Consumer Guidance From Extensive Research


This research and information on MLM (multi-level or network marketing, etc.) was prepared with the help of top experts over fifteen years by the Consumer Awareness Institute, directed by Dr. Jon Taylor. Quantitative MLM data collection was conducted by SEO expert, Jonathan E. Brand. Opinions vary widely on MLM’s legitimacy. But here you will find independent research on success and loss rates, compensation plans, viability of MLM as a business model, etc.

What went into the research by Consumer Awareness Institute? The investigative research that formed the basis of these reports includes:

  • Analysis of the compensation plans of over 500 MLM programs
  • Extensive comparative research on MLM compensation plans and alternative business models to clarify differences
  • Worldwide feedback from thousands of MLM distributors and ex-distributors in a wide variety of MLM programs over a period of over 15 years
  • Interviews with the top experts in the field
  • Surveys of hundreds of tax professionals where MLM is concentrated – representing millions of tax returns of MLM participants
  • IRS income tax records of top distributors in one state
  • Public court records in MLM cases
  • Household consumer surveys regarding MLM participation
  • Surveys of leading MLM company presidents
  • Private and public financial disclosures by MLM companies
  • Communications with law enforcement officials at all levels
  • Direct experience with prominent MLM companies.

Are there “good” MLM’s – which are not like typical MLM’s?

Probably not – the notion of a “good MLM” may be an oxymoron.

In studying the compensation plans of over 400 MLMs, I have not seen one with a compensation plan that would not be considered a “recruitment-driven MLM.” The compensation plan of a “good MLM”, if such existed, would be very different from typical MLMs that incentivize an endless chain of recruitment of participants as primary customers.

We also see MLM companies that were once focused on legitimate direct sales to end users. However, perhaps because of unfair competition posed by recruiting MLMs, they begin to make tradeoffs that take away from what was once a great program. Some engage in “channel stuffing,” or pressuring participants to buy products they have a hard time selling, leaving them with out-of-pocket costs that are difficult to justify in conducting a profitable sales operation. Or they have steep “pay to play”(minimum quota of purchases) requirements that make them marginally if not technically recruitment-driven MLM’s. Or they may have excessive levels of distributors that give leverage to those at or near the top of their hierarchy of participants, but make it very difficult for those at the bottom to profit except through aggressive recruitment. Or they may actually pay more per sale to up-line participants than to the person selling the products, again creating excessive incentive to recruit and inadequate incentive to sell to the general public. All MLMs we have studied have at least some of these features.

Comments from a licensed private investigator

ATTN: Jon and CAI editors, investigators and consultants.

You guys rock!!

I can’t tell you how useful your site is. Thank you so much for proving that ethics, moral standards and common sense are not lost. I have a friend who gets involved with the newest MLM every time a recruiter asks him to come to a meeting. It has become such an issue that it has affected our friendship. I will refer to your website often to counter the nonsense and unethical behavior that traps people like my friend. I commend and thank you for your efforts in helping people who truly are victims of this economic cancer.

I am a licensed private investigator that would love to help you in any way I can and if I have the time. (My time would be free of charge) Please let me know if there is anything I can do to help further your cause. I will do anything to help the public see these for what they are, because in one way or another they affect all of us. – Jake A.

Nu Skin’s Naughty Numbers

Nu Skin, Pharmanex (was IDN), Big Planet*, PhotoMax, etc

nuskin-naughty

One of the MLM companies most studied by Dr. Jon Taylor is Nu Skin Enterprises, Inc., which has recently operated as Pharmanex, Big Planet, and IDN (Interior Design Nutritionals)* – all of which could be considered Nu Skin corporate facials. Under tremendous pressure by persons he respected, he was aggressively recruited by Nu Skin (then IDN) promoters in 1994. He said “no” four times, but then decided to perform a one-year test of the program by signing up as a distributor and giving it his all for a year. He was successful as a recruiter and rose to the top 1% of distributors by the end of the year, but he was still losing money. His decision to quit and report his findings led to more extensive research on the entire MLM field and to the reports on this web site.

During this experience, Taylor learned that the numbers that were quoted him on average earnings of distributors and other relevant reports were full of misrepresentations, as were the reports of many other MLM companies. A more complete account of Taylor’s experiences with Nu Skin is reported in “NuSkin attempts to discredit its whistleblower.”

