“Nu Skin is a paradox, an enterprise that purports to have a higher calling even as it makes breathtaking claims for what are known in the industry as ‘lotions and potions,’ and dangles dreams of lucre for those who sell its products”.- Fortune
What is Nu Skin?
Founded in 1984 in Provo, Utah, Nu Skin Enterprises, Inc. is an international multi-billion dollar direct selling and multilevel marketing company currently in 53 markets. The company develops over 200 personal care products under the Nu Skin brand along with dietary and nutritional supplements under the Pharmanex brand which are bought and marketed by 950,000 distributors. All their products claim to make people look and feel younger.
Nu Skin’s ageLOC skin care line was amongst the most successful and was responsible for 23% of their total profits, growing to an astonishing 43% at the end of 2012.-NYTimes
The Nu Skin Reality- It’s A Pyramid Scheme
Independent salespeople have to pay a $25 sign-up fee to be able to buy at wholesale and sell them for a profit, but the only way they can succeed is by building a hefty downline and having them duplicate the process. Thus, the vast majority of distributors end up losing thousands of dollars.
The Immoral Nu Skin Co-founders
The co-founders of Nu Skin are Blake Roney, Steve Lund, Sandie Tillotson, and Nedra Roney. Nedra’s name was deleted from their website in an attempt to hide that she is a co-founder because she’s been involved in several lawsuits and pleaded guilty to prescription-drug fraud in 1996. –Fortune
“Over the next 20 years, this wouldn’t be the first (or last) time that one of the female founders had to sleep with someone to achieve a business goal. They jokingly referred to it as ‘net 90 pussy.’- ”
– “Formerly Filthy Rich, My Scandalous Life with a Billionaire Cougar” by Adam Baker- based on his six year marriage to Tillotson.
-Along with success came money and Nedra became a drug addict. She was bluntly told to stop coming to work due to her behavior and Steve Lund took her position.- Multi-Level Marketing Fraud Uncovered – Nu Skin
Nedra’s husband Robert Clark McKell was accused of rape and sedomy. In December 2013, she was arrested for allegedly harassing an 18-year-old female so she would drop the first-degree felony charges, court documents claim.- Dailymail
Sandie Tillotson was already a multi-millionaire when she co-founded Nu Skin which she made with the Cambridge Diet, another bankrupt pyramid scheme. She is the reason Nu Skin’s sales increased to $500 million in 1984 when she introduced numerous new products including Nu Colour line of makeup, Safiro perfume and nutritional supplements. – Source Deseretnews.com
Once we were inside she screamed at me to get her hand sanitizer, that she couldn’t stand these people and they all smelled like garlic,” he says. “Now remember, these are people who paid for Nu Skin distributorships and Sandie made a handsome profit on them. And she couldn’t stand them. It was unbelievable. It was the same with her Force for Good charity. We flew to Malawi and she couldn’t stand to touch the children.
“Her whole life was built on lies,” Adam continues. “She wouldn’t even use the products she sold, because she said they were junk.” Baker recounts the story of what he calls “the ultimate scam,” the company’s patented Biophotonic scanner. “The scanner is supposed to measure the carotenoid levels in a person’s skin, and has a money back guarantee. The idea is that if your levels are low, you take some Nu Skin supplements and, bingo, the levels are magically where they’re supposed to be. But the device only works because it knows the identity of the person being scanned. Sandie said it was the only way they can have the money back guarantee, and not pay any money out.”
– “Formerly Filthy Rich, My Scandalous Life with a Billionaire Cougar” by Adam Baker- based on his six year marriage to Tillotson.
Nu Skin knew that Adam knew too much about the company and his book was banned from Amazon and Barnes & Nobles.
… Adam says he stands by every word he’s written, and is ready to produce witnesses. If that’s the case, then there is no defamation. Nu Skin says burn the book anyway, before anyone gets to read it. Barnes & Noble rolled over and pulled the book from its website quicker than you could say, oh, Sarah Palin. The Joe McGinnis book about Palin if you’re keeping score, is still available, even if it is defamation, or claimed to be.
