Nerium has changed their name to Neora. Truth in Advertising explains that it might be various FTC complaints and lawsuits against Nerium. This article was written during that Nerium past.
Last August I wrote an article on the MLM, Nerium. Quite a bit has happened since that time. Their largest critic has been silenced and they’ve come out with another product. I found an CBS News local affiliate who covered it in depth. There was even a clinical study published last month (May 2015). It seems in the best interest of consumers to have a revised article that covers some of this in detail.
Please be aware that some of it may have a slighted disjointed timeline since I’m mixing some of the original article with the new information. Let’s get started…
People have been asking me about Nerium since November of 2011. Specifically Jeff Flanzer of Ojai, CA wrote me as he became a distributor citing the integrity of Nerium founder Jeff Olson who worked for Pre-Paid Legal, which Mr. Flanzer was a distributor for. He said that Pre-Paid Legal was a “good company” which caught my attention.
In the world of Multi-Level Marketing, people have a very strange opinion of what a “good company” is. Pre-Paid Legal got bought out, but before it did, its history is laughable. Wikipedia cites the following: the Wyoming Attorney General smacking them for distributors using prohibited income representations, the SEC smacking them for counting money they paid to salespeople as assets instead of expenses, and settling 400 lawsuits in just the state of Missouri, which doesn’t include one they lost to a customer who cashed in for $9.9 million.
And that was just what happened to Pre-Paid Legal in 2001. Perhaps Jeff Olson came along later in time for the FTC investigation in 2010? I’m not sure, but it doesn’t make sense to me that one would willingly join an organization with this history and reputation unless their other offers were absolutely terrible.
Last December I got an email from a reader named Missy which read, “I have childhood friends who are giving up their careers for Nerium AD because of the $$/Lexus they have rec’d. It all seems like Monavie all over again but I can’t convince them otherwise because of the ‘science’ behind it.”
The multiple emails and my own experience (see the Success from Home magazine story I detail below) lead me write about Nerium today. (This is an answer to all the Nerium salespeople who think I just “slam companies to make money.” I get general inquiries from real people, do the research, and present the results of that research.)
Nerium Products: Nerium AD and Nerium EHT
Much of this article was originally written when Nerium only had it’s Nerium AD skin cream available. I’ve attempted to rework and update the article to include their introduction of the Nerium EHT product. Nerium, the company, and Nerium AD was covered extensively by Bare Face Truth, so I will start there.
Nerium AD gets Bare Faced Truth’d
The website Bare Faced Truth is run by two doctors and had written about Nerium extensively for more than two years. Their articles had hundreds of comments. Unfortunately, the information on Bare Faced Truth has been deleted from their website. This happens quite often in the world of MLM. Usually it is because of one of three things happens:
- The lawyers for the MLM threaten to sue the authors for libel if the material is not removed.
- The MLM offers a cash settlement to remove the information.
- The authors get harassed and bow to the bullying. For example: I’ve had my life threatened, been blackmailed, and had my website hacked.
I can’t say what is happening in this case, but usually when someone puts months of their life into (successfully in my opinion) exposing fraud they don’t decide to delete it haphazardly.
I’ve replaced the links below to ones from Archive.org. I encourage everyone to archive those on their hard drive, because it might soon be gone forever.
The first Nerium article serves as an introduction and points out the oleander kills cells, not just cancer ones, which makes it sound harmful. It also explains that the salespeople know the marketing, but not the science behind the product. It is a huge red flag of a pyramid scheme when salespeople pitch the business opportunity and can’t tell consumers how the product works. I also found it interesting that the article mentioned a close friend who was a distributor in Ojai, CA. It couldn’t be the same Jeff Flanzer who contacted me, could it?
In their second Nerium artice, Bare Faced Truth, explains that they contacted MD Anderson Cancer Center, which was supposedly a reputable place “looking into Nerium”, yet no one they contacted seemed to have heard of it. The specific person looking into it, could not be located. They then went to many independent blog sites and looked at reviews. It seems there were two types of reviews: 1) Horrible ones and 2) Ones from distributors trying to make money. Finally, they expose many of the lies that MLM tells the public in great detail.
