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BITE, NESARA, MLM - an acronym special


This week’s newsletter seems to have ended up being mostly about acronyms. I’ve written about how to determine what is and isn’t a cult, using the BITE model, drawing from a recent visit I received from a pair of Sister Missionaries. I also try to get to the nugget of truth at the centre of the NESARA conspiracy. Bronwyn takes a look at one of my favourite skeptical topics, MLMs - the scam I love to hate. She’s even promising to write more about some of the MLMs we see in New Zealand, which I’m really looking forward to. Finally Bronwyn wonders whether Finland exists.

Mark Honeychurch

In this week's newsletter



 

Taking a BITE out of Mormonism

Last week I had a couple of Latter Day Saints (Mormon) Missionaries visit me. They called me a few days in advance to ask if it was okay to come round, and then I totally forgot about our meeting until I received a call saying they were having problems finding my house on the street.

I usually welcome religious visitors in my home. I figure that, although it’s not the right place for me to question someone’s religion when I visit their places of worship, when they’re the ones reaching out to try to convert me it’s fair game to give a bit of pushback. I’m still never rude or argumentative, but I’m happy to ask some uncomfortable questions about their beliefs, especially when it comes down to the treatment of minorities. There aren’t many religious groups that score well in that regard!

We talked for an hour or more, and of the two missionaries one was almost at the end of her 18 month mission, and the other was just starting. In fact, this was the very first house visit of her mission. Normally a Mormon mission is a two year event (18 months for women) in another country, but with the advent of COVID international travel has been cancelled and Mormons are finding themselves sent to a destination within their own country. From what I can tell, though, this is often still an exciting occurrence for these domestic missionaries as many of them have never really travelled much - I assume dedicated Mormon families have very little time or money to spend on frivolous activities like holidays.

I know enough about Mormons that when I invited them in I didn’t offer them tea or coffee. Instead we sat down and started chatting about their religion, with me asking questions and them seemingly working through a set of pre-ordained steps that a mission visit is supposed to entail. We had prayers, testimony, the quoting of scripture, a description of what sets Mormons apart from other Christians, and veneration of the current “prophet”, their leader - a man called Russell Nelson. Unsurprisingly, this happens to be an old, white man, and I was shown a printed picture of him as if it was something precious.
 



One of the points I bought up was that their God seems to have always chosen old, white men as the prophet, with nobody of colour ever having been chosen for the top job. In fact, the church didn’t allow anyone of colour to hold a leadership role at all until 1978. And it’ll be no surprise to skeptics to hear that this God also doesn’t want women in leadership roles.

At the end of the meeting (closed with a prayer, of course) I was left with a copy of the Book of Mormon. I said I didn’t need one, as I already have a copy - so now I have two. If you’re interested in learning about the inception of the Mormon church, although this sounds silly, I highly recommend the classic South Park episode about Joseph Smith. Sadly, us in NZ can’t watch the free online version - but if you have a VPN, or own a copy of the Season 7 DVDs, or you’re a pirate, enjoy!

A few days after our chat, I was watching a video from the Genetically Modified Skeptic about the Multi Level Marketing (MLM) scheme his family had been involved with - Young Living essential oils. He mentioned an idea that intrigued me - that under the BITE model, it could be considered that MLMs like Young Living are a form of cult.

Okay, so let’s back up a little. The BITE model is a way of analysing the behaviours of groups to see if they’re likely to be a cult. The model was created by Steven Hassan, who was once a member of the Unification Church (better known as the Moonies) and since leaving the church has been tirelessly helping people who want to leave high control groups like cults.

Steven’s BITE Model breaks down the controlling tendency of cult groups into four areas - Behaviour, Information, Thought and Emotions. Under each of these categories, Steven’s BITE model lists a set of ways that these four aspects can be controlled. For example, under Behaviour Control there’s punishment for disobedience, control over sexual activity, and financial exploitation (among many others). The Information control has six main areas - deception, restricting access to outside info, compartmentalising, spying, internal propaganda, and the use of confession. Thought control includes getting people to change their name, having them reject critical thinking, and pushing an us vs them mentality. Finally, the Emotional control section includes the use of fear, alternating between extremes of affection and rejection, and shunning.

This is far from the only attempt to define what makes a cult. I regularly listen to the Let’s Talk About Sects podcast from Sarah Steel (she’s Australian, so the podcast regularly features content relevant to New Zealand, such as a great couple of episodes on Gloriavale), and quite like the definition she often uses. According to Sarah, a cult is a group:
 

  1. Dominated by a charismatic leader, or leadership, that closely controls its members, particularly with regards to their exercising their free will to disengage with the group and its ideology,

  2. Who believes that they exclusively have access to the truth, and the rest of the world is wrong, and

  3. Who are largely secretive of the workings of their society to outsiders.


The BITE model has been received well by cult researchers, I think because of how well respected Steven is for his deep knowledge of cults, his long time dedication to the subject, and because of the academic work he’s applied to his model - including it being the topic of his recent PhD thesis titled “The BITE Model of Authoritarian Control: Undue Influence, Thought Reform, Brainwashing, Mind Control, Trafficking and the Law”.

