a critique of the Nutrition for Life enforcement action
Various regulatory agencies proposed to impose sanctions against
Nutrition for Life, but these agencies chose not to pursue
such sanctions after changes were made
to the company's program.
The gist of this page is to address two questions raised by this behavior:
Did the changes to the Nutrition for Life program
bring the company into effective compliance with the law?
Given that these were not minor technical violations,
is it good public policy to allow Nutrition for Life
to get off with what is essentially a warning?
The Illinois Attorney General's office claims that their agreement
provides a "shield of protection" for consumers.
The provisions in this agreement are similar to those in consent
agreements that have been made with other multi-level marketing
companies by federal and state authorities.
These provisions include prohibitions on front-loading, requirements
to have a certain number of retail customers and a
certain percentage of sales to retail customers, accurate
disclosure of average incomes of other distributors,
and a provision for the company to buy back unsold inventory
at the original price less a re-stocking fee.
Although these may sound good on paper, in practice they
have probably done as much to hurt as to help people who
are introduced to these programs.
Bottom line on the Illinois Attorney General's agreement with NFLI
The provisions in this agreement were similar to those that have
been reached with other mlm companies.
Nevertheless, these provisions do nothing to prevent a company
from disguising a pyramid scheme as a multi-level marketing
The only benefit distributors receive from these provisions is to
be able to get back a piece of what they have paid, and the value
of this is even questionable.
Regulators should be creating effective guidelines to ensure that
compensation plans cannot be structured to turn them into pyramid schemes.
Dr. Brown's Mind & Body Newsletter (v.1 n.1)
Dr. Brown's Mind & Body Newsletter (v.1 n.4)
Trudeau Marketing Group
Nutrition for Life background
Nutrition for Life promoter charged
agreement reached with Nutrition for Life
NFLI Announcement of Consent Agreements
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