Note: Bare Faced Truth found that MD Anderson Cancer Center specifically wrote that they DO NOT ENDORSE Nerium in any way. One or two individuals with an affiliation to an institution may make a claim or have accepted money to do research for a company, but it doesn’t mean the institution itself is. If someone in the US Army buys Nerium AD, we don’t say that the US Army uses Nerium AD.
In this case, the marketing was so overblown that MD Anderson Cancer Center had to set the record straight. There’s a huge problem with MLM… take one inaccuracy and spread it without regard to fact-checking or the truth.
In their third Nerium article, Bare Faced Truth covers the “mania” of its distributors saying that Nerium AD really does work. It touches on a few of the factors that I’ve covered in-depth at No, Your MLM Health Product Does Not Work.
In their fourth Nerium article, Bare Faced Truth covers a Nerium distributor (called a Brand Partner) who set up a misleading press release lying about how new information on Nerium was going to be released in the wake of the FDA warning L’Oreal’s promoting practices. It was simply a marketing ploy. Is it lost on anyone that the irony of misleading and lying to people in a press release to sell Nerium product is worse than what it was condemning L’Oreal for?
In their fifth Nerium article, Bare Faced Truth reveals that Nerium has decided to attack Bare Faced Truth rather than work with them to answer their questions. Bare Faced Truth shows that Nerium admits that they are trying to silence such critics… effectively trying to cease their freedom of speech (or press in this case I suppose). For example I have experienced this myself.
Reputable companies address criticism openly and transparently. If they can defend their actions they do. If they can not, they pledge to make amends and do a better job in the future. However, if a company isn’t reputable and can’t address criticism openly, defend their actions, admit to mistakes, or pledge to do better in the future, I guess the last option is try to silence the criticism itself.
In their sixth Nerium article, Bare Faced Truth goes into very specific detail to show that Nerium AD causes massive oxidative stress that kills cells.
There is (or was before it was deleted) a lot more on the Bare Faced Truth website and it’s really impossible for me to cover it all here. Once again, the unbiased doctors have spoken and given you all the information you need to know about misleading marketing of Nerium.
A Local CBS Affiliate Exposes Nerium
There’s a great article and video on Nerium on CBS San Francisco affiliate KPIX 5’s website. Here is the article… and here’s the video that goes with it:
It is worth reading and watching, but essentially CBS gets unbiased doctors who say that there’s no proof Nerium is safe and nothing to indicate it is effective. They even brought up concerns that it could cause an allergic reaction. One doctor went as far to say that it is not real science when asked. The same doctor looked at the before and after pictures and concluded that only an eyebrow lift or Botox could cause the result.
I found this part particularly interesting:
“Olson says the proof the product works is in the sales, over 3 million bottles, and the rave reviews from the women our Los Angeles affiliate station interviewed. But since the product is sold mostly through multi-level marketing, KPIX 5 asked him: ‘A lot of your strong supporters, they have a vested interest in this company.” Olson responded: “That is one of the good things about word of mouth business or relationship marketing, people give their own testimonial to the product.'”
It reminds me of 7 years ago when MonaVie sold a billion dollars worth of $40 juice that the inventor admitted was “expensive, flavored water.” People were buying product because it was necessary to participate in the “business opportunity” of recruiting others into the “business opportunity” commonly referred to as a pyramid scheme. The sales do not indicate real interest in the product, but interest in financial freedom.
We also saw how the perceived chance at financial freedom caused MonaVie distributors to make unreasonable testimonials about the flavored water. Some even that MonaVie cured cancer.
It is further worth noting that the FTC Endorsement Guidelines require the following:
“If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances;”
As the doctors made clear, the advertiser (Nerium) doesn’t have proof about what the endorser’s experience will be. These testimonials seem to fall on the wrong side of the law. This is a huge negative that should have been pointed out by the CEO.
The video added more information that the company’s salespeople specifically work push down negative reviews in the search engines, so that only their financially biased reviews show up. It’s becoming clear to me why Bare Faced Truth’s reviews seemed to go away.
What is this, the skin cream mafia?
Nerium AD and Clinical Trials
When I did the research for this article in August 2014, I wrote,
“I noticed that Nerium claims to have done a clinical trial. Best I can tell from the pictures at the bottom of the page, the ‘trial’ consisted of only 4 people. Actually it could have been more people and those were just the four they wanted to show. Details of the clinical trial are largely ignored without even a link (that I could find) to give more information. Nerium said it “enlisted the services” of a third party. Funding your own studies is always a red flag… even if it a third party service.
