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Nu Skin - Nightmare on MLM Street
Nu Skin - that fledgling Provo, Utah MLM company founded in 1984 that grew into one of the industry giants with reported earnings of US$1.74 billion in revenue for 2011.
They've kept their company secrets pretty well guarded - until recently.
Things are starting to come to light out there in Mormon country that the company wishes I'm sure hadn't been made public.
It started with this headline in The Salt Lake Tribune Jun 30 2012:
Nu Skin co-founder embroils company in her marital maelstrom
... with the sub-heading: "Books by two ex-husbands prompt lawsuit as share price plummets".
Actually, it was those two books by her ex-husbands and the efforts of Sandie and her team of high priced lawyers to suppress them that really got things rolling! :RpS_smile:
Oh, and Dr. Jon Taylor's seminal work - Nu Skin’s Naughty Numbers (What few NuSkin recruiters know (and none who do know will say—or admit) about their “opportunity of a lifetime) - that estimates a 99.94% failure with Nu Skin didn't help matters either! :RpS_smile:
This is just the tip of the iceberg.
Former distributors that got taken, and were fearful about speaking out about the abuse, are finally starting to come forward and speak up.
Things are going to be very interesting in the next while as this NuSkin story takes on a life of it's own! :RpS_wink:
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Re: Nu Skin - Nightmare on MLM Street
One of a gazillion stories about Nu Scam that people are starting to tell:
Quote:
Reported By: BJean — Sandy Utah United States of America
First a few details about who we are: We live up the road from Ms. Tillotson and see the yearly spectacle her family creates by hosting a full blown rodeo on their property along Wasatch Blvd. Cars line the road and it goes on for a full day. But let me tell you what troubles me to the point of actually taking time to post this and many other postings. My family was involved with Nu Skin in the early nineties all the way up to 2001. First it was just me, later my husband joined and we did everything right, followed the advice from our up-line Nathan Ricks. For a while things were growing but when running the business claimed every minute of our day it nearly ripped our family apart. We realized we either do Nu Skin 24/7 or forget about family night, sports, vacation and many other activities that used to hold us together. It was just near impossible to keep things going unless we did three-way-calls, attend, host meetings or do one-on-one's with new distributors who sign up but then fail within a year or less. After eight years we had to stop and do something else simply to make ends meet.
The fact that only three people out of our down-line of over a thousand worldwide are still involved tells you what chances you have to get Nu Skin going. And of these three only one (in Taiwan), is actually able to make enough money to pay for kids and college.
Adam came on the radio and the moment I heard he'd written a book I ordered it online and devoured it is mere minutes. And so did many of the people I know who have been involved with Nu Skin. It really hit a nerve!
Around here we know all about Sandie and the other Tillotsons. Some of her kids went to the same school as our kids, played sports together and I've seen and heard more than most of the lavish, wasteful lifestyle their Nu Skin provides for. We've even seen Adam drive his Ferrari, BMW M-8 and most of the cars he described in his book. It is all true!
Don't think I am bitter because Sandie, or any of them, have more money. This is absolutely not the issue at all. We are not only doing well now but what irks me is the fact that thousands who join Nu Skin every day lose out after dreaming big. They too follow the advice that Nathan Ricks and all the other Nu Skin leaders keep giving. Only to realize that in the end all they do is proclaim that growth and success are within reach, 'just work it', 'don't ever give up', 'seize the day' and all the other empty slogans they keep pumping. They don't tell you that they are either related to the Nu Skin family or got involved early on.
No matter how many millionaires they say they produce, for every one of them many thousand had to lose out to finance it. If they speak up Nu Skin employees purge their blogs and sue them in to oblivion. They 'Google Bomb' all negative (true) statements immediately; Adam's book was suppressed within a week of coming out.
Dr. Jon M. Taylor wrote a book on Nu Skin. The truth about MLM (multi-level or network marketing) Check it out!
Anyone out there thinking of joining Nu Skin better think again. We know what is going on and don't be seduced by the empty promises and endless list of deception.
