The Two Faces of Nu Skin


via
Freedom of Mind
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"In the United States, multi-level marketing (MLM) has become part of our economic fabric. It is not our proudest achievement, but nonetheless it has become a part of our society – one that sells dreams along with an array of overpriced products that most people can live without just fine. The U. S. has established a patchwork of little understood regulations that provide some protection for the public from the most abusive forms of pyramid schemes, mostly under the jurisdiction of the U.S. Federal Trade Commission. ( See “Lotions and Potions” at the FTC website. http://www.sec.gov/answers/pyramid.htm (The SEC also has both concerns and regulatory oversight in this problematic area: http://www.sec.gov/answers/pyramid.htm )



By contrast, China prohibits multi-level marketing strictly and in entirety. Pyramid schemes create victims by creating an endless chain of recruits who recruit new recruits into a wealth transfer scheme which cannot possibly be sustained. Therefore the vast majority of the participants lose their money. Often pyramid schemes are cloaked in the sale of an overpriced product, with new recruits being required to “invest in inventory” to gain or maintain certain levels of membership which most will be unable to achieve. These abusive business models are understandably outlawed under Chinese law.



China does have a law which defines and permits only “direct selling”. Much like many Chinese companies which ignored the regulatory laws of the United States, it is the opinion of Citron Research that Nu Skin is grossly violating the laws of the PRC, and their entire Chinese business operation could be in jeopardy of seizure and other substantial risks.



Before we introduce the evidence pointing conclusively to widespread violation of Chinese law, this discussion begins with the importance of the China market to Nu Skin."