Early January 2014, Sensa and three other national marketers of fad weight-loss products settled charges raised by the FTC in an effort to stop “misleading claims for products promoting easy weight loss and slimmer bodies.” The weight-loss company, Sensa, will pay $26.5 million to settle charges that accused the company of exhorting consumers in their “sprinkle, eat, and lose weight” campaign. Charges were also announced against the companies L’Occitane and HCG Diet Direct for making unfounded promises to consumers. The combined total the companies are ordered to pay is approximately $34 million, which the FTC will use to refund consumers.
To read the FTC’s full press release, click HERE.
A Belgian appellate court declared December 3, 2013 that Herbalife is in fact operating in compliance with Belgian law, reports Yahoo! news. This ruling is in response to previous claims by the consumer organization, Test-Aankoop, that the international nutrition company was operating as a pyramid scheme.
Herbalife was established in 1980 and operates in over 75 countries. The company is the world’s fifth top direct selling company, with 2.7 million salespeople in roughly 79 markets, reports mlmlegal.com.
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According to the Direct Selling Association (DSA), shares of wellness and services products have gradually increased over the past several years. This, of course, doesn’t mean that wellness and services are always going to be the most successful products in an MLM business model but they are right now. The DSA states the following about current MLM product success:
Wellness (including weight management products, nutritional supplements, health foods and beverages, etc.) and Services (including utilities, and financial products) has steadily increased for the last several years…
Easy access to information about health and wellness has contributed to increased consumer interest in such products… Direct sales not only offers desirable products in this category, but has the value-added benefit of personal interaction with a knowledgeable representative to help the consumer make their purchasing decisions.
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The direct selling industry hasn’t proved to be as vulnerable to a down economy as other industry sectors. Fledgling and startup MLM companies are either flourishing or remaining economically consistent (see our recent blog post on the DSA’s – Direct Selling Association – Annual Growth & Outlook Survey for the latest U.S. direct selling industry statistics). Proof for this can be seen in the latest MLM industry headlines, but also in the growing pending member applications under review by the DSA.
Four new direct selling companies have applied for membership with the Direct Selling Association, announced in a recent DSA press release.