The FTC charged AdvoCare of operating an illegal pyramid scheme.
According to the FTC complaint filed against AdvoCare, the company made numerous false claims regarding the distributor earnings. The company promised its recruits a business system that would help them generate ‘Unlimited Income’.
The FTC instigation discovered that in 2016 more than 72 percent of AdvoCare’s distributors did not earn any compensation and an additional 18 percent earned an annual income between 1 cent and $250.
AdvoCare issued a statement denying that the company operated a pyramid, “We strongly disagree with the F.T.C. allegations, but we are committed to abiding by this agreement and moving forward.”
The FTC accused AdvoCare of operating an illegal pyramid scheme by focusing on recruiting more than selling products. The AdvoCare compensation plan was designed to push distributors to purchase large quantities of AdvoCare products to participate in the business.
The company directive was, according to one AdvoCare distributor, to “recruit business builders who recruit business builders who recruit business builders. . ..”
The FTC alleged that AdvoCare executives told distributors to make unrealistic income claims, telling average people could make—as much as hundreds of thousands or millions of dollars a year. In reality, AdvoCare did not offer consumers a viable path to financial freedom.
Click here to read the full review of the AdvoCare mlm business.