Scientists: research into network marketing glosses over its real risks

However, a new study by scientists from the Netherlands and the United States shows that the dangers of such schemes have been systematically underestimated in the academic literature.

Researchers Claudia Gros (Radbaud University) and William Kip (College of New Jersey) analysed dozens of academic publications and found a worrying trend: many articles in prestigious journals portray the multi-level marketing (MLM) industry in a positive light, ignoring the legal and financial risks for participants.

The results of their analysis are published in the Journal of Marketing Management.

The authors studied 33 legal publications and 68 articles from leading marketing journals devoted to MLM. The researchers found many warnings in the legal literature: MLM participants often lose money, the schemes often resemble pyramid schemes, and advertised products may be accompanied by false medical promises - for example, "cure cancer" or "fight COVID-19".

In marketing publications, however, the picture turned out to be quite different.

"The vast majority of articles describe MLM exclusively positively - as a source of personal growth or a way to earn money. At the same time almost no mention is made of the risks and real losses," notes Claudia Gros. - "In some cases, there are even misleading statements that justify questionable practices."

Particularly disturbing was the fact that in 40 of the 68 papers analysed, the authors had direct links to the MLM industry.

"Such connections give the false impression that science supposedly confirms the safety of MLM," says Gros. - "This is reminiscent of the strategy of tobacco companies, which for decades funded studies that understated the risks of smoking."

Although MLM companies officially offer the sale of products ranging from cosmetics to nutritional supplements, members' main income comes not from sales but from recruiting new members. In fact, the researchers note, this turns the system into a pyramid scheme, where most people lose their investment.

Today, network marketing is actively promoted through social networks: TikTok, Instagram and YouTube. Young users are particularly vulnerable, lured by promises of easy income from courses on investing, cryptocurrency trading and "business without bosses".

"Young people can lose thousands and sometimes tens of thousands of euros by buying expensive courses and 'product' packages," Gros warns.

According to the authors, the underestimation of MLM risks in the scientific literature hinders the development of legislative measures. When research creates the illusion of safety, the industry gains an argument against increased scrutiny.

Researchers call for more transparency in academic funding and for independent research that can objectively assess MLM's impact on consumers.

"Multi-level marketing carries real risks that science has an obligation to reflect honestly," Gros summarises.