The story presented to Amazon by Robert S. Clark of Peer Brown Gee & Loveless of Salt Lake City, said nothing about defamation, but the result was the same. Nu Skin argued that the material in the book was not Adam’s. Baker says that of course it’s his story, and is ready to produce his drafts and copyrights to prove it. No matter, Amazon has pulled the book ‘pending investigation’”.
Adam’s WordPress blog was also shut down shortly after.
Nu Skin’s Tarnished History
Nu Skin was investigated by the Federal Trade Commission (FTC) in the 1990’s over its business practices when Nu Skin invested in Big Planet, a multi-level marketing company selling internet services.
The New York Times noted that Big Planet recruited people that had little knowledge of the technology that they are selling.
In 1992, Nu Skin made settlements with Michigan, Florida, Illinois, Ohio and Pennsylvania in which Nu Skin agreed to manage distributor training meetings, offer 90 percent refunds with no time limit on unopened products, supervise sales to ensure at least 80 percent of them sales are retail sales made to a minimum of five customers who aren’t distributors, and review all sales aids and promotional materials.
But Connecticut’s attorney general, Richard Blumenthal filed a lawsuit against Nu Skin and alleged it’s an illegal pyramid scheme and engages in unjust and deceptive business practices.
Michigan’s Attorney General Frank Kelley filed a notice of intended action against Nu Skin declaring it violates the Michigan Franchise Investment Act and state consumer protection laws.
– Deseret News
In April 1994, following an investigation by the FTC, the company paid $1.2 million and signed a consent order prohibiting it from making deceptive claims about their products and to provide reliable scientific evidence about the benefits and make certain disclosures regarding income potential. – FTC
Pharmanex was acquired by Nu Skin in 1996. They developed a device called “BioPhotonic Scanner” which measures the carotenoid level in skin. According to Women’s Health Letter, the device is a scam since its sole purpose is to motivate customers to consistently consume LifePak for longer periods of time which can be found in their 2002 annual report.
Nu Skin paid a $1.5 million civil penalty for a third time in three years to settle FTC charges over the fat-loss, muscle-maintenance and other false claims it made for supplements containing chromium picolinate and L-carnitine including “Metabotrim,” “OverDrive,” “GlycoBar,” “Appeal Lite,” and “Breakbar” on August 1997 after violating the 1994 FTC court order. –FTC
Nu Skin’s had 80,613 active distributors during 2011.
Nu Skin acquired LifeGen, a genomics company in December, 2011whose genetic database helped launch the ageLOC brand.
In 2012, Stanford University sent a cease and desist letter to stop the use of Stuart Kim, PhD-a professor at Stanford in Nu Skin’s advertising claims and products because he was no longer involved with research funded by Nu Skin. However, the letter did not recognize the existing research relationship between Stanford and Nu Skin. Wikepedia
The Pharmanex LifePak Anti-Aging supplements were tested by ConsumerLab.com and were reported as failing the overall review to clearly indicate its total Vitamin A content per FDA requirements.
If someone tells you they know what the mechanism of aging is, they are trying to kid you,” says University of Michigan Medical School professor Richard Miller, who heads a team evaluating anti-aging drugs and nutritional supplements for the National Institute on Aging. Reversing age-related gene expression in mice is several steps removed from proving anything about humans, he says, much less evidence that a substance will work on people. “You can’t just point to some gene-expression stuff and say, ‘This is just as good as studying the effect of my drug.’” (In August, Nu Skin was forced to remove references to a “collaboration” with a Stanford professor after he protested; he calls its ageLOC claims “science fiction.”) –Fortune
At the end of December 2012, 89% of its income was from foreign countries.
