points were coloured red, suggesting that the Mormon church uses a lot of the control techniques that are the hallmarks of a cult.

This got me thinking – what else might the BITE model be relevant to? It seems to be good for assessing fringe religious groups we often consider to be cults, and may also be good at figuring out which of the larger religious groups are using cult techniques for control. But it sounds like it might also be good at assessing how dangerous Multi Level Marketing schemes can be. We’ll hear some more about this from Bronwyn, in her article in this newsletter about MLMs, and possibly also some more details at a later date.

Given my recent crusade against NFTs, I wondered if maybe the insular communities who promote and invest in cryptocurrencies and NFTs – people sometimes called Crypto Bros – would also score highly under the BITE model. But, although there does seem to be some effort to control what information people consume, and there’s talk about outsiders “not understanding crypto” and “spreading FUD” (Fear, Uncertainty and Doubt), it’s obvious that this fad hasn’t risen to the point of being cult-like. At least, it isn’t that bad yet!

Does Finland exist?

Bronwyn Rideout

While current geopolitical matters might have some Finns wishing they were a tad more invisible, at first pass this is hardly a skeptical topic. But this modern conspiracy is worth a chuckle, especially given the exasperated sighs you’ll get from that one friend who has more than a passing knowledge of statistics.

A popular version of the Finland conspiracy is geographical in nature, claiming that instead of landmass, Finland is just an empty blot of sea. Fuelling this was Reddit user Rarega, who was taking the mickey out of the fluctuating relationship between Japan and Russia through the 20th and 21st centuries, particularly around fishing rights. Because the “Fin” in Finland refers to the fins on a fish, right? Get it?

Another common argument in support of Finland being non-existent is that the so-called Finns don’t even live in Finland, but reside in the bordering countries of Russia, Sweden, and Estonia. This subreddit, r/finlandConspiracy, gives a decent run down as well as this Youtube video by Good Mythical Morning.

If you are a person who likes to bring math into already complicated diplomatic matters, this calculating version of the meme goes like this:

There’s approximately 5.4 million Finnish people in the world, right? That’s out of 7.125 billion humans. That means Finns make up 0.0729% of the planet.

Now the best government censuses have a margin of error about 1%. So, Finns make up 0.0729% of the planet, plus or minus 1%. In conclusion: There’s a 50/50 chance Finland does not exist

If you really know your memes, you won’t be surprised to learn that this is one of the oldest jokes on the internet, with various towns and regions with even smaller populations being deemed as being fictional.

As of 2020, “Finland’s” population is just over 5.5 million. However, The world’s population that same year was 7.9 billion. Even if we were to believe that anyone lives in Finland, this would still only account for just over 0.07% of the world’s population, meaning it is less likely to exist than it ever was before.

NESARA and GESARA

I’ve recently been seeing mentions of NESARA and GESARA online, in conspiracy groups, and also on a badly painted sign at at least one local protest. So I did a little bit of reading to find out what it’s all about. So, if you’ve seen these terms being used and, like me, have no idea what they mean, here’s a quick description of their real world meaning and what the conspiracy theorists wrongly think they’re all about.

In reality NESARA was the National Economic Security and Recovery Act, a set of economic reforms for the United States that were proposed by Harvey Francis Barnard, an engineering consultant. Barnard wrote a proposal titled “Draining the Swamp: Monetary and Fiscal Policy Reform” in the 1990s, and in it he promoted the idea of his NESARA Act. He sent copies to members of Congress, hoping that they’d see his genius and vote in his new rules. Barnard’s plan was to overhaul large parts of the US economy, with ideas like scrapping income tax (and replacing it with a sales tax), abolishing compound interest on loans, and returning to the Gold Standard (well, technically a “bimetallic currency” of both gold and silver). The bill, unsurprisingly, went nowhere.

In conspiracy circles NESARA (often erroneously called the National Economic Security and Reformation Act or the National Economic Stabilization and Recovery Act) is an Act that not only introduces the Gold Standard and the removal of income tax, but also abolishes the Internal Revenue Service, cancels all personal debt and declares world peace! The Act was apparently successfully voted on back in March 2000, and was then signed into law by Bill Clinton. But just as the law was due to come into force, on September the 11th, 2001, a major terrorist attack put a stop to its implementation. Since then, military officials have been trying in vain to enact this new law. Shaini Goodwin from Ramtha’s School of Enlightenment, operating under the name “Dove of Oneness”, appears to have been the genesis of this conspiracy theory, although familiar names such as Sherry Shriner (whose story is documented in a podcast called The Opportunist) also seem to be involved in its spread. UFOs, aliens, Jesus, reptilians and fake wars have all been woven into the story.

