http://blogs.cooperhealth.org/?option=Stocks-And-Shares-Quoted-On-The-Stock-Exchange Stocks And Shares Quoted On The Stock Exchange
In the usual terms of class action settlements, Amway admitted no guilt, however, it has agreed to pay back millions of dollars to consumers, lower product prices, increase the refund period, pay all the attorney fees of the victims and offer free products to victims. Significant changes are also to be made in the “tools” business, which some claim is the main source of revenue to Amway’s top distributors, not commissions from Amway sales. Failing distributors are induced to pay even more money for “tools” (seminars, CDs, books) they are told will help them “succeed.”
Pyramid Scheme Alert’s analysis of Amway payouts shows that more than 99% of all who sign up never earn a profit. When actual costs are factored, including the related “tools” business, some estimates put the loss rates at 99.9%
Under terms of the settlement, Amway is restating its “income disclosure” to reflect that the figure offered to consumers is a “gross income” not net, meaning that it is not profit and does not reflect costs. (Amway’s advertised “average income” is also a “mean” average, so it factors the high incomes of the few at the peak of the pyramid, skewing up the “average.” The mean average can also mislead consumers to think that the “average” participant actually earns a profit, masking the reality that the vast majority earn nothing or no net profit.)
The lawsuit was filed in 2007 by the firm of Boies, Schiller, Flexner. Amway delayed settlement with claims that the victims had no right to sue because the Amway contract requires “binding arbitration.” A Federal court ruled that the arbitration process was unenforceable and unfair. “The federal judge said of Amway’s arbitration requirements, “the requirement …is substantively unconscionable, and exceedingly so” and characterized the Amway arbitration as a “stacked deck” in Amway’s favor.