The Direct Sales company Advocare International should be investigated by the FTC.


The Direct Sales company Advocare International should be investigated by the FTC.
The Issue
AdvoCare is a multi-level-marketing company (MLM), founded in 1993 by Charles Ragus. Charlie once worked as a regional vice president for Fidelity Union Insurance while being a distributor for Herbalife. In 1989 Charlie cofounded, Omnitrition International. Similar to AdvoCare, Omnitrition sold nutritional supplements, vitamins and skin care products. Charlie sold out after only a few years when Omnitrition became embroiled in controversy for being a pyramid scheme. The resulting lawsuit, Webster v. Omnitrition International Inc has become a landmark case in the MLM industry.
AdvoCare claims to provide physical and financial wellness, through the sale of sports performance, nutritional, weight control, and skincare products (AdvoCare). Similar to other MLM companies, such as Mary Kay, Vemma, and Herbalife, they recruit distributors to sell their products via word of mouth and face-to-face sales, all the while promoting the idea that wealth and success can be obtained by anyone that adheres to their business model.
It's our opinion AdvoCare has put their system together in such way that it strategically misleads people into joining by convincing them that success is as simple as replicating their system. They add to this deception by playing on the desire for quick, easy, weight loss and better health. The reality is that less than two percent of the people attempting to build wealth ever do, and that AdvoCare has never published any clinical trials or studies supporting their product claims. They have incorporated means, through their Policy & Procedures manual, to control where and how the product is sold and restricts the use of highly effective social media and on-line sales. Some have wondered if they also utilize strategic lawsuits to control how many distributors are active, and to some extent who succeeds. They have incorporated what amounts to meaningless product guarantees as most people have been recruited by family, or a friend, and most likely have no intention of returning the product due to the fear of personal retribution. They have incorporated the use of religion and God as a way to ingratiate themselves into these groups and take advantage of the relationships and trust within. This further helps disguise the deceptive behaviors.
AdvoCare advertises that their products are backed by the ‘best’ medical advisory board, third party tested, and backed by scientific studies. But there is a darker side to this type of MLM. When you dig into AdvoCare’s sales and marketing training materials, and listen to the people in the “up-lines”, many would say that a large portion of their actions resemble the tactics employed by cults. They prey on good people that are intelligent, honest, often religious, and driven by passion and desire. These tactics often insist that you separate yourself from family and friends who may be, “nay-sayers” and that your “up-line” then becomes your “family”. After joining, many distributors face family hardships as they work through their warm market and begin to alienate members of their family and friends. Separating you from your family is often a red flag in abusive relationships, cults, and in MLM schemes.
Similar to other MLM company, AdvoCare’s products have a significant mark-up making them very difficult to sell. This mark-up is a necessity of the MLM business model; without the added markup, there would be no money flowing up the chain to pay for the many levels of commissions. Even if AdvoCare users chose not to sell the product, they feel compelled to join as a wholesale distributor just to obtain a 20% discount, or to make family members, or friends(warm market) happy. The nutrition/supplement market is a billion dollar a year industry and the competition is fierce. The unfortunate reality is that in spite of the fact that there is very little – if any – research behind these products, consumers fall prey to the hyped-up claims and convincing marketing. These products do well in MLM because they could never compete in the marketplace if placed on a shelf side-by-side with the competition.
Once someone joins, AdvoCare distributors are directed to use a tactic dubbed, “The Bullet proof shield”. In brief, this tactic is employed anytime a question regarding how a product works, how it is formulated, questions about general nutrition, how the business works, etc. When you are confronted with a question such as these, you reply with, “Well, I don’t know about that, but what I do know is…” and you go on about some story of success and hope that you’ve effectively deflected the query. Imagine speaking to a car salesperson and you ask the question, “What are the reliability ratings of this model?” and the sales person replies with, “Well, I don’t know about that, but what I do know is that my mother-in-law bought a car like this and she raves about how plush and smooth the ride is!” This course of action is heavily promoted by one of AdvoCare’s top earners, Danny McDaniel, to help deflect any negative rhetoric and avoid even reasonable questions. Even though this tactic is used to avoid the truth, it doesn’t change the fact that more than ninety-eight percent of all active distributors have failed to make any serious money since AdvoCare was founded (see income disclosure statement), and there is no real proof that AdvoCare’s products work as claimed.
Therefore, just as you have with other DSA members Veema, BurnLounge, and Herbalife, we request you launch an investigation into Advocare International to determine if it is operating as a pyramid scheme or as a legitimate Direct Sales organization.
