Dubli's legal representatives issued a cease and desist letter to Troy Dooly on May 21, accusing him of "false and defamatory conduct" published on his MLM Helpdesk website and linked to "Oz" on behindmlm.com. The letter, sent by Richard Sybert of Gorden & Reese, targeted Dooly's commentary on Dubli's business practices, specifically challenging claims about the company's compensation structure and brand reputation.
Sybert's letter asserted that Dubli "never paid for recruitment," labeling the premise of Dooly's article as "damaging and flatly wrong." The law firm maintained that Dubli's leader contracts activate only after a Business Associate performs, not as a pre-condition for joining. This directly countered Dooly's reporting that Dubli offered commissions for bringing in new members.
BehindMLM's September 2014 review of Dubli's e-commerce operations found a different reality. The analysis of Dubli's compensation plan at the time showed affiliates paid up to $12,000 to join the company. These fees were commissionable, allowing existing affiliates to earn up to 27.5% depending on the amount paid by new recruits. Such a structure directly links compensation to recruitment payments, a point often scrutinized by regulators.
The distinction between sales commissions and recruitment commissions remains a critical area for multi-level marketing companies. Regulators, including the Federal Trade Commission, often examine compensation plans to determine if a company operates as a legitimate direct selling enterprise or an illegal pyramid scheme. Schemes typically generate revenue primarily from recruiting new participants, who must pay upfront fees, rather than from actual product sales to end consumers. Dubli's lawyers themselves conceded the charge of paying recruitment commissions was "potentially highly damaging" within the network marketing industry.
The cease and desist letter also challenged Dooly's description of Dubli's branding as "disastrous." Sybert clarified that Dubli Network itself was not changing, only the corporate name, Dubli, Inc. He argued that the company had remained active since closing its auction services, continuing its shopping mall business and Dubli Network operations.
BehindMLM had previously reported that Dubli effectively "disappeared" from public view after shutting down its auctions. While the company may have continued some operations, the public perception of its activity levels dropped significantly. This perceived dormancy contrasted sharply with the active profile it held during its auction phase. Dooly's earlier plans for a series of articles on Dubli were abandoned due to this apparent decline in visibility and newsworthy activity.
The legal action from Dubli's representatives seeks to control the narrative around the company's financial model and public image amidst ongoing scrutiny of MLM practices.