Tag Archive for FTC

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TriVita Pays $3 Million In Refund Checks For Class Action

by Tina Williams • May 20, 2015 • 0 Comments

Back in the day, about the only people who even thought about drinking cactus juice were prospectors and pioneers who’d gotten lost in the desert. But times have changed and now you can order a whopping four-pack of 32-ounce bottles of Nopalea cactus juice from a company called TriVita.
Why would you want to do that?
Well, according to the company’s website, its cactus juice from the blazing hot Sonora Desert of southern Arizona is downright anti-inflammatory. You know, sort of like it fights fire with fire.

Or as TriVita puts it: “Featuring the superfruit of the prickly pear (nopal) cactus, it contains a powerful class of nutrients called Bioflavonoids.”

Checks being mailed
Could be but the Federal Trade Commission is mailing nearly 500,000 checks totaling about $3 million to consumers who actually ordered the stuff and, presumably,

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FTC Commissioner Praises Direct Sellers

by Ramya Chandrasekaran • April 21, 2015 • 0 Comments

The direct-selling industry on Tuesday earned praise from a Federal Trade Commission (FTC) commissioner amid calls for greater regulation.
FTC Commissioner Maureen Ohlhausen praised the industry’s efforts to improve its self-regulation efforts during remarks at the National Press Club in Washington.

“I commend you for your partnership with [Council of Better Business Bureaus] that has increased awareness and understanding – and appreciation – of the importance that the direct selling industry places as an industry on ensuring it is an ethical and trustworthy marketplace,” she said.

The industry has come under fire from advocates who say more regulations are needed from FTC officials to protect consumers from pyramid schemes and faulty advertising.
But Ohlhausen said that sometimes self-regulation is “the only option for certain advertising practices where government intervention is limited by First Amendment concerns.”
Still, Ohlhausen

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Lindsey Duncan, CEO Genesis Today Fined With $9 Million

by Ted Nuyten • January 30, 2015 • 0 Comments

Lindsey Duncan and the companies he controlled have agreed to settle Federal Trade Commission charges that they deceptively touted the supposed weight-loss benefits of green coffee bean extract through a campaign that included appearances on The Dr. Oz Show, The View, and other television programs.
Under the FTC settlement, the defendants are barred from making deceptive claims about the health benefits or efficacy of any dietary supplement or drug product, and will pay $9 million for consumer redress.
“Lindsey Duncan and his companies made millions by falsely claiming that green coffee bean supplements cause significant and rapid weight loss,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This case shows that the Federal Trade Commission will continue to fight deceptive marketers’ attempts to prey on consumers trying to improve their health.”
The FTC charged that Duncan and his companies, Pure Health LLC and Genesis Today, Inc., deceptively claimed that the supplement could cause consumers to lose 17 pounds and 16 percent of their body fat in just 12 weeks without diet or exercise, and that the claim was backed up by a clinical study. In September 2014, the FTC settled charges against the company that sponsored the severely flawed study

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Herbalife Will Be Exonerated After FTC Probe

by Tina Williams • October 24, 2014 • 0 Comments

Herbalife Ltd. (HLF), the nutrition-product maker facing allegations that it runs a pyramid scheme, expects to be cleared of wrongdoing when regulators complete an investigation of the company.

“We anticipate at the end of the day we will be exonerated,” Chief Financial Officer John Desimone said in an interview. “We will wait to say anything more until the investigation is complete.”

The U.S. Federal Trade Commission is probing the Los Angeles-based maker of weight-loss shakes and nutritional supplements following accusations by billionaire hedge-fund manager Bill Ackmanthat the company misleads distributors, misrepresents sales figures and sells a commodity product at inflated prices. The Federal Bureau of Investigation also opened an investigation and several states are looking into complaints.
“We will respect the integrity of the investigations,” Desimone said. “We will fully cooperate and we have complete faith in our members and our business model.”
With a $1 billion bet against Herbalife, Ackman’s Pershing Square Capital Management LP is trying to profit from a drop in the shares. He’s been campaigning to shut down the company since December 2012, saying it exploits distributors rather than selling products to consumers.
Looking Glass
Ackman’s latest salvo came yesterday. Christine Richard, a Pershing-hired researcher who first brought Herbalife to Ackman’s attention, posted

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‘Herbalife Will Strike A Deal With FTC’

by Tina Williams • October 20, 2014 • 0 Comments

Herbalife Ltd. (NYSE:HLF) bull Tim Ramey is back in the saddle again, this time at Pivotal Research. Unsurprisingly, he’s covering the nutritional supplements company again, and he’s initiated coverage with aBuy rating. The analyst has set a $110 per share price target on Herbalife.
He also says he’s expecting the company to make a deal with the Federal Trade Commission and that it will be so good for it that shares will skyrocket as a result.
Herbalife as “alpha”
Ramey remains just as bullish on Herbalife as ever. In his report dated Oct. 20, 2014, the analysts said Herbalife Ltd. (NYSE:HLF) is the best “example of ‘alpha’ in the stock market today.” Although his 12 to 18 month price target is $110, he expects Herbalife shares to climb to between $150 and $200 in the long term.
He calls the recent pullback in Herbalife stock “déjà vu,” suggesting that the company’s miss of 2 cents per share isn’t a big deal. He notes that when activist investor Bill Ackman thought he had finally dealt the “death blow” to Herbalife, investors weren’t impressed, and shares climbed 25%. Because of this increase, he suggests that investors shouldn’t worry about a small miss of 2 cents per share.
Herbalife’s growth has slowed
Ramey does point

