Blacklist of network companies. How to avoid becoming a victim of a financial pyramid?

In Europe, direct sales through MLM models reached €29.712 billion in 2023, which is 3.9% more than in 2022, with a simultaneous decrease in the number of independent distributors from 6 million to 5.2 million people. However, in the same year, Europol reported losses of €113 million to victims of a fraudulent investment scheme in just one criminal case.

To help entrepreneurs with this, the BlooMLM team and its expert Yevhen Kasyanenko decided to compile a blacklist of network marketing companies. Specialists will help you determine when you are dealing with a pyramid scheme. This will help you choose the right company that will become a reliable partner for you and contribute to stable financial growth. 

The fact that BlooMLM experts can be trusted is evident from their case studies. Find out how specialists have already helped many companies.

What is a blacklist of network companies?

The list of blacklisted MLM companies includes those engaged in fraudulent schemes or operating without transparency and ethical standards. These are dishonest companies with a bad reputation in the market. 

Definition and purpose

The purpose of the blacklist is to protect distributors from pyramid schemes. There are companies that can cause financial damage to entrepreneurs. Such organizations directly harm the reputation of network marketing. Because of them, people stop trusting legitimate organizations. To avoid potential risks, such lists have been created to help both buyers and distributors themselves. 

Which companies are blacklisted and why?

To be blacklisted, a company must have the following characteristics:

• Promising quick profits. If a company focuses solely on making money easily and instantly, this raises doubts. After all, such organizations usually lack a real business model. These companies promise 80–100% profits by attracting newcomers rather than selling real products.
• Unclear terms of employment and cooperation. There is simply no transparency in the agreements. Payments are hidden, and there are mandatory purchases of the goods offered. All this raises suspicions about honesty. There are no clear bonus plans, and commissions for registration packages costing €300–500 are hidden.
• Lack of a real product or service. This is a pyramid scheme, where the only way to make money is to recruit new members, not sell products. Examples include TelexFree and OneCoin, bankrupt schemes that raised more than $4 billion from investors around the world.

Blacklisted companies actively violate the law. They use false information to attract partners. To identify such risks and avoid working with dangerous organizations, it is necessary to review the blacklist. This will allow you to refuse cooperation in a timely manner.

Signs of a pyramid scheme

By recognizing an illegal company’s scheme in time, you can protect yourself and your reputation. After all, some organizations know how to disguise themselves as legitimate businesses in network marketing.

How to distinguish a pyramid scheme from a legitimate MLM company?

Although a pyramid scheme may resemble a network marketing company, it has a number of distinctive features. These features set it apart. Here are some of them:

• There is no clear business model. Legitimate MLM companies usually have an honest and understandable business model or plan. It includes the sale of a real product or service. A pyramid scheme, on the other hand, focuses entirely on attracting new partners. This is how it survives.
•  At Amway and Oriflame, 90% of revenue comes from retail sales, not just recruitment. Income is entirely based on recruiting new members. If you realize that your earnings will depend entirely on whether new partners contribute funds, it’s worth thinking twice. This is a clear red flag. Questionable companies do not offer income from sales. A pyramid scheme pays 100% of commissions from new contributions, while a legitimate company limits bonuses to 25–35% of actual sales.

What are the risks of working with dubious companies?

Working with a pyramid scheme is dangerous. It leads to serious problems. For example, you can lose money. When a pyramid collapses due to the cessation of new participants, the remaining participants lose 80–90% of the money they invested in the business. 

There may also be reputational risks. After all, when an entrepreneur cooperates with such companies, it negatively affects their professional reputation. In the future, it will be difficult to build a career in network marketing. 

Illegal companies do not offer legal protection. This is because pyramid schemes operate outside the law. If you participate in one, your rights cannot be protected by law.

Understanding these points will help you do everything possible to avoid mistakes and choose a reliable MLM company.

How to protect your rights when working with network companies

To protect your rights in business, you need to choose your partner carefully. It is also important to carefully check the legal aspects of the cooperation. 

