The Wellness Hustle

Every year, thousands of Canadians are reeled into multi-level-marketing schemes on promises of wealth and healing.

The rover

CHRISTOPHER CURTIS

September 25, 2023

Rachel* used to think she'd be medicated for the rest of her life.

By her mid 20s, she was on antidepressants, took sedatives for her anxiety, stimulants for her ADHD and sleeping aids to counter the effects of the stimulants.

It started in elementary school with Ritalin. The drug helped Rachel's grades improve but she says it sapped the creativity she loved about herself. A few years later, she started taking Accutane to treat her acne but Rachel says it also gave her suicidal thoughts (a common side effect in the now discontinued drug).

By the time she was in high school, Rachel's principal insisted on watching her take her Ritalin twice a day.

"He'd literally check under my tongue to make sure I took the pill," she said. "And then he'd sign my agenda. Every day. My grades went up but everything that made me me … went down the drain."

Once Rachel became a mother, she finally had enough of the pills, the side effects and health problems that never seemed to get any better. So she radically changed her diet, started doing yoga every day, and she joined Purium ― a multi-level marketing (MLM) company that sells "superfood" supplements.

Rachel tells her story in a YouTube video called "How I got off all my medications". The clip links to an online store where you can order Purium's "Ultimate Lifestyle Transformation" package for $500. The order includes enough vegan proteins and "power shakes" for a 30-day cleanse to detoxify your body, boost your energy, stabilize your mood and give you more restful sleep. That's what Purium claims, anyway.

On Instagram, Rachel writes about how selling Purium products allowed her to heal herself and earn a living while working from home.

"I'm so grateful that my way of making money is dependent on helping people heal themselves and help others," she writes, under one post. "If you already have a heart to help and change the world then I have your vehicle to let you get compensated so you can be the light."

In Rachel's world, Purium is a quasi-religious experience, bringing women together, helping them enrich themselves and empowering thousands to embrace healthier habits and ultimately change the world. It's almost too good to be true.

And maybe it is.

Two of Purium's biggest salespeople are speaking at Lola Rosa Place des Arts for a "Superfood Social" on Oct. 1. Just like Young Living or Amway, Purium is part of Canada's $4 billion direct sales industry, which employs over 1 million people across the country.

Nearly 90 per cent of the industry's salesforce are women who tap into their social network and recruit people to sell under them in order to move up the ladder. The more people who work in your "downstream" ― as the industry calls it ― the higher your commission gets and if your recruits put their own team together, you get a piece of that too.

In theory, there's a whole universe of cash waiting to be made. But in practice, almost no one involved in MLMs actually makes money. Less than a quarter of MLM salespeople turn a profit and nearly half lose money, according to a 2018 study by the Federal Trade Commission. Most of those fortunate enough to earn something make less than minimum wage.

What's troubling, in cases like Rachel's ― whose sales pitch includes the unfounded claim that Purium is a cure-all for depression and other complex health problems ― salespeople often violate industry regulations that could open them up to fines.

"In MLMs, you're not supposed to make performance claims beyond what you're legally allowed to say on the package," said Peter Maddox, president of the Direct Sellers Association of Canada ― a group that represents MLMs and lobbies the federal government on their behalf. 

"Someone's personal experience can be okay, but if they're creating a narrative with 'By me having that lived experience, you can too!' it starts to get a little bit dangerous."

And because MLM reps are independent contractors, they are personally liable for fines handed down by the Competition Bureau of Canada ― which protects consumers from fraudulent business practices. In 2004, the bureau fined two small business owners $150,000 for deceptive marketing related to the sale of Herbalife Nutrition shakes. 

But despite what some insiders call "a culture of routinely deceptive claims" from salespeople across Canada, fines from the Competition Bureau are exceedingly rare. In fact, there hasn't been a charge against an MLM in over 19 years, according to the Competition Bureau.

"I've got to say that's astounding to me because some of our sales pitches were aggressively illegal," said one MLM owner who left the industry two years ago. "When you're claiming that your cancer went away after discovering a line of supplements, you're making a fraudulent claim. And our sales people were saying shit like that all the time. 

"They may not have said, 'This product cures cancer' or 'I cured my depression using this' but any reasonable person could infer that. And many did."

***

Emily Paulsen was a successful MLM salesperson who quit her job to become one of the industry's most fervent critics. 

She says that, from her own experience, it's alarmingly common for reps to make illegal claims about the products they're selling.

"What you need to consider is the people making these claims are financially benefiting from them," said Paulsen, who wrote about her experience in the critically-acclaimed book Hey Hun. "They may believe in what they're saying but, in my experience, it's not like they're consulting doctors or any kind of empirical research. It's just about getting other people to believe the claims so they can be brought into the fold and sell product for you.

"And these are extremely dangerous claims. Convincing someone they can stop taking medication and replace it with a supplement or a protein shake, that's blatantly illegal and you're putting people's health at risk.   

"The companies will tell their reps 'Don't make health claims, don't make financial claims' and that exonerates them. And if someone steps over the line and gets caught, they just terminate them. Because these women are just contractors with little legal protections."