1. Nu Skin satisfies all 5 Red Flags of a “recruiting MLM”** with a highly leveraged breakaway compensation plan, causing an extremely high loss rate.

When one examines the compensation plan of Nu Skin Enterprises, including Pharmanex and Big Planet, one finds all “5 Red Flags for Identifying Exploitive Product-based Pyramid Schemes, or Recruiting MLM’s*”. When these 5 red flags are all present, available data lead to the conclusion that the loss rate approximates 99.9% – far worse than the average 90% loss rate of clearly illegal 1-2-4-8 no-product pyramid schemes. In other words, of all participants who sign up for such recruiting MLM programs, approximately 99.9% can be expected to lose money – especially if purchases from the company to qualify for commissions and advancement in the scheme are subtracted as a business expense! See the shocking statistics in the chart “Comparing MLM success rates with no-product pyramid schemes and gambling.”

For reports on recruitment-driven MLMs, or product-based pyramid schemes, and related reports, read the reports listed under “consumer guides” – and/or read other reports on research related to MLM or network marketing. You may also find information on legal and regulatory issues related to MLM or network marketing on our page on law enforcement and MLM or network marketing. For a more complete listing of pages on our web site go to the home page of our site – www.mlm-thetruth.com. Or if you just want to be entertained, go to our page on MLM humor and satire – including some great cartoons.

Here is how Nu Skin stacks up against the “5 Red Flags” of a recruiting MLM**, or product-based pyramid scheme
1.Recruitment of participants is unlimited in an endless chain of empowered and motivated recruiters recruiting recruiters.  YES
2. Advancement in a hierarchy of multiple levels of participants is achieved by recruitment, rather than by appointment.YES
3. Significant requirements that participants “pay to play” the game via product purchases. Thus, new recruits are the primary customers. YES
4. MLM company pays commissions and/or bonuses to at least 5 levels of participants, creating great “leverage” at the top. (Nu Skin uses a breakaway compensation system, with six levels of whole groups of participants, making it a mega-pyramid with one of the most extreme or highly leveraged compensation plans in existence. This is great for those at the top, but the pits for hundreds of thousands beneath them, who become its victims.) YES
5. Most of the payout goes to the upline, rather than to the person selling products, creating excessive incentive to recruit and inadequate incentive to sell products (except to new recruits) – and an extreme concentration of income at the top of a hierarchy (pyramid) of participants. YES

2. Victims of Nu Skin and its various divisions tell a sad story of a money trap for all but those at the top of a mega-pyramid of distributors.

3. Nu Skin’s reports provide a fascinating case study of misleading reports, of deceptive sales practices, and of FTC ineptitude (and of lax law enforcement in Utah)

Read the “REPORT OF VIOLATIONS” (PDF) by Nu Skin of the FTC’s 1994 Order for Nu Skin to stop its misrepresentations of distributor earnings. Appendix E of the report (downloaded as a separate scanned PDF file), illustrates the mega-pyramid structure of Nu Skin’s breakaway compensation plan, which enriches Blue Diamond distributors at the expense of huge downlines of victim-participants. In 1998, Nu Skin reported almost five times as much U.S. revenues to prospects (until 2001) and to the FTC as to the SEC in its official financial reports. Also, while Nu Skin officials did disclose some average income figures as requested by the FTC, the report supplied to the agency and to prospects was found by Dr. Taylor to contain 20 deceptions on the a single page! This also was reported to FTC officials. Other typical MLM deceptions are linked under the Nu Skin section of the page on MLM regulations.

If you were a responsible FTC official reading this, (after working the numbers from Nu Skin’s own reports), could you see any justification for failing to act on such blatant misrepresentations? Yet, even after such strong evidence of ongoing violations, the FTC failed to fully enforce its own Order. And this is only one example of MLM’s that engage in massive misrepresentations in order to recruit participants who will invest in products in order to “play the game.”

4. Officials in Utah (and most other states) lack the resources and the will to cope with MLM.

The above-mentioned “Report of Violations” by Nu Skin was amended to include the strong evidence of violations of Utah statutes against pyramid schemes and deceptive sales practices, based on the same evidence and arguments in the complaint filed with the FTC.

