MLM News Alert


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[ March 24, 2021 ] LuLaRoe: The California-based clothing MLM was hit with another class-action lawsuit alleging that it is a pyramid scheme. Specifically, the complaint claims that “LuLaRoe is an unlawful, fraudulent pyramid scheme which preys on stay-at-home mothers, promising them they can generate substantial income while still being able to spend time at home with their families.” The lawsuit seeks to represent all distributors in the U.S. from Jan. 1, 2013 until the present. For more on TINA.org’s coverage of LuLaRoe, click here.

[ Mar. 8, 2021 ] ONEHOPE: The DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision finding that ONEHOPE, a California-based MLM that sells wine and coffee, was making inappropriate income claims to promote the company’s business opportunity. The company removed some of the ad claims at issue and modified others. The DSSRC was still concerned that the company didn’t address one of the social media posts and recommended that the company make additional modifications to other claims.

[ Feb. 19, 2021 ] RBC Life Sciences, Inc.: The DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision finding that RBC Life Sciences, a Texas-based MLM that sells nutritional and wellness products, was making inappropriate income claims to promote the company’s business opportunity and unsubstantiated health and efficacy claims to promote the company’s products. The company did not respond to the DSSRC, prompting the DSSRC to refer the matter to the FTC.

[ Feb. 1, 2021 ] LuLaRoe: A couple weeks before trial was scheduled to begin, the state of Washington’s pyramid case against the clothing MLM settled. LuLaRoe agreed to pay $4.75 million, most of which will be used to refund consumers in Washington who were recruited to the company. The consent decree also prohibits LuLaRoe from operating a pyramid scheme and requires the company to publish an income disclosure statement that tells recruits how much they might expect to earn as a distributor with the company. For more of TINA.org’s coverage of LuLaRoe, click here.

[ Jan. 22, 2021 ] Magnetude Jewelry: The DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision finding that Magnetude Jewelry, a Maryland-based MLM that sells bio-magnetic fashion jewelry, was making inappropriate income claims to promote the company’s business opportunity and unsubstantiated health and efficacy claims to promote the company’s products. While the company made some changes to its deceptive marketing statements, Magnetude Jewelry refused to comply with all of the DSSRC’s recommendations. The DSSRC decision made no mention of an FTC referral.

[ Jan. 20, 2021 ] Young Living: The Utah-based essential oils MLM is now facing a second class-action lawsuit in New York federal court alleging that the company is deceptively labeling and marketing its essential oils as therapeutic for a variety of health conditions in order to charge a premium price for the products. The first class action making similar allegations was filed on Dec. 3, 2020, in Minnesota federal court. For more of TINA.org’s coverage of Young Living, click here.

[ Jan. 20, 2021 ] Primerica: The DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision based on a TINA.org complaint finding that Primerica, a Georgia-based MLM (and Direct Selling Association member) that sells term life insurance and various other financial service products, and its distributors were making inappropriate income claims to promote the company’s business opportunity. The DSSRC determined that the company had removed many of the claims identified by TINA.org from publication and that it should include a disclosure of the income that can be generally expected by the typical distributor if the depicted distributor references financial success that is attributable to the company’s business opportunity. The DSSRC did not address the inadequacy of Primerica’s current income disclosure. For more of TINA.org’s coverage of Primerica, click here.

[ Jan. 7, 2021 ] Gano Excel USA, Inc.: Gano, a California-based MLM that sells drinks and personal care products, was on the receiving end of a DSSRC (Direct Selling Self-Regulatory Council) inquiry, which found “egregious unsupported earnings claims” and “aggressive and unsupported health-related claims,” with several examples directly referencing the COVID-19 pandemic. Because Gano only managed to take down 5 of 17 identified inappropriate claims, the DSSRC said it would continue to monitor the company’s actions and initiate a compliance inquiry if necessary.

[ Dec. 21, 2020 ] WorldVentures: The Texas-based MLM, which sells travel-related products, filed for Chapter 11 bankruptcy. Debtors include Spherature Investments LLC, Rovia, LLC, WorldVentures Marketing Holdings, LLC, WorldVentures Marketplace, LLC, WorldVentures Marketing, LLC and WorldVentures Services, LLC. Bankruptcy documents indicate that assets and liabilities are estimated between $50 and $100 million, and that there are more than 100 creditors. For more of TINA.org’s coverage of WorldVentures, click here.

[ Dec. 3, 2020 ] Young Living: On the heels of the National Advertising Review Board finding that the Utah-based essential oils MLM company did not have the requisite scientific support to claim that its oils are “therapeutic grade,” the company has been hit with a class-action lawsuit in Minnesota federal court. The lawsuit claims that the MLM is deceptively labeling and marketing its essential oils as therapeutic for a variety of ailments in order to charge a premium price for its products. For more of TINA.org’s coverage of Young Living, click here.

[ Sept. 9, 2020 ] International Markets Live (aka IML and IM Mastery Academy): DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision based on a TINA.org complaint finding that IML and its distributors were making inappropriate income claims to promote the company’s business opportunity. DSSRC recommended that the company “engage in effective training and monitoring of its IBOs (distributors) and use appropriate enforcement procedures to provide reasonable assurance that earnings claims made by its IBOs are substantiated, contain appropriate disclosures and are not misleading.” For more of TINA.org’s coverage of IML, click here.

