In November of 2013, I got an email from Kris Spears who identified herself as a ND and ACN about a company called FG Express. She was promoting a product called Xpress Strips. Her LinkedIn page is here. I’m not sure what the ACN abbreviation means (I’ve been looking), but ND seems to be short for Naturopathic Doctor.
Before we go very far, I want to state that a respected medical journal write about Naturopathic Doctors:
“Their training, however, amounts to a small fraction of that of medical doctors who practice primary care. An examination of their literature, moreover, reveals that it is replete with pseudoscientific, ineffective, unethical, and potentially dangerous practices. Despite this, naturopaths have achieved legal and political recognition, including licensure in 13 states”
So I guess they are considered doctored in 13 states. However, there are numerous comparisons of it with quackery here.
Last August I received another email from a reader with the following:
A friend of mine has been roped into the world of FG Xpress Power Strips. He has been brainwashed into thinking that this is a miracle product different to the pills and options other MlM’s are selling. Is there any way it can convince him that it is just a placebo too? Have you done any research on this company or product?
I had already had it on my list to write about thanks for Ms. Spears, so I put high up on my to-do list. Unfortunately there are a lot of scams to cover. I took the holidays off from covering them as uncovering fraud is not the most festive topic to cover.
A week or two ago, I got word that MonaVie’s Randy Schroeder moved to FG Xpress. You’ll remember that I exposed MonaVie as a scam as well as their MonaVie Mynt. I went as far as explaining why it appears to be a pyramid scheme according to the FTC’s guidelines. Schroeder supported MonaVie the whole time while the scheme imploded as evidenced by Google Trends:
It looks like Schroeder left with a bang leaving MonaVie with quite a bit of explaining to do.
Of course, before he joined MonaVie, Randy Schroeder was with Agel, yet another pyramiding company.
Why the long introduction? Whenever I write about an MLM company their distributors flood the comments saying, “You are only trashing a good company to sell advertising on your website.” No, I write because their distributor pitched me, a reader has had a friend brainwashed by them, and they seem to have hired a person who I knew from a pyramid company that I covered long ago.
With that out of the way let’s dig in.
FG Xpress Power Strips: FDA Class One Medical Device?
One of the first things that Kris Spears tried to sell me on in her email is: “Our product is FDA Listed as a Class 1 Medical Device for Pain relief called Power Strips.” The company is not shy about sharing that point. See the image on the right.
Sounds very impressive doesn’t it? I have looked into more than a couple dozen different MLM companies and you never see them tie the FDA with their products.
In addition, we’ve become a world where we talk about our smartphones and tablets as devices. People refer to their Apple products as iDevices for example.
In fact, ForeverGreen (the FG) put out a press release stating: “ForeverGreen, in cooperation with the manufacturer of its PowerStrips product, has completed the tedious, time consuming and expensive process of listing PowerStrips on the FDA medical device list. As a listed Class 1 medical device, the FGX PowerStrips are unique.”
Except that a Class 1 Medical Device isn’t impressive or unique at all
If you look up the FDA’s listing of FGX PowerStrips, you’ll see that the classification is “PACK, HOT OR COLD, DISPOSABLE”. The definition of this classification is on the FDA’s website:
“A hot or cold disposable pack is a device intended for medical purposes that consists of a sealed plastic bag incorporating chemicals that, upon activation, provides hot or cold therapy for body surfaces…. Except when intended for use on infants, the device is exempt from the premarket notification procedures in subpart E of part 807 of this chapter subject to 890.9.”
In other words, it is classified as a disposable heating pack… the kind of item that you can buy for 75 cents on Amazon. And if you think heating packs are particularly magical, here’s how they work. It also seems you don’t even have to tell the FDA you intend to sell products as it is exempt from the premarket notification procedures.
How many class one medical devices are listed? I couldn’t find an exact number, but the the FDA’s website lists 500 alphabetically and only gets to “CA”. There might be as many as ten thousand products listed. It doesn’t seem like a process that is very tedious at all.
As far as the cost involved it seems to be $2,575 for the fiscal year 2013. Expensive is a relative term, but if ForeverGreen thinks that $2,575 is expensive for critical marketing of their heating sticker, don’t expect them to pay out more than “tens” of dollars to their salesforce.