This information was presented to Utah’s Division of Consumer Protection (DCP), along with the names of several complainants, but no general action was taken against Nu Skin – only a settlement on a complaint filed by one brave ex-distributor with a small claim. One major claim filed with DCP was forwarded to Nu Skin, but with very little effort expended by DCP to resolve the formal complaint on behalf of the victim, who lost several thousand dollars from his participation.
The DCP’s justification for not conducting a general investigation of Nu Skin and other MLM’s which have proliferated in Utah is that they get too few complaints to justify a general action against most MLM companies. But if you read Taylor’s Frequently Asked Questions, you will understand why victims of established MLM’s almost never file complaints.

So – based on Nu Skin’s loss rate of approximately 99.94%, literally millions of victims suffered losses totaling several billion dollars without either the FTC or Utah’s DCP doing anything concrete about it.

You can find more updated information on legal and regulatory issues related to MLM or network marketing in the ebook The Case against Multi-level Marketing as an Unfair and Deceptive Practice.

5. Olympic officials just want the money – Forget the ethics!

When the Salt Lake Olympic Committee (SLOC) accepted Nu Skin as a sponsor of the 2002 Salt Lake Winter Olympics, a report entitled “Nu Skin’s Naughty Numbers” (NNN) was sent as a petition to them and the local press to discourage SLOC from allowing Nu Skin to exploit its Olympic connection. SLOC, USOC (US Olympic Committee), and IOC (Int’l Olympic Comm.) ignored the petition; and the Olympic rings were displayed at Nu Skin “opportunity meetings” (recruitment rallies) world-wide and on recruitment and product literature. (The Olympics still accepts Nu Skin as a sponsor.)

6. Nu Skin’s reactions to it’s whistle-blower are typical MLM defenses.

You may find it interesting to read “NuSkin Attempts to Discredit its Whistleblower”, which refutes charges Nu Skin circulated to news organizations about Dr. Jon Taylor. It includes Taylor’s rigorous one-year test of the Nu Skin program before reporting his experiences.

7. Nu Skin claims to be a direct selling company, but lobbied for the removal of the direct selling requirement from Utah’s Pyramid Scheme Act.

In 2005 and 2006, Nu Skin communicators (based in Utah) lobbied for legislation (SB 182) removing the requirement for direct selling to legitimate customers in Utah’s Pyramid Scheme Act. In doing so, they did a great disservice to consumers world wide who are affected by Utah-based schemes. Nu Skin executives worked closely with the DSA (Direct Selling Assn.), the lobbying organization which has been taken over by MLM chain sellers and which has been deceptively lobbying to weaken anti-pyramid statutes in state after state.

8. Use the “Answer Cards” to tell five others about this site, and ask each of them to tell 5 more, and they each 5 more, etc. . .
Print a supply of these handy answer cards (in PDF format) for distribution to persons who try to recruit you or persons you care about.

* The nu face of Nu Skin in 1994 was Interior Design Nutritionals, which was shed with two new facials – Big Planet and Pharmanex.

** A recruiting MLM is an MLM with a compensation system that rewards recruitment more than actual sales of products to persons outside the network of participants. So significant income is unlikely without recruitment of a large downline.

Thoroughly researched:
The truth about Nu Skin ( Pharmanex, Big Planet, PhotoMax, and its other nu faces) has been answered in the following:

  • Surveys of tax professionals (those who handle the taxes of persons who participate in network marketing)
  • FTC and court records for actions against Nu Skin
  • Surveys of consumers in areas of intense participation by Nu Skin,
  • Nu Skin’s financial reports
  • Nu Skin’s marketing materials,
  • Communications with top Nu Skin officials
  • Correspondence and meetings with FTC and state officials regarding Nu Skin
  • World-wide feedback from thousands of victims who have suffered losses from participation in Nu Skin programs
  • Insider documents of Nu Skin officials
  • Interviews with current and past distributors from Nu Skin programs
  • Reports of comparative analyses of alternative income opportunities
  • Compensation plans, and actual income reports of Nu Skin and other MLM/network marketing companies (compared with gambling and no-product pyramid schemes)
  • First-hand experience in the full sales and recruitment program by the author
  • REPORT OF VIOLATIONS of the FTC Order for Nu Skin to stop its misrepresentations of earnings of its distributors, etc. After ten years of research, all this information is now made available this site. You can now find the answers to your questions regarding the truth about Nu Skin and its divisions, as well as other MLM/network marketing programs.
  • Summary of important links to learn more of the truth about MLM:

To gain help with decisions about MLM participation, go to MLM Consumer Guides, especially the 5-Step Do-it-yourself Evaluation.
To learn what the odds of actually making a profit in typical MLMs, go to MLM Statistics page.
To learn if the products are what promoters claim and worth the price, go to MLM Products.
To gain a greater understanding and a nice summary of why the media and academia is not more critical of MLM as a business model, read Frequently Asked Questions.
To read why MLM is virtually unregulated read and check out the links from the Regulation and Law Enforcement pages.
To review the research behind all this, go to the research references on this website.

To have a good laugh about the cultish culture at Nu Skin opportunity meetings, read “Jon Taylor observes Nu Skin convention as ex-distributor


To order printed copies
If you prefer to have us print and mail to you a coil-bound copy of the book, please send us your address and a check or money order in the amount of $65 ($85 for hardbound) to –

Consumer Awareness Institute
291 E. 1850 South
bountiful, UT 84010

For copies of the “Regulatory Capture” report, send $35. Shipment may take about two weeks.
For two-day priority shipment, send an extra $10. 

 

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Disclaimer: These reports are intended purely to communicate information in accordance with the right of free speech. They do not constitute legal or tax advice. Anyone seeking such advice should consult a competent professional who has expertise in endless chain or pyramid selling schemes. Readers are specifically advised to obey all applicable laws, whether or not enforced in their area. Neither the Consumer Awareness Institute nor the authors assume any responsibility for the consequences of anyone acting according to the information in these reports.

Sample Readers’ Comments

Congratulations for a great lifetime of research! Coming from a background of IT and Political Sciences, I like and appreciate the scientific way in which you present information.– Claire Zarb

__________________________

OMG, Dr. Taylor, your research is incredible and a direct hit. I’m trying [to counter this], but this cult is getting stronger as our economic down turn continues to plague us. . . It is sad in this case because this family will pull their son from his sophomore year at University of San Francisco to work full time in this MLM cult. I escorted my family members to this conference and felt like it was a version of the Jonestown revival act episode II. – Karen H., California

__________________________

“Thank you for your great insights and all the work you have put into researching this little-understood subject.  If every [person] interested in joining recruiting MLM’s would just take the time to read your [reports] and educate themselves, they could save a lot of grief.”  —Michael Rawlings

__________________________

“Thank you for your work on MLM!  It is exactly what I’ve been looking for to get a data-based picture of the opportunity I am currently pursuing.  Your logical questions and objective research are exactly what is needed in this industry.” —Donna Horowitz

 _________________

While I was looking for a little bit of information on MLMs, I found your page through Wikipedia. I also read your 44 page paper “The 5 Red Flags: Five Causal and Defining Characteristics of Product-based Pyramid Schemes, or Recruiting MLM’s.” It didn’t take me long to figure out that MLMs were much worse than I had thought. I thought about it from a business and an economic standpoint and I realized that this business model makes absolutely no sense. . . I can’t thank you enough for the information. It may have saved my mother from disaster. I am going to do what I can to spread the message to others. – Noah Abrams

__________________________

I found your paper on the internet – “the five red flags” to identifying product based pyramid schemes. Very informative. I forwarded it to my friends and tried to get them to understand that what they are involved in is unethical at a minimum . . but they just sent me back the published hype – all the typical things you referred to in your paper. These [MLM] companies seem to prey on housewives who don’t understand the basics of market supply and demand. They are so naïve that they cannot see the forest for the trees.

