The Federal Trade Commission (FTC) has sued multi-level marketer Neora LLC, formerly known as Nerium International, LLC alleging that the company operated an illegal pyramid scheme.  Additionally, the FTC is alleging that Nerium deceptively and falsely promoted “EHT” supplements as an antidote to concussions and chronic traumatic encephalopathy (CTE)  as well as Alzheimer’s disease and Parkinson’s disease.  Nerium would sell these worthless EHT supplements as well as other supplements and skin creams through multi-level marketing, however, rather than a legitimate multi-level marketing company such as Amway, the FTC alleges that Nerium operated as an illegal pyramid scheme through which its distributors made money by recruiting new distributors rather than through selling products which is the hallmark of an illegal pyramid scheme.  As Andrew Smith the FTC’s Director of Consumer Protection said, “Participants in legitimate multi-level marketing companies earn money based on actual sales to real customers rather than recruitment.  But pyramid schemes depend on recruitment of new participants to pay out to existing participants, meaning that the vast majority of participants will ultimately lose money.”  According to the FTC, Nerium lied to its distributors about the money they could earn when the truth was that the majority of its distributors would actually lose money.

Sometimes a legitimate multilevel marketing business may look quite similar to an illegitimate pyramid scheme, which is one of the reasons that so many people fall prey to these scams.  For every legitimate multilevel marketing company, such as Mary Kay and Amway, there are many that are just scams.  In a legitimate multilevel marketing company, investors make money by selling products to the public and by recruiting new salespeople.  In a pyramid scheme the source of profits is based primarily on the recruiting of new members or salespeople.

TIPS

Anyone who is considering investing in what is represented to be a multilevel marketing business should always investigate the company and the terms of investment carefully before investing any money.  In addition, you should also check out the company with the FTC and your state’s attorney general to make sure that the company is legitimate before investing any money.  Here is a link to information from the FTC that you should consider before investing in a multilevel marketing business.  http://www.consumer.ftc.gov/articles/0065-multilevel-marketing

As for supplements that purport to enhance your brain, the truth is that there are no pills or quick fixes that can dramatically increase your brain power or memory.  You should always be wary of products being  sold that promise to dramatically improve your memory, increase your brain’s efficiency or cure diseases such as Alzheimer’s Disease, Parkinson’s Disease and CTE.  Never buy any such product without doing research as to the effectiveness of the product and consulting with your own physician.

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