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FTC Cracks Down On Advertising And Claims, Potentially Affecting Network Marketing

by Tina Williams • October 16, 2014 • 0 Comments

The chairwoman of the Federal Trade Commission, Edith Ramirez, has announced that the FTC is significantly increasing scrutiny and enforcement of mainstream advertising by reputable companies. Chairwoman Ramirez recently said that the FTC is increasing enforcement against not only “outright fraud,” but also national advertising campaigns.
The FTC’s recent approach of vigorous false advertising enforcement is intended to support the goal that, as the chairwoman stated, “advertising must be truthful and non-deceptive.”
As part of this aggressive push, the FTC has launched “Operation Full Disclosure,” a truth-in-advertising campaign that already includes FTC-issued “warning letters” to more than 60 companies regarding inadequate disclosures in their advertising. The sweeping goal stated by Chairwoman Ramirez suggests that even credible advertising claims may encounter FTC investigation, saying that the FTC will push its campaign “until we are confident the industry understands the need for ‘clear and conspicuous’ disclosures, and what ‘clear and conspicuous’ means.” It is important to note that the FTC has clearly said that not receiving a “Full Disclosure” letter doesn’t mean anything: you could still be in the crosshairs.
What Does This Mean To Companies?
The FTC’s statements and actions are consistent with a broader trend we have observed of increasing FTC actions against

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Herbalife Hires Former FTC Commissioner For Compliance Department

by Tina Williams • October 7, 2014 • 0 Comments

Herbalife Ltd. HLF has hired a former U.S. regulator to lead its compliance team, after the Federal Trade Commission opened an investigation into the embattled nutritional-supplement company in March.
Pamela Jones Harbour —who worked as an FTC commissioner from 2003 to 2010 and as a prosecutor for the New York State Attorney General’s office for 12 years—has been appointed senior vice president of global member compliance and privacy. She will lead a compliance team across 91 markets in the newly created role, Herbalife said Monday.
Ms. Harbour’s appointment comes as activist investors continue to face off over the company.
Herbalife, which sells weight-loss shakes and fitness supplements, has been pummeled by hedge fund manager William Ackman since December 2012, when he spent more than three hours in a Manhattan auditorium laying out his case for why he thinks the direct marketer is a pyramid scheme whose salespeople rely more on signing up new recruits than selling product. Mr. Ackman has repeatedly called for an FTC investigation into the company, and his firm, Pershing Square Capital Management, has bet about $1 billion that the company’s shares will fall.
The company has repeatedly defended its operations and has won the support of a number of Mr. Ackman’s hedge fund rivals, including Carl

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Amway Korea Flaunts Regulations, Receives Slap On The Wrist

by Tina Williams • August 5, 2014 • 0 Comments

Ammway Korea (CEO Park Sae-joon), the largest multi-level marketing company, received correctional orders from the Fair Trade Commission (FTC) for flaunting the regulations set for multi-level marketing companies. However, the FTC has also been criticized for handing out a too-light punishment.
Unilateral Arrogance
According to the FTC on July 29, Amway forced its salespersons who resell Amway products to not sell products cheaper than a stated purchase price. If any salesperson violated this order, they were temporarily disqualified from conducting any sales activities. Disqualified salespersons are not eligible for support allowances, usually paid depending on each person’s sales performance and that of their subordinate salespersons. Disqualified salespersons can no longer recruit subordinates, either.
This is a clear violation of the Monopoly Regulation and Fair Trade Act (Section 21). Amway salespersons are not employees of the multi-level marketing company, but are considered to be independent retail distributors. Accordingly, salespersons can legally dispose of products they buy from the company via any method, including price discounts. This possibly helps consumers buy daily necessities at lower prices.

The FTC gave Amway corrective orders to stop the price fixing activities and delete the relevant clause from their sales guidelines. The FTC said, “Amway deprived consumers of the opportunity

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FTC In South Korea Reveals Average MLM Incomes

by Ted Nuyten • July 8, 2014 • 0 Comments

The South Korea FTC released information on the country’s multi-level direct marketing companies and their distributors.
Distributors at Amway in South-Korea made an average of 770,000 won ($760) last year, data by the Fair Trade Commission (FTC) showed Tuesday.
According to the data, the number of such companies has been growing steadily, to 106 last year from 67 in 2010.
These companies recorded 3.9 trillion won in combined sales last year, up 19.9 percent from the previous year.
They paid their distributors 1.3 trillion won as commission, but the income was concentrated on only a handful of them ? while the top 1 percent of the active distributors were paid on average 56.6 million won for 2013, the remaining 99 percent made 469,000 won on average.
The number of those who got commissions was 1.3 million, or 22 percent of the total registered as distributors at these multi-level direct sales companies.
Among the multi-level direct marketing companies in the country, Amway Korea is the biggest, with 1.1 trillion won in sales and 1.1 million distributors last year.
Among them, 456,797 got sales commissions totaling 353.3 billion won ? an average of 770,000 won each.
Herbalife in Korea, ranked as the second-biggest player in the industry, with 568.3 billion

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