In the US, MLM works as “Affiliated Marketing” in 50 states. It is also called “Home Based Business Franchising”. Even though multilevel marketing is lawful, some of the practices are considered criminal.

“Avoid multilevel marketing programmes that pay commissions for recruiting new distributors,” the US Federal Trade Commission (FTC) advises. They’re actually pyramid schemes that are against the law. What makes pyramiding so risky? Because programmes that pay commissions for bringing on new distributors will surely fail if no new distributors can be found.

Federal Trade Commission also advises the people not to join MLM where money-making is the primary objective. Because not at all MLM is legal by law or it may not trustable.  The FTC advises that multi-level marketing organisations with greater incentives for recruitment than product sales are to be viewed sceptically. The FTC also warns that the practice of getting commissions from recruiting new members is outlawed in most states as “pyramiding”. State Government and FTC formulate and implement the Law regarding MLM.