The HooK  

Scams for a new millennium: Work at home and make $$$$, Sucker
By Lisa Provence

Who hasn't seen those signs?

At 29 North and Hydraulic one tantalizingly offers: "Work at home. Part time $1,500, full time $5,000." The bait is even tastier over near Foods of All Nations, this one promising up to $6,500 a month.

But, probably to no one's surprise, "Most work-at-home jobs are not jobs at all, but outright scams," according to J. Steven Niznik, an expert in employment-related issues.

Just exactly how does someone with no experience, sitting at home, make big bucks from a sign posted on the side of the road? The Hook spared no expense-- we coughed up $45, to be precise-- to solve the mystery of the ubiquitous signs.

Many of the local work-at-home flyers and ads come from a company called the Newest Way to Wealth,, a multi-level marketing plan that bears a marked resemblance to illegal pyramid schemes.

What we didn't expect was that those omnipresent work-at-home signs are related to another ever-popular sign: "29 People Wanted to get paid $$ to lose up to 30 pounds in the next 30 days. Natural/guaranteed."

A recording at the number listed on the $5,000/month Hydraulic Road sign describes a direct marketing mail order business with a company that's been traded on the Nasdaq exchange for 20 years. The recording emphasizes that you have to be serious, and that this phone call is the first step to changing your life. But it doesn't mention anything about what the work-at-home business actually is. Hoping to find out, we ordered the free information pack.

A red booklet arrived from S&H Enterprises in Chesapeake, Ohio, full of first-name-only testimonials by people who've earned fantastic incomes in a short time-- but still didn't tell us how they did it. What is the product that allowed a single mother to earn $10,000 a month; what is the "$450 billion industry that needs your help!" (That number, by the way, dwarfs car manufacturing, which is merely a $348 billion industry, according to 1999 figures from the U.S. Department of Commerce.)

On the last page of the booklet we find another number that will "change your life forever." By now we're thinking, if in only two months former waitress Amber, working from home, can earn double what her shampoo salesman husband makes and can live in a $700,000 dream house, then we too should "CHOOSE SUCCESS."

A recorded woman's voice at S&H Enterprises tells us the company was recently picked by Business Weekly as a top stock pick. Hmm... we've heard of Business Week, but Business Weekly? Still, for only $45-- and a 30-day, money-back guarantee-- it looks like we're finally on the road from low-paid newspaper reporting to easy street.

The $45 package arrives. In the cardboard box labeled "The Newest Way to Wealth,,"we find a booklet, cassette tape, and videotape.

In her letter, heavy with exclamation points and words in all caps, Heather Duncan, the woman who posted the signs, relates how dramatically her life has been changed: her PERSONAL AND FINANCIAL FREEDOM is detailed in bold. And Heather, now our "mentor," emphasizes with underlining that the job involves no cold calling, door-to-door selling, or bothering friends and relatives.

Eager to get started, we leaf through the "gold edition" of the Level-One Training booklet. On page 13, we learn that before the unnamed authors give us access to the Newest Way's technology secrets, we must, alas, qualify.

The very first words put us on notice: "The information you are about to read will be life changing if you believe! Success is 90% attitude and 10% knowledge." We read on. "If your dream is big enough, the facts don't count." Well, who isn't tired of letting pesky facts stand in their way?

But by the end of the 36-page booklet, the only clues about this exciting business are that health and nutrition is a $100-billion plus industry, and there are a lot of overweight baby boomers out there. The company's products combine herbs and "botanical factors" in a special "doctor recommended" formulation with the most "advanced anti-aging and anti-oxidant formulas available today!"

But still no specific information on the products-- because of competition from those who might try to "ineffectively... imitate" the Newest Way to Wealth.

Finished with Training Level One, we're ready to move on to Level Two-- the cassette. The tape-- narrated by a guy named Anthony Powell, presumably not the late famous author-- boasts even more testimonials from people who ditched their wretched underpaying jobs to live the high life.

Finally, we sit down to watch the videotape... but we find only more testimonials from people living in beachfront houses, but maddeningly few details about how we, too, can move to the coast. We're beginning to wonder whether our $45 for this package was money well spent.

When I take the next step, and call to schedule the interview with my personal mentor, Heather, I'm instructed to have my husband on the phone because this program will change both of our lives.

Heather, who owns a trucking company with her husband, has been following the Newest Way to Wealth since August 2000. She's looking for people who want to own their own business and work from home, and who are serious, teachable, and willing to work.

She tells us about her mentor, Monica, who used to work in "corporate America," a favorite phrase of work-at-home marketers. Monica made $900 in her first month with the program. Within three months, Monica was on a $2,500 a month clip, and in six months she was making $6,000. And now Monica expects to increase her income by 40 percent.

