FTC Sues Neora, Alleging it Operates as an Illegal Pyramid Scheme

FTC Sues Neora

Just hours after Neora posted their press release about suing the FTC for improperly changing direct selling laws, The FTC posted its own press release stating alleging that Neora, formerly Nerium International, and its Chief Executive Officer, Jeffrey Olson, operates an illegal pyramid scheme that pushes distributors or brand partners to focus on recruiting new distributors, rather than retail sales to customers. According to the FTC’s complaint, one of Neora’s top earners advised in a 2015 promotional video that there are three things brand partners should do to “explode” their business: “Number one: Recruit. Number two: Recruit. Number three: Recruit.”

According to the FTC, Neora and its CEO also have misrepresented that brand partners can earn substantial income and achieve financial independence. The complaint alleges that Neora promises “lifestyle-changing income” to its recruits, and that social media posts by Neora and its brand partners feature brand partners who were supposedly able to retire from their jobs or earn a six-figure income. In reality, the FTC alleges, Neora’s compensation plan is structured so that, at any particular time, the majority of brand partners will not make substantial income and will instead lose money.

The FTC complaint also alleges that in an effort to capitalize on growing awareness of concussion-related CTE among football players, Neora recruited former professional football players such as Sidney Rice, Steve Weatherford, and Cory Redding Jr. to pitch the products to parents and coaches concerned about children’s health.

To read the full press release, click here