Even their own annual numbers spell it out: 99.6% loss!
Don't say Adam and many of us ex Nu Skinner's didn't warn you!
Read the book!
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Re: Nu Skin - Nightmare on MLM Street
Very interesting that the first article to which you referred Doc, tells us that Salt Lake Tribune considered questions asked by a hedge fund manager about the MLM model to be the real issue.
I consider it very clever of you to have started this thread where RS members can ignore the sensationalism and porn. We can start following the MLM aspects from the start. I put my own publications "On Ice" for four years because I could see that building my own list and developing relationships in online communities where one could report facts not froth, was the way forward.
I am sure that links to this thread in RS will be one that will get the attention of responsible journalists in many countries. August is the silly seaso for journalists. No stories of any worth unless a member of the public leaks something of interest to a real news hound.
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Re: Nu Skin - Nightmare on MLM Street
Why, thank you, P2P!:RpS_smile:
You're right, I wanted to separate the company from the people running it.
We already have that Adam Baker thread to provide the sensationalism.
Now hopefully we can have a serious thread to warn people to think twice before getting involved with Nu Skin.
To that end I hope to include the experiences of people that did try building a Nu Skin business, a closer look at the pay plan, Nu Skin's ties with politicians in Utah, etc. etc.
So, for starts, from the "Did You Know?" files...
Quote:
Utah had never been particularly aggressive about prosecuting pyramid schemes perpetuated by its homegrown companies. The state's longtime attorney general, Mark Shurtleff, was elected with lots of money from MLM companies, and he supported gutting the anti-pyramid scheme law that he was charged with enforcing.
Jon Huntsman then signed into law a bill that may have sanctioned the practices of at least 20 companies in the state thought to be illegally operating a pyramid scheme under the old statute, according to Jon Taylor, the head of the Utah-based Consumer Awareness Institute.
Nu Skin, for one, has a provision in its contracts with distributors requiring them to bring any lawsuits against the company into Utah courts, where the Utah law applies, rather than in their home states, which might have more stringent consumer protection laws. The new law ensures that ripped off distributors don't have a prayer of holding the company accountable in a Utah court.
Bad Business Under Jon Huntsman
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2 Attachment(s)
Re: Nu Skin - Nightmare on MLM Street
There's this guy in the Philippines that apparently has a serious dislike for Nu Skin! :RpS_smile:
He's started a blog about their unethical business practices.
Beware of NuSkin or NSE Philippines
Quote:
A Blog that Exposes the Unethical Business Practices of Members of NuSkin Philippines and How They Misrepresent! This is not a HATE blog against NuSkin, the company itself. This is focused on its members and their manner of recruiting. To Those Who Were Victimized by NuSkin, Send in Your Stories Too! Email it to
boycottnuskin@gmail.com
A sample of his posts:
Quote:
**** you NSE Philippines members!
No threat will stop me! Coz if anything happens to me, the whole public knows and Google themselves knows that there is no one else to blame except for you NuSkin members!
You think coming up with threats will stop me from exposing your trash? Why not change your ways of recruiting and maybe something better will happen!
Notice that everyone are against how you recruit? You do nothing but scam, and now you are sending out threats?
15th floor Octagon bldg, NSE Philippines members sending out threats! Yes there is no one else to blame but you guys and your members!
That is how scumbags you are! You are desperate! You are fuckin desperate! Why? Broke? I feel so sorry for you!
Quote:
Toby Tangsoc... the Scumbag Behind NSE Philippines
Attachment 1493
You are a disgrace to NSE Philippines of Nu Skin Mr. Toby Tangsoc! You are one big mother ******! You force the parents of these students to give out information by saying that you are a company offering a job opportunity! You never mention the name of NuSkin, you never even mention that your offer is to be a network marketer!
Quote:
Poor You NuSkin Scammers
Attachment 1494
Yes you NSE Philippines or NuSkin scammers based on the 15th floor octagon bldg, you are a dumbfuck! No **** huh!? Now you are desperate because people are now questioning your manners of recruitment! You tell the people "are you rich" when you can't prove anything yourselves!