The Rover contacted Purium and provided a link to the "How I got off all my medications" video, asking the company if they believe it's an illegal claim but, despite multiple requests, they have chosen not to respond. A review of Rachel's Instagram reveals a series of unsubstantiated statements and insinuations about Purium's supplements.

In one post ― which depicts Rachel holding 16 pills in the palm of her hand ― she writes that these plant-based "superfoods" are substitutes for meals. In a story on Rachel's Instagram, a child holds up a fistfull of pills under the caption "Like mother like daughter." Another post claims "you can effectively kill (intestinal) parasites during a full moon" to help with depression, sugar cravings and insomnia.

Though many of these testimonials are carefully written ― the benefits are often insinuated with terms like "has been proven to" or "may help with" ― Rachel's Instagram links to her Purium sales page. A review of a dozen other Quebec-based Purium reps shows a pattern of borderline and sometimes plainly illegal claims.

One rep said they got rid of a chronic fungal infection that plagued them for years simply by detoxing with Purium products. Another wrote that they "heal" their brain by using a Purium cleanse that costs $500. Some claim the products "have been proven" to reverse the effects of gum recession.

Jennifer* is a former MLM sales rep who recently left the industry. She says the pressure on individual reps becomes unbearable. Worn out from all the sales pitches and desperate to impress the person who recruited them, she says they knowingly exaggerate the product's benefits.

"It consumes you, you lose yourself in the sales pitch and your life just becomes selling, selling, selling," said Jennifer*, who did not want her real name published for fear or reprisals from her former company. 

"Because all of these people who mentor you, who invite you to dinner, who call you their family, they will turn on you the minute you start to question the products. They will turn on you when you underperform. And I get it. They're under the same pressure from the people on top of them."

Jennifer

Jennifer got her start in the industry with Young Living  ― a wellness company that sells essential oils using the MLM model. She says that her mentors were constantly telling her she was just a few big sales away from having her dreams come true. If she could just get those two or three high-performing salespeople under her, she'd be able to work from home, make a living working part time and have more quality time for her husband. 

For a long time, she believed this was within reach.

This too is a common selling point on the social media feeds of sales reps like Rachel and others. They're encouraged to use terms like "time freedom" or "take control of your life" over sunwashed pictures of them playing with the children at the beach.

One former rep said she would go on a two-week vacation with her family and continue using photos from the trip for months to make it seem like she was always on vacation.

"They really want you to craft this false reality," said the former rep. "Sure it's not illegal, no one's literally saying 'If you join my MLM you'll be rich' but you're manipulating them. Because that's what your own mentor did to attract you. 

"So you go on Instagram and show people this perfect life when, in reality, it's all a mirage. For all the posts about my family and the freedom of owning my own business, you didn't see all the arguing, all the stress over paying our bills and the sleepless nights."

In Jennifer's case, she was working every night, spending less and less time with her husband so she could keep growing her business. At her peak, she put in upwards of 50 hours a week and had 13 sales reps working under her. Back then, Rachel was making less than $500 a month.

A colleague of Jennifer's, who we'll call April, had built a customer base of over 300 people ― including 30 reps ― and worked every day to grow her business. At its most lucrative, the business was pulling in $2,500 a month. That's less than minimum wage.

April, who also worked with Young Living, got into MLMs because it was the first time she felt so welcome in a community of women. But when she started questioning some of the company's business practices and the claims some of its reps made, she was ostracized. After leaving Young Living, most of her "sisters" stopped talking to her.

"It's a weird dynamic that develops in MLMs. You start to feel like you belong to the person who recruited you and the people you recruited belong to you," Jennifer said. "So when the person you recruited leaves, it feels like a betrayal and you're almost encouraged to shun them. Especially if they start selling for another MLM.

"The most fucked up part of this is that it radically changes how you start to look at relationships. When you meet someone for the first time and you form a good connection, you stop thinking of them as people or potential friends. All you see is a new recruit, a potential client, a buyer. So when you're asking for their phone number or social media, you have zero interest in friendship. It's all a hustle, it's all a grift."

Paulsen says one of the true dangers of MLMs is they turn salespeople into evangelists, that the industry uses the same sort of "cultish" techniques to separate people from their support networks. But they do so using the language of wellness.

"It's not sales, it's a mission, it's 'life changing' and 'empowering' and 'a gift you give others,'" Paulsen said. "But really it's all about getting people into the funnel, grooming people into the business. Most people who get into the industry, it's through a friend or family member. So you think, 'Well I know and trust this person, why would they lead me astray? I want to be a part of that success. I've been offered this gift and now I'll share it with my friends.' 

"But then you're taught that if someone doesn't buy products off you or if someone questions the company, then they are against you. And that drives you from people, in your real life, who can offer you perspective about what's going on. 

"They want to help you see that you're going down a dangerous path but that help is seen as an attack. So it drives you deeper into the MLM. And your MLM 'family' is never going to question what you're doing because they're making money off you."

***

The number of Canadians who participate MLMs jumped by 20 per cent during the pandemic. 