And so, having heard the idea that some of the more nefarious MLMs appear to align well with Steven’s BITE model, and with my recent visit from the Mormons still on my mind, I wondered if anyone had tried to apply the BITE model to the Mormon church. Sure enough, when I typed “BITE Model” into the Google search box, before I’d even had a chance to start writing the word Mormon, up popped Google’s suggestions. And there, at the top of the list, was the suggested search phrase “BITE Model Mormonism”.

I clicked on this suggestion, and immediately found a great article where the author had colour coded all the bullet points of each of the four categories - Behavioural, Information, Thought and Emotional Control - according to whether the church of the Latter Day Saints was known to use those techniques to control their members. Red was for regular use, orange for occasional use and green marked techniques that the church was not known to use. Although there were a few green and orange lines (such as sleep deprivation and speaking in tongues), most of the points were coloured red, suggesting that the Mormon church uses a lot of the control techniques that are the hallmarks of a cult.

This got me thinking - what else might the BITE model be relevant to? It seems to be good for assessing fringe religious groups we often consider to be cults, and may also be good at figuring out which of the larger religious groups are using cult techniques for control. But it sounds like it might also be good at assessing how dangerous Multi Level Marketing schemes can be. We’ll hear some more about this from Bronwyn, in her article in this newsletter about MLMs, and possibly also some more details at a later date.

Given my recent crusade against NFTs, I wondered if maybe the insular communities who promote and invest in cryptocurrencies and NFTs - people sometimes called Crypto Bros - would also score highly under the BITE model. But, although there does seem to be some effort to control what information people consume, and there’s talk about outsiders “not understanding crypto” and “spreading FUD” (Fear, Uncertainty and Doubt), it’s obvious that this fad hasn’t risen to the point of being cult-like. At least, it isn’t that bad yet!

 


Does Finland exist?

 

Bronwyn Rideout

 

While current geopolitical matters might have some Finns wishing they were a tad more invisible, at first pass this is hardly a skeptical topic. But this modern conspiracy is worth a chuckle, especially given the exasperated sighs you’ll get from that one friend who has more than a passing knowledge of statistics.

A popular version of the Finland conspiracy is geographical in nature, claiming that instead of landmass, Finland is just an empty blot of sea. Fuelling this was Reddit user Rarega, who was taking the mickey out of the fluctuating relationship between Japan and Russia through the 20th and 21st centuries, particularly around fishing rights. Because the “Fin” in Finland refers to the fins on a fish, right? Get it?

Another common argument in support of Finland being non-existent is that the so-called Finns don’t even live in Finland, but reside in the bordering countries of Russia, Sweden, and Estonia. This subreddit, r/finlandConspiracy, gives a decent run down as well as this Youtube video by Good Mythical Morning.

If you are a person who likes to bring math into already complicated diplomatic matters, this calculating version of the meme goes like this:

There’s approximately 5.4 million Finnish people in the world, right? That’s out of 7.125 billion humans. That means Finns make up 0.0729% of the planet.

That’s not even a tenth of a percent. That means that more than 99.9% of the world isn’t Finnish. How do we know this? Government censuses.

Now the best government censuses have a margin of error about 1%. So, Finns make up 0.0729% of the planet, plus or minus 1%. In conclusion: There’s a 50/50 chance Finland does not exist


If you really know your memes, you won’t be surprised to learn that this is one of the oldest jokes on the internet, with various towns and regions with even smaller populations being deemed as being fictional.

As of 2020, “Finland’s” population is just over 5.5 million. However, The world’s population that same year was 7.9 billion. Even if we were to believe that anyone lives in Finland, this would still only account for just over 0.07% of the world’s population, meaning it is less likely to exist than it ever was before.

 

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NESARA and GESARA

I’ve recently been seeing mentions of NESARA and GESARA online, in conspiracy groups, and also on a badly painted sign at at least one local protest. So I did a little bit of reading to find out what it’s all about. So, if you’ve seen these terms being used and, like me, have no idea what they mean, here’s a quick description of their real world meaning and what the conspiracy theorists wrongly think they’re all about.

