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Belated Father’s Day Wishes, Too Big to Fail, and Misleading Marketing in MLMs

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I hope all the fathers out there had a good day yesterday. My wife took me out for a combined father-to-be and dad-to-our-dog lunch yesterday. We went to Fleming's Steak House, but we didn't fully take advantage of them, with gift certificates from Costco as they haven't been offered near us in months.

They lured fathers in with the promise of a $25 coupon to a future visit. Unfortunately we found out that money expires in a month. Our receipt came with another $25 off for taking a short survey, but the two specials can't be combined. I'll give Flemings some points for being crafty in luring people in with free money they usually give people anyone in the form of that receipt survey.

While on the topic of Father's Day, my wife, dog, and I went to the drive-in on Saturday night to see That's My Boy, the new Adam Sandler - Andy Sandberg movie about fatherhood. We saved some money at the drive-in by packing our own drinks and snacks. While the critics panned the movie as being terrible, my wife and thought it was hilarious. It probably has something to do with being from Boston and knowing a friend who is a dead ringer for Adam Sandler's character.

Transitioning to movies in general, I caught Too Big to Fail, which is an HBO movie about the bank collapse in 2008. I took a lot of comfort in knowing that it wasn't entirely due to my trip to Australia. The movie went into great detail about how things fell apart. If you are looking for a movie that is educational, give it a look. The cast consisted of all names you will recognize. My favorite quote was the following:

"What do I say when they ask me why it wasn’t regulated?" asks a Treasury Department official, who is to answer questions for a press conference explaining bundled home loans and the potential collapse of AIG.

"No one wanted it," Hank Paulson replies. "They were making too much money."

This reminds me of the hundreds or thousands of MLM companies that are operating today who meet the FTC's guidelines of being illegal pyramid schemes. It is exactly the same question and answer.

On that topic, I noticed that the Direct Selling Association (DSA) put out some guidelines on legit multi-level marketing (MLM) companies and pyramid schemes. If you didn't know that 95% of the members of the DSA are MLMs, you would probably wonder why they'd do such a thing. After all, direct selling to most people is Ebay and the Girl Scouts and has nothing to do with some kind of multi-level marketing business. I took a little time to analyze their recommendations and contrast that with the FTC's recommendations on the exact same topic. The result is: Myths from the Direct Selling Association (DSA). I think it is an interesting exercise on how some clever marketing can change a few subtle points to make something that looks clearly illegal seem legit.

Here are the personal finance links for this week:

Posted on June 18, 2012.

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2 Responses to “Belated Father’s Day Wishes, Too Big to Fail, and Misleading Marketing in MLMs”

  1. Evan says:

    I still can’t believe there are people fighting with you on those MLM posts! The worst part is that when I receive the email and the poster is just an idiot I cringe how bad they are going going to destroyed lol

  2. Lazy Man says:

    The sad part is that in this case it is the Direct Selling Association, which is the collective wisdom of a bunch of MLM companies. You’d think that they would be capable of some kind of rational logic.

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