Yeah, offhand I'd say this guy didn't like Nu Skin's methods of operating in the Philippines!:RpS_smile:
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Re: Nu Skin - Nightmare on MLM Street
Quote:
Originally Posted by Doc Bunkum
Yeah, offhand I'd say this guy didn't like Nu Skin's methods of operating in the Philippines!
So, would I be right in assuming you don't think it's simply a cultural difference, then ??
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Re: Nu Skin - Nightmare on MLM Street
Quote:
Originally Posted by
littleroundman
So, would I be right in assuming you don't think it's simply a cultural difference, then ??
Granted, there might have been something lost in the translation. :RpS_smile:
Quote:
Rolly said
July 2, 2008 at 5:40 am
@ Francine: Don’t be a dick and start misleading people into your cult! There are more than a million opportunities in this world so do not tell these people that missing out on joining your NuSkin cult is a great lose! No it is absolutely not! In fact, we feel like winners not joining you cult called NuSkin or NSE Philippines! We do not want to be trained to mislead, deceive, lie, and misrepresent. That is what you guys are good in, right!? Common, thanks to Google, we all know the truth!
Your products are good, but you members suck! Your recruitment strategies suck! You deceive people! You lie! You misrepresent! You mislead! That is where you are all good at! And you train people to be like you!
I am rich! I am filthy rich! I am richer than each and every member in your cult! And I became rich without having to mislead, misrepresent, or deceive! I can put up as many businesses as I want because I have the capabilities to do so, coz I do not misrepresent! I am transparent in business, and I practice good ethics!
You in NuSkin? Good ethics? BULLSHIT! You use deceit in order to recruit! You misrepresent in order to recruit! You lie in order to recruit! You guys fuckin duped my friend who flew all the way to Davao just to learn you were NuSkin, an MLM or networking company, wherein she even asked over the phone if you were MLM and you guys said NO!
Assholes! Liars! Thats what you all are! And do not bullshit the members here to join your NuSkinism cult! We do not want tobe like you and your members! We do not wanna bullshit! We want proper business practices!
Do not bullshit also us by saying Robert Kiyosaki, Donald Trump and Harv Eker’s names! They all said one thing, choose the network marketing company that gives you THE BEST TRAINING!
Misleading is best training? BULLSHIT!
Misrepresent is best training? BULLSHIT!
Not answering questions directly is best training? BULLSHIT!
Do not fuckin dupe the people here with your fuckin words of wisdom, coz it wont work anymore! And do not fuckin bullshit me that you all are rich in that company! I proved its all bullshit!
This guy of NuSkin who claims to be making US$50,000? BULLSHIT!
The Sunday Phonecall. « Dyiele Mi Luana's Project
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Re: Nu Skin - Nightmare on MLM Street
So, how did that happen?
I just quoted from the The Sunday Phonecall blog above, and now I see there's an immediate link back to this forum created as the last entry...
Quote:
Nu Skin - Nightmare on MLM Street said
August 9, 2012 at 3:28 pm
[...] [...]
Reply
I think I'll just have to tell all those nice Philippine folks to go read Adam Baker's tell-all book! :RpS_smile:
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Re: Nu Skin - Nightmare on MLM Street
Quote:
Your recruitment strategies suck! You deceive people! You lie! You misrepresent! You mislead! That is where you are all good at! And you train people to be like you!
IOW, it's a standard, run of the mill MLM doing what MLMs do.
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Re: Nu Skin - Nightmare on MLM Street
So glad that I found this thread. I have bookmarked it now. There is a huge community of Phillipine people in Earls Court "Doc." If I get some very brief facts, I will run off a few leaflet for you and drop them into local shops.