All it takes for us to get in on this, reveals Heather, is a little start-up capital of $299.

We interrupt what sounds like a script to ask Heather how much she's making (a question that in another business would certainly be considered rude). Heather says she just got serious about the program a month ago, made $800 last week, and $1,000 this week working three to four hours a day, mostly in the evening.

At last Heather reveals the name of the product that's going to make us rich: Herbalife International.

"Is it a shampoo?" asks my husband.

No, Heather says. It's one of the fastest growing companies in the health and weight loss industries, earning well over $2 billion and on its way to $5 billion a year by 2004. "You can't buy it in stores, and the products move themselves," she explains.

In the past three weeks, Heather says, she's lost 15 pounds using Herbalife. And she doesn't have migraine headaches anymore.

Heather explains that the Newest Way to Wealth is an exclusive organization within Herbalife. All sales are done over the phone, by internet, or U.S. mail. "Did I have to beg you to talk?" she asks.

She calls this a very powerful system that allows people to make money three ways: 1) by using and retailing the product; 2) by introducing the opportunity to sell the product to others; and 3) by teaching others how to use the system.

While you can limit yourself to selling the product, Heather focuses on "introducing the opportunity" to others-- like me. In fact, 80 percent of her business is introducing the opportunity, and only 20 percent actually selling Herbalife.

That's where the $299 comes in. For that, you get your own distributorship, including a one-month supply of the advance diet program. "You're going to want to take these products and get your own story," Heather informs us. And it doesn't matter if you want to lose weight or gain weight-- Herbalife helps you do both!

"For every ailment you've got," Heather explains, "Herbalife has a product for it." We can't help but notice that Herbalife hasn't done anything for Heather's persistent cough.

The package includes the Newest Way's Quick Start Work Book that, along with "action" conference calls, will tell me how to advertise, talk to customers, and expand the business. Another video called "Personalize your Program" features Herbalife's main doctor, Jamie McManus, and there are five "Friendship CDs" to pass around to expand the business. And, Heather says, there's a business license that can be filled out over the phone and used in all 50 states.

"There's no such thing as a business license for all 50 states," says Betty Graham, a business license inspector for the City of Charlottesville. "We wouldn't accept a business license from another county-- or even Albemarle County."

Back to Heather. There are three things we have to do to get started. First is purchasing the distributorship. Next, review a free info package that includes the $20K plan, which, Heather explains, will train me to make $20,000 a month in 90 days.

But wait-- Heather didn't say she was making $20,000 a month. "I just got serious about the program in the past month," she explains. In fact, she went from distributor to supervisor within days of getting her distributorship. Last, we get our first "training call."

Heather explains how selling Herbalife works. I will get a 25 percent discount on every order I place with them. Heather gets a 50 percent discount on products she buys as well as a cut from my sales. The more people she signs up, the more money she makes.

At this point, I ask Heather if this is a pyramid scheme. "What's a pyramid scheme?" she asks-- and I don't think she's kidding. "This," she specifies, "is multi-level marketing."

So just how did Heather, who lives in Ohio, post those signs in Charlottesville? Simple-- she and her husband hopped out and tacked them up along the way on a trip from Ohio to Virginia Beach. Heather must not know that posting signs is illegal in Albemarle County.

On a Sunday shortly before I chatted with Heather, the Daily Progress carried seven different classified ads for work-at-home jobs. I responded to many of them and ended up with four more booklets exactly like the one Heather sent me. When asked if there is any danger of market saturation, Heather is adamant: "I live in the poorest county in Ohio. There's not a chance of saturation because there's such a small percentage of people doing this."

Herbalife calls
Engrossed in following the Newest Way to Wealth, I'd forgotten about responding to the plea, "29 people wanted to get paid $$ to lose up to 30 pounds in the next 30 days." My call was returned on a Friday evening.

Sign-poster Antoinette Hilyard, a teacher at Walker Upper Elementary School, asked me how much weight I wanted to lose, how my energy levels were, and to rate my commitment to losing weight on a scale from one to 10. Hilyard recommended Thermojetics by... Herbalife International. Apparently she isn't connected with the Newest Way to Wealth. I could tell because she was interested strictly in selling the product rather than signing me up to recruit other people.

Hilyard says she lost 15 pounds and 15 inches in six to eight weeks using Herbalife Thermojetics tablets with vitamins, minerals, and herbs to control her appetite. For $38 plus shipping, she got a three- to four-week supply-- with a free tape measure and tablet box "so you don't have to carry the bottle around"-- and a 30-day money back guarantee.