Here’s how classes are explained in plain language on the FDA’s website:
“Using a risk-based classification framework, FDA places every medical device into one of three “classes” depending on the degree of regulatory control needed to provide reasonable assurance of safety and effectiveness. Devices posing the lowest risk, such as elastic bandages, are placed in Class I (General Controls). These general controls include the classification process itself, establishment registration and premarket notification, Quality System Requirements for manufacturing, provisions regarding adulteration and misbranding, recordkeeping, and reporting of adverse events. If general controls alone do not reasonably ensure the safety and effectiveness of a device, but FDA can identify an additional measure or measures that would provide that assurance — “special controls” – FDA places that type of device into Class II (Special Controls), e.g., laparoscopes. Such Class II devices generally pose higher risks than Class I devices. They are then subject to the general controls that also apply to Class I devices, plus one or more of a wide range of special controls that the Agency may designate. These special controls may include performance standards, postmarket surveillance, patient registries, guidance documents, labeling, and/or clinical studies which, taken together with the general controls, are sufficient to provide a reasonable assurance of safety and effectiveness of the device. When FDA cannot be assured that the combination of general controls and special controls is sufficient to reasonably ensure safety and effectiveness of a medical device – generally higher risk devices – such devices are placed into Class III (Premarket Approval), e.g., the newer generation of global endometrial ablation systems. Premarket Approval (PMA) requires manufacturers to submit an application to FDA, which is then subject to careful scientific review to provide reasonable assurance of the safety and effectiveness of the device. FDA approval of a PMA application is necessary before a Class III device may be marketed. Once approved for marketing, Class III devices also remain subject to the general controls already described.”
That same page gives you the great information that a condom is a class II medical device. So essentially FG Xpress Strips are actually less impressive than a piece of latex that I can buy for 33 cents on Amazon.
I think that puts the marketing of a “Class I Medical Device” in perspective.
On the basis of that alone, I’d say that FG Express PowerStrips count as a “scam” going by definition at dictionary.com of it being a “confidence game.” The highlighting of a class one medical device and marketing from distributors certainly seems to inspire more confidence in the “uniqueness” of the product than one should have.
I have no problem with ForeverGreen getting the FDA listing. I have a problem with ForeverGreen using the FDA’s designation of heating packs as marketing that the product is in any way special.
Is FG Xpress a Pyramid Scheme?
There’s a lot of discussion about MLMs and pyramid schemes nowadays. Just last week there was an article in the NY Times about whether Herbalife is a pyramid scheme. Interestingly the author couldn’t get the FTC to respond with a clear definition of what a pyramid scheme is. The closest I’ve seen an official definition from the FTC is this set of guidelines on their website. It includes the following:
“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
So if the money you make is based on sales to the public, it might be legitimate. If it’s based on recruiting and sales to them it IS an illegal pyramid scheme. Note that the FTC doesn’t hedge their bets with language such as “might.” It is definitive.
Recently the multi-billion dollar company Pershing Square created an easy to understand video primer on pyramid schemes and how they defraud consumers out of their money:
Now that we know what a pyramid scheme is, let’s look at FG Xpress and a video found on it’s “opportunity” page:
I’m hoping you noticed the similarities in the videos.
The FG Xpress video begins by saying that you become active by purchasing and order to get 50 or 100 volume points. At the 1:05 point in the Pyramid Scheme primer video it is explained that in order qualify as a distributor you have buy a minimum amount of product from the company.
The next section of the FG Xpress video covers how you recruit 4 people who each have purchased 100 QV worth of products themselves and explain that an X-Tribe is a two layers with at least 1000 QV in the group. At the 45 second mark of the FG Xpress video, it explains how it is a duplication model.
As the Pyramid Scheme primer video says at the 2:00 mark, the constant emphasis on recruiting is a tell-tale sign of a pyramid scheme. If you look back to the FTC document that we cited above, recruiting was also cited as the defining characteristic of a pyramid scheme.
It should be obvious by now that FG Xpress’ video explaining its business is exactly what defined a pyramid scheme in the primer and in the FTC document.
At the 1:30 mark of the FG Xpress video they even explain that your bonus is based on how much product you buy from them. It also encouraged people to spend more to get the 100 QV to qualify for the larger bonus. A pyramid scheme would want people paying as much into the system as possible each month.
At the 2:00 mark of the FG Xpress video, it says, “while your enrollment tree continues growing…” At this point I’d like to point out that recruit and enroll are synonyms and tree and pyramid are synonyms in how they explain how it works. The video continues to explain that you only get paid from the lower leg. So if you recruit a lot active people on one side, but have duds on the other side, you are not going to get credit from good side. Even if FG Xpress wasn’t a pyramid scheme, this is clearly seriously unfair.