Harrods often display genuine produce from that part of the world. I am going up there tomorrow for my day job. I will have a prelimiinary "sniff around." and pass on any hot news to you by PM
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Re: Nu Skin - Nightmare on MLM Street
Quote:
Originally Posted by
path2prosperity
So glad that I found this thread. I have bookmarked it now. There is a huge community of Phillipine people in Earls Court "Doc." If I get some very brief facts, I will run off a few leaflet for you and drop them into local shops.
Harrods often display genuine produce from that part of the world. I am going up there tomorrow for my day job. I will have a prelimiinary "sniff around." and pass on any hot news to you by PM
Thanks. Please do!
In the meantime, I posted this comment on that Philippine blog I mentioned above.
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Re: Nu Skin - Nightmare on MLM Street
Some guy purporting to be Mark Yarnell posted the following on Rob Fore's blog:
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Mark Yarnel February 13, 2011
I have been a Nu Skin distributor for years and discovered that it takes about 999 people before you find one who will succeed, which translates to one-tenth-of-a-percent! NOT a good margin.
Most of us leaders either started very early and we had money, as without these two there is NO WAY you can make it in MLM and that includes Nu Skin. Nu Skin as a company is good….for the owners NOT for the distributors as most of them lose. Read Jon Taylors book Nu Skin’s Naughty numbers to learn the truth. Do NOT join Nu Skin if you are looking for a home based business and you are not able to ”buy” leaders to join and ”premarket” new markets as that is what it takes to succeed…really it does. It even took me years to see the deceptive reality of the math. So, for every successful Hawaiian Blue Diamond Nu Skin distributor it took thousands to lose their hide! Don’t take my word for it, just look it up. The truth about MLM (multi-level or network marketing)
This whole MLM sales deal is based on the LDS method of prosylation…it is a numbers game. The LDS cult sells you a one way ticket to the illusionary ”Kingdom of Heaven” while Nu Skin sells you a one way ticket to the land of Unobtainable Wealth in the Land of Greed… Do you own research and if you can find fault with what I say I love to hear it because I even bet for a thousand bucks that you can not find better success rates than 0.01% Stay away!
Now, whether or not that is the Mark Yarnell, I don't know.
But whatever, the numbers speak for themselves.
The reality is that Nu Skin has a 99.94% attrition (failure) rate for its distributors. That means only approximately 1 in 4,000 new sign-ups will make any money on the business model.
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Re: Nu Skin - Nightmare on MLM Street
Quote:
This whole MLM sales deal is based on the LDS method of prosylation…it is a numbers game. The LDS cult sells you a one way ticket to the illusionary ”Kingdom of Heaven” while Nu Skin sells you a one way ticket to the land of Unobtainable Wealth in the Land of Greed… Do your own research and if you can find fault with what I say I love to hear it because I even bet for a thousand bucks that you can not find better success rates than 0.01% Stay away!
We have had some of these 'people' in our house - my husband wanted one of their bibles. They did not stay long when I started asking pertinent questions about the REAL Holy Bible and where theirs came from. I have heard horror stories from friends of mine who were raised in this environment and seen some of the results. I could not believe that my Sister's granddaughter had to take a bath with her 'clothes' on and was made to sleep in a certain outfit. Strange culture and I am not condemning anyone, just relating what I have witnessed.
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Re: Nu Skin - Nightmare on MLM Street
Looks like MONEY was able to take down another site that I was just looking at and when I clicked off it, this one popped up:
Nu Skin Scam – Raw and Uncensored
I am trying to find the site I was directed to, I even copied the formulas she gave for skin treatment and her name was Heather.
Quote:
Recipe 1: Clean the wrinkled area with witch hazel. And apply the Honey Mask (recipe below) to the skin using fingers or a cotton ball. Leave on for 15 minutes and rinse.
Recipe 2: Apply my Herbal Moisturizer (recipe below) for a radiant glow all day.
I've provided the recipes below. I definitely want to hear from you try the treatment. I'm happy to provide the information for free. If you find the treatment valuable, and you feel like donating a little please click the paypal button.
You are in no way obligated to donate. Use the treatment for free. If it works, tell your friends. I'm hope to save women all over the world thousands on expensive creams and treatments. The answer can be very simple. How could I not share it?
