The FTC said the multi-level marketing company promised high earnings, but most sellers actually lost money.
A nutritional supplement multi-level marketing company has been operating as an illegal pyramid scheme and will be forced to pay a $150 million settlement, according to the Federal Trade Commission.
Multi-level marketing companies work by not only selling a product, but by recruiting new sellers. Members who recruit new sellers create a “downline,” and take a percentage of that downline’s profits. According to the FTC, legitimate multi-level marketing relies on product sales for the business to succeed, whereas illegal pyramid schemes rely on recruitment to create profit up the chain.
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