At the 2:30 mark of the FG Xpress video, they say that the team bonus can pay you “up to $20,000 a week.” They even write that number down and color it in to draw attention to it. Do the math on that. It is essentially baiting you with a potential of a million dollars a year (52 x $20,000 = $1,040,000), from just this aspect of the compensation plan.
At the 2:25 mark of the pyramid scheme primer, it explains how companies will tell you that you’ll make a lot of money. Hmmm, just like FG Xpress did in their explanation.
The FG Xpress continues on for another minute or two explaining other bonuses they pay. They don’t really give good examples with numbers behind them and instead use percentages and ranges of money you could make for rank advancements.
The biggest thing missing from the video… no mention of selling any product to anyone. There’s no mention of selling product to the public which the FTC says “might” be an indication that it is legit. In fact, if you look at the entire FG Xpress opportunity page (as I write this), there is no mention of selling product to the public. In the whole opportunity video, the rewards were all based on recruiting, not sales to the public.
At this point, I think any reasonable person would conclude that FG Xpress is clearly a pyramid scheme based on the FTC guidelines above.
However, we can continue with the pyramid scheme primer video and see what else applies to FG Express. We left off at the 2:30 mark where it warned of promises of big money. At the 2:45 mark, it is mentioned that pyramid schemes will make “grand claims about the products back by extensive research and awards and have the ability to do amazing things… like cure illness.” Anyone else flashing back to the “Class One Medical Device” section above?
At the 5:00 mark the primer offers a checklist of 6 things to look for in a pyramid scheme:
1. Promise large monthly income
2. Require investing your money by buying product
3. Strongly emphasize recruiting others
4. Complex commission structure
5. Lacks retail sales outside the distributor network
6. Sounds too good to be true
In my opinion you could almost take this list and use it to make the FG Xpress video. It satisfies all 6 points.
The marketing of PowerStrips seems designed to mislead people that the product is somehow more advanced that a cheap heating pack. The FG Xpress business opportunity appears, in every possible way I look at it, a pyramid scheme. Either one alone should be enough to send you running away. The combination of the two is simply inexcusable fraud in my view.
As the pyramid scheme primer says, help your community by spreading the word.
Cliff Lindquist says
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Thank you very much!
You know, after the enrollement, they leave an auto-shipping on. So, if one is not alert, they auto send more strips. And, they do not send just one pack, they send two. Automatically discounted from your credit card…
I was aware of this auto shipping, ’cause the guy who put us on this told us, but he said that he would be on top of it and would cancel this auto optin, “when possible”, ’cause it’s not possible in the beggining. So we’ve spend 45€x3 times and more in shipping, if I remember. And the guy never showed up again. I’ve used the strips 5 times, and only one time it heated up. Each one costed 3€, and he told us to sell it by 5€. 5€ for a strip! It’s very expensive. It always smelled bad to me, but the guy was so good talking, and also our costumer, that he conviced us. From my point of view, it’s a bad investment.
I am NOT an FGX distribute, but wanted to put some food up for thought. it is easy to pull isolated clips out of context and compare them against a model to make something scream scam. Amway by these same standards is a scheme, and yet it is the largest corporation in the world and as far as i know has not been shut down. From what I have looked at with FGX, it is a Binary MLM with some modifications to help offset the unfairness of paying on the shorter, weaker, leg. They boast a 68% payout to their distributors, and a substantial percentage stays within 4 levels….thus indicating it is not a pyramid scheme.
When you look at MLM’s and payouts more like a corporation paying dividends to its shareholders (owners) the MLM model encourages growth by motivating the shareholders to work.
Saying that most of the sales are made within the distributorship is a bit of a low blow. People become distributors simply because it is the most economical way to purchase the products.
It’s real easy to stand on the side of the road and throw rocks… The hypocrisy ofLazy Man, is that he does this while he has advertisements up to make money whilst presenting similarities as accusations between videos without qualifying them and without making any substantial inquiries or research into the entire business model.
Lazy Man says
I didn’t pull any clips out of context. I put them in proper context. If you think the context is wrong, please explain why.
Amway is not close to the largest corporation in the world. It is Apple. Amway is not even a blip on the radar. The reason why Amway hasn’t been shut down is that they pay huge, huge fines and settle with governments to avoid getting shut down. For example, they paid $155 million. You don’t give away $155 million dollars for the fun of it.
