Wednesday, March 20, 2013

YOR Health's Questionable Documents

Good afternoon! I decided to do a quick post before I continue on my analysis of the aforementioned video on the Independent Representative Important Disclosures document which is found on the YOR Health website. Now, this is a very important document indeed. So important, in fact, that all text is printed in very squashed, very tight capital letters. Now, this makes it very difficult to read, as the normal visual cues are missing (such as the start of sentence or a proper noun). In design, the use of all capital letters is a sign of bad readability; it discourages the reader. So why, is one of the most important, informative legal documents on this company's website presented in this way I hear you ask? Well, it might have something to do with this:


Now, this is straight from the Independent Representative Important Disclosures document, on page 2. Let me break it down for you.

'As of 01/2013 the number of current YOR Independent Representatives who have not received any commissions, bonuses or overrides is 6391 or 45.26% of such independent representatives.'

This is nothing new, I did mention it in the previous post, however I wanted to draw attention to the lack of references. Who conducted this study? 6391 out of how many? Is this just in the U.S or worldwide?

'As of 01/2013 the median amount of commissions, bonuses and overrides received by all Independent Representatives in YOR is $0.00. 63.52% of all Independent Representatives have received, in the aggregate, less than or equal to this amount. 36.48% of all Independent Representatives have received, in the aggregate, more than this amount.'

Ok so this is incredibly concerning. First of all, we use median when data is skewed. Skewed data means the distribution is unbalanced. Here is a basic example of skewed graphs:



Skewness refers to a lack of symmetry. The median marks the 50th percentile. Fifty percent of the scores are above the median and fifty percent fall below the median. Now, the median amount of commission, bonuses and overrides received by YOR Health Independent Representatives is $0.00. Fifty percent of Independent Representatives earn above $0.00, and fifty percent earn below. BUT, if 63.52% of all Independent Representatives have received, in the aggregate, less than or equal this amount, and 36.48% have received, in the aggregate, more than this amount, how much are those lucky enough to actually make any money, earning? Well:

'As of 01/2013 the average amount of commissions, overrides and bonuses that have been received by all Independent Representatives is $582.30.'

The average amount? As of 01/2013 would lead me to believe that that figure is total amount up to 01/2013. TOTAL amount received by ALL (36.48%) Independent Representatives averages $582.30. That's less than the average weekly income earned by Australian adults through traditional employment (Click here for ABS statistics).


Needless to say, it's important to take the time to thoroughly read things like this. I'm curious to know whether any of the Independent Representatives did take the time to examine this document? I shall leave you to ponder on a quote from the very top of the YOR Health disclosure statement:



4 comments:

Kitty Meow said...

I too fail to be impressed by the unimpressive.

The disclosure statement is certainly skewed in that the entire sales force are not included, with those who weren't able to qualify in order to receive bonuses and commissions excluded from this.

If a group of 6391 (who represent 45.26% of the sales force) earned ZERO – that means, 6391 representatives out of of 14,121 lost money. As you have correctly pointed out, what isn't clear is who is included in this group specifically - and there's no guess this isn't an accident.

The yearly average earnings of $582.30 only equates to $11.20 per week...prior to expenses and clearly represents a loss.

it was identified a couple of years ago by Dr John Taylor (a consumer advocate against pyramid fraud) in a report presented to the FTC that YOR Health fails to disclose to prospective investors that 99% of all participants LOSE money.
http://www.ftc.gov/os/comments/bizoppstaffreport/00010-57283.pdf

It's entirely inaccurate to represent this as an income opportunity given it's an almost certainty that a person will lose given the typical result at $11.20 is LOSS.

Kitty Meow said...

And since we're looking at this company, let's start from the beginning....with the founder himself.

Dennis Wong has been convicted of pyramid fraud in the past. In 2005, he was fined millions of dollars after the last company he founded, 2by2.net/Mall Ventures, was found in fact to be an illegal pyramid scheme and he was barred from participating in any prohibited marketing scheme, including any business that operates as a pyramid scheme and barred from misrepresenting the potential or likely earnings or income from any business venture, the benefits any participant can expect, and assisting others to make misleading claims.
http://www.ftc.gov/opa/2005/05/nexgen.shtm

His subsequent venture, YOR.net, which the below article confirms attracted a number of complaints to the BBB and FTC from consumers who alleged it was also an illegal pyramid scheme...
http://www.nysun.com/new-york/phone-firm-reacts-to-complaints/59871/

The top recruiter referred to in the above article (Johnny Ly) who followed Dennis Wong from the illegal pyramid scam 2by2.net/Mall Ventures, to YOR.net.....well, you'll never guess where he is now....yep, YOR Health….

www.youtube.com/watch?v=GNY4XNkx8p8

https://twitter.com/JLyYORHealth

Given the reputation of a company is important (the FTC recommends people study the history of the company and I would imagine those associated too) this is an enormous red flag.

It remains that it's entirely feasible, possible or more likely even probable that this is Dennis Wong's 3rd bite at the cherry when it comes to pyramid schemes.....this time a product based pyramid scheme where the product is being used to launder the investment into the underlying pyramid scam.

Commer Perrelation said...

@Kitty Meow thank you so much for your comments. It really begs the question - does anyone who signs up with this company bother to/have someone read these documents? It seems like a no-brainer... Either they don't read them at all, or don't understand and are left confused by the (intentional) jargon.

Kitty Meow said...

There's no doubt the literature is intentionally made difficult to understand - including the compensation plans which are no doubt in some instances designed to confuse regulators and disguise how top weighted the schemes are..

It's certainly a bizarre phenomena....having people presented with facts and figures right there in front of them, on company literature, and STILL refusing to believe. When you attend an MLM presentation, the company literature is referred to in passing, but the promise of passive, residual income possible for anyone to achieve, luxury cars offered when ranks are reached, the extravagant lifestyles flaunted by the highest ranked....these are powerful incentives for people to close thir eyes to any piece of material fact.

You know, I've read about participants likening their experience in MLM as being similar to a cult and the deprogramming they've had to undergo thereafter. I'm sure that we could come up with some very close parallels between used n cults and that used to entice people in these schemes.