Category Archives: Amway North America

Missing: Amway victims – if found please report to Boies, Schiller & Flexner

As regular readers would know, a few years back some disgruntled former Quixtar IBOs, Pokorny & Blenn, launched a class action lawsuit in California against Quixtar (now Amway) and Britt World Wide. In my view the case was clearly bogus, but Amway decided to avoid the cost of a long court case, and also take the opportunity to clear the decks of any issues from the past. What they did was to not only offer a settlement, but to bring all the other major Amway business support groups in to the case as well, so that any IBOs who felt they’d been exploited could get some restitution and agree not to launch any future legal actions. Everyone could just move on.

Well, today I received an email from the “Class Counsel” handling the settlement that began like this –

Records show that you are a current or former Amway/Quixtar distributor (“IBO”). Former IBOs can get benefits from a Settlement providing $34 million in cash and $21 million (retail value) in free products from Quixtar. Initially, eligible claimants had until August 17, 2012 to file a claim to receive cash or free products. However, after accounting for the claims that have already been filed, there is excess cash and products in the Settlement Funds.

Critics of multilevel marketing claim there are literally hundreds of millions of “victims” of MLM companies that have lost thousands, even tens and hundreds of thousands of dollars. When asked where all these “victims” are, and why they haven’t requested refunds, or complained to authorities or groups like the Better Business Bureau (there are very, very few complaints against legitimate MLM companies), critics claim that these “victims” are too ashamed to complain.

Right now, hedge fund short seller Bill Ackman has been making similar claims against Herbalife, another large MLM company. He has made various accusations against them, including that it is an illegal pyramid scheme, and is betting it will be closed down, in which case he will make hundreds of millions of dollars from shorting the stock. (In reality he stands to make a lot of money just by driving the stock price down, which he successfully did just by making the accusations). Another investor, Daniel Loeb, made the following comment about Ackman’s accusations –

“The short thesis rests on the notion that the FTC has been asleep at the switch, missed a massive fraud for over three decades, and will shortly awaken (at the behest of hedge fund short seller) to shut down the company,” Mr. Loeb wrote. “We find this thesis to be preposterous.”

We find this thesis to be preposterous. Loeb has stated well the reality of  many of the claims of critics of the multilevel marketing industry. We find this thesis to be preposterous.

Well, following Amway’s settlement in the Pokorny Class Action, the administrators endeavoured to contact every single Amway/Quixtar IBO over the last decade in the United States. They contacted them and offered them money.

The result? To clear the settlement money they’ve had to extend the time to submit a claim by seven months and expand the benefit dramatically. The value of the product packs available has doubled, and if you spent money on BSM, you can just write a letter and claim you spent money, and how much, and get some of the cash.

So c’mon, don’t be ashamed! Get your free wag now at www.quixtarclass.com

Amway to open first US business center

 

Amway's London Business Centre
Amway’s London Business Centre

Following a model which has proven successful in various Amway markets around the world, Amway North America has announced that the first US “Amway Business Center” will open soon at Citi Field, home of the famous Major League Baseball team, The New York Mets. According to a report in the latest Amway Business News, the experience center will offer –

  • Credible Opportunity Messaging greets all IBOs and their prospects as soon as they walk in the door.
  • Lounge Spaces where IBOs can meet and connect with their prospects and each other for one-on-one opportunity presentations and mentoring sessions, or just catch up on some business.
  • Brand Experiences to promote Amway’s biggest and best brands: ARTISTRY®, NUTRILITE®, LEGACY OF CLEAN™ (as well as the Healthy Living brands), and XS®. IBOs and their prospects can engage with the products and the brands for themselves through interactive and engaging experiences.
  • Training & Education through a variety of scheduled knowledge- and skill-building sessions held in the large training room. There will also be opportunities for IBO groups to reserve the room for education, leadership events, and business meetings.
  • Ordering and New IBO Registration can be done on the spot via on-site computers. A few products are also available for purchase in limited quantities.
  • Education and Activities will begin soon.