None of the things you said about FGX (modified binary, payout to distributors, etc.) indicates it is not a pyramid scheme. The FTC guidelines don’t list any of those things.
If MLM was a single-level commission with no recruiting then you could claim it is about motivating the shareholders/salesmen to work. MLM isn’t that way. Again, there’s a reason why the FTC puts together the guidelines I referenced above… and it isn’t because MLM is legit.
Brian said, “People become distributors simply because it is the most economical way to purchase the products.” The MLMs have to change their model then. They blur the line of customer and distributor to the ridiculous point where people are stupid enough to claim that someone signing a distributor contract is a customer. When you say that being a distributor is the most economical way to purchase products, you are essentially admitting that it makes no sense to be a customer… and that is a pyramid scheme.
I don’t know what you are talking about with regard to the business model… I’ve studied MLM for 7 years now… You’ll see my articles on this website are very extensive.
Brian said: “Amway…is the largest corporation in the world.”
As Lazy Man said, that’s not even close to being true. It’s laughable that you would come here to criticize Lazy Man, and then kick off your critique by saying something so demonstrably false.
Brian said: “When you look at MLM’s and payouts more like a corporation paying dividends to its shareholders (owners)”
It’s nothing at all like paying dividends to shareholders. Shareholders own an actual tangible stake in a company, and the shares they own have face value. The shares can also be bought and sold. In contrast, an MLM distributor owns nothing; even their distributorship can be revoked at the company’s sole discretion. What an MLM distributor is, in reality, is a very poorly compensated commissioned salesperson/recruiter that is extremely unlikely to earn even minimum wage for their efforts, and will not receive any of the standard benefits that workers are entitled to or typically get, like paid vacation, sick leave, 401K, workplace protection, health insurance, etc.
Brian said: “Saying that most of the sales are made within the distributorship is a bit of a low blow.”
Stating a fact is not a low blow. It’s a sad reality that you, as a staunch defender of MLMs, must grapple with.
Brian said: “People become distributors simply because it is the most economical way to purchase the products.”
First of all, that’s merely your opinion. There is no data to back up that claim. Worse still, why would an MLM force customers to become distributors merely to receive a discount? They could easily just offer up the same discount to people for bulk purchases or standing orders without requiring them to sign a distributor agreement. As Lazy Man said, the blame lies with MLMs for blurring the lines between customer and distributor.
Signing a distributor agreement also place numerous legal obligations on the signer, including what they are allowed to say about the product and the company. Who in their right mind would take on such an onerous burden merely to receive a discount of 20% or so on a misleadingly advertised product that’s insanely overpriced to begin with?
Brian said: “It’s real easy to stand on the side of the road and throw rocks…”
Which is precisely what you’re doing. You’re not even throwing rocks per se; just nuggets of BS, like telling us that Amway is the largest company in the world. What Lazy Man is doing is quite the opposite of your approach. He uses facts and air tight logic to make his points. You should try it some time.
Brian said: “The hypocrisy of Lazy Man, is that he does this while he has advertisements up to make money whilst presenting similarities as accusations between videos without qualifying them and without making any substantial inquiries or research into the entire business model.”
Lazy Man’s research puts yours to shame; and that’s being generous, because apparently you didn’t do any research at all. Your critique is the very essence of hypocrisy. An epic fail!
JR McLean says
Thanks for your review. I just finished listening to the pitch for this product, mostly because I couldn’t get rid of the guy any other way. My problem with researching these things is that there are so many “reviews” demonstrably coming from the pens of distributors or others with a stake in this business. Yours is the first that tells me something useful.
I use this product. I also sell this product at full-blown retail. Why? Because it works. People in pain want relief and this works for many of them. If they want to get involved with the organisation, that’s their choice. They can then buy the product at a wholesale rate and they are happy with that. If they recommend it to someone and they buy it, they make a bit of money. What’s the problem?
Lazy Man says
Please see the FTC page about MLMs and pyramid schemes.
There’s nothing wrong with selling product directly, but typically that doesn’t happen. See: Why Would Anyone Buy an MLM Product? As you said they get involved in the organization and thus are part of the pyramid, which is a problem.
There’s nothing to show me that it works any better than a tube of icy hot or similar topical. It certainly isn’t worth the misleading information that the company and distributors are using to market it.