And now I Present to You...The Recipes
Honey Mask
In a bowl, combine:
3 Vitamin E Pills
1 Half a Lemon
1/2 Tsp Honey
2 Tsp plain yogurt
1 tsp Coconut oil
Mix this well and apply to the face or wrinkled area with cotton or your fingers. Leave on for 15-20 minutes. Rinse well and apply moisturizer:
Moisturizer
1 Tbsp Tea tree oil
2 Tbsp Aloe
Apply generously to the skin for a healthy glow.
Thanks again for visiting my site. If you found this information useful, feel free to maybe donate a little.
Other Tips for Healthy Skin
1. Drink lots of water - 4 quarts of water a day recommended
2. Cut back on drinking and smoking
3. Maintain a healthy diet - Eat organic pesticide free foods. Stay away from oils, fats and sugars. Eat fruits and vegetables. Pineapple and apple juices as well as avocado are all good skin healthy foods
There were a lot of error messages, wish I had gotten a screen shot.
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Re: Nu Skin - Nightmare on MLM Street
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Re: Nu Skin - Nightmare on MLM Street
Mark Yarnel
vs
Mark Yarnell
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Re: Nu Skin - Nightmare on MLM Street
Appears Citron Research is going after Nu Skin big time! :scared_1:
Citron is Unraveling the Big Lies at Nu Skin
Quote:
August 16, 2012
Nu Skin is :
* operating an illegal MLM in China,
* in apparent violation of FDA and/or FTC regulatory law in
the U.S., and
* lying about a scientific research relationship with
Stanford University for their flagship technology AgeLOC.
And worse, they are instructing their own sales
representatives to deceive anyone who questions the actual
scientific basis of Nu Skin's product claims...
18 page document.
WOW! :shocked:
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Re: Nu Skin - Nightmare on MLM Street
Stanford demands Nu Skin stop using researcher's name in advertising
Quote:
08/16/2012
WASHINGTON -- Stanford University has sent a "cease and desist" letter to Nu Skin Enterprises asking the company to stop using a university researcher's name in its advertising material, according to an email obtained by Reuters.
The letter says Stuart Kim, a Stanford researcher, is listed as a "Nu Skin Partner" even though he has nothing to do with the company. It asks Nu Skin, a personal-care products maker, to remove all references to him from its website by Friday. Kim previously collaborated with Nu Skin but stopped the relationship in 2011, Kim told Reuters on Thursday.
The news comes hours after short seller Andrew Left's Citron Research issued a report critical of Nu Skin, saying that Nu Skin had misrepresented its relationship with Kim and had never funded any of his research.
A Stanford spokesman said the university's dermatology department has a long-standing clinical trial relationship with Nu Skin, and a clinical trial is currently under way. Kim works in the genetics department.
Nu Skin said its relationship with Stanford began in 1999. In 2009, it gave $1.5 million to a study on human skin aging with Kim, who specializes in genetics, and other scientists. Kim later left the study, but two dermatologists, Dr. Anne Change and Dr. Alfred Lane, continue to work on the study, Nu Skin said...
It just keeps getting better and better! :RpS_smile:
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Re: Nu Skin - Nightmare on MLM Street
The heat is being turned up by mainstream media.
Nu Skin and the short-sellers - Fortune Management
The article makes excellent points about the flawed business model and does a superb job of exposing the Nu Skin Age Loc products. Nu Skin's future I would agree looks quite murky.
L'Oreal and Avon getting warning letters from the FDA is a huge red flag for stockholders of Nu Skin. NuSkin is likely to be next!
Mitt Romney is called out. He is an MLM whore and needs to get the facts and quit supporting this very harmful business (scamming) model.
Quote:
...To qualify for multilevel commissions, they must purchase or sell at least $100 of its merchandise every month; they and their recruits must collectively generate at least $2,000 in monthly sales. A handful have made fabulous sums: 34 distributors have made $20 million or more in lifetime commissions, the company says. But far more lose money after their personal purchases, or make piddling amounts. Just 12.7% of active U.S. distributors received any commission check in 2011, according to company disclosures; those who did averaged $931 a month....