Class action against Amway Canada thrown out

Well, “thrown out” is probably not a technically correct legal term, but the result is the same. Back in 2009 a pair of disgruntled IBOs, husband and wife Kerry Murphy and Cheryl Rhodes, of Cloverdale, British Columbia, filed a class action lawsuit against Amway Canada. This  of course made news with the anti-Amway brigade, but funnily enough some other news didn’t – way back in November of last year, the Court sided with Amway and said their complaint should go through Amway’s arbitration system.

I should clarify – not their complaint. In what has to be one of the least successful attempts at a class action ever, Murphy and Rhodes launched this lawsuit and promoted their class action through press releases and websites. The result? Well, in a class action, one of the tasks of the Judge is to determine if there is a sufficiently large group of people with the same grievance. In May 2011, his wife Cheryl Rhodes curiously withdrew from the class action. So we’re down to one, and in the judgement, the Judge had this to say –

the plaintiff has only provided evidence of one claim – his own for the amount of $15,000. …. Absent any convincing evidence of multiple claims or multiple defendants, the issue of the reasonableness of a partial stay is simply not triggered.

So it became his complaint. Just Kerry Murphy. No Cheryl Rhodes, and nobody else stood up to offer further claims. It gets even worse for Mr Murphy-

THIS COURT ORDERS that the defendant’s Motion to Stay and to Compel Arbitration is allowed. Costs shall be awarded to the defendant.

It seems to me highly likely that the defendants (Amway) costs for a case like this are going to far, far exceed the $15000 Murphy claimed he lost doing Amway during his four times as an IBO. I notice looking through the court records that  Robert FitzPatrick provided an affidavit in support of Murphy and Rhodes. I have little doubt that anti-MLM zealots like FitzPatrick encouraged this action.

FitzPatrick and his ilk are causing real financial damage to people by leading them astray with their falsehoods and anti-mlm zealotry.

Murphy has appealed the case. I feel sorry for him.

Oh the confusion …. CSPI gets it (mostly) very wrong.

The Centre for Science in the Public Interest (CSPI) is a somewhat voracious “defender” of a healthy lifestyle. While I agree with many of their positions, I disagree with much of the way they go about it, with attacks on various foods and supplements that often go outside scientific support and verge on obsession. I think they need to remember that stressing too much about what you’re eating can be more damaging to the health than whatever it is you are actually eating!

Anyway, this week CSPI set it’s eyes on Amway and Nutrilite in a letter to Amway President Steve Van Andel and a widely circulated press release. At best their claims against Amway are confused. At worst they are outright deceptive. They are also incredibly ironic!

CSPI attacks Amway over Nutrilite twist tubes, mentioning in particular two products, Nutrilite Fruit & Vegetables 2GO twist tubes  and Strawberry Kiwi flavored Immunity Twist Tubes. CSPI’s letter and press release show a lack of due diligence on their part both with regards the products they attack and Amway itself, as well as, surprisingly, a lack of understanding of FDA regulations. I’ll start with their confusing, and misleading press release.

In the release they say –

“Fruits & Vegtables 2GO” has “the antioxidant equivalent of two of the 9–13 daily servings of fruits and vegetables your body needs,” according to Amway. But there’s far more to fruits and vegetables than just antioxidants, according to CSPI.

Oh the irony. CSPI is pretty much parroting Nutrilite’s greatest marketing differential back at Nutrilite to falsely criticise a Nutrilite product. Yes, CSPI, you are right. There is far more to fruits and vegetables than just antioxidants. It’s what Nutrilite has been saying for nearly 80 years. That’s why Fruits & vegetables 2GO has actual fruit and vegetables in it! A review of the ingredient label shows it includes “Acerola Cherry Concentrate … Pomegranate, Cranberry, Blueberry, Carrot, and Red Beet Juice Concentrates”. Real fruit and real vegetables, complete with all those phytochemicals CSPI correctly points out are important.

