In Wake Of Herbalife Probe And Vemma Litigation, ESPN Asks If AdvoCare Is Pyramid Scheme And Pusher Of False Hope

“And while the company claims its primary objective is selling products, many of its distributors tell a different story. ESPN interviewed more than 30 current and former salespeople, the vast majority of whom said their focus, and the focus of their superiors, was on recruiting other distributors. These new members, many of whom are drawn to the business’ strong religious culture or convinced of its credibility by its ties to the sports world, infuse the company with new funds — money that ultimately flows up to the powerful people who walk the stage at Success School.”From “Drew Brees Has A Dream He’d Like To Sell You,” ESPN The Magazine And “Outside The Lines,” March 15, 2016

advocarelogoWith Herbalife under investigation by the Federal Trade Commission and Vemma charged by the FTC with operating a pyramid scheme, ESPN has asked one of its own sponsors — AdvoCare, an MLM company — whether it is pushing a pyramid scheme.

“Absolutely not,” replied Allison Levy, AdvoCare’s executive vice president and chief legal officer. (Link to March 11 AdvoCare video below. In its story (link below), ESPN said AdvoCare set up two cameras to record ESPN’s recording of the March 2 interview and also changed some info on its website after the network began to ask questions.)

With MLM, one of the key questions is whether a significant percentage of products end up in the hands of retail users or whether a program’s distributors load up on product to qualify for commissions.

Levy did not discuss the Herbalife and Vemma matters, although AdvoCare says on its website that it has 320,147 “retail customers.” Herbalife once famously said it didn’t have “visibility” into its number of retail customers, fueling concerns it was a pyramid scheme.

One of the questions posed in the ESPN story is whether AdvoCare is drafting the unwary into its MLM program by relaying on professional athletes such as Drew Brees of the New Orleans Saints to be spokespeople for the firm. And is the company also trading on religion?

Read the ESPN story.

Visit the AdvoCare website to view its March 11 “media update” in advance of the ESPN story, published today.

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