A Clark County man has sued Usana Health Sciences Inc., alleging the big direct marketer of nutritional and cosmetic products operates as a pyramid scheme in which independent distributors must focus on signing up more distributors as opposed to selling products.
Joseph Chirco, in his lawsuit filed last week in Clark County District Court, seeks to have the suit certified as a class-action representing all Nevada Usana distributors. His Las Vegas attorney is John Nowakowski.
Chirco claims to have lost money by purchasing a Usana distributorship.
He alleges violations of Nevada’s deceptive trade practices act and accuses Usana of consumer fraud, of failing to disclose all required facts about its marketing program, of unjustly enriching itself at the expense of distributors and of civil conspiracy.
“Those already in the pyramid are greedily incentivized to recruit more and more distributors to grow the base for the benefit of those higher up on the pyramid,” Chirco’s suit charges. “It isn’t until one is locked into a distributorship that it becomes clear that merely selling products to consumers without a pyramid position is not a realistically sustainable option. The only way for an associate to economically stay afloat is to recruit lower ranks for the Usana pyramid.”
Logo from USANA
MLM Business Opportunities Blog | Man Accuses USANA Of Operating … by MLM Success Notes on April 27th, 2009 at 5:20 pm
[...] Excerpt from: MLM Business Opportunities Blog | Man Accuses USANA Of Operating … [...]
Miss Masters on April 27th, 2009 at 6:38 pm
I find it hard to believe that the man bought into something without getting all the information or fully understanding what was expected of him. I further find it hard to believe that he had “no idea?” Please! I think think this is a frivolous lawsuit.
Kevin Thompson on April 28th, 2009 at 6:11 am
It may not be a frivolous lawsuit. It’s the second class action that USANA has faced in the past two years. It takes a lot of motivation for a distributor to go after a company class action style. Also, if the allegations are true and USANA distributors are forced to focus on recruiting (because their products cannot be sold to nonparticipants), then there may be some truth to the lawsuit. I wrote about this in my ebook. http://www.scribd.com/doc/13639323/Defining-the-Grayfull-Version
Angela, do you have a link to the actual complaint? Thanks.
Angela on April 28th, 2009 at 6:16 am
Kevin,
No, just the full article at: http://www.lasvegassun.com/news/2009/apr/24/man-accuses-usana-operating-pyramid-scheme/
They might have something linked from there.
FTC flexes its muscles, USANA gets sued (again) | Kevin Thompson on May 1st, 2009 at 5:11 am
[...] appears a similar lawsuit was filed in Nevada. Angela at the Business Opportunities Blog wrote a short summary of the USANA lawsuit here. The plaintiffs allege, Those already in the pyramid are greedily incentivized to recruit more and [...]