Roman told him he spoke very little French. But then another voice popped up from behind, inquiring in Russian if he needed a translator. The men asked Roman if they could ask him a few questions for a survey about Web usage; they were starting up an Internet company in Estonia, they said.
It seemed harmless enough. He had time to spare before returning to work. And Roman, an American expatriate who has lived in Tallinn for the past two and a half years, was curious about their questions, intrigued at the prospect of French and Russian dot-com entrepreneurs, on a quest to do business in his adopted hometown.
"I asked them what they are doing. They were cagey about the details," Roman explained. "The man said, 'Why don't you come to a meeting and we can explain it?'"
It wasn't until several minutes into their meeting a week later, in a bare-bones, rented-out office space occupied by crisply-dressed Frenchmen busily typing away on space-age miniature laptops, that Roman realized he was the target of a so-called "pyramid marketing" ploy, also known under its more authoritative-sounding label: multi-level marketing.
As soon as Jean Marc began sketching a pyramid-shaped diagram of how their business operated, Roman said, the light bulb went off.
But most Estonians are probably less aware of the artful reasoning of pyramid marketing. It is a scheme booming in his native California that has found its way into even remote pockets of the globe - thanks to the Internet and crafty salesmen.
"[The salesmen] would say, 'When you go into Stockmann and you tell a friend about it, you don't usually get paid for it. But we pay you.' They tried to take the high ground," Roman explained. "They were rather fast-talking and had an answer to deflect every criticism. They argued, 'We came here from France on our own money from this. We wouldn't be doing this if there was no opportunity to make money.'"
The "business plan" unveiled by pyramid or multi-level marketers involves the "chain-referral sales" technique, as explained by Poznaklaw.com, in which the "distributors" earn their fee by inducing others to participate in the plan rather than by selling goods or services.
Roman's case was typical: Jean Marc wanted him to pay a 100 euro ($94) initial fee for cosmetics and other merchandise sold on a special Web site. Roman would be given a personalized code number attached to all the products. He was told to tell his friends about the site, and from any of the goods they purchased, he would receive a commission. However, the real inducement to joining was the opportunity to recruit others to pay the 100 euros to become distributors themselves. These new distributors would in turn recruit others, and Roman would supposedly earn a percentage of the "profits" all the way down the chain.
One similar pyramid marketer in the United States, Fortuna Alliance, promised profits of up to $5,000 per month to entice consumers to join, for dues ranging from $250 to $1750, according to a PC World article. In 1997, the company settled with the Federal Trade Commission, agreeing to pay $2.8 million to repay the consumers who lost money investing in the scheme.
Yet, there are countless variations of pyramid marketing plans - some of them legitimate. But generally, the checks are a pittance, and harder earned than its promoters claim, according to critics. One of the most famous in the craze, Alladvantage.com, recruits thousands of people willing to let advertisers track their Web surfing and send them ads tailored to their habits. The company pays members about 50 cents an hour to surf, and then a 10 cent commission for each hour their "referrals" spend online.
Jean Marc and his partners were not happy when Roman began chipping away at their sales logic, and promptly dismissed him from the meeting. On his way out, he warned a Russian woman also present who was hoping to save money to send her son to college. She followed him out the door.
When The Baltic Times asked Tallinn's Labor Market Board and the Estonian Chamber of Commerce about pyramid marketing making its way into the country, they said they were not aware of it, nor of regulations concerning it.
"I think they came here because they think Estonians are naive and not savvy to this kind of operation," Roman said. But that may change. The mushrooming of multi-level marketing is, no doubt, rooted in the Internet. He pointed out: "The Net is more widely used per capita here than in France."
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