In reality NESARA was the National Economic Security and Recovery Act, a set of economic reforms for the United States that were proposed by Harvey Francis Barnard, an engineering consultant. Barnard wrote a proposal titled “Draining the Swamp: Monetary and Fiscal Policy Reform” in the 1990s, and in it he promoted the idea of his NESARA Act. He sent copies to members of Congress, hoping that they’d see his genius and vote in his new rules. Barnard’s plan was to overhaul large parts of the US economy, with ideas like scrapping income tax (and replacing it with a sales tax), abolishing compound interest on loans, and returning to the Gold Standard (well, technically a “bimetallic currency” of both gold and silver). The bill, unsurprisingly, went nowhere.

In conspiracy circles NESARA (often erroneously called the National Economic Security and Reformation Act or the National Economic Stabilization and Recovery Act) is an Act that not only introduces the Gold Standard and the removal of income tax, but also abolishes the Internal Revenue Service, cancels all personal debt and declares world peace! The Act was apparently successfully voted on back in March 2000, and was then signed into law by Bill Clinton. But just as the law was due to come into force, on September the 11th, 2001, a major terrorist attack put a stop to its implementation. Since then, military officials have been trying in vain to enact this new law. Shaini Goodwin from Ramtha's School of Enlightenment, operating under the name "Dove of Oneness", appears to have been the genesis of this conspiracy theory, although familiar names such as Sherry Shriner (whose story is documented in a podcast called The Opportunist) also seem to be involved in its spread. UFOs, aliens, Jesus, reptilians and fake wars have all been woven into the story.

GESARA is an extension of the conspiracy side of NESARA, with the G standing for Global instead of the National in NESARA. I guess conspiracy theorists outside of the US were feeling left out, and so an expanded version of this law that would restructure the global financial system was imagined and added to the conspiracy.

So, there we have it. The reality is that NESARA was a crackpot economic idea from someone who didn’t understand economics, and unsurprisingly the US government just ignored it. Conspiracy theorists have taken that idea and run with it, imagining secrets and lies, subterfuge, and a global battle between the forces of good and evil. I can imagine this conspiracy probably appeals to many people, because most of us have some kind of debt in our lives, and it would certainly be nice to wake up one day and have that yoke of debt lifted from our shoulders. But, alas, this idea of our debts being suddenly wiped out one day is not reality - it looked cool when it happened at the end of the movie Fight Club, but it’s just a case of wishful thinking, and a total lack of critical thinking to boot.


 

MLMs and the promise of wealth from your dining room table

 

Bronwyn Rideout

 

What do Avon, Tupperware, Doterra, and Arbonne have in common? They are all businesses in New Zealand that utilise multi-level marketing (MLM) strategies. If you aren’t familiar with the names or the products, ranging from hair care and makeup to herbal supplements, you might at least have come across the sales and recruitment gimmicks they employ. Maybe your Mom was a frequent invitee or hostess for a friend’s sex toy party (Pure Romance) or cooking utensil business (Pampered Chef); maybe your favourite Uncle loved to talk about the conventions and seminars he was attending (Amway). Regardless, the fact remains that they are a controversial marketing model that exploits millions of people worldwide with promises of financial freedom that are only available to those who are placed at the tippy top of the MLMs’ pyramid-like structures.

The core of these operations is a non-salaried workforce (called Independent contractors or distributors) who earn commissions through two revenue streams: one being the products they sell themselves to customers, and the second from bonuses accrued from products purchased/sold by their recruits (often called their “downline”). The latter, for the majority of MLMs, will be the bigger income stream of the two - and it’s where one will find the most controversial practices. A common practice is front- or inventory-loading, whereby the independent contractor pays up front for inventory or “start-up kits” as a means to buy into the MLM’s ranking scheme. However, these products are often overpriced compared to market value, so the real earning power is getting members into your downline to buy those products and start-up kits to rank-up, thereby artificially bolstering your own commissions and rank. Another tactic is auto-shipping, where a customer is enrolled into a subscription programme to receive regular product deliveries and credit card charges; these enrolments may be further incentivised for the contractor to increase their rank, but it is not uncommon for customers to be subscribed without their knowledge or permission.

If the flow of money here sounds a bit pyramidal in its shape, you wouldn’t be far off the mark. While not all MLMs are pyramid schemes, the United States Federal Trade Commission’s (FTC) position means there are decidedly few that fall in that category: If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors.

A common argument is that MLMs are not pyramid schemes because they sell products; pyramid schemes only promise money in exchange for recruiting others, but have no product to sell. The FTC takes a dim view of this. To wit:

“The promoters of a pyramid scheme may try to recruit you with pitches about what you’ll earn. They may say you can change your life — quit your job and even get rich — by selling the company’s products. That’s a lie. Your income would be based mostly on how many people you recruit, not how much product you sell. Pyramid schemes are set up to encourage everyone to keep recruiting people to keep a constant stream of new distributors — and their money — flowing into the business.”