The best I could tell, the clinical trial was not published in any peer-reviewed scientific journals. While getting published in a peer-reviewed journal isn’t a guarantee of a product working, it is a little bit better than, “We paid a company to study our product, and, surprise! they found it worked phenomenally.” As noted in this Reuter’s article on beauty products: ‘… studies had shown industry-funded research is more likely to have positive outcomes, and that people could be influenced by financial interests even if they didn’t realize it.'”
As I mentioned at the very beginning of the article, there is a clinical trial published in May 2015. What’s interesting is that Nerium has change their page on clinical trials to no longer say that they enlisted the services of a third party, but instead say that they are independent clinical trials. They have taken the opposite stance from a few months ago.
If you look at that clinical trial, one of the authors is Robert A Newman who is listed as being affiliated with MD Anderson Cancer Center (see above mention about that) and Nerium. Since when are independent clinical trials authored by the people clearly affiliated with those who make the product? It also says it was approved for publication by Jeffery Weinberg who happens to work at MD Anderson.
If you dig a little deeper you’ll see that Kathleen Benson and Gitte Jensen work for NIS Labs, which is presumably the third-party that Nerium hired. NIS Labs lists on their industry services page: “We are clinical trial and lab test specialists for the natural products industry. We specialize in pre-clinical testing and clinical trials as part of an overall strategic research plan. We encourage sequential publishing of peer-reviewed manuscripts as data is generated from in vitro bioassays and clinical studies, to help build a strong science-based product portfolio.”
This doesn’t look like an independent clinical trial at all to me. It looks to me like Nerium hired a third party to “help build a strong, science-based, product portfolio” and utilized Newman’s connection with MD Anderson to get a colleague to approve it for publishing. And Newman himself seemed to contribute significantly to the cause as he was an author of the paper.
Before you even get into the details of the clinical trial, the conflicts of interest here seem very, very obvious.
“Did You Try It?”
Whenever I write about an MLM health product, I get the a minority of distributors asking a question that seems logical to most people, “Did you try it?” With any health product, certain factors such as placebo effect make one individual’s trial useless. The sample size of one person is too small. If it appears to that individual to work, then it could be the placebo effect, essentially an illusion of it working. If it appears to that individual to not work, then it might just not work. The question doesn’t lead to any helpful conclusions.
This is why scientists don’t test new experimental medicines on one person and then release it to the public. It doesn’t matter what one person’s view of their results are.
In fact, it often takes testing on many, many people to determine if the product has harmful side effects. These tests are called clinical trials. You want to stick to products that have successfully completed enough of them to get FDA certification for any claims they make.
Wrinkle Creams in General
As Lifehacker points out, “clinically tested” and “dermatologist tested” have almost no meaning when it comes to skin cream.
That article references a tremendous article in The Atlantic on skin cream in general. Here are some highlights (I’m tempted to cut and paste the whole article):
“Now, this machine looked impressive, but despite the good bit of digging I did after the appointment, I could not find an independent analysis of its clinical value…. Reading between the lines (or, actually, simply reading the lines), it seemed the company viewed this machine as a way to move product.
The size and influence of [the beauty] industry creates challenges for anyone seeking to get to the truth about the products it makes and promotes. Many experts I found were not independent scientists, but dermatologists who also had a clinical practice and, as such, benefit (some greatly) from a thriving industry. I am not saying that physicians knowingly twist information about the efficacy of beauty treatments, but there is ample evidence that such conflicts of interest can have an impact on how research is presented and interpreted.
In addition, little literature produced by independent researchers is out there. For many beauty products, there seem to be either no data or only small studies produced by proponents of the product… So there isn’t a lot of good science to draw on.
To make matters worse, the popular press is rarely critical of new beauty products… Rarely did I find any real evidence or expertise beyond personal testimonies (which I don’t need to remind you are not evidence)… The so-called experts who are quoted in these stories are often part of the beauty industry or individuals with no research background.
Publishers don’t generally sell magazines by reminding readers that nothing works. Consequently, getting straight answers about anti-aging and beauty products is nearly impossible. There exists a confluence of fact-twisting forces: lots of money to be made by manufacturers and providers, huge advertising campaigns that deploy vast quantities of pseudoscientific gobbledygook, a lack of independent research and information, and consumers who desperately want the products to do for them what is claimed. The cumulative impact of all these forces results in a massive bias toward representing a product or procedure as effective.