Hilyard would pay fifty cents for every pound I lost, and $5 for every referral I gave her-- or I could double that amount and take it in products. She recommended I look at the website

Herbalife was founded 21 years ago by Mark Hughes whose mom died from yoyo dieting, says Hilyard. Doctors and nutritionists developed the product, which she assured me is "a wonderful program."

Unfortunately, if the L.A. Times is be believed, Hughes' mother died not from yoyo dieting or diet drugs, but addicted to painkillers. Hughes himself died under less than healthy circumstances in May 2000. He was found dead in his Malibu mansion from a lethal combination of alcohol and antidepressants, according to the L.A. Times. The company he founded is actively traded on Nasdaq, but it has dropped from its high of $37 in 1997 to $6 and is currently trading around $14.

The L.A. Times notes that Herbalife was indeed mentioned in Business Week, as in "Mark Hughes completely pushed the limits of shareholder boundaries."

In 1985, Hughes ran afoul of the California attorney general and the state Department of Health Services, which charged him and Herbalife with making "untrue or misleading" product claims-- primarily involving the caffeine content of some Herbalife products-- and operating an "endless chain marketing scheme," according to the newspaper.

Since Hughes' death, Herbalife has teamed up with the Newest Way to Wealth-- and some Herbalife distributors aren't happy about it. In fact, they've started a petition,, asking Herbalife to stop Newest Way's monopoly over them, claiming that Newest Way has caused many of them to go into massive debt using methods such as "running a preposterous amount of newspaper ads, putting up illegal flyers and signs on utility poles, forcing them to spend $500 for a website and pay an annual fee of $300."

In addition, the petitioners object to charging people $45 for the audio/video promotional sets, and allege, "We were also encouraged to focus solely on recruiting efforts."

Hilyard says she's never heard of Newest Way to Wealth. She found out about Herbalife from a sign and received a blue book rather than Newest Way's red one. She sent her $45 to a company in Michigan called E-Commerce. When she put up her signs, "I wasn't recruiting people," she says. "I was just a distributor."

Because of personal problems, Hilyard, a single mother, is no longer trying to sell Herbalife. She says she needed to make $200 to $300 a month selling Herbalife to break even-- and that didn't happen.

"I like the products, but the timing wasn't good for me," she says. She believes that if things had happened differently in her personal life and if, for instance, the 800 number she paid $29 a month for had worked correctly, she would have made money selling Herbalife. And as far as her mentor, "I could never say enough good things about her."

Hilyard is appalled to hear about the other Herbalife distributors' claims that people have gone into debt following the Newest Way to Wealth plan. "I can't imagine people doing that," she says.

Experts weigh in
Palmyra's Leslie Truex runs a resource and scam alert website, Truex says the methods of Newest Way to Wealth sound like the "envelope stuffing," a popular scam from the 1970s and '80s.

"They'll pay you to put up signs," says Truex, "and there's no product. The FTC says you've got to sell something. You can't just recruit. Otherwise, you're a pyramid."

On its website, the Better Business Bureau explains the difference between legitimate multi-level marketing-- a business that sells products and recruits distributors-- and an illegitimate pyramid scheme:

"An obvious difference is that the emphasis is on recruiting others to join the program, not on selling the product. For a time, new recruits who make the investment to buy product samples keep money coming into the system, but very few products are sold. Sooner or later the people on the bottom are stuck with a saturated market, and they cannot make money by selling products or recruiting. When the whole system collapses, only a few people at the top have made money-- and those at the bottom have lost their investment."

Herbalife, a real company that uses network marketing, although it's had its share of complaints, does have real products. Truex has nothing against network marketing itself, the process used by companies like Tupperware or Amway. "But," she warns, "you have to be careful."

In the case of Heather, who was posting the illegal signs from Ohio to Virginia, Truex offers this sympathetic vision, "If you can't afford to place a real ad, you ain't making any money."

Even responding to a work-at-home scam can put one on a sucker's list.

"If you respond to the ads, you're considered 'hot' by the scam artists," writes Steven Niznik, a job fraud expert for "Even if you don't buy into their scams, they make money on you anyway," says Niznik, who points out that name-selling is a big business.

Indeed, since this reporter began requesting information from work-at-home ads, we've gotten mail from chain letter scams ("RAKE IN a tidy sum of CASH for almost next to nothing!") and emails promising diplomas "from prestigious non-accredited universities."

Niznik says that there are plenty of work-at-home jobs with reputable companies-- but they usually don't call them "work-at-home" jobs, nor do these companies advertise telecommuting positions.

Truex, a social worker by training who has done a lot of freelance work at home, advises people to be pro-active, for instance, by writing a potential employer. That's how Truex got her new stay-at-home job-- in social work.

© Copyright 2002 The HooK.   Last update: 03.07.2002; 7:55:50 PM.