Consumer Alert: Freeway 100

Freeway 100 [Wayback archive] used to offer various communication services, such as long distance telephone service, through a multi-level marketing program. Quoting from their web site, your only requirement to collect bonuses on all seven levels is to pay for your monthly service(s) and refer one person to Freeway 100.

While this may sound innocuous, linking eligibility for commissions to purchases for personal use may make this plan illegal in various jurisdictions.

Another potential problem was the $240 required for the business startup kit, which would be a problem in many jurisdictions if Freeway 100 or any distributor profits from this fee.

A further problematic area was the training program. Distributors could become eligible to qualify as instructors at various levels, and receive compensation for training new distributors. Even if the fees involved were reasonable for the training involved, this could be viewed as a pyramid... it involves paying money to participants for the right to receive money from new participants. This is virtually the legal definition of a pyramid.

These practices are considered abusive. They result in people buying the product in order to participate in the business opportunity and/or people being compensated for recruiting other distributors rather than for product sales to non-distributors.

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