The video above was based off of Herbalife. This is the disclaimer on the site it was provided from:
[Editor’s Note: Interested parties can go read the disclaimer on the site. I’m not going to take up valuable discussion space here by reprinting it.]
Coincidentally I just accidentally (yes, accidentally) attended a type of recruitment seminar for FGX (I say accidentally because I heard an interview on the radio in which they went on and on about the marine phytoplankton and I thought that was interesting and thought this was a presentation on the benefits on marine phytoplankton, but anyway).
So basically this guy was an amazing presenter and gave these incredible stories about how this product works. He even showed his own commisions on his own personal website (unbelievable the money he makes), to show how it’s not a fluke. He also mentioned that the powerstrip is FDA approved (which it is not, FDA does not approve any natural products) and that this is a unique product.
The commission set up is based around the premise that you only RECOMMEND the product. You don’t actually sell anyone anything. You recommend the product, give samples and a personalised link. And your done. They hop on to said link and buy the product (or enroll as a FGX seller) if they wish. Or don’t do anything with it.
This sounds different from what you describe as the by-FTC-constructred-guidelines for a pyramid scheme.
What is your opinion on this?
Lazy Man says
The FTC hasn’t been very interested in pyramid schemes in general. It’s a small part of what they do. They did just shut down Vemma for being a pyramid scheme, but they were pretending to be a legitimate MLM. I don’t think a legitimate MLM exists… and I explain why here: Is Every MLM a Scam?
The short answer is that it doesn’t make sense to be legitimate, where the money is better being illegal and it is rarely prosecuted.
MLMs have been “moving the goalpost” on the FTC. Some 15-20 years ago, most of them would burden salespeople with a ton product that they had to buy to be eligible for commissions. Nowadays, they work on the subscription model, trying to get people to pay $100, $150, or $200 a month for overpriced product to be “active/eligible for commissions.” In the old days, people actually sold physical product. They still can do that nowadays, but it usually is bought/shipped online.
At the end of the day, it doesn’t really matter when people are recommending the product or selling it. It’s whether their money comes recruiting other people who buy product to be active/eligible for commissions.
I like to consider it a hybrid of two things:
1) Selling product which is legal
2) Running a pyramid scheme which is illegal
When you start to see people lying for companies… or misrepresenting the products (i.e. the FDA approval thing)… I think you get the idea that it really isn’t on the level. I’m disgusted that they’d misrepresent in the first place, which is really all I think anyone needs to know.
ive been taken for a fool and im gonna tell the world about how blah blah blah lazyman, this whole thing is a bash on the mlm scene well james hit it on the head they recamend and sample product the big bad mlm here to give you free stuff… and the xtribe bonus looks like itll pay for that autoship that alex forgot to tell when signing up you give people you cc info ? i know i dont. even in the video about the company it says you must be on active order… site some more links how a scam illegal company is a publicly traded company with it address everywhere, and love how money solves your big gap of how and why they dont get shut down or banned from America… reason free enterprise, so go back to russia you communist!
Lazy Man says
Huh, notlazyman? Your comment doesn’t sound like English.
notlazyman said: “how and why they dont get shut down or banned from America… reason free enterprise, so go back to russia you communist!”
Ah, the quality of the pro-MLM arguments never ceases to amaze. The irony is that many MLMs have moved into Russia because it’s like the wild west with respect to lax MLM regulations. In 2011, the DSA reported that MLM was a $3 billion industry in Russia.
Jack Burg says
So a friend of mine got exposed to FGxpress strips, I asked about the ingredients and once they mentioned Germanium I saw a red flag. did a little digging and among everything else (including Dr. of radiology (?!) Adam Saucedo’s citation of seven counts of professional misconduct circa 2001) found this page. shared it and hope he doesn’t invest. I don’t mind people buying placebos if it does them good, but pyramid schemes are a different matter…
I have been approached by a friend to attend various meetings of FG Express in Switzerland. I did go once. My conclusion was that everyone there was try to push the product but no-one brought and objective tests on the Power Strips and Face Mask. Lots of information was given on how much could be earned and how it worked.
What I would like to know is what (if any) independant medical test have been done on these products. Medical proof of how the products works. To what degree do the products work (quantified). If the power strips are really good, why are they not prescribed by doctors?
It seems to me that if the products are as good as they claim, they would not need a “pyramid” network to sell it. It would fly off the shelves.