Holy Shit! Amway is a Pyramid Scheme?

Yesterday, it was reported on MLive that Amway has agreed to pay out $56 million to plaintiffs in a “class-action suit alleging the company and some of its top-level distributors operate an illegal pyramid scheme.”

The article goes on to say that the lawsuit, “alleged the company used unfair and illegal business practices that mislead distributors about their ability to make money and how much it would cost to be part of the business.”

However, despite the claims made in the lawsuit, Amway President Doug DeVos still does not want to admit to the allegations in the lawsuit. In an interesting display of journalism, the Grand Rapids Press included a letter that the Amway executives sent to the “Amway Community.”

The letter states that while the company has agreed to pay out $56 million and “the company and its IBO leaders take responsibility for all past issues,” it still denies any real wrong doing.

While one could argue that it shows that the Press is not afraid of exposing the wrong doings of the most powerful company in West Michigan, the way the Press presents the story suggests otherwise.

First, this story is archived in the Business section of MLive and not in general news where other crime stories are found. Make no mistake this is a crime story. It might be a “white collar” crime, but it is definitely crime. And to be realistic, which is worse, the guy who steals a few hundred bucks from the local party store or business practices which steal millions?

Second, the Press does not bother to seek out other sources for this story, but relies on Amway executives to tell us what we should believe. MLive did run a follow up article today, which cited two of the lawyers representing the plaintiffs, but they still don’t go far enough to seek out local or national sources that could speak to the allegations in the lawsuit.

Lastly, the Press fails to question the very nature of Amway’s business practices. So while this lawsuit identifies specific claims from specific plaintiffs about pyramid scheme practices, the Press misses the opportunity to ask the question, “Isn’t Amway fundamentally based on a pyramid scheme system?”

This is exactly what numerous former Independent Business Operators (IBOs) of Amway have been claiming for years. One of those former IMOs is Steve Butterfield who wrote the book Amway: The Cult of Free Enterprise. That the Press chose not to include voices like Steve Butterfield’s and not question how Amway has operated from the very beginning is a clear indicator that the Press is unwilling to challenge the power of the Ada-based company.