CSPI seems to have assumed that Amway’s products are like most other competitors in the nutritional supplements category – composed of synthetic isolates. In general, they’re not. That’s the Nutrilite difference. In their letter to Steve Van Andel, CSPI goes further –

Amway claims that “60mg of vitamin C from NUTRILITE Acerola Cherry Concentrate [provides] the natural vitamin C equivalent of about one mango or 1/2 cup of cooked broccoli” and “5 mg of Beta carotene from the algae plant [provides] the natural beta carotene equivalent of about one medium carrot or one cupe of cataloupe.” These claims suggest that the ingestion of isolate vitamins or antioxidants have the same benefit as the ingestion of whole foods such as mango, broccoli, carrots, or cataloupe that countain those vitamins and antioxidants. This is not the case, and suggesting as much is deceptive to consumers.

CSPI has somehow come to the conclusion that “Nutrilite Acerola Cherry Concentrate” is somehow an “isolated vitamin”. It’s not. It’s exactly what it says, Acerola Cherry Concentrate. Amway also clearly states that it’s natural beta carotene, from algae, provides the equivalent beta carotene as a carrot or some cantaloupe. “equivalent” is not “the same“. A cup of cantaloupe is not the same as a medium carrot is not the same as some algae. Contrary to CSPI’s claims, Amway nowhere suggests they are, and I can’t see how this is at all “deceptive to consumers”

Now, the Strawberry/Kiwi flavored immunity twist tube is one of those exceptions from “the Nutrilite difference”. It doesn’t contain fruit and vegetables as nutritional sources, it’s primarily Vitamin C as ascorbic acid (almost certainly synthetic). Personally I, and others who contribute to this blog and Amway Talk, were a little bit disappointed in the twist tube products when they came out, because they didn’t uphold the Nutrilite difference. The Fruit & Vegetables 2GO product, released fairly recently, begins to address that. Still, CSPI’s criticisms of this product verge on the childish. Despite the very name of the product saying it’s “Strawberry and Kiwi flavored dietary supplement”, CSPI apparently believes the pictures of a kiwi and a strawberry on the front misleads consumers in to thinking it has actual fruit in it. That might be true if you were already aware of the normal Nutrilite approach, but for the vast majority of consumers – really? A can of fanta has a picture of an orange on the front. Do people really believe it contains oranges? Pictures of fruit on packaging are an extremely common approach for depicting the flavor of a product. Is CSPI going to threaten to sue them all?

CSPI also criticises this product for the claim that  it is a an “immune system booster” that will “protect your cells.”  CSPI believes this claim is deceptive as it implies it prevents or cures disease – a no no under FDA rules. They’re wrong. This is what are categorised by the FDA as “structure/function” claim, not a disease claim. The idea that antioxidants are import in protecting cells and the immune system is well established, I believe Amway is on safe ground on this issue.

There is one area where I think CSPI is correct in their criticism. They state – “Also, both product lines contain the artificial sweetener sucralose, despite a print advertisement for “fruits & vegetables 2GO” that claims the product has no artificial ingredients.”

Both products state on their packages and on the Amway website that they contain “no artificial colors or flavors”. This is correct. Personally I think this kind of marketing line does verge on deceptive as many people would interpret it as “nothing artificial” rather than just limited to colors or flavorsSucralose is neither a color or flavor so Amway is technically and legally correct. However, CSPI also refers to a print advertisement  (pictured right) for Fruit & Vegetables 2GO which states the product “contains no artifical colors, flavors, preservatives or ingredients“. This is clearly wrong, it contains sucralose, which is an artificial ingredient.

So CSPI gets one claim right out of the many they make against Amway. Their letter to Steve Van Andel though, I find extremely ironic, with several pages devoted to educating him about the benefits of phytochemicals, a consumer field Amway and Nutrilite virtually pioneered!

A little more due diligence next time, CSPI.

1222 new Founder Platinums and above for Amway North America!

I saw a tweet from Jody Victor earlier today that was so incredible I had to confirm it before posting about it here –

What I needed to confirm was this was just for Amway North America. It seemed too small for Amway globally, but an almost unbelievable result for just Amway in North America. Well, Jody confirmed it. Amazing.

