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FTC challenges seller’s business model & product claims

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Make tens of thousands of dollars a month selling wellness products. Skeptical? Here’s why you should be.

On Friday, the FTC filed a complaint against Neora, LLC, formerly known as Nerium International, LLC and several other defendants, alleging the defendants operate an illegal pyramid scheme, make false and misleading earning claims, and use false and unsubstantiated claims to market EHT dietary supplements.

The FTC alleged that Nerium falsely claims that EHT can prevent, reduce the risk of, or treat chronic traumatic encephalopathy (CTE), caused by repetitive brain trauma, as well as Alzheimer’s and Parkinson’s disease.

According to the FTC, Nerium also made the misleading promise that people who join Nerium will earn “lifestyle-changing income” and live a “lavish lifestyle” but in reality, only a small percentage even make back the money they pay upfront.

The defendants allegedly deceived consumers for more than four years, touting the unproven benefits of taking their EHT supplements, which resulted in sales of more than $120 million.

With its lawsuit, the FTC seeks to permanently stop the defendants’ practices and return money to consumers.

If you’re thinking about buying into a multilevel marketing plan (MLM), get the details. Not all MLMs are legitimate – some are illegal pyramid schemes. If the MLM’s sales pitch focuses on recruiting, and says little about sales of products to the public, walk away. Also, pay attention to whether the recruitment pitch says or suggests that you will be living in the lap of luxury. In cases brought by the FTC, a substantial percentage of distributors in the pyramid scheme lost money, so beware of promises that you will gain financial freedom or be able to quit your job.

Considering a supplement? People spend billions of dollars each year on health-related products and treatments that don’t deliver. People who buy them are cheated out of their money, their time, and even their health. Talk to your healthcare professional, and be skeptical about amazing health claims.

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Want to avoid the latest rip-offs? Sign up for free consumer alerts from the FTC at ftc.gov/subscribe. If you spot a scam, report it at ftc.gov/complaint.

 

 

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