… history tells us that a skeptical position is almost always correct. As with trendy diets, after a bit of time it almost invariably becomes clear that the alleged benefits associated with some new, exciting anti-aging beauty product can’t live up to the hype.
Virtually every magazine with a focus on fashion, celebrities, health, or fitness offers regular advice on skin care and combating aging. Most newspapers have a weekly style or beauty section. At any given moment, probably hundreds of beauty-related recommendations are sitting on the average midsize magazine stand. And all these stories are almost completely devoid of any reference to credible evidence. Beauty advice is a science-free zone. Anything goes.”
Hopefully this puts the “Did you Try It?” question in more perspective. A better question would be, “Why would anyone pay money for wrinkle creams without scientifically credible proof?” And by scientifically credible we don’t mean all the biased stuff mentioned above.
The above was mostly focused on Nerium AD… it’s been around a lot longer. Nerium EHT is very, very new, so there isn’t as much on it. However, there are a few things that I think are worth looking at.
Nerium EHT and Princeton
In mid-April of 2015, Nerium put out a press release announcing Nerium EHT. The press release read, “The key to Nerium’s groundbreaking anti-aging formula is the exclusive, patented EHT extract, discovered after 20 years of research in Princeton University Labs by Dr. Jeffry B. Stock.”
The wording of this press release could certainly lead one to jump to the conclusion that there was a partnership with Princeton, right? It was even questioned in a comment on this website. The best evidence though came from Twitter. Look at how many times Princeton had to set the record straight:
@karinweizel We do not have a partnership with Nerium.
— Princeton University (@Princeton) April 10, 2015
@jill_welton Please correct or remove your post. Nerium does not have a partnership with Nerium.
— Princeton University (@Princeton) April 11, 2015
@TrishKrachun There is no Nerium partnership with this university.
— Princeton University (@Princeton) April 11, 2015
@jenlewis4_lewis Cerium was an autocorrect fail. The error is the claim that Princeton, Nerium are partners. We are not. Thanks.
— Princeton University (@Princeton) April 11, 2015
So why did Princeton have to correct all the Nerium distributors. It wasn’t just the press release. Coinciding with that press release, Nerium had one of their big gathering of distributors called “Get Real 2015.”
Here’s a video of CEO Jeff Olson introducing EHT. Take notice into how much focus he puts on Princeton:
Nerium clearly didn’t have to mention Princeton at all, especially because Stock’s work was for Signum BioSciences as mentioned here.
No wonder Brand Partners were quick to use the Princeton name to market the product instead of the more correct, but much lesser known, Signum BioSciences.
This is one famous way MLMs mislead distributors. They hitch on to credibility of places like Princeton, even when the University has no affiliation with the MLM. Like the telephone game gone bad, distributors incorrectly spread the misleading information that such a partnership exists. It’s a numbers game, they only need the most ignorant 5-10% of the population to believe it and jump on board.
Nerium EHT’s History and Marketing
I noticed that Nerium’s blog calls Nerium EHT “The newest Nerium Breakthrough!”
Nerium didn’t have a breakthrough other than negotiating the distribution rights to a product that was already available.
Nerium EHT’s Effectiveness
I haven’t seen anything scientific regarding Nerium EHT being effective. It seems that the marketing point of Nerium EHT is that is slows down the aging process of the brain. It is confusing how they’d be able to scientifically assess that on such a new product. It isn’t like you can test “brain age” over a couple of weeks and say that one group’s aged less than another groups.
If there was a magic “brain-age slowing-down” product, I think you’d have to test two large groups over 10-20 years and hope you find a difference. This difference would not likely be very large since the brain, like all parts of the body, is going to age. Most people tend to age as a similar rate (it isn’t often that someone mistakes a 40 year old for a 20 year old.)
Nerium Product Information available Elsewhere
This section may expand over time. For now, I have one piece of information on the products that are worth sharing.
There’s a good article on Nerium AD’s toxic ingredients from an licensed esthetician here.
