BurnLounge

Buyers burned by BurnLounge

Retrieved on: 
Friday, November 25, 2022
Sale, FTC, Marketing, MLM, Federal Trade Commission Act of 1914, Federal Trade Commission v. Vemma Nutrition Company, Privacy, Order, Program, CEO, Policy, Music, Court, BurnLounge, Federal Trade Commission, Record, Blog, Judgement, Fraud, Comment, Income, Online shopping

If you or your clients work in the multi-level marketing (MLM) arena, a decision by a federal judge in the FTC's lawsuit against BurnLounge, Inc., merits your attention.

Key Points: 
  • If you or your clients work in the multi-level marketing (MLM) arena, a decision by a federal judge in the FTC's lawsuit against BurnLounge, Inc., merits your attention.
  • After a nine-day trial, the court ordered a total of $17 million in refunds for consumers who were burned by the scam.
  • BurnLounge promoted itself online, through phone calls, and via in-person meetings with claims of big money to be made.
  • BurnLounge claimed to be a cutting edge way to sell digital music through multi-level marketing, but music sales accounted for only a small percentage of the money.

FTC settlement ends AdvoCare’s alleged pyramid scheme and bans defendants from multi-level marketing

Retrieved on: 
Thursday, October 3, 2019
Marketing, Direct selling, Business models, Direct marketing, Distribution marketing), Herbalife Nutrition, Pyramid scheme, AdvoCare, Multi-level marketing, Personal selling, Vemma, BurnLounge

The FTC says Texas-based AdvoCare operated a pyramid scheme disguised as a business opportunity and swindled hundreds of thousands of consumers who signed up to be distributors of its health-and-wellness products.

Key Points: 
  • The FTC says Texas-based AdvoCare operated a pyramid scheme disguised as a business opportunity and swindled hundreds of thousands of consumers who signed up to be distributors of its health-and-wellness products.
  • Under a landmark settlement, AdvoCare and its former chief executive will pay $150 million for consumer redress and be banned from multi-level marketing.
  • In the FTCs long history of actions alleging deception by multi-level marketers, this is the largest company banned from multi-level marketing and only the $200 million settlement with Herbalife was larger.
  • The FTC charged it was a classic pyramid scheme that compensated distributors for recruiting, rather than for retail sales to customers who actually wanted to use the product.