GESARA is an extension of the conspiracy side of NESARA, with the G standing for Global instead of the National in NESARA. I guess conspiracy theorists outside of the US were feeling left out, and so an expanded version of this law that would restructure the global financial system was imagined and added to the conspiracy.

So, there we have it. The reality is that NESARA was a crackpot economic idea from someone who didn’t understand economics, and unsurprisingly the US government just ignored it. Conspiracy theorists have taken that idea and run with it, imagining secrets and lies, subterfuge, and a global battle between the forces of good and evil. I can imagine this conspiracy probably appeals to many people, because most of us have some kind of debt in our lives, and it would certainly be nice to wake up one day and have that yoke of debt lifted from our shoulders. But, alas, this idea of our debts being suddenly wiped out one day is not reality – it looked cool when it happened at the end of the movie Fight Club, but it’s just a case of wishful thinking, and a total lack of critical thinking to boot.

MLMs and the promise of wealth from your dining room table

Bronwyn Rideout

What do Avon, Tupperware, Doterra, and Arbonne have in common? They are all businesses in New Zealand that utilise multi-level marketing (MLM) strategies. If you aren’t familiar with the names or the products, ranging from hair care and makeup to herbal supplements, you might at least have come across the sales and recruitment gimmicks they employ. Maybe your Mom was a frequent invitee or hostess for a friend’s sex toy party (Pure Romance) or cooking utensil business (Pampered Chef); maybe your favourite Uncle loved to talk about the conventions and seminars he was attending (Amway). Regardless, the fact remains that they are a controversial marketing model that exploits millions of people worldwide with promises of financial freedom that are only available to those who are placed at the tippy top of the MLMs’ pyramid-like structures.

The core of these operations is a non-salaried workforce (called Independent contractors or distributors) who earn commissions through two revenue streams: one being the products they sell themselves to customers, and the second from bonuses accrued from products purchased/sold by their recruits (often called their “downline”). The latter, for the majority of MLMs, will be the bigger income stream of the two – and it’s where one will find the most controversial practices. A common practice is front- or inventory-loading, whereby the independent contractor pays up front for inventory or “start-up kits” as a means to buy into the MLM’s ranking scheme. However, these products are often overpriced compared to market value, so the real earning power is getting members into your downline to buy those products and start-up kits to rank-up, thereby artificially bolstering your own commissions and rank. Another tactic is auto-shipping, where a customer is enrolled into a subscription programme to receive regular product deliveries and credit card charges; these enrolments may be further incentivised for the contractor to increase their rank, but it is not uncommon for customers to be subscribed without their knowledge or permission.

If the flow of money here sounds a bit pyramidal in its shape, you wouldn’t be far off the mark. While not all MLMs are pyramid schemes, the United States Federal Trade Commission’s (FTC) position means there are decidedly few that fall in that category: If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors.

A common argument is that MLMs are not pyramid schemes because they sell products; pyramid schemes only promise money in exchange for recruiting others, but have no product to sell. The FTC takes a dim view of this. To wit:

“The promoters of a pyramid scheme may try to recruit you with pitches about what you’ll earn. They may say you can change your life — quit your job and even get rich — by selling the company’s products. That’s a lie. Your income would be based mostly on how many people you recruit, not how much product you sell. Pyramid schemes are set up to encourage everyone to keep recruiting people to keep a constant stream of new distributors — and their money — flowing into the business.”

The NZ Commerce Commission appears to be considerably more flexible, stating:

No, there are a number of multi-level marketing schemes operating in New Zealand which are not pyramid selling schemes. With multi-level marketing schemes salespeople are expected to sell products directly to consumers. They are separately incentivised to recruit others as fellow salespeople. Participants earn commission from selling products, whereas pyramid selling involves participants earning money solely or primarily by introducing other people into the scheme.

In a multi-level marketing scheme, income expectation is limited by the number of sales, not by the number of new sales representatives. Customers of multi-level marketing companies can buy the goods or services they offer without joining the scheme. Multi-level marketing also usually involves commercially viable products (for example clothing, jewellery, cosmetics, health products, cleaning products and cookware) which present genuine business and income-earning opportunities through sales to clients.

