Lindy and Vicki Mack's Rebuttal to Quixtar

Quixtar got it wrong.

In its "response" to the Dateline NBC exposé on Quixtar and its motivational organizations, Quixtar has shown itself to be inaccurate and in many ways, deceptive. It also failed to understand that the Dateline exposé, in a very limited period of time, was trying to show that the problem is with the motivational systems operated by a few kingpin distributors. That Quixtar, and its predecessor Amway, has deliberately ignored what they themselves perceive to be an illegal pyramid scheme, and in fact have dismissed distributors who tried to change things, speaks volumes about the integrity of this multi-billion dollar company. But having billions of dollars does not make a company ethical.

First, and foremost, Quixtar's response is not a response. A response is an answer. By definition, a response waits for the issues to be raised before a contrary opinion is offered. Quixtar did not wait for the issues to be raised. It guessed what the issues might be and responded to its own guesses. It planned and prepared its "response" months before issuing it. Its response attacked the messenger in an attempt to obscure the message.

The most recent update of their website, www.quixtar-response.com, was created before the Dateline program even aired. It was on the Internet within moments of the broadcast and could not have been created in response to the program so quickly if it had been an actual response to the show.

It is simply their corporate spin, created and timed to coincide with the Dateline show. Nothing more.

Glaring Errors

Regarding the inaccuracy in the site's content, there are several glaring errors that should be pointed out and are further evidence that the "response" was not any more than a company line intended solely to protect themselves rather than to present the truth.

First, they claimed that Scott Larsen was interviewed for the program when, in fact, he was not. Their original Quixtar Response web page contained a bio about him on the same page with those of us who had appeared on the program. Quixtar changed this after Scott pointed out their error.

Second, the short biography about us is incorrect. We were not Amway Distributors from 1991-1995, as the bio states. We signed up in June, 1995, were active through the switchover to Quixtar, and remained IBOs until the end of 2001. (Although our appearance on the program may have been something of a surprise to Quixtar, they should have been able to find accurate information about us on their computers since we left the business less than three years ago.)

No Record of Complaints

A third error is Quixtar's claim that we only contacted the company regarding routine issues. As Amway distributors, we contacted them on more than one occasion about rules violations, particularly the employment of politicians and ministers onstage at Amway/Quixtar functions. This directly interfered with our building of the business. "The Right To Differ," a policy statement about which Quixtar felt so strongly that it was included in the Quixtar Response page, is a noble document, but a meaningless one since Quixtar and its predecessor, Amway, have never enforced it. In fact, Amway Customer Relations promised to look into our complaint, but their only response was to send us a copy of "The Right to Differ." We already knew about that policy. We contacted Amway to complain to the corporation about violations of that policy. As far as we were able to determine, Distributor Relations dismissed our complaint as unimportant. To our knowledge, our upline was never contacted to resolve the issue, and Amway never took our complaint seriously.

After our initial complaints to the corporation were ignored, we elected to take any further concerns to our upline directly, rather than wasting our time getting nowhere with the corporation. The reassurances we received from our upline were satisfying enough that we stayed in the business, even though nothing had significantly changed. But the issues always remained, despite the fact that we voiced our concerns about them throughout the five years of our involvement. So while it may be true that Amway/Quixtar cannot locate records of our complaints about the problems we saw, that does not mean that we were silent.

In our final complaint letter to our upline, we wrote, "We would not compromise our convictions for money - thus we will never see the money alluded to in the plan, because the big money is in the tools and speaking. We would not accept the tools money, as long as it is a secret pyramid system. We would rarely be asked to speak. Why? Because we are not Christian and we are not right wing conservative Republicans, and never will be. People who have beliefs such as ours usually leave the business much sooner than we have. We kept hoping that when we made Diamond we could speak our convictions in a way that helps others. We were told that this could happen. However, our own research has told us otherwise. Knowing that we will never be able to speak our convictions, that we must actually hide them, and continue to do so for the rest of our lives in this business, causes us to realize that we cannot do so without a tremendous loss of self-respect. We feel excluded already. Unfortunately, the sense of exclusion has only increased over time. With respect to building the business, it is extraordinarily de-motivating."

If Quixtar executives are unable or unwilling to enforce "The Right To Differ," which they describe as one of the foundations of the business, how many others rules have been deemed unworthy of enforcement, even if they appear on its books? Chaos and the potential for criminal activity are the result when rules are enforced selectively or not at all.

The fact that we did not complain to the corporation about everything that we are addressing now does not mean that we are fabricating our complaints. While we were in the business, we didn't complain about the fact that we were never taught retailing, as we were taught that retailing wasn't important. We were not even aware of the importance of the retail sales rule; we were told to ignore this rule by our upline and when pressed about it, we were told that our personal consumption applied to the rule. We went inactive in 2000 and did not renew after 2001. It is highly unlikely that Quixtar would have responded to any complaints from an inactive IBO, particularly about an issue that had been systematically ignored for at least a decade, if not much longer. We understood how seriously we were deceived by our participation in the system and how significantly it damaged our finances only after we had gone inactive. In addition, we found out that this was occurring to the vast majority of the IBOs after we had gone inactive. Given the history of ignoring these very major problems, what were certain that any complaint of ours would never be taken seriously.