It was the compensation structure that got me suspicious – when I realized that these minimum purchases were involved I started doing a little break-even analysis and realized how much I’d have to sell at these low commission rates to just make back the money they have you spend as monthly minimums. It really does not become clear until you start to calculate how many people you have to sell to just to break even! Then it became clear to me that you had to recruit people to make any money. I thought this was very fishy – and so I jumped on the internet and found your article…and then it all really clicked in my brain. – Susan S., MBA

__________________________

RE: Accolades and Thanks

Since a trusted family friend got me started on a food supplement distributed by a multi-level marketing (MLM) company a few weeks ago I have been searching academic databases and the web for specific, evidence-based research on the company and its products. The line of reasoning which goes, “If it works, buy it,” is simply not good enough for me.  I need to look at the larger picture of who is producing, what kind of business are they operating and how are they treating people.  My question is a more general, “Does this company have integrity?”  If I’m considering committing $150 a month for the rest of my life to a supplier of food supplements, it had better be a company that serves not only me but the society my children, my neighbors and I will live in.  So if it is defrauding its distributors, no matter what good its products are doing for me, I won’t buy.

Searching academic databases and the web, I found nothing whatsoever on the supplements I was ingesting.  No science at all, strange since the company has been selling them and claiming amazing results for eighteen years, similar to Mannatech‘s data.  The only scientific data I found was about the business practices of the MLM companies.  That was on your web site.  I very much appreciate your dedication to fact finding about the MLMs and their ‘contributions’ to our society.  What you have found is yet another example of Americans with money and power defrauding middle and lower class people with much less.  I applaud your painstaking, research carried on over decades and at your own expense.  The future of democracy depends on the kind of public awareness that you are making possible through your research. 
– JN, MCS, MEd, college instructor, BC, Canada

 


OMG, Dr. Taylor, your research is incredible and a direct hit. I’m trying [to counter this], but this cult is getting stronger as our economic down turn continues to plague us. . . It is sad in this case because this family will pull their son from his sophomore year at University of San Francisco to work full time in this MLM cult. I escorted my family members to this conference and felt like it was a version of the Jonestown revival act episode II. – Karen H., California


“Thank you for your great insights and all the work you have put into researching this little-understood subject. If every [person] interested in joining recruiting MLM’s would just take the time to read your [reports] and educate themselves, they could save a lot of grief.” —Michael Rawlings


“Thank you for your work on MLM! It is exactly what I’ve been looking for to get a data-based picture of the opportunity I am currently pursuing. Your logical questions and objective research are exactly what is needed in this industry.” —Donna Horowitz

Nu Skin’s Naughty Numbers

Nu Skin, Pharmanex (was IDN), Big Planet*, PhotoMax, etc

One of the MLM companies most studied by Dr. Jon Taylor is Nu Skin Enterprises, Inc., which has recently operated as Pharmanex, Big Planet, and IDN (Interior Design Nutritionals)* – all of which could be considered Nu Skin corporate facials. Under tremendous pressure by persons he respected, he was aggressively recruited by Nu Skin (then IDN) promoters in 1994. He said “no” four times, but then decided to perform a one-year test of the program by signing up as a distributor and giving it his all for a year. He was successful as a recruiter and rose to the top 1% of distributors by the end of the year, but he was still losing money. His decision to quit and report his findings led to more extensive research on the entire MLM field and to the reports on this web site.

During this experience, Taylor learned that the numbers that were quoted him on average earnings of distributors and other relevant reports were full of misrepresentations, as were the reports of many other MLM companies. A more complete account of Taylor’s experiences with Nu Skin is reported in “NuSkin attempts to discredit its whistleblower.”

1. Nu Skin satisfies all 5 Red Flags of a “recruiting MLM”** with a highly leveraged breakaway compensation plan, causing an extremely high loss rate.

When one examines the compensation plan of Nu Skin Enterprises, including Pharmanex and Big Planet, one finds all “5 Red Flags for Identifying Exploitive Product-based Pyramid Schemes, or Recruiting MLM’s*”. When these 5 red flags are all present, available data lead to the conclusion that the loss rate approximates 99.9% – far worse than the average 90% loss rate of clearly illegal 1-2-4-8 no-product pyramid schemes. In other words, of all participants who sign up for such recruiting MLM programs, approximately 99.9% can be expected to lose money – especially if purchases from the company to qualify for commissions and advancement in the scheme are subtracted as a business expense! See the shocking statistics in the chart “Comparing MLM success rates with no-product pyramid schemes and gambling.”

