Amway not happy about John Oliver calling out industry as ‘pyramid scheme’

ADA, MI — John Oliver’s takedown of the multi-level marketing industry skipped Amway, but the Michigan company is still calling foul.

“We were disappointed to see a story that misrepresents direct selling, an industry that has brought great opportunity to so many people around the world and continues to do so today,” Amway said in a statement.

In his most recent episode of “Last Week Tonight,” Oliver blasts MLMs for unethical practices that sound a lot like pyramid schemes where only the people at the top make the big money.

“MLMs may present themselves as a great opportunities, but your chance of success is actually remote,” Oliver said.

Using other media reports and his team’s own research, he pointed out that most who join MLMs don’t make money from selling products but from recruiting more distributors.

“It is hard for the FTC to investigate these companies,” said Oliver, noting the industry is large and opaque, making pursuing a case an arduous process. There have been only 25 cases in the last 40 years.

Amway was one of the first MLMs investigated. In 1979, the federal agency ruled Amway was not an illegal pyramid scheme, but was guilty of price fixing and overstating income potential.

Oliver didn’t mention Amway, which pioneered multi-level marketing, and collects more than a quarter of the industry’s $36 billion in annual revenues. The Ada-headquartered company sells cosmetics, household products and nutritional supplements through more than 3 million distributors around the world.

The Nov. 6 episode did highlight a dozen other MLM companies, mostly notably Herbalife, which competes with Amway in the vitamin front. Earlier this year, Herbalife was ordered by the Federal Trade Commission to pay $200 million to reimburse distributors who lost money and make major changes in its sales and distribution practices.

The Direct Sales Association also criticized the show with a statement on its Facebook page.

The industry organization said it requires members to follow a Code of Ethics that are more stringent than federal and state laws. Under those rules, member companies must “buy back unused inventory at no less than 90% of the original purchase price.”

On his HBO show, Oliver, the award-winning English satirist, delivers well-researched exposes with profanity-laced humor. He has taken on religious tax exemptions, police accountability, and charter schools – usually from a liberal perspective.

So far, a YouTube video of the MLM episode has been watched more than 5 million times.

Article Source: mlive.com