Nerium, Ray Liotta, Before and After Pictures
Nerium distributors like to show a lot of before and after pictures. However, one set has put Nerium in hot water. Ray Liotta is suing Nerium for the before and after pictures it used without his permission. Perhaps most importantly, Liotta claims to have never used Nerium and says he wouldn’t even if paid to do so.
If that weren’t bad enough for Nerium, the lawsuit claims that Nerium is a “product-based pyramid scheme” on page 5 paragraph 31. If lawyers are calling Nerium a pyramid scheme, I’m certainly not going to argue. I imagine they’d get sued for libel if they were wrong (as “pyramid schemes” are illegal).
The lawsuit cites many claims of Nerium’s salespeople using social media to post the fake pictures of Liotta and fake claims that Nerium AD was the cause of the result. The MLM structure makes it easy for distributors to run amok with a lie, like a false rumor running through a high school. MLM proponents say they shouldn’t be punished for one bad apple. However, you are always going to have a few bad apples in every barrel and the MLM system maximizes the damage from such bad apples.
While before and after pictures seem impressive, after watching this 37 second Photoshop transformation, it’s hard to take them seriously. We know top magazines airbrush attractive movie stars to make them perfect. Why would you trust a skin cream company NOT to do the same? They have millions and millions of dollars on the line.
Enough about Nerium’s products, let’s get down to the business… and Nerium’s MLM/pyramid business “opportunity.”
Nerium Lies about MLM and Pyramid Schemes?
I found an interesting article on Nerium’s website about MLM and pyramid schemes. You may find it here, but I suspect they’ll revise it substantially after reading this, so I archived a PDF version here.
The article is fairly unprofessional and full of misleading and just wrong information.
It starts off with a title of “MLM’s Explained.” The title itself implies that “explained” is possessed by an “MLM” due to the apostrophe. I’m not immune to typos myself, but I don’t make the kind of money to employ an editor and I’m a one-person shop. While I’m being picking of typos there’s also a point where they write, “It’s not dependent on any product every being sold.” It feels like they rushed this document.
Interestingly in the paragraph of “MLM’s Explained”, they don’t attempt to explain MLMs. Instead they discuss the “direct selling model.” This is a common game MLM companies play to confuse people. They refer to the same thing, and “direct selling” was invented because MLMs got a bad reputation. You probably know that Ebay, the most pure example of “direct selling” in the United States, is very, very different than MLM.
The first paragraph mentions that the “… independent contractors [are] able to set their own hours and be their own boss.” This is true, but here is what they leave out:
1) independent contractors in MLM usually make about half of minimum wage in revenue.
2) independent contractors in MLM are responsible for their sales supplies, marketing materials. Overall, more 99% of contractors LOSE money when accounting for the costs.
3) independent contractors in MLM earn no benefits such as health insurance or vacation.
Being your own boss and setting your own hours while you lose money is not a good idea.
Nerium continues with the next section of “Direct Selling Advantages.” Specifically they write, “direct selling allows people to try out the product or see a demonstration of how it works before deciding whether to buy it.” This is only true if an independent contractor pays for product to demonstrate or give away as a sample. The product is already bought and paid for. In contrast, numerous non-direct selling methods exist that give people samples and demonstrations. You can often see both examples at Costco. That’s a true example of trying before buying, because it doesn’t rely on inflicting more debt on independent contractors who are already losing money.
Nerium’s attempt at explaining MLM/Direct Selling continues: “And since there are no stores or corporate overhead costs and the sellers can usually work out of their own homes, direct selling is cheaper for everyone involved.”
Actually, Nerium does have corporate overhead. Their CEO doesn’t work for free. The product doesn’t materialize out of thin air. It is true that they don’t have stores, but many products are sold on Amazon, Ebay, or an official website which don’t require stores. I’ve covered dozens of MLMs and the products are very expensive. In this case, we have the scientist from CBS San Francisco who said that there’s no science to Nerium AD… and they are selling a business kit full of product for $999.
It may be cheaper for Nerium to pay sales people less than minimum wage and give them no benefits. It is especially true when the sales people spend their earnings on the product. However, when the product is vastly overpriced, it isn’t cheaper for the independent contractors.
It continues, “For the independent contractors, it’s the most accessible way to go into business for themselves.” Actually blogging is a more accessible way… not that recommend it because blogging is difficult. I’m sure you can buy some “no money down” real estate flipping products to get into business too. The point being, that these are terrible businesses.