So, why do MLMs still proliferate and prosper?

This is a complex question that ties in the legal permissiveness of the MLM model, the ramifications of the pandemic, the populations that MLMs target, and the strategies used to keep them there.

In the United States, an MLM can be considered legitimate and not a pyramid scheme if at least 70% of all goods sold are purchased by non-distributors. However, this can be difficult to investigate due to the inventory-loading discussed earlier. Some distributors also utilise dummy accounts registered under the name of naive family or friends, thereby falsely presenting them as customers while artificially maintaining their ranks on their MLM’s compensation plan.

In NZ, MLMs are not prohibited by the Fair Trade Act, but there are protections for some MLM customers through the Consumer Guarantees act. If you purchase an MLM item that is not as advertised, especially from a party plan MLM, you do have recourse.

One would think that the pandemic would be the death knell of MLMs, but that would only be true if you thought MLMs were stuck in the dark ages of catalogues and door-to-door sales. But, at least for the successful distributors, the pandemic has been a boon time on multiple levels. Distributors for MLMs like Arbonne and doTerra make health claims that their products are effective in protecting or boosting immunity against the coronavirus, pulling in a consumer base that is scared of the unknown. Others are attracted to the promise of a guaranteed income from working from home in a time where jobs in many industries are disappearing or being furloughed. Social media has also been a boon for the more tech-savvy MLMs as Facebook, Instagram, and TikTok allowed devotees unfettered and uninterrupted bandwidth to talk up the benefits of their business and show-off all the wealth and consumer goods they have courtesy of their essential oils or buttery-soft leggings. Influencers with pre-existing and large followings were desirable recruits themselves, due to their wide reach; even with a modest goal of converting 1% of their following into their downline, influences with followings in the 10s or 100s of thousands could start earning sizable commissions on the basis of a selfie or two. The hipness of MLMs is further embedded by some crafty evasion of the MLM label through terms such as direct-selling, influencer-marketing or affiliate-marketing.

A representative’s sphere of influence is no longer limited to a couple of neighbourhood blocks, but instead can be global in scope.

However, there is a dark side to this pandemic gold rush. The fact remains that a large portion of distributors will only earn annual incomes in the double or triple digits. The key document to look for with any MLM is the Income Disclosure statement. Consider this one published by Arbonne for the NZ market. 47% of independent consultants at the lowest rank in the compensation scheme earned an average of $229 per year, with the Top 25 average being $1,801 per annum and the lowest 25 being $5 per annum. Even the next level up is hardly enticing, with an average annual earnings of $2,037 per year.

In the United States, however, loyalty to an MLM has been fatal for many. Attendees at a Paparazzi Accessories (jewellery MLM) convention fell victim to a super spreader event – something that the company itself has not fully addressed to this day.

On the cultural side of things, MLMs and their products are heavily marketed to women. In NZ, the Direct Selling Association of NZ reports that at least 71.5% of the MLM salesforce in NZ is female, while a strong male presence is observed internationally. This is not accidental. Again, the promise of flexible work arrangements and a sisterhood strongly appeals to women, often mothers, who are isolated socially or restricted from re-entering the workforce due to costs of childcare, etc.

As we talked about in Episode 4 of the Yeah…Nah podcast, a strong presence of MLMs in Utah can be attributed to both the lax legal requirements as well as a captive market of connected, educated women with large families who aren’t able to take on traditional careers at this time in their life, but still want to financially contribute. Gimmicks like parties (i.e. Tupperware), conventions (Amway), or some combination of the two (LulaRoe) lean on those insecurities with the promise of a new sisterhood of ambitious women who are cheering on your success. And, if you read Mark’s contribution about the BITE model, that sisterhood will be all too ready to step in to replace the nay-sayers in your life who don’t support your new business.

Over the next few weeks, I’ll be looking at several MLMs that are active in NZ and abroad. I will be deconstructing their compensation plans, their products, their social media presence, and what happens to the distributors that don’t succeed, or who decided to turn away from the business. Hopefully, this project can arm New Zealand Skeptics with information that they can use to dissuade friends and family from signing-up with these money pits.

Deepfakes

With the Russian invasion of Ukraine, propaganda raises its head. Propaganda has always been a tool of war (and peace) but we’re seeing escalation to new levels.

