Advocare is a multi-level marketing company that sells health and wellness products, including supplements, meal replacement shakes, and energy drinks. The company also offers a business opportunity for individuals to become independent distributors and earn commissions on sales. Advocare promotes a healthy lifestyle through its products and encourages individuals to achieve their fitness and wellness goals.
Advocare is a multi-level marketing company that sells health and wellness products. The company operates through a network of independent distributors who earn commissions based on their sales and recruitment efforts. Advocare has faced legal scrutiny and regulatory challenges in the past.
In 2019, the Federal Trade Commission (FTC) filed a complaint against Advocare, alleging that the company operated an illegal pyramid scheme. The FTC claimed that Advocare’s compensation plan primarily rewarded distributors for recruiting new participants rather than selling products to retail customers. The complaint also alleged that Advocare made false income claims and failed to disclose the low success rates of its distributors.
As a result of the FTC’s action, Advocare agreed to a settlement in which it permanently banned the recruitment-based compensation structure and agreed to pay $150 million in consumer refunds. The company also agreed to notify its distributors about the changes and provide them with the opportunity to cancel their agreements and receive a refund.
Following the settlement, Advocare announced a new compensation plan that focused on retail sales rather than recruitment. The company also implemented stricter compliance measures to ensure adherence to legal requirements.
It is important to note that this summary provides a brief overview of Advocare’s legal issues and is not an exhaustive analysis of the company’s legal history.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March 2024.
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