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Comment by woodruffw | Hacker News Reader

> Utah, reputed to be the fraud capital of America; the state is estimated by some to boast a Ponzi scheme for every hundred thousand people

Small tangent, but does anybody in Utah have insight into why this might be? This is bewildering to me.

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I live in Utah and was a missionary for the Church of Jesus Christ of Latter-Day Saints (the dominant church in Utah -- which often bleeds into the culture). In my opinion, the large amount of former missionaries (who often participate in door-to-door sales-like evangelizing) in Utah provides an ideal workforce willing to participate in difficult sales. Many of my friends and family went into sales after their missions as an easy way to make a lot of money. I think this is a large piece to your question.

Additionally, as another comment has said many of the stay-at-home mothers I know who are members of the Church become huge advocates for these pyramid schemes and push them onto friends and family.

This is just anecdotal data so I apologize for the lack of sources other than my own, subjective experience.

I asked for anecdotes! Thank you for sharing.

Wasn't good old Orin Hatch a protector of MLMs and things like snake oil vitamins and supplements in the Senate?

edit - wow - ok he wrote a law exempting them from regulation apparently (https://www.latimes.com/business/hiltzik/la-fi-hiltzik-hatch...)

My anecdote agrees: a good friend of mine was raised as a Jehovah’s Witness and is now an incredible salesman. He explained that he spent his entire childhood selling something no one wanted and where people would hurl insults at him daily. Now as an adult in business, selling whatever product is 100x easier and he has limitless tolerance for rejection.

Yeah, I served my mission in California and I can say there aren't many topics that make strangers more uncomfortable than religion.

At the end of the day, though, I found most people (whether or not they were interested in religion) care about being happy and having purpose and it was/is enjoyable to observe common ground with other humans in that realm.

That being said, lots of people get pissed about religion being shoved in their face and I do not blame anyone as it can be a huge source of trauma.

Utah has the strongest legal protections for MLMs/Pyramid Schemes/etc. in the country [1].

The demand for that safe harbor and the political will to pass it is largely a result of Mormonism. The hierarchy of the church discourages anyone from criticizing the next level 'above' them. There is also strong societal pressure for Mormon wives to be stay-at-home mothers, but the economic reality means they often need to find some way to make additional money. Add that to the Mormon mission system, and you have a vast number of people comfortable making cold calls (whether for Elohim or doTERRA).

[1] https://quackwatch.org/mlm/legal/utahbill/

I'm not sure about the "mission system" part. Most of the MLM people I encountered in Utah did not come through the "mission system." I kinda discount the church hierarchy theory, too. The point about stay at home moms carries water, I think. There aren't a lot of ways to make money while raising a 1, 4, and 7 year old. You can let somebody else raise them while you work. Or... you could have a playdoh party at your house. You can have your one-year-old on your lap while you explain to the other mothers (who are playing with their children as you talk) why they need the rainbow castle addon to the playdoh kingdom set.

A couple fingernail kit / vitamin / kitchenware / scented candle / whatever parties might promise to make you $500. That could pay for a month of piano lessons. Your old dental hygienist job didn't let you bring your kids to work and only work 4 hours on two Saturdays a month. I guess you could give it a try once. And who couldn't use a new cheese grater?

I totally see your points and I agree.

> I'm not sure about the "mission system" part.

Here's my (subjective and likely limited) perspective: the LDS church has a culture that heavily emphasizes missionary efforts. Young adult men active in the church are expected to serve missions. Most of my female friends/family who are active members are taught to marry active men who have returned home from missions. My opinion is that that missionary culture saturates even those women who have not served who are active members (especially if they have married a former missionary) and I would imagine that bolsters their willpower to persistently push these products. Additionally, there is a busy-body culture (that I also feel is heavily influenced by missionary culture) I have noticed to be always engaged in good things and I would imagine for a lot of women making money fits that mold.

I may be totally wrong, but that's a theory that makes sense to me and lines up with my experiences.

So as someone who grew up with lots of Utah Mormons (mother was a convert) I believe there was a strong evolutionary selection pressure for naivety to both become a Mormon and then remain Mormon through all of their “trials and tribulations” in the mid 1800s. If you thought it was all horse shit you wouldn’t have moved 1000 miles to Utah in the middle of nowhere.

While members of the Church of Jesus Christ of Latter Day Saints can be exceptionally intelligent people, there’s also an air of childish gullibility I don’t see in the general population.

I’m not super confident with this theory and have no skin in the game but it’s something I’ll posit to friends over a drink if Mormons come up.

I think LDS folks have a little too much trust in other LDS folk.

“Brother So-in-so works for doTerra, Sister So-in-so sells it and says it cleared up her eczema. These people wouldn’t lie to me!”

And so they take whatever they say as truth. I don’t think it’s what I would describe as “childish gullibility”. But too much unchecked trust in members of their circles (still gullibility. But I wouldn’t call it childish). And then it compounds. Well, Bishop So-in-so wouldn’t participate in an MLM if it were immoral so it must be good!

I think this is at the root of the problem in Utah. Between that and the Utah moms wanting to make an easy buck.

Source: LDS myself living in Utah County. My wife and I often discuss why there is just so many MLMs that are clearly (to me) scams that run unchecked.

I sympathize a lot with the moms you characterize as "wanting to make an easy buck." How do you put in 8 hours a day as an accountant or hair stylist or fire fighter or HR rep between morning snack, potty training, reading time, nap time, outside play time, music time, etc.?

