Quixtar (Amway) - Sued For Being An Illegal Pyramid Scheme
Wed, Jan 31, 2007
On the 10th January this year a class action lawsuit was filed against Quixtar (formerly known as Amway). This class action lawsuit charges that the company are operating an illegal pyramid scheme, a move which could have far reaching consequences for the MLM world.
The charges target the very heart of what MLM has become synonymous with - that there is no real selling of product and that profits are earned primarily from recruiting others beneath you in the pyramid scheme.
Al Gore
The charges have been raised by a law firm known as Boies, Schiller and Flexner - David Boies represented Al Gore in the Gore vs. Bush vote counting case during the 2000 Presidential election.
The suit brings similar charges to those that have shut down other MLM operations, namely that recruits are buying products for personal use rather than to sell at retail and that they are given incentives to recruit further members to the scheme under the same conditions. It is further alleged that the resulting multi-level compensation scheme associated with such recruitment is nothing more than a fraud.
Interestingly, Quixtar’s own payout data shows that less than 1% of those who sign up to their scheme ever earn any profit. Lawyers will attempt to prove that this is due to the pyramid recruitment model and non-selling of real product rather than the inability of new recruits to be successful.
Interesting that you don’t note that (a) the lawsuit was bought by some folk kicked out of Quixtar/Amway for unethical business practices and who were wanting to start a competitor and (b) the lawsuit was thrown out.
Kind of puts things in an important perspective, don’t you think?
/ibofb
The Truth About Amway