They may not generate much wealth to their labour force but MLMs are a massive part of the direct sales economy in Canada, which employs roughly 1.1 million people and generates $1.5 billion in tax revenue every year, according to the DSA. At a time when the ability to work from home is a growing factor in people's career choice, it's easy to see the draw towards direct sales.

And despite nebulous claims from individual sales reps, most of the supplements sold by these companies, including Purium, can be beneficial to a person's health. There's a substantial amount of research that links gut health to mental health and there are an alarming amount of toxins in the foods we eat every day. 

So it's not like the message of eating healthier and reading labels is a bad thing.

Even though the lopsided structure of MLMs may seem immoral, it's legal. 

Unlike in the U.S. and other jurisdictions, Canadian MLMs are not allowed to coerce their reps into buying thousands of dollars worth of inventory they won't be able to sell. All sales go directly from the manufacturer to the consumer. It's also illegal for MLMs to pay or promote their reps simply on the basis of recruiting other people. In other words, unlike in a pyramid scheme ― where the goal is to get as many people into the company as possible ― the law states MLMs have to focus on selling products over recruiting new salespeople.

"Most people in the industry, they're doing it to make a little bit of money and get some free products," Maddox said. "Of course there are bad actors and bad MLMs and when they do something bad it reflects poorly on all of us. We want to weed them out of the industry as well."

That said, the fact that Canada's Competition Bureau hasn't filed charges against a single MLM member in 20 years sort of undercuts the argument that the industry is well-regulated. The Direct Sales Association of Canada has a cozy relationship with Ottawa, lobbying the federal government on 10 different files this year alone. 

The DSA has met with Members of Parliament whose job it is to regulate federal commerce and policy advisers from the Minister of Health. Earlier this year, the DSA posted photos of their members drinking wine with MPs at a luncheon on Parliament Hill, during a trip where they discussed preserving the independent contractor status ― and therefore limiting the MLMs legal obligations to their salespeople ― of folks working in direct sales. 

When reached for comment, the office of Health Minister Mark Holland refused to discuss the subject of its meeting with the DSA, opting instead to issue a statement.

"We encourage all Canadians to engage with us on the work we're doing to help improve healthcare in Canada," the statement reads. "We communicate broadly and constructively with stakeholders with the goal to always ensure the safety, health and wellbeing of Canadians."

Paulsen says that, in the United States, lobbying is how MLMs keep the government out of their business. 

"They lobby politicians on both sides of the aisle, there's millions going towards those efforts," Paulsen said. "So there's a financial incentive for politicians not to get involved. Betsy DeVos (who served as secretary of education for the Trump Administration), her husband runs an MLM. Donald Trump had an MLM. (Tennessee Republican Senator) Marsha Blackburn comes from the MLM space."

In fact, Blackburn was given an award by the American DSA in 2018 for her work championing pro-MLM legislation in congress.

And while the industry resists regulation, people like April, Jennifer and Rachel get roped in on unrealistic promises of wealth and freedom. 

There's also a growing body of evidence linking the wellness industry to COVID-19 disinformation and political extremism. Last year's Freedom Convoy in Ottawa brought together white nationalists and QAnon conspiracy theorists like Alexis Cosette Trudel with wellness influencers like Amélie Paul and some of the most successful MLM reps in Canada.

Though most of the wellness crowd were merely in Ottawa to protest COVID-19 restrictions and vaccine mandates, some were drawn deeper into a brand of extremism that advocates for a violent takeover of the government.

Paulsen says these may be fringe cases but they're the product of a culture that rejects outside criticism, balks at government regulation and isolates salespeople from their own families.

"You're being groomed, it's as simple as that," Paulsen said. "You're living in an insular world that gets you in so deep that you can't leave. Because maybe you've alienated yourself from your family and you feel like you can't go back. Because the only people you interact with are other MLM salespeople. There's a lot of shame when you want to leave."

When Jennifer finally left Young Living for another MLM, she became the target of a smear campaign from her former mentors. She was accused of trying to poach salespeople, of being duplicitous and ultimately rejected by people she once considered family.

"These were my people, we were going to change the world together," Jennifer said. "But then you leave and you start to hear these rumours about yourself and people stop returning your calls. And maybe that was a warning to the others, you know? 'If you leave, we'll bash you good.' It was so toxic and I feel a lot of guilt that I was roped in and even more guilt that I roped others in with me.

"Eventually, I just ran out of steam and couldn't take the bullshit anymore. So I left and one of the first things my husband said was, 'Wow, I'm so happy to have you back.' Instead of feeling like a traitor, I just felt like myself again."

*The sources asked to not have their real names published for fear of reprisals from former colleagues 

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About the Artist

Fabiana Margarita is a passionate graphic designer and illustrator based in Tiohtià:ke (Montreal). Born in Venezuela, she is deeply committed to giving voice to the voiceless and representing her community through art. Her biggest goal is to use her creative talents to advocate for gender equality, LGBTQ+ rights, and social justice, all while adding vibrant colours to the world of design.

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Author

CHRISTOPHER CURTIS

 

Award-winning journalist, mediocre cook

 

https://therover.ca/the-wellness-hustle/