Interviews Quixtar Refused To Grant and Videotaped Statements

Regarding the "Interviews Dateline Didn't Do" it must first and foremost be pointed out that Quixtar became aware of the Dateline program nine months ago when Dateline asked to interview Quixtar executives. They refused. To be accurate, the title of this section of the website should be "Video Clips of Statements by Quixtar Executives and Apologists who Refused to Grant Interviews and a Smattering of Generic Statements by People with Titles." By videotaping statements, they avoid answering any questions at all, yet give the appearance of being interviewed.

To all those who were too cowardly to appear on camera, realize that both Mr. Scheibeler and Mr. Short have been physically threatened. We do not live far from those who apparently threatened these people. We are putting our reputations and our families at risk by appearing.

Ken McDonald stated that the IBOs never registered a complaint with Quixtar. In the Dateline program, Bo Short stated on the air that he met with Mr. McDonald and talked with him specifically about Quixtar's role in supporting the approximately twenty high level IBOs who are raking in millions of dollars selling tapes and seminars to distributors like us, yet not supporting them in developing a legitimate retailing business. The tapes are designed to make IBOs feel guilty for not doing it, but do not teach how to do the business ethically. Mr. Short told Mr. McDonald to his face that people were being hurt. He was on a first name basis with Mr. McDonald. In this video clip, Mr. McDonald is not telling the truth.

Ken McDonald stated that the IBO under whom Dateline reporters joined, is a widow was supporting herself and seven children with the business. Yet in the SA-4400, it is clearly stated that the average gross income for an IBO is $1380. It is unlikely that almost anyone can support themselves with a Quixtar business, just the top few. Is this IBO outraged enough to step forward? Is she indeed supporting herself and her seven children with Quixtar income? Is Mr. McDonald accurate in this claim? Should he be believed in the absence of her corroboration?

Mr. McDonald stated that one of the ex-IBOs interviewed was just trying to promote his own company. This is false. Not one interviewee promoted any company of his own. Additionally, this ex-IBO is well connected and hardly needs to do a Dateline interview for his "fifteen minutes of fame," as Mr. McDonald claimed. Mr. McDonald clearly intended to insult him, to try to destroy his credibility. Credibility can only stand up when the facts support one's position. It appears, though, that the Quixtar executives who videotaped their statements would prefer to ignore the facts. They were so concerned about the Dateline show that they put together a carefully crafted but highly deceptive website, one that they paid Google to place in a sponsored website section.

Randy Bancino's videotaped statement clearly demonstrates that the purpose of the Quixtar Response website is to attack the messenger in order to obscure the issues. Quixtar hopes that the issue can be forgotten under all its rhetoric. Given that the website was prepared months in advance, Quixtar executives did not know what the message was going to be. Their choice was to attack the messenger rather than engage in a meaningful dialogue. This is a cheap shot in which the credibility of the messenger is attacked in such as way as to avoid acknowledging the truth or the logic of the message.

In his video clip, Mr. Bancino implies that the problem is that it is a "clash" of business models. He describes the Quixtar business model of "people helping people" as clashing with Dateline's model of "putting sensational shows on television so that they can get good ratings and sell advertising." First, Dateline NBC puts its ratings and credibility on the line with every show, and has nothing to gain and everything to lose if they cannot back up their story with facts. In his carefully scripted clip, Mr. Bancino tries to imply that "sensational" translates to "untrue," which of course it does not. This is intended to deceive the reader. The story is sensational precisely because it is true. Second, when one analyzes the dollars and cents of the Quixtar business as practiced by actual IBOs, it is difficult to believe that Quixtar is truly committed to "people helping people". Quixtar's numbers clearly do not support this claim. Third, comparing business models is completely irrelevant to the issues! Mr. Bancino is comparing apples and elephants, when the issue is a few kingpins taking advantage of people's trust in their friends and family to systematically deceive them out of their hard earned cash under false pretexts. Last and most important, Dateline did not go out and look for this story. Individuals sought to put this story in the public arena, because they had suffered harm from their involvement in Amway and Quixtar, realized that most of their fellow IBOs were suffering the same fate, and wanted the truth to be in the public arena.