Recently, a video was shared on social media of the Ukrainian President – Volodymyr Zelendskyy – asking citizens to lay down their arms against the Russian invaders. Analysis by experts has concluded that it’s a poorly done deepfake video. Zelendskyy’s head didn’t really fit his neck, and his head was disproportionate to his body.

So, what is a deepfake video? Deepfake, as Wikipedia describes it, is a portmanteau of “deep learning” and fake. Deep learning, in this instance, is referring to a technique in computer science that uses machine learning and artificial intelligence to create new content by analysing existing content.

The technology allows videos and other media to be created where the video appears to show somebody doing or saying something when they were not involved in the video at all.

There have been low quality instances of this for online porn, where celebrity faces are substituted for paid porn actors in an attempt to bolster the popularity of a video. 

And there have been “fun” apps built which allow you to substitute a person’s face into scenes from movies and TV shows, using just a single photograph. With more data, such as more photographs with open and closed eyes, and open and closed mouths, the video can become more realistic.

Ever since the creation of media there have been people who have experimented with faking. In Victorian times, camera double exposures were a common technique to generate a ghostly image of another person in a shot. But surely, all but the most gullible or invested viewer would spot that these were faked. (Although perhaps I’m over-estimating people – we regularly see images with photographic artefacts, such as lens flaring, being claimed as evidence of the paranormal!)

With the advent of film and video, creative editing techniques could be used to fool the viewer, to an extent. 

But recently, the advance of AI and ubiquity of powerful computing technology has advanced to a point where it’s becoming very difficult to tell whether something is fake or not. 

As an example of this, I tried out a website which specialises in producing great-sounding voice overs for promotional videos. The site allows you to paste in your text, then have it rendered as a realistic sounding voice of your choosing – say Ava, a young adult female, or Ethan, a middle-aged male. I tried this out with the opening paragraphs of this item, and it’s surprisingly realistic. Have a listen. 

While that site allows you to choose from predefined voices, with a suitable budget, AI can analyse anybody’s voice and then produce a facsimile of that voice saying words they never uttered.

As an aside, I experimented with speech synthesiser chips interfaced with 8-bit microcomputers in the mid 1980s. Back then, you could make a computer talk, with an extremely robotic sounding voice (that you often had to strain to understand), by figuring out what phonemes to send to the synthesiser chip to make the words. There’s an example of a project using the SP0256-AL2 chip interfaced to a Zilog Z-80 processor in modern times. (Back in the day, the processor I cut my teeth on was a MOS Technology 6502). So, the speech synthesis of today just blows me away!

Anyway, the skeptical implications of deepfakes are huge. It used to be that seeing was believing – at least to a degree. The resources and technology required to fake somebody doing or saying something they never did were next to impossible. Now, it’s certainly possible to produce something that is good enough to convince enough people that it’s real.

The use of altered video in films has been around for a while. Forrest Gump had amusing use of obviously faked video content. More recently, the For All Mankind series on Apple TV+ included very realistic video of Ronald Reagan, and of The Johnny Carson Show. (The series portrays an alternate reality where the Russians beat the USA to the moon.) And, at the moment, I’m enjoying the Amazon Prime series The Man in the High Castle, which shows an alternate reality where Germany and Japan won World War II, but features films of alternate realities where the allies won. Characters in the series comment on the seeming impossibility that the films could have been faked!

The danger is that future elections will be fought and won using these deepfake techniques. It will be relatively easy to produce an incriminating video of a political opponent saying something distasteful. The converse of this is that nobody will trust anything they see in the media or online (and, are we getting to that point already?) so that, even if a video is real, there will be those that doubt its veracity. And while most people might recognise a fake video, enough might think it’s real to sway opinion enough to affect the outcome of an election.

We should always be very wary about believing something when that thing plays into our own personal biases. The thing is that determining what is real, and what’s generated, is becoming increasingly difficult.

Cycling back to Snopes – their recommendation is that it’s possible to spot a deepfake video by looking at it, and also by considering the source where it’s posted. I contend that simply looking at the video and figuring out whether it’s real or not will become increasingly difficult over time. Checking where it is posted is a good indicator though – did it appear on the usual channels, or has it arisen from somewhere unknown or suspicious. Of course, hackers might also have the ability to post content through seemingly trustworthy channels.

Deepfakes

With the Russian invasion of Ukraine, propaganda raises its head. Propaganda has always been a tool of war (and peace) but we’re seeing escalation to new levels.