The Issue
AdvoCare is a multi-level-marketing company (MLM), founded in 1993 by Charles Ragus. Charlie once worked as a regional vice president for Fidelity Union Insurance while being a distributor for Herbalife. In 1989 Charlie cofounded, Omnitrition International. Similar to AdvoCare, Omnitrition sold nutritional supplements, vitamins and skin care products. Charlie sold out after only a few years when Omnitrition became embroiled in controversy for being a pyramid scheme. The resulting lawsuit, Webster v. Omnitrition International Inc has become a landmark case in the MLM industry.
AdvoCare claims to provide physical and financial wellness, through the sale of sports performance, nutritional, weight control, and skincare products (AdvoCare). Similar to other MLM companies, such as Mary Kay, Vemma, and Herbalife, they recruit distributors to sell their products via word of mouth and face-to-face sales, all the while promoting the idea that wealth and success can be obtained by anyone that adheres to their business model.
It's our opinion AdvoCare has put their system together in such way that it strategically misleads people into joining by convincing them that success is as simple as replicating their system. They add to this deception by playing on the desire for quick, easy, weight loss and better health. The reality is that less than two percent of the people attempting to build wealth ever do, and that AdvoCare has never published any clinical trials or studies supporting their product claims. They have incorporated means, through their Policy & Procedures manual, to control where and how the product is sold and restricts the use of highly effective social media and on-line sales. Some have wondered if they also utilize strategic lawsuits to control how many distributors are active, and to some extent who succeeds. They have incorporated what amounts to meaningless product guarantees as most people have been recruited by family, or a friend, and most likely have no intention of returning the product due to the fear of personal retribution. They have incorporated the use of religion and God as a way to ingratiate themselves into these groups and take advantage of the relationships and trust within. This further helps disguise the deceptive behaviors.
AdvoCare advertises that their products are backed by the ‘best’ medical advisory board, third party tested, and backed by scientific studies. But there is a darker side to this type of MLM. When you dig into AdvoCare’s sales and marketing training materials, and listen to the people in the “up-lines”, many would say that a large portion of their actions resemble the tactics employed by cults. They prey on good people that are intelligent, honest, often religious, and driven by passion and desire. These tactics often insist that you separate yourself from family and friends who may be, “nay-sayers” and that your “up-line” then becomes your “family”. After joining, many distributors face family hardships as they work through their warm market and begin to alienate members of their family and friends. Separating you from your family is often a red flag in abusive relationships, cults, and in MLM schemes.
Similar to other MLM company, AdvoCare’s products have a significant mark-up making them very difficult to sell. This mark-up is a necessity of the MLM business model; without the added markup, there would be no money flowing up the chain to pay for the many levels of commissions. Even if AdvoCare users chose not to sell the product, they feel compelled to join as a wholesale distributor just to obtain a 20% discount, or to make family members, or friends(warm market) happy. The nutrition/supplement market is a billion dollar a year industry and the competition is fierce. The unfortunate reality is that in spite of the fact that there is very little – if any – research behind these products, consumers fall prey to the hyped-up claims and convincing marketing. These products do well in MLM because they could never compete in the marketplace if placed on a shelf side-by-side with the competition.
Once someone joins, AdvoCare distributors are directed to use a tactic dubbed, “The Bullet proof shield”. In brief, this tactic is employed anytime a question regarding how a product works, how it is formulated, questions about general nutrition, how the business works, etc. When you are confronted with a question such as these, you reply with, “Well, I don’t know about that, but what I do know is…” and you go on about some story of success and hope that you’ve effectively deflected the query. Imagine speaking to a car salesperson and you ask the question, “What are the reliability ratings of this model?” and the sales person replies with, “Well, I don’t know about that, but what I do know is that my mother-in-law bought a car like this and she raves about how plush and smooth the ride is!” This course of action is heavily promoted by one of AdvoCare’s top earners, Danny McDaniel, to help deflect any negative rhetoric and avoid even reasonable questions. Even though this tactic is used to avoid the truth, it doesn’t change the fact that more than ninety-eight percent of all active distributors have failed to make any serious money since AdvoCare was founded (see income disclosure statement), and there is no real proof that AdvoCare’s products work as claimed.
Therefore, just as you have with other DSA members Veema, BurnLounge, and Herbalife, we request you launch an investigation into Advocare International to determine if it is operating as a pyramid scheme or as a legitimate Direct Sales organization.
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The Decision Makers
Petition created on November 10, 2015
