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Old 02-18-2004, 10:58 PM   #1
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Default Primerica

Has anyone heard of Primerica?
They are just starting to move into my area and I've been contacted by them.
I did my research and found that they are a real business owned by CitiGroup (CitiBank), but their business practices are somewhat unethical and sleazy.

Can anyone shed any light on this?
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Old 02-18-2004, 11:39 PM   #2
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Yeah, someone roped me into the Primerica Finacial Solutions gimmick. Its multi-level-marketing for life insurance and retirement products. I don't think they have a good selection of funds to choose from (Smith Barney when I was in it) but I think the life insurance (term) is good. Their philosophy is buy "term" and invest the differnce.

Learned a lot of good/valuable stuff, but MAN I can't stand that "amway" atmosphere...
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Old 02-19-2004, 04:09 PM   #3
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Yeah, I agree. They contacted me a while back. It is pyramid marketing (they call it Network Marketing). But essentially, you get a comission on what you sell/sign up. They provide an area with a phone and conference room where you can do your calling and pitch their instruments--but it is not "your" office, but rather a shared office that you sign up to use. They have quasi rewards for different "levels" of performance...but the carrot is always just out of reach. I didn't sign up because I believe it is an unethical marketing practice. It is a legal pyramid scheme because they actually have a product (financial instruments) that benefit the buyer. But the pyramid principle is still there: the more people you get signed up under you (do do the marketing and sales) the higher up in the company you go, and the more commission you earn (off of your downline sales reps--getting paid for their efforts).

The biggest problem with this is that no one stays in long enough for you to really make a go at it. You are constantly having to fill the vacancies created under your pyramid by downline reps getting frustrated and leaving...until one day you get frustrated and leave.

The unethical part is that uplines get commissions on downline'* work.

The old pyramid scams (where this type of marketing originated) were as follows:

Someone would start a "company" and be the top executive. He would then recruit ten people to give him $500 each (= $5,000). They would then get the packet that told them to get ten people each to give them $500 each. The first ten people would then keep $100 each and submitt the remaining $400 to their upline (the first person--who now has $40,000 from the lower line plus $5,000 from the second line = $45,000). The 100 lower level people all recruit 10 people each and charge them $500 each--keeping $100 for themselves and forwarding the $400 to their upline--who keeps $100 themselves and forwards the remaing $300 to the top executive (--who now has $300,000 from the new lowest level plus the $45,000 from the other two levels= $345,000). Those 1000 people would then recruit 10 people each and charge them $500 each--each level keeping $100 each untill the top executive would get $200 from each (which would now equal $2,000,000 plus the $345,000 equals $2,345,000). Now the new lower level would do the same--all 10, 000 people recruiting 10 people each--charging $500--keeping $100 on up the line until the top executive keeps the remaining $100 from the lower level. (Now the top executive has $10,000,000 plus the $2,345,000--which equals $12,345,000). All subsequent recruits will not affect his income--so he moves to a country that does not extridite and retires. In theory, if the pattern continues with no variation, the new recruit would get $11,111,000 for his $500 investment (as he would only get the $100 for each step until the $500 distribution couldn't reach him with a "dividend".

This is HIGHLY ILLEGAL but did happen quite a bit in the 70'* and 80'*. Eventually the pyramid would run out of "investors" and the last line would be out $500.
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