[ Aug. 31, 2020 ] Le-Vel Brands: DSSRC (Direct Selling Self-Regulatory Council) closed an investigation and issued a case decision based on a TINA.org complaint finding that Le-Vel and its distributors were making inappropriate health claims about the Thrive product line and atypical income claims about the company’s business opportunity. The decision concluded by stating that “DSSRC will continue to monitor the messages disseminated by the Company’s promoters … and will take prompt and necessary steps … should it identify an ongoing proliferation of unsupported product or income claims ….” For more of TINA.org’s coverage of Le-Vel, click here.

[ Aug. 31, 2020 ] Neora (aka Nerium International): Neora’s lawsuit against the FTC, in which the company argued that the commission was attempting to improperly change direct selling laws, was dismissed on Monday. The court found that Neora’s claims were not ripe for adjudication and that it could properly defend itself against allegations that it is a pyramid scheme in the agency’s enforcement action currently pending in Texas federal court. For more of TINA.org’s coverage of Neora, click here.

[ Aug. 28, 2020 ] LuLaRoe: In the state of Washington’s pyramid case against the clothing MLM, the court denied the company’s (and other defendants’) motion for summary judgment on Friday. It also refused to seal or redact exhibits used in support of the state’s opposition to summary judgment. Trial is scheduled to begin on Feb. 16, 2021.

[ Aug. 28, 2020 ] Herbalife: On Friday, the Department of Justice reported that Herbalife had agreed to pay penalties of more than $122 million and admitted that it “knowingly and willfully conspired with others in a scheme to falsify its books and records and provide corrupt payments and benefits to Chinese government officials” in order to obtain, retain and increase its business in China.

[ Aug. 17, 2020 ] Monat Global: Monat entered into an Assurance of Voluntary Compliance (AVC) with the state of Florida on Friday. Pursuant to the AVC, Monat must refund consumers more than $80,000 and pay Florida $250,000. The company is also enjoined from engaging in deceptive marketing, making unauthorized charges on consumers’ bank accounts, making it impossible for consumers to cancel orders, and refusing to provide appropriate refunds, among other things. For more of TINA.org’s coverage of Monat Global, click here.

[ Aug. 5, 2020 ] LuLaRoe: Things are starting to heat up in Washington state’s pyramid scheme case against LuLaRoe, which was originally filed in January 2019. LuLaRoe’s motion for summary judgment is now fully briefed, but the company is fighting to keep about 20 exhibits in support of Washington’s opposition to the summary judgment motion from public view. Among the exhibits currently available for viewing are seven declarations from former LuLaRoe distributors, which contain interesting details about their experiences with the company, such as the fact that six of the distributors went into debt to start their LuLaRoe businesses. For more on TINA.org’s coverage of LuLaRoe, click here.

[ July 29, 2020 ] Herbalife: An appellate court has upheld a district court decision in a class action RICO case against Herbalife and dozens of its top distributors denying distributors’ motion to compel arbitration. The Eleventh Circuit ruled that “[b]ecause none of the top distributors is a party to any of the aggrieved distributors’ agreements, they cannot invoke the agreements’ arbitration clauses.” For more of TINA.org’s coverage of Herbalife, click here.

[ July 27, 2020 ] Neora (aka Nerium International): The FTC scored a small victory in its pyramid scheme lawsuit against Neora on Monday when a New Jersey federal court, in denying Neora’s motion to dismiss the case, held that an earlier lawsuit instituted by Neora against the FTC in Illinois was “filed in bad faith” and raised “improper forum selection concerns.” The court did, however, transfer the FTC’s action to Texas, where Neora is headquartered. For more of TINA.org’s coverage of Neora, click here.

[ July 22, 2020 ] Young Living: SC Johnson & Son challenged a multitude of health and wellness claims being made by Young Living to market its essential oils before the National Advertising Division (NAD). On Wednesday, the self-regulatory body recommended that Young Living discontinue “unsupported, health-related essential oil product claims of ‘therapeutic grade’ and physical and/or mental health benefits, as these claims are unsupported.” Young Living is appealing NAD’s decision to the National Advertising Review Board. For more of TINA.org’s coverage of Young Living, click here.

[ July 9, 2020 ] DSSRC (Direct Selling Self-Regulatory Council): The DSSRC published Guidance on Earnings Claims for the Direct Selling Industry, which it states provides detail on how it reviews and evaluates earnings claims in the MLM industry. The guidance cautions against using phrases such as “financial freedom,” “full-time income,” “replacement income,” “residual income” and “career-level income,” among other things.

[ July 2020 ] DSA (Direct Selling Association): The DSA published its 2019 industry overview. Comparing the data to the associations’ 2018 overview reveal, among other things, that direct retail sales in the U.S. decreased from $35.4 billion in 2018 to $35.2 billion in 2019 while the number of distributors increased from 6.2 million in 2018 to 6.8 million in 2019. For more of TINA.org’s coverage of DSA fact sheets, click here.

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Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

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