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Direct Seller’s Data Counters FTC’s Pyramid Scheme Complaint Based On ‘Assumption’ About Sales

 
• By Malcolm Spicer

Ruling in Texas federal court on FTC complaint against Neora could serve as instructions for agency on how not to prosecute pyramid scheme allegations and for direct sellers about operating businesses so regulators find no hint of sales associates’ compensation plans based more on recruiting additional participants than on selling products.

• Source: Shutterstock

A Texas federal court ruling pokes holes in the Federal Trade Commission’s expectations for alleging pyramid schemes against direct sellers by picking apart the agency’s complaint against dietary supplement and beauty products firm Neora LLC.

The ruling by Judge Barbara Lynn in US District Court for North Texas on the FTC complaint for a permanent injunction could serve as instructions for the agency on...

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