Recently, a video was shared on social media of the Ukrainian President – Volodymyr Zelendskyy – asking citizens to lay down their arms against the Russian invaders. Analysis by experts has concluded that it’s a poorly done deepfake video. Zelendskyy’s head didn’t really fit his neck, and his head was disproportionate to his body.

So, what is a deepfake video? Deepfake, as Wikipedia describes it, is a portmanteau of “deep learning” and fake. Deep learning, in this instance, is referring to a technique in computer science that uses machine learning and artificial intelligence to create new content by analysing existing content.

The technology allows videos and other media to be created where the video appears to show somebody doing or saying something when they were not involved in the video at all.

There have been low quality instances of this for online porn, where celebrity faces are substituted for paid porn actors in an attempt to bolster the popularity of a video. 

And there have been “fun” apps built which allow you to substitute a person’s face into scenes from movies and TV shows, using just a single photograph. With more data, such as more photographs with open and closed eyes, and open and closed mouths, the video can become more realistic.

Ever since the creation of media there have been people who have experimented with faking. In Victorian times, camera double exposures were a common technique to generate a ghostly image of another person in a shot. But surely, all but the most gullible or invested viewer would spot that these were faked. (Although perhaps I’m over-estimating people – we regularly see images with photographic artefacts, such as lens flaring, being claimed as evidence of the paranormal!)

With the advent of film and video, creative editing techniques could be used to fool the viewer, to an extent. 

But recently, the advance of AI and ubiquity of powerful computing technology has advanced to a point where it’s becoming very difficult to tell whether something is fake or not. 

As an example of this, I tried out a website which specialises in producing great-sounding voice overs for promotional videos. The site allows you to paste in your text, then have it rendered as a realistic sounding voice of your choosing – say Ava, a young adult female, or Ethan, a middle-aged male. I tried this out with the opening paragraphs of this item, and it’s surprisingly realistic. Have a listen. 

While that site allows you to choose from predefined voices, with a suitable budget, AI can analyse anybody’s voice and then produce a facsimile of that voice saying words they never uttered.

As an aside, I experimented with speech synthesiser chips interfaced with 8-bit microcomputers in the mid 1980s. Back then, you could make a computer talk, with an extremely robotic sounding voice (that you often had to strain to understand), by figuring out what phonemes to send to the synthesiser chip to make the words. There’s an example of a project using the SP0256-AL2 chip interfaced to a Zilog Z-80 processor in modern times. (Back in the day, the processor I cut my teeth on was a MOS Technology 6502). So, the speech synthesis of today just blows me away!

Anyway, the skeptical implications of deepfakes are huge. It used to be that seeing was believing – at least to a degree. The resources and technology required to fake somebody doing or saying something they never did were next to impossible. Now, it’s certainly possible to produce something that is good enough to convince enough people that it’s real.

The use of altered video in films has been around for a while. Forrest Gump had amusing use of obviously faked video content. More recently, the For All Mankind series on Apple TV+ included very realistic video of Ronald Reagan, and of The Johnny Carson Show. (The series portrays an alternate reality where the Russians beat the USA to the moon.) And, at the moment, I’m enjoying the Amazon Prime series The Man in the High Castle, which shows an alternate reality where Germany and Japan won World War II, but features films of alternate realities where the allies won. Characters in the series comment on the seeming impossibility that the films could have been faked!

The danger is that future elections will be fought and won using these deepfake techniques. It will be relatively easy to produce an incriminating video of a political opponent saying something distasteful. The converse of this is that nobody will trust anything they see in the media or online (and, are we getting to that point already?) so that, even if a video is real, there will be those that doubt its veracity. And while most people might recognise a fake video, enough might think it’s real to sway opinion enough to affect the outcome of an election.

We should always be very wary about believing something when that thing plays into our own personal biases. The thing is that determining what is real, and what’s generated, is becoming increasingly difficult.

Cycling back to Snopes – their recommendation is that it’s possible to spot a deepfake video by looking at it, and also by considering the source where it’s posted. I contend that simply looking at the video and figuring out whether it’s real or not will become increasingly difficult over time. Checking where it is posted is a good indicator though – did it appear on the usual channels, or has it arisen from somewhere unknown or suspicious. Of course, hackers might also have the ability to post content through seemingly trustworthy channels.