Of course, we know how the failures get morphed out of the active distributors, so in reality much fewer even get a pittance of a check than the 12.7% listed.
Quote:
...host Barbara Walters: "Is Nu Skin nothing but a scheme promising the American dream while for many delivering only the nightmare?"....Attorneys general for a half-dozen states pounced....The products couldn't do any of those miraculous things, the FTC charged. The agency also cited "deceptive" boasts of earnings.
It is a nightmare for most to be sure!
Quote:
The story goes like this: ageLOC products can "reset" genes that affect aging, transforming them back to "a more youthful state....ageLOC science is the biggest scientific breakthrough that I have ever seen."
The FDA is likely to be all over these claims.
We also have the stock analysts weighing in. There is a reason most MLMs don't go public!!!
A discussion of whether Nu Skin is operating legally in China ensues.
We then meet the hero in this story. Deiderik van Nederveen and his issues with Nu Skin and its founder Sandie Tillotson are brought to the forefront. Kudos to these men that had the courage to expose this egregious business model and the top dogs who are profiting on the horrific losses of the masses at the bottom of these staggering pyramids.
The rest of the article turns into an attack of the messenger because Nu Skin's and Sandie Tillotson's attorneys cannot effectively attack (i.e refute the message) the message. Sandie Tillotson obviously cannot handle her personal affairs in a reasonable manner as they are all over the media. I think it is highly appropriate for van Nederveen to address his concerns about Nu Skin. He watched first hand the devastation caused by the Nu Skin business model as he met reps from around the globe.
I am looking forward to the deluge of media coverage this will generate. I hope that van Nederveen will be able to have a full loving relationship with his daughter who is sadly in the middle of this battle. May it lead to stricter laws regarding MLM. It is high time the media take a critical and thorough look at the scourge that is MLM!!!!
Soapboxmom
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Re: Nu Skin - Nightmare on MLM Street
Thank you SBM, I just saw this and am posting the link on FB. It will not make my friends and family happy but people need to know the truth!!
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Re: Nu Skin - Nightmare on MLM Street
I admire the lawyers having to try and find legal loopholes proving the deceptive practice of Nu Skin. I also hope to see a big MLM-company go down one day. Any newsletters on the latest updates regarding Nu Skin, new laws/rules etc.? Seems like an exciting time to pay attention to Nu Skin and other MLMs.
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Re: Nu Skin - Nightmare on MLM Street
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Re: Nu Skin - Nightmare on MLM Street
Nu Skin says likely to be fined by Chinese regulators
(Reuters) - Nu Skin Enterprises Inc said on Tuesday that it would likely be fined by Chinese regulators investigating whether the producer of personal care products and nutritional supplements distributed false information and conducted illegal business in China.
Nu Skin also said in its annual report filed with the U.S. Securities and Exchange Commission that it has temporarily suspended promotional meetings and accepting applications from prospective new sales representatives in China.
The company said that in addition to fines, it could potentially face sanctions in China, such as a formal suspension of its ability to recruit new sales people and a temporary suspension of its right to sell products in various markets.
In January, China's State Administration for Industry and Commerce (SAIC) ordered local authorities to investigate media reports alleging misconduct by Nu Skin.
Nu Skin shares fell 4 percent to $73.57 in after hours trading.
REUTERS.com
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Re: Nu Skin - Nightmare on MLM Street
Nu Skin Provides Update on China Regulatory Reviews
http://mw1.wsj.net/MW5/content/story...o-Newswire.png
PROVO, Utah, March 24, 2014 /PRNewswire/ -- Nu Skin Enterprises, Inc. NUS -0.12% today provided an update on the regulatory reviews conducted by the Administration of Industry and Commerce ("AIC") in Shanghai, where its China business is headquartered, and the AIC in Beijing, where the company maintains a branch office. These reviews were conducted under the direction of China's State AIC.