Just for fun, let’s see just how accurate that  a certain prolific anti-Amway blogger and obsessive has been over the past year –

Sep 1 2010 – I believe that Amway is shrinking in North America

Nov 29 2010 – It sure looks like Amway in the US and Canada is shrinking

Feb 11 2011 – it appears that Amway is shrinking in the US and Canada

Feb 12 2011 – I believe Amway is alreadu [sic] shrinking

Feb 28 2011 – it appears that Amway is shrinking in the US

May 24 2011 – especially in North America where Amway appears to be shrinking instead of growing.

June 23 2011 – I have heard recently that Amway and WWDB is shrinking in the US.

But don’t hold your breath expecting a little thing like reality to change his tune.  You’ll note three of the quotes above, in February 2011, were made just days after Amway revealed North American growth the previous year had been 5%. Who are you listening to?

Exciting times for Amway IBOs in North America – 1222 new Founders Platinums and above! Wow!

Updated Amway IBO average income statistics, plus an important clarification

For the last decade, whenever Amway has published income data for the Amway business they have also reported, based on a survey in 2000, an “average income” for “active IBOs” –

The average monthly gross income for “active” IBOs was $115.

Approximately 66% of all IBOs of record were found to be “active.”

“Active” means an IBO attempted to make a retail sale, or presented the Amway Independent Business Ownership Plan, or received bonus money, or attended a company or IBO meeting in the year 2000.

“Gross income” means the amount received from retail sales, minus the cost of goods sold, plus the amount of Performance Bonus retained. There may be significant business expenses, mostly discretionary, that may be greater in relation to income in the first years of operation.

Amway critics have often latched on to this “average income” and claimed (by falsely assuming all these IBOs are working hard and have business expenses) that virtually all IBOs are losing money and that it’s a poor business opportunity. In reality it’s a very poor and virtually meaningless statistic. There’s a reason why if you google “average income” you’ll be hard pressed to find it. What you’ll find instead is “median income”, which is altogether different statistic. “Average” only really works when you have a group that is homogenous, or members are similar to each other.  The group used by Amway is “active IBOs”, and as per their definition includes everyone from the handful of US Founders Crown Ambassadors who have been building their businesses for decades and earn millions, through to the 19yr old college student who joined a few months back and  asked their brother if they wanted to buy an XS – and the brother said “no”, and they never did anything again.

Clearly the statistic doesn’t tell us much at all! I can only surmise that Amway keeps publishing it at the behest of their lawyers, who want to keep on the good side of the FTC and ensure nobody can complain Amway gave them an overly optimistic view of their chances of making money with Amway.

So, we’re left with a lousy, misleading, statistic. At least now though, we’re not left with an old lousy, misleading statistic. Recent issues of Amway’s Achieve Magazine have been reporting new data, based on a survey from 2010 – Continue reading Updated Amway IBO average income statistics, plus an important clarification

Amway to be presenting sponsor of the Detroit Red Wings

Amway and the 11 time Stanley Cup winning Detroit Red Wings have announced that Amway is to be the team’s first ever presenting sponsor, and Nutrilite the team’s official nutritional supplement. Nutrilite is also going to work with the team on optimising supplements for each player.

With 11 titles the Red Wings are the most successful ice hockey club in the US, bested in the overall NHL rankings only by two Canadian teams. Along with the AC Milan sponsorship this means Amway and Nutrilite are partnered with two of the most successful teams in world sport. This sponsorship has benefits outside of the US though, with the team currently including not only 6 American players, but 7 Canadians, 6 Swedes, 2 Czechs, a Russian, a Finn, and a Slovenian. Indeed the captain, Niklas Lindström, is a Swede, so this sponsorship might be a fillip for Amway Sweden as well as North America.

The increased effort in marketing and branding seems to be working, with Amway North America Vice-President of Sales, Sandy Spielmaker revealing in a video to IBOs this week that Amway North America has been experiencing double digit growth over the past year.