For reports on recruitment-driven MLMs, or product-based pyramid schemes, and related reports, read the reports listed under “consumer guides” – and/or read other reports on research related to MLM or network marketing. You may also find information on legal and regulatory issues related to MLM or network marketing on our page on law enforcement and MLM or network marketing. For a more complete listing of pages on our web site go to the home page of our site – www.mlm-thetruth.com. Or if you just want to be entertained, go to our page on MLM humor and satire – including some great cartoons.

Here is how Nu Skin stacks up against the “5 Red Flags” of a recruiting MLM**, or product-based pyramid scheme
1.Recruitment of participants is unlimited in an endless chain of empowered and motivated recruiters recruiting recruiters.  YES
2. Advancement in a hierarchy of multiple levels of participants is achieved by recruitment, rather than by appointment.YES
3. Significant requirements that participants “pay to play” the game via product purchases. Thus, new recruits are the primary customers. YES
4. MLM company pays commissions and/or bonuses to at least 5 levels of participants, creating great “leverage” at the top. (Nu Skin uses a breakaway compensation system, with six levels of whole groups of participants, making it a mega-pyramid with one of the most extreme or highly leveraged compensation plans in existence. This is great for those at the top, but the pits for hundreds of thousands beneath them, who become its victims.) YES
5. Most of the payout goes to the upline, rather than to the person selling products, creating excessive incentive to recruit and inadequate incentive to sell products (except to new recruits) – and an extreme concentration of income at the top of a hierarchy (pyramid) of participants. YES

2. Victims of Nu Skin and its various divisions tell a sad story of a money trap for all but those at the top of a mega-pyramid of distributors.

3. Nu Skin’s reports provide a fascinating case study of misleading reports, of deceptive sales practices, and of FTC ineptitude (and of lax law enforcement in Utah)

Read the “REPORT OF VIOLATIONS” (PDF) by Nu Skin of the FTC’s 1994 Order for Nu Skin to stop its misrepresentations of distributor earnings. Appendix E of the report (downloaded as a separate scanned PDF file), illustrates the mega-pyramid structure of Nu Skin’s breakaway compensation plan, which enriches Blue Diamond distributors at the expense of huge downlines of victim-participants. In 1998, Nu Skin reported almost five times as much U.S. revenues to prospects (until 2001) and to the FTC as to the SEC in its official financial reports. Also, while Nu Skin officials did disclose some average income figures as requested by the FTC, the report supplied to the agency and to prospects was found by Dr. Taylor to contain 20 deceptions on the a single page! This also was reported to FTC officials. Other typical MLM deceptions are linked under the Nu Skin section of the page on MLM regulations.

If you were a responsible FTC official reading this, (after working the numbers from Nu Skin’s own reports), could you see any justification for failing to act on such blatant misrepresentations? Yet, even after such strong evidence of ongoing violations, the FTC failed to fully enforce its own Order. And this is only one example of MLM’s that engage in massive misrepresentations in order to recruit participants who will invest in products in order to “play the game.”

4. Officials in Utah (and most other states) lack the resources and the will to cope with MLM.

The above-mentioned “Report of Violations” by Nu Skin was amended to include the strong evidence of violations of Utah statutes against pyramid schemes and deceptive sales practices, based on the same evidence and arguments in the complaint filed with the FTC.

This information was presented to Utah’s Division of Consumer Protection (DCP), along with the names of several complainants, but no general action was taken against Nu Skin – only a settlement on a complaint filed by one brave ex-distributor with a small claim. One major claim filed with DCP was forwarded to Nu Skin, but with very little effort expended by DCP to resolve the formal complaint on behalf of the victim, who lost several thousand dollars from his participation.
The DCP’s justification for not conducting a general investigation of Nu Skin and other MLM’s which have proliferated in Utah is that they get too few complaints to justify a general action against most MLM companies. But if you read Taylor’s Frequently Asked Questions, you will understand why victims of established MLM’s almost never file complaints.

So – based on Nu Skin’s loss rate of approximately 99.94%, literally millions of victims suffered losses totaling several billion dollars without either the FTC or Utah’s DCP doing anything concrete about it.

You can find more updated information on legal and regulatory issues related to MLM or network marketing in the ebook The Case against Multi-level Marketing as an Unfair and Deceptive Practice.