Continuing… “90% of the work of starting a business is already done: the product is already invented and tested, the factory is up and running, and the branding is already taken care of. Forget needing millions of dollars for start-up costs; practically anyone can afford to start a direct-selling business.”
This is exactly why MLM is a terrible business. Since anyone can do it, there’s no barrier to entry. You may have millions of competitors. The independent contractors who lose money often put the products on Ebay to recoup some of their money. You are competing against that. You don’t have any input into product direction or pricing. As author MJ DeMarco put it, “As a network marketer, you don’t own a business – you own a job managing and creating a sales organization… MLM distributors are commissioned employees disguised as entrepreneurs…”
To top it off Nerium continues with this, “To reach more customers, direct sellers can recruit and train other individuals to join and become sellers themselves. It’s kind of like outsourcing our marketing and training programs: in addition to making money by selling Nerium products, our Brand Partners can earn commissions for coaching new independent sellers.”
That also appears to be the definition of a pyramid scheme, but we’ll get that in a bit.
Nerium: “[MLM] simply refers to the fact that new Brand Partners are trained by more experienced Brand Partners, creating different ‘levels’ the same way that an office organizational chart would usually have multiple different levels.”
This is where Nerium is confusing a legal hierarchical organization where payment is not based on recruiting with a pyramid scheme where the structure is defined by recruiting and payment based on the recruiting hierarchy.
It’s a good try, but everyone in MLM should be focused on product sales. There’s no need for multiple levels when everyone is trying to do the same thing. It’s not like Microsoft that might have a head of Microsoft Office, head of Microsoft Windows, and head of human resources overseeing entirely different areas.
Nerium: “Multi-level marketing does have a mixed reputation, because a few bad apples have used it as a cover for running scams. These scams are MLMs in name only, because they’re not really ‘marketing’ any products; instead, they’re pyramid schemes.”
This is not an accurate description of an MLM or a pyramid scheme. The FTC has guidelines on MLMs/pyramid schemes here and there is no mention of “not really ‘marketing’ any products” or anything of the sort. In fact, the FTC shut down Fortune Hi-Tech Marketing (FHTM) for being a pyramid scheme. It had claimed it was an MLM. As that Wall Street Journal points out, “FHTM sales people sold a whole variety of things, from Dish Network packages to organic shampoos, nutritional supplements, residential gas and electricity contracts and mobile phone plans.”
So it is clear, pyramid schemes can be marketing legitimate products. The inclusion of a legitimate product is not an indicator of whether a business is a pyramid scheme.
Nerium: “In a pyramid scheme, people who join pay money to those higher up the pyramid, and hope that they can get other people to join who will pay money up to them. It’s not dependent on any product every being sold.”
This does not line up with the FTC has guidelines on MLMs/pyramid schemes at all. While it might be true of a simplistic pyramid scheme, MLMs can run more complicated ones like FHTM that went on for a decade.
Nerium: “However, that’s not at all how Nerium works. Nerium is a true MLM, with a top-quality product to sell. All commissions are based on sales of products to customers. It’s a system that works because the product works, as the results show.”
Well, again independent scientists say that the product is not science and is not a top-quality product. And while the commissions are based on sales of products to customers, those customers could be other independent contractors, which do not qualify as customers according to the FTC:
“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.”
My simple interpretation of this is that if you can find a Nerium Brand Partner who makes more money from his downline than from the product he is selling to people outside the sales organization, he’s running a pyramid scheme… and Nerium is helping him do it. The problem with Nerium’s statement about commissions being based on product being sold to customers is that they are also based on product being sold to the sales organization which is not considered a customer.
In my opinion, Nerium would be wise to update their documentation to match the FTC guidelines instead of attempting to create their own definition of what a pyramid scheme is.
If you are still confused about whether Nerium is a pyramid scheme, here’s a video that should help you clear it up:
Nerium’s Fraudulent Marketing in Success From Home?
A couple of months ago, I got into a discussion with some Herbalife supporters on Seeking Alpha. Their argument was that MLM must be a legitimate business because it was covered by Success Magazine. I pointed out that Success Magazine was owned by VideoPlus (which is now called Success Partners) and that their website openly shows that their advertising partners are exclusively MLM companies… naming dozens of them. They somehow couldn’t grasp the bias right in front of them, or didn’t want to admit they were wrong.
