Of the FTC Order for Nu Skin to Stop

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REPORT OF

VIOLATIONS

of the FTC Order for Nu Skin to Stop

Misrepresenting Earnings of Distributors –

and the Need for FTC Action to Redress Damages

and to Prevent Further World Wide Consumer Losses

By Jon M. Taylor, Ph.D., President, Consumer Awareness Institute,

and Director, Pyramid Scheme Alert

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 The content, appropriateness, and importance of the 1994 Order for Nu Skin to stop misrepresenting earnings of distributors

 The three stages of violations of the Order by Nu Skin, and the billions of dollars in cost to consumers worldwide as a result of said violations

 Three primary deceptions underlying said violations, including the attempt by Nu Skin to position itself as primarily a direct sales company, and the resulting distorted picture of “the Nu Skin opportunity”

Five red flags that clearly identify Nu Skin’s compensation system as an exploitive product-based pyramid scheme, or recruiting MLM.

 The motivation for misrepresentations by Nu Skin – their highly leveraged breakaway compensation system, leading to in an abnormally high loss rate and ongoing deceptions in order to survive and grow

 Worldwide Ponzi/pyramid fraud resulting from Nu Skin’s de facto market saturation and misrepresentations about moving from the market in one country to fresh markets elsewhere

 Nu Skin’s efforts to buy credibility for its fraudulent program through worthy and visible donations, Olympic sponsorships, famous speakers at its conventions, notables on its board of directors, and other associations

 The need for prompt action by the FTC to fulfill its mission to protect consumers and fair trade – by finding Nu Skin in violation of the Order and by enforcing it with appropriate sanctions

 How failure by the FTC to take enforcement action in the case of the 1994 Order for the protection of consumers (small investors) is analogous to the failure of the SEC to protect large investors in the Enron/Worldcom debacle