Maybe you try to get paid for raising your own kids by daycaring other kids at the same time. Is that also an easy buck?

Not everybody has a k8s genius spouse pulling down 6 figures. Any buck that can be gained in two or three hour increments a week is a lifeline.

Oh don’t get me wrong. I get it. maybe “easy buck” was lazy commenting. Being able to work your own hours, focus on the family you prioritize, work from home, etc etc. I get all that and is exactly what I was trying to say with “easy buck”. Poor choice of words.

So what if a housewife/family refuse to purchase any product another housewife/family is pushing? Is there any rejection of said family? Is the whole family networking system based solely on sales? Is it considered not cooperating, from a religious stand point, not to purchase these products? Will church status be effected if purchases aren't made and a family punished?

This is a fair question from somebody who has never seen it in action. The answer, from my experience, is no. Regarding the religious or church status matter, absolutely no. The church isn't pushing these things and even cautions about them.

Socially? A person might feel obligated to help a friend, same as any other culture. Then again, if you're just as cash strapped, ... It's really a personal decision. Just like buying Girl Scout cookies. Or the open guitar case next to the street performer. Plenty of people refuse to respond to invites to an MLM "party." Some people avoid yard sales. But it shouldn't affect friendships.

I lived in Utah. There’s plenty of MLMs and Ponzi schemes due to the religious culture. Oils, beauty products, blankets, weight loss solutions, workout pants, you name it.

There are many stay at home mothers who get involved in these schemes to make a few dollars here and there. They end up buying plenty of product up front and not being able to sell it.

Hope that helps.

It does, thank you. I hadn’t considered the stay at home moms.

Sorry to bicker, but MLMs and Ponzi schemes are really different things.

That comment does not say they are the same. It says they are both present.

I used to be Mormon, I think Mormon culture is the main reason. This article seems to describe the reasons well: https://religionnews.com/2017/06/20/10-reasons-mormons-domin...

Likewise. All negative or positive aspects of the religion aside, the geographical aspect to Mormon congregations build affinity networks quickly. This is both an asset (it can integrate you into a community quickly) while also being a liability (more MLM and Ponzi schemes).

I learned this weekend this geographic designation for local congregations is shared among the Amish, where congregation (to my understanding and happy to be corrected) are between 20-40 families.

Do the Amish, or Hasidic Jews or whoever, have lots of MLMs and Ponzi schemes?

Bernie Madoff is the classic example, his affinity fraud targeted wealthy Jewish individuals, foundations, and charities. In terms of relative frequency though, good question. Utah is an oddity where state-level stats are a decent estimate for Mormons, given the 70% membership. It would be harder to get equivalent stats for Jewish or Amish communities.

Somewhat OT, but that web site is quite a find: No clickbait, no discernible slant to the content, equal billing for "Unaffiliated / Atheist"

https://religionnews.com/category/faith/unaffiliated-atheism...

Completely anecdotal but this might be related to the notion of it being the MLM capital as well. Most marry young and settle down quickly. The notion of a housewife being able to contribute monetarily is infatuating. This coupled with the fact that Mormons (typically) are trustworthy of insiders means frauds and MLMs can spread virally.

Entire communities would get caught up in the latest herbal essence MLM.

Utah now has a fraud registry (like a sex offender registry) to help prevent serial fraudsters from finding another mark. I have no idea if it's effective but it did seem like a good idea when they first implemented it.

It's somewhat interesting reading to just skip around and see the different kinds of schemes being used (they all have descriptions of the how the fraud worked).

https://www.utfraud.com/Home/Registry

I also suggest the /r/scams subreddit to keep up on what is out there. Most are laughably bad but occasionally some are quite clever.

A relatively close-knit, high-trust society, with a lot of housewives eager to make themselves some money in a socially acceptable way?

You’re describing Japan. Does Japan have pyramid schemes and MLM?

I just watched the anime “Welcome to NHK” and there was an MLM subplot.

Yeah, it happens in Japan. Even more dangerous are new religious groups - like the Unification Church you'd probably heard about due to Abe's asassination.

The former prime minister was just gunned down in the street over his endorsement of one.

Every insular culture is vulnerable to trust-exploiting schemes.

I described it that way because I live in Japan and recognized the similarities :). Outright violent crime is very rare here, but there are a lot of scams.

I was extremely disappointed to see this statistic trotted out in the New Yorker - almost as a throw away line. It’s such a weak claim for something to be “reputed to be” or “estimated by some” which is probably how it got past the fact checkers (I have not been able to find the source of the 1:100,000 estimate), but it’s stated with authority and smugness and contributes to national readers’ general misunderstandings of Utah and Latter-day Saints.

I know MLMs happen in and are more common in Utah than in other states for all the reasons people have identified in this thread, but it’s also true that high-trust communities have many many benefits, and though there are bad actors who figure out how to exploit these trust networks, the networks somehow stay resilient and help lead Utah to lead the nation on a number of wellness statistics such as the lowest unemployment rate in salt lake out of all big cities [1] and having the lowest income inequality other than Alaska and Wyoming (which have less than 1M people each) [2]

[1] https://www.economist.com/united-states/2021/09/18/salt-lake...

[2] https://worldpopulationreview.com/state-rankings/income-ineq...

High levels of social trust. Makes for a good environment for scams - everybody wants to think the best of people.

Major source of income for Mormons, who run the state

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