AdvoCare International, the multilevel marketing health and wellness company end...
FILE PHOTO: Federal Trade Commission seal is seen at a news conference at FTC headquarters in Washington, U.S., July 24, 2019. REUTERS/Yuri Gripas/File Photo
AdvoCare “pushed distributors to focus on recruiting new distributors rather than retail sales to consumers,” the Federal Trade Commission said in a statement on Wednesday. Multilevel marketing companies such as AdvoCare typically enlist consumers to sell their products and to enlist other people as distributors for a commission, saying the opportunity can earn them money.
The company denied that it admitted to operating as a pyramid, saying in a statement that Smith’s statement is “categorically false” and that “to this day, AdvoCare denies it operated as a pyramid.” The Texas-based company sold health and wellness products such as energy drinks and weight loss supplements through its distributors. But consumers were charged $59 to become a distributor and had to spend between $1,200 and $2,400 on AdvoCare products to earn “all possible forms of compensation,” the FTC said. Hundreds of thousands of consumers in the United States were negatively affected by AdvoCare, the FTC said.
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