Amway, one of the world’s biggest multi-level marketing companies, is in court again.
The world’s largest Amway distributors expanded their business from Taiwan into Chinese communities in the United States, defrauding their new clients with promises of “enormous profits,” nine Amway sellers claim in court.
Lead plaintiff Longsheng Lei and eight other of the self-described “most successful distributors in the entire Amway organization” sued Amway and husband-and-wife Amway distributors Barry Chi and Holly Chen in Superior Court. They allege breach of contract, fraud, false advertising, unfair competition, unjust enrichment, conversion and negligent misrepresentation.
Barry Chi and Holly Chen are named as the most successful Amway distributors in the world. The plaintiffs allege they were persuaded to attend the Chen’s seminars to become “independent business owners” where they were promised enormous profit. But, claim the plaintiffs, these distributors know that most of the new Amway sign-ons make $100-200 a month. Not enough to live on.
It’s rather messy. Amway certainly does recruit distributors with descriptions of big income. (I can attest to this from personal involvement long ago.) They have been accused of running a pyramid scheme where the emphasis is on recruitment rather than selling a product.
There has been a HISTORY of suits. They have had their wrists slapped but the structure is still going strong. Be wise if you are approached by recruiters. Know exactly what you are getting into.
Did you know that Amway distributors were accused of propagating the Proctor and Gamble satanic symbol legend? Procter & Gamble alleged that several Amway distributors were behind a resurgence of the urban legend in the 1990s (probably to benefit their own sales bottom line) resulting in a suit for defamation and slander. Procter & Gamble was awarded $19.25M by a jury from this case.
It’s hard to say how this current suit will play out.
With all the bad connotations and shadiness behind Amway, they have a fair share of detractors. You can read more about it here.
It IS a multi-level marketing plan and that is bad news for most participants who remain on the bottom.
Tip: @krelnik (Tim Farley)