As a result of the reviews, Nu Skin China was penalized in the amount of US $524,000 (RMB 3.26 million) for the sale of certain products by individual direct sellers that, while permitted for sale in Nu Skin China's retail stores, were not registered for the direct selling channel. Nu Skin China was also fined US $16,000(RMB 100,000) for product claims that were deemed to lack sufficient documentary support. The company understands that six of its sales employees have been fined for unauthorized promotional activities in an aggregate amount of US $241,000 (RMB 1.50 million). In addition, Nu Skin China was asked to enhance the education and supervision of sales representatives. The company is already taking steps to correct the issues raised in the AIC reviews, and is not aware of any other material enforcement investigations currently pending in China.
As announced on Jan. 21, 2014, Nu Skin China voluntarily suspended business promotional meetings and applications for new sales representatives to fully cooperate with the regulatory reviews. The company is working diligently to enhance sales representative training and supervision, and will seek direction from the Chinese government with respect to resuming normal business activities.
"We continue to believe in the potential of China's large and growing market," said Dan Chard, president of global sales and operations. "We remain committed to working cooperatively with the Chinese government to ensure the healthy, long-term growth of our business."
(The entire Nu Skin PR release can be read HERE)
[Highlighting of penalties added by author]
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Re: Nu Skin - Nightmare on MLM Street
Quote:
Originally Posted by
littleroundman
Nu Skin Provides Update on China Regulatory Reviews
http://mw1.wsj.net/MW5/content/story...o-Newswire.png
PROVO, Utah, March 24, 2014 /PRNewswire/ -- Nu Skin Enterprises, Inc.
NUS -0.12% today provided an update on the regulatory reviews conducted by the Administration of Industry and Commerce ("AIC") in Shanghai, where its China business is headquartered, and the AIC in Beijing, where the company maintains a branch office. These reviews were conducted under the direction of China's State AIC.
As a result of the reviews, Nu Skin China was penalized in the amount of US $524,000 (RMB 3.26 million) for the sale of certain products by individual direct sellers that, while permitted for sale in Nu Skin China's retail stores, were not registered for the direct selling channel. Nu Skin China was also fined US $16,000(RMB 100,000) for product claims that were deemed to lack sufficient documentary support. The company understands that six of its sales employees have been fined for unauthorized promotional activities in an aggregate amount of US $241,000 (RMB 1.50 million). In addition, Nu Skin China was asked to enhance the education and supervision of sales representatives. The company is already taking steps to correct the issues raised in the AIC reviews, and is not aware of any other material enforcement investigations currently pending in China.
As announced on Jan. 21, 2014, Nu Skin China voluntarily suspended business promotional meetings and applications for new sales representatives to fully cooperate with the regulatory reviews. The company is working diligently to enhance sales representative training and supervision, and will seek direction from the Chinese government with respect to resuming normal business activities.
"We continue to believe in the potential of China's large and growing market," said Dan Chard, president of global sales and operations. "We remain committed to working cooperatively with the Chinese government to ensure the healthy, long-term growth of our business."
(The entire Nu Skin PR release can be read HERE)
[Highlighting of penalties added by author]
When I was looking at that, I thought it was a pretty small fine. Apparently investors agree:
Quote:
"Shares of Nu Skin have gained 19% to $89.12 at 10:36 a.m. today and the news is also giving a boost to other multi-level sellers. Shares of Usana Health Sciences (USNA) have risen 6.1% to $70.77, while Herbal (HLF) has advanced 4.8% to $51.91 after Carl Icahn added three members to the company’s board."
Nu Skin: You Call That a Fine? - Stocks To Watch - Barrons.com
Considering this part of your original post:
Quote:
"The company said that in addition to fines, it could potentially face sanctions in China, such as a formal suspension of its ability to recruit new sales people and a temporary suspension of its right to sell products in various markets."
...it makes me wonder if investors don't really believe that they'll face those sanctions.
