Amway settles lawsuit by former members
By Ed Brayton 11/4/10 7:54 AM Michigan-based Amway (aka Quixtar, aka Alticor) has settled a lawsuit brought against it by a large group of former distributors who accused the company of a range of illegal activities for $56 million. The Grand Rapids Press reports:
Amway this morning announced a deal to pay $34 million in cash and provide $22 million worth of products to settle a 2007 class-action suit alleging the company and some of its top-level distributors operate an illegal pyramid scheme.
The case was filed in California by former distributors for Quixtar, the name Amway used for its U.S.-based operation at the time…
The plaintiffs said the company used unfair and illegal business practices that mislead distributors about their ability to make money and how much it would cost to be part of the business.
The settlement with the former distributors, or Independent Business Owners as Amway calls them, does not constitute an admission of guilt. But the company “stipulates that certain reforms in its business instituted after the filing of this action have been motivated” by the case.
Translation: “We didn’t do anything wrong but we promise not to do it again.”
Joe's Opinion (Commentary): It appears by its actions that Amway is footing the bill and paying to cover the problems caused by upline leaders. It also looks like an admission that Amway has been aware of, but ineffective in monitoring the activities of the "kingpin" leaders who promote Amway as a means to gain wealth and obtain luxurious lifestyles. I wonder what happens next?