Recommendations from Yevhen Kasyanenko

There are several recommendations that will help you build a safe and profitable partnership with an MLM company. These tips are provided by an experienced expert. By following them, you will avoid mistakes. 

The first recommendation is to check the company. Do not start cooperation until you have carefully studied the company’s reputation. You need to find out what business model it uses and what feedback those who have participated in the process have given. If the company is legal, it will be ready to provide honest information about its product, working conditions, and bonus system.

The next important point is to sign a contract. You must insist on signing an official contract. It should specify the terms of your cooperation with the company, as well as your obligations and rights. This will allow you to protect your interests when problems and disputes arise.

And finally, seek legal support. Use the help of professionals. Yevhen Kasyanenko and his team can help you with this. They will help you make sure that the company can be trusted, and then you will avoid fraud. 

Yevhen Kasyanenko’s team has proven its professionalism. This is evident from their awards and achievements, which are listed below.

What to do if you have already fallen victim to fraud?

There are several recommendations that will help those who have already encountered a dishonest online company. Here are the important steps to take:

• Request a refund. Use an official request form to submit your request for a refund, for example, by letter or email. If necessary, contact consumer protection authorities. 
• Hold the organization accountable. Gather evidence, which may include your correspondence, receipts, and contracts. This will give you a legal basis for taking the matter to court or law enforcement.
• Don’t make the same mistakes. Analyze the situation you find yourself in. This is necessary to avoid the same thing happening again. Seek professional help to assess the company correctly. 

With these recommendations, you can protect your rights and minimize losses.

List of verified and reliable companies

By working with network marketing companies that have stood the test of time, you reduce risks and gain stability. This is important if you are interested in a legal and long-term business.

Why is it important to work with proven companies?

When you find a proven company and start working with it, it will bring you huge benefits. Here are the advantages of such a decision:

• Services or products are quality guaranteed. A reliable company is ready to offer its customers only those products that have been certified and manufactured in accordance with international standards. These companies invest up to 20% of their income in R&D to maintain quality.
• Clear and fair terms of cooperation. You should understand how the company’s business model is structured, how remuneration is calculated, and what requirements are imposed on you. Proven partners provide transparent payment plans of up to 35% of sales.
• Legal protection. Since market leaders value their reputation, they will only offer you legal working conditions that are clear and protected by law. 

There are already several leaders in network marketing who have an impeccable reputation. These include Amway, Herbalife, and Avon. This reliability is confirmed by Seldia data: in 2023, the market leaders were Amway (€3.8 billion), Oriflame (€2.1 billion), Herbalife (€1.5 billion), and Avon (€1.8 billion). They have managed to remain stable, honest, and sustainable for many years. These are the companies you should trust. 

How does BlooMLM help you choose a reliable partner?

BlooMLM and Yevhen Kasyanenko are experts who are ready to help you choose a company that meets your requirements. Our specialists analyze the market. To do this, they conduct in-depth monitoring of each network company, analyze its reputation, terms of cooperation, and reviews. 

The experts are also ready to give you personal recommendations. They will study your goals and expectations to find the most suitable option for cooperation with a company.

The BlooMLM team is ready to protect your interests. Here you can take advantage of legal and informational support. All of this is aimed at helping you avoid mistakes, such as signing contracts or making strategic decisions. When you work with experts like BlooMLM, you can minimize risks and focus on successfully achieving your goals. 

Frequently asked questions about the blacklist of network companies

When you understand the risks and check a company’s reputation, you get the key to safe cooperation. This is important, considering how many unscrupulous organizations there are today.

Conclusion: blacklists of network companies

When you know that there are blacklists of companies, you can protect your interests. It is important to remember that some people have suffered because of pyramid schemes and unscrupulous companies. This has caused serious damage to their reputation and budget. If you are familiar with the signs of fraud and work with trusted partners, you can avoid these risks. 

We recommend consulting with Yevhen Kasyanenko and his BlooMLM team. This will help you succeed in network marketing. With the help of expert advice, you will choose a reliable partner for cooperation and avoid problems associated with fraud.