John Parker stated that Quixtar paid out $343 million dollars and that there are hundreds of thousands of "successful" IBOs. Do the math. Even if there were only 100,000 IBOs, that translates to a mere $3430 per IBO per year, gross income. Quixtar states the actual number is $1400 gross annually. Are these 'hundreds of thousands" of IBOs actually meeting their goals? Of course not. The facts simply do not add up. Mr. Parker stated that there were only a few disgruntled IBOs. The company's own statistics also clearly indicate that Mr. Parker is not telling the truth. In 2001, the percentage of first-year IBOs renewing was 32%. The average PV was 38 per IBO. The average number of retail customers per IBO is 0.23. This translates to one retail customer for every 4 IBOs. One cannot have a legitimate business with four business owners per customer! It is a mathematical impossibility. In the year 2000, a Quixtar document was included in The Business Owner magazine, published by Internet Services Corporation. In that document, it was stated in very small print that less than 0.2% of IBOs were Q-12 (Platinums qualifying 12 months out of the year). But are even these IBOs profitable? Emerald Eric Scheibeler's net annual income was $34,000 at its peak.

Ken McDonald complained that Dateline interviewed a disgruntled few. It would be absurd to try to interview thousands for a twenty-minute segment. There was much material Dateline did not use. Mr. McDonald, two out of every three IBOS quit every year. It appears to us that there are far more people unhappy with your business model than are happy with it. If we had been told we would be highly unlikely to make more than $1000 a year, but that it would cost us five thousand dollars per year to attend all these seminars and functions to teach us to do this, would we have ever started in the business? No, of course not. We were lied to, and systematically taught lies to tell our prospects, by our upline, all the way up to and beyond the Diamond level. We were taught specifically not to seek verification of these statements independently.

The Quixtar Response videoclip of Thomas Donohue, CEO of the United States Chamber of Commerce falls in the category of "Generic Statements by People with Titles." His statement failed to mention Quixtar or multi-level marketing at all. He spoke about franchising, an entirely different business model. He spoke blandly about a few bad apples, but he did not address the problem of the corporate executives supporting and protecting the bad apples. He spoke generically of whistle-blower programs. Since the whole point of the Dateline NBC program was to blow the whistle, we have no idea why this was included in their response site. His statement certainly does not paint Quixtar in a positive light at all.

Who Is Quixtar Ignoring?

Now, in response to the first part of the Quixtar Response web site, Dateline did not ignore the" hundreds of thousands" of IBOs who are achieving their goals. Dateline, as well as we, doubts the veracity of the claim of that there are many successful IBOs. Dateline appropriately asked the tough questions on behalf of the many thousands of IBOs who were not achieving their goals. It is Quixtar who is ignoring and discounting those IBOs who, in spite of the teaching and the expected investment, were forced to leave the business with far less than they had when they registered. There is no harm in asking questions and seeking answers. The harm comes in ignoring and deceiving those who would seek to correct inequities, and when no response is forthcoming, complain about those abuses.

Quixtar claims that, in spite of not being "perfect," they do a lot of things right. Perhaps they could answer why more than 50% of IBOs do not renew every year and 99% of IBOs never achieve profitability. Perhaps they could explain why the overwhelming majority of IBOs work their businesses as we did, with complete faithfulness to the teachings of the system, fail to profit in their business, and lose year after year. Perhaps they could explain why they fail to acknowledge and attempt to hide the existence of documents like the Blakey Report and the Postma Memo.

Tools Are Optional, and So Is Success

Quixtar's claim that the tools are optional doesn't preclude the fact that IBOs are pressured into buying them. With repeated messages that "the tools are optional, and so is success," IBOs have little choice in the matter. An IBO not subscribing to the tapes and not participating in the seminars is ignored and shunned by their upline, despite very clear rules to the contrary. Additionally, and very importantly, when we signed up for the business, no one informed us that anyone derived income from the sale of tools and function tickets, and our upline denied that such profiteering was occurring.

Values

Doug DeVos spoke of "the values of the business," not elaborating on what those values might be. Given the inaccuracies and the deception surrounding this business, one has to wonder. The Dateline program was about the motivational systems, the leaders of which are the defendants in various lawsuits. It was not necessarily about Quixtar, the company. Mr. DeVos, you would do well to heed the words of your own father:

"Let me talk to you about the legal side, beyond price fixing, that deals with pyramids, that deals with the illegal operation of a business that does not have an end consumer, where the product is not retailed. That would include all books and tapes. The sad news, folks, is that when those things go out that way and they become excessive, beyond my ten or twenty percent theoretical guideline, hopefully acceptable, to where it's a reasonable support system, but not beyond the reasonable element, then it becomes an out and out illegal pyramid."

That Quixtar chooses to align itself with the few who are making over 90% of their Quixtar-related income from the motivational system, which the founder of Amway deems an "illegal pyramid" and less than 10% from product sales, preying on the hopes and dreams of thousands of IBOs, often leading to derailed careers and ruined finances, speaks volumes about the truth of Quixtar and its goals.

Quixtar, and its predecessor, Amway, has allowed these abuses to continue for more than twenty-five years. Quixtar's propaganda campaign cannot hide that fact.