They suggested that I go to Barnes and Nobles and pick out a Success Magazine and read it. Unfortunately, my Barnes and Nobles was sold out or didn’t stock it. However, they did have another magazine from the same publishers called Success from Home.
The Success from Home magazine was clearly an advertisement for Nerium. It was like reading an infomercial, but without any kind of disclosure that Nerium pays Success Partners. There was no attempt to be objective about other types of successful home businesses (blogging anyone? just kidding). There was no attempt to be objective about the thousands of MLM companies available. It was around 120 pages with over 90% of the content based on Nerium. The other 10% was boilerplate good financial or entrepreneurial advice to convey credibility.
To its credit, Success from Home comes clean on its website:
“Each issue is written and designed to inform, motivate and inspire individuals considering the home-based business market and further the success of those who already own their own business.
Every month Success from Home spotlights an individual network marketing or direct selling company, exposing readers to its rich history, exciting future and the people responsible for its success.”
There’s a word for this: Propaganda
It’s one thing when you know to expect the bias and the paid advertisement is disclosed. It’s another when Success From Home highlights the few successes ignoring that the financial harm that is inflicted to others in the pyramid, and includes profiles of vacation destinations (that certainly isn’t “from home”). One of the big red flags with MLMs being pyramid schemes is the pitch of income expectations, and this would certainly qualify especially in a paid advertisement attempting to hide itself as a business publication.
That’s not all, the May 2014 issue was the third time that Nerium was the featured company of Success From Home, even though Nerium has only been around for three years now. Nerium must be paying them a pretty penny to get about 1/12th of the magazine’s annual focus. Again, this isn’t what you’d expect from a broad magazine about every home business industry. If the magazine changed its name to “MLM Monthly”, that would at least be less misleading, but still would draw suspicion for focusing so often on one company.
I don’t see how this kind of marketing can be considered anything but fraudulent. Quite frankly I’m shocked that the FTC hasn’t acted on this already. This marketing was not committed by a few rogue distributors, but it is deliberately designed by management of Nerium itself. Fraudulent marketing is the kind of thing that’s going to get a company written up by personal finance bloggers (or at least this one) as being a scam.
Most people should be able to realize that Success and Success From Home aim to mislead people into thinking they are legitimate business magazines giving legitimate business advice. Maybe that’s why the FTC isn’t putting resources into shutting it down. A legitimate company would distance themselves from such marketing… it certainly wouldn’t embrace it.
My Gift to You
If you’ve read this far, I appreciate your dedication. Whether you found what you were looking for or not in the article above, I want to help you with your financial situation. It’s what I do.
Here are two things you can do to put yourself in a better financial position:
- Create an Emergency Fund – Dobot squirrels small amounts of money from your checking account to its FDIC-insured account. It’s 100% free. You simply have to create a goal of having an emergency fund. You don’t have to think about it and you’ll likely never notice the small amount of money being moved. I’ve squirreled away more than $1100. You can read my Dobot review here.
- Track Your Money – Over the years, I’ve gathered so many financial accounts. Banks, Brokerages, Loans, I got multiple of them all. The best software for tracking them all is Personal Capital. You can’t get to your destination if you don’t know where you are to start. Personal Capital gives you that… and, like Dobot, it is completely free.
For more visit my five minute financial fixes article. If neither of the above is helpful, I’m sorry. I appreciate you for just being here. The person recruiting you has a financial incentive to present only one side of the story. Kudos to you for searching for more information to make an informed decision.
This article is now nearly 6000 words long and still Bare Faced Truth has done all the heavy-lifting for me (at least for Nerium AD). Given all this information, I am forced to conclude that Nerium is a scam in my opinion. It doesn’t appear to use reputable marketing and the “science” behind its product is doubted by experts… except for what appear to be their own studies. Their salespeople seem to use misleading marketing as well. The company itself seems to mislead people about what MLMs and pyramid schemes are which I find especially egregious. I think most of this information by itself would be enough to conclude that the product and company is a scam, but that is up to you to decide.
Combine all the evidence together… and I don’t see how you can come to any other conclusion.
Update: Looking for another opinion? Ethan VanderBuilt has written about Nerium as well.
Update: Truth in Advertising reports on their #NeriumTruth campaign cc’ing the FTC about allegedly illegal claims.