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Wed November 3, 2010
Amway to settle lawsuit alleging unfair and illegal business practices
Amway is one of the leading, if not the largest, direct selling companies in the world. Three people trying to sell the vitamins, cookware and beauty products the company distributes sued an Amway subsidiary in 2007. They claim the company then known as Quixtar misled them about start up costs and how much money they'd make.
Rob Zeiger is a company spokesman. He says the lawsuit does not specifically allege Amyway's business model is a pyramid scheme. "You will see that claim was dropped from the case," Zeiger said, "But at the end of the day we take responsibility for having some customers who were disappointed with their Amway experience. We've fixed those issues and think that the opportunity we offer today is as strong as it has ever been." He says the settlement will take care of any distributors with similar complaints dating back to 2003. "It could involve thousands," Zeiger said, "But we don't believe that the number of people dissatisfied with their Quixtar experience was especially large. We think that the lawsuit dealt with isolated problems that we have fixed."
Zeiger says they've invested millions to better train potential sellers and now they offer a 90-day money back guarantee. He says they settled to avoid a lengthy trial that may have hurt the business of current distributors. Terms of the settlement have yet to be approved by a judge.