The NZ Commerce Commission appears to be considerably more flexible, stating:

No, there are a number of multi-level marketing schemes operating in New Zealand which are not pyramid selling schemes. With multi-level marketing schemes salespeople are expected to sell products directly to consumers. They are separately incentivised to recruit others as fellow salespeople. Participants earn commission from selling products, whereas pyramid selling involves participants earning money solely or primarily by introducing other people into the scheme.

In a multi-level marketing scheme, income expectation is limited by the number of sales, not by the number of new sales representatives. Customers of multi-level marketing companies can buy the goods or services they offer without joining the scheme. Multi-level marketing also usually involves commercially viable products (for example clothing, jewellery, cosmetics, health products, cleaning products and cookware) which present genuine business and income-earning opportunities through sales to clients.


So, why do MLMs still proliferate and prosper?

This is a complex question that ties in the legal permissiveness of the MLM model, the ramifications of the pandemic, the populations that MLMs target, and the strategies used to keep them there.

In the United States, an MLM can be considered legitimate and not a pyramid scheme if at least 70% of all goods sold are purchased by non-distributors. However, this can be difficult to investigate due to the inventory-loading discussed earlier. Some distributors also utilise dummy accounts registered under the name of naive family or friends, thereby falsely presenting them as customers while artificially maintaining their ranks on their MLM’s compensation plan.

In NZ, MLMs are not prohibited by the Fair Trade Act, but there are protections for some MLM customers through the Consumer Guarantees act. If you purchase an MLM item that is not as advertised, especially from a party plan MLM, you do have recourse.

One would think that the pandemic would be the death knell of MLMs, but that would only be true if you thought MLMs were stuck in the dark ages of catalogues and door-to-door sales. But, at least for the successful distributors, the pandemic has been a boon time on multiple levels. Distributors for MLMs like Arbonne and doTerra make health claims that their products are effective in protecting or boosting immunity against the coronavirus, pulling in a consumer base that is scared of the unknown. Others are attracted to the promise of a guaranteed income from working from home in a time where jobs in many industries are disappearing or being furloughed. Social media has also been a boon for the more tech-savvy MLMs as Facebook, Instagram, and TikTok allowed devotees unfettered and uninterrupted bandwidth to talk up the benefits of their business and show-off all the wealth and consumer goods they have courtesy of their essential oils or buttery-soft leggings. Influencers with pre-existing and large followings were desirable recruits themselves, due to their wide reach; even with a modest goal of converting 1% of their following into their downline, influences with followings in the 10s or 100s of thousands could start earning sizable commissions on the basis of a selfie or two. The hipness of MLMs is further embedded by some crafty evasion of the MLM label through terms such as direct-selling, influencer-marketing or affiliate-marketing.

A representative’s sphere of influence is no longer limited to a couple of neighbourhood blocks, but instead can be global in scope.

However, there is a dark side to this pandemic gold rush. The fact remains that a large portion of distributors will only earn annual incomes in the double or triple digits. The key document to look for with any MLM is the Income Disclosure statement. Consider this one published by Arbonne for the NZ market. 47% of independent consultants at the lowest rank in the compensation scheme earned an average of $229 per year, with the Top 25 average being $1,801 per annum and the lowest 25 being $5 per annum. Even the next level up is hardly enticing, with an average annual earnings of $2,037 per year.

In the United States, however, loyalty to an MLM has been fatal for many. Attendees at a Paparazzi Accessories (jewellery MLM) convention fell victim to a super spreader event - something that the company itself has not fully addressed to this day.

On the cultural side of things, MLMs and their products are heavily marketed to women. In NZ, the Direct Selling Association of NZ reports that at least 71.5% of the MLM salesforce in NZ is female, while a strong male presence is observed internationally. This is not accidental. Again, the promise of flexible work arrangements and a sisterhood strongly appeals to women, often mothers, who are isolated socially or restricted from re-entering the workforce due to costs of childcare, etc.

As we talked about in Episode 4 of the Yeah…Nah podcast, a strong presence of MLMs in Utah can be attributed to both the lax legal requirements as well as a captive market of connected, educated women with large families who aren’t able to take on traditional careers at this time in their life, but still want to financially contribute. Gimmicks like parties (i.e. Tupperware), conventions (Amway), or some combination of the two (LulaRoe) lean on those insecurities with the promise of a new sisterhood of ambitious women who are cheering on your success. And, if you read Mark’s contribution about the BITE model, that sisterhood will be all too ready to step in to replace the nay-sayers in your life who don’t support your new business.

Over the next few weeks, I’ll be looking at several MLMs that are active in NZ and abroad. I will be deconstructing their compensation plans, their products, their social media presence, and what happens to the distributors that don’t succeed, or who decided to turn away from the business. Hopefully, this project can arm New Zealand Skeptics with information that they can use to dissuade friends and family from signing-up with these money pits.

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