5. Olympic officials just want the money – Forget the ethics!

When the Salt Lake Olympic Committee (SLOC) accepted Nu Skin as a sponsor of the 2002 Salt Lake Winter Olympics, a report entitled “Nu Skin’s Naughty Numbers” (NNN) was sent as a petition to them and the local press to discourage SLOC from allowing Nu Skin to exploit its Olympic connection. SLOC, USOC (US Olympic Committee), and IOC (Int’l Olympic Comm.) ignored the petition; and the Olympic rings were displayed at Nu Skin “opportunity meetings” (recruitment rallies) world-wide and on recruitment and product literature. (The Olympics still accepts Nu Skin as a sponsor.)

6. Nu Skin’s reactions to it’s whistle-blower are typical MLM defenses.

You may find it interesting to read “NuSkin Attempts to Discredit its Whistleblower”, which refutes charges Nu Skin circulated to news organizations about Dr. Jon Taylor. It includes Taylor’s rigorous one-year test of the Nu Skin program before reporting his experiences.

7. Nu Skin claims to be a direct selling company, but lobbied for the removal of the direct selling requirement from Utah’s Pyramid Scheme Act.

In 2005 and 2006, Nu Skin communicators (based in Utah) lobbied for legislation (SB 182) removing the requirement for direct selling to legitimate customers in Utah’s Pyramid Scheme Act. In doing so, they did a great disservice to consumers world wide who are affected by Utah-based schemes. Nu Skin executives worked closely with the DSA (Direct Selling Assn.), the lobbying organization which has been taken over by MLM chain sellers and which has been deceptively lobbying to weaken anti-pyramid statutes in state after state.

8. Use the “Answer Cards” to tell five others about this site, and ask each of them to tell 5 more, and they each 5 more, etc. . .
Print a supply of these handy answer cards (in PDF format) for distribution to persons who try to recruit you or persons you care about.

* The nu face of Nu Skin in 1994 was Interior Design Nutritionals, which was shed with two new facials – Big Planet and Pharmanex.

** A recruiting MLM is an MLM with a compensation system that rewards recruitment more than actual sales of products to persons outside the network of participants. So significant income is unlikely without recruitment of a large downline.

Thoroughly researched:
The truth about Nu Skin ( Pharmanex, Big Planet, PhotoMax, and its other nu faces) has been answered in the following:

  • Surveys of tax professionals (those who handle the taxes of persons who participate in network marketing)
  • FTC and court records for actions against Nu Skin
  • Surveys of consumers in areas of intense participation by Nu Skin,
  • Nu Skin’s financial reports
  • Nu Skin’s marketing materials,
  • Communications with top Nu Skin officials
  • Correspondence and meetings with FTC and state officials regarding Nu Skin
  • World-wide feedback from thousands of victims who have suffered losses from participation in Nu Skin programs
  • Insider documents of Nu Skin officials
  • Interviews with current and past distributors from Nu Skin programs
  • Reports of comparative analyses of alternative income opportunities
  • Compensation plans, and actual income reports of Nu Skin and other MLM/network marketing companies (compared with gambling and no-product pyramid schemes)
  • First-hand experience in the full sales and recruitment program by the author
  • REPORT OF VIOLATIONS of the FTC Order for Nu Skin to stop its misrepresentations of earnings of its distributors, etc. After ten years of research, all this information is now made available this site. You can now find the answers to your questions regarding the truth about Nu Skin and its divisions, as well as other MLM/network marketing programs.
  • Summary of important links to learn more of the truth about MLM:

To gain help with decisions about MLM participation, go to MLM Consumer Guides, especially the 5-Step Do-it-yourself Evaluation.
To learn what the odds of actually making a profit in typical MLMs, go to MLM Statistics page.
To learn if the products are what promoters claim and worth the price, go to MLM Products.
To gain a greater understanding and a nice summary of why the media and academia is not more critical of MLM as a business model, read Frequently Asked Questions.
To read why MLM is virtually unregulated read and check out the links from the Regulation and Law Enforcement pages.
To review the research behind all this, go to the research references on this website.

To have a good laugh about the cultish culture at Nu Skin opportunity meetings, read “Jon Taylor observes Nu Skin convention as ex-distributor