Their active distributors dropped to 67,740 during 2013. –NuSkin
In 2014, China fined Nu Skin $540,000. Six sales staff will also face individual fines totaling $241,000 for illegal product sales and misleading local consumers. –Reuters
“Citron alluded to the negative impact a disruption to China business would have on the Utah based company, pointing out that nearly 30% of Nu Skin’s total revenue over the last year came from China, up from 10% a year earlier and accounting for all the 30 year-old company’s impressive growth. ‘Without that Mainland China growth,” read the report, ‘Nu Skin’s revenue growth would have been negative on a year-over-year basis.”–Forbes
“On October 8, 2014, the Securities and Exchange Commission confirmed in its letter that Nu Skin Enterprises is recently under investigation by them. The company has now been added to Probes Reporter’s watch list of companies with undisclosed SEC probes. The report also points out that in a letter dated Sept. 24, 2014, the SEC cited the “law enforcement exemption” of the Freedom of Information Act (FOIA) as a basis to deny the public access to the detailed records Probes Reporter sought on Nu Skin.” – Valuewalk.com
Dr. Taylor’s Personal Experience With Nu Skin and Why He Quit
But just being in the top 1% was very much a losing proposition, after subtracting all expenses, which were not mentioned.., expenses would have to include product purchases. Our family’s purchases of nutritional supplements and skin care products jumped from about $50 a month to over $450 a month, all of course from Nu Skin. This was not unusual for Nu Skin distributors, who were urged to be a “product of the products.”… Meeting purchase quotas is how they “pay to play” the game! This is how investments in the pyramid scheme are cleverly disguised or laundered to appear legitimate…
Before I quit Nu Skin after a year of concentrated effort, I could see clearly what I would have to do to earn over $700,000 a year as a Blue Diamond. I would have to deceive hundreds, even thousands of downline distributors (like I had been deceived), into believing that they too could achieve what I had achieved– and then maintaining required monthly volumes and downline head counts. It simply was not worth it – and not moral. For me to receive that much income, thousands would have to lose their investment–the money would have to come from somewhere. It certainly does not come in any significant amount from actual sales to non-distributors.”-MLMTheTruth
NuSkin’s False Product Claims
The FDA prohibits cosmetic companies to make claims that their products affect bodily structures or functions-
“Nu Skin has learned how crucial gene expression is to retaining youth. In fact, in order to retain a youthful appearance, we understand how science can restore youthful activity patterns to our genes.”
“Nu Skin’s proprietary ageLOC science resets Youth Gene Clusters to create a youthful balance within each cluster—returning them to their youthful patterns of activity.” – Nuskin.com
The Compensation Plan Raises Red Flags
“To qualify for commissions and as an active distributor, you have to generate 100 PSV (personal sales volume) have to purchase or sell a minimum of $100 of its products every month to qualify for multilevel commissions. $2,000 in monthly sales must be made by their team, accounting for the majority of Nu Skin’s sales. Most of them will lose thousands of dollars in this scheme and have unsold products in their basements”.-Fortune
A huge red flag is that Nu Skin doesn’t disclose the amount of retail sales that are made by distributors to customers to new customers. They also hide that their compensation plan is six levels deep.
“Illustrations that show a person’s downline organization as a pyramid are prohibited. Nu Skin will not allow illustrations that show the structure of an organization without including customers in that structure. The illustration itself should not extend more than two levels deep”- NuSkin.com
The Inferior Nu Skin Products:
Here are some of their product categories:
- ageLOC LumiSpa
- Powerlips Fluid
- ageLOC Me
- ageLoc
I took a look at the ageLOC Gentle Cleanse and Toner and found out that their product is full of toxic ingredients.
Below are the ingredients for ageLOC and then the natural ingredients found in 100 Percent Pure’s products:
Let’ continue with the endless product categories:
- Spa Systems
- Face Care
- Body Care
- Color Cosmetics
- Tru Face Targeted Treatments
- Nu Skin 180
- Nutricentials
- Tri-Phasic White
- Clear Action
- Peels, Masks & Scrubs
- Moisturizers
- Dr. Dana Nail Renewal System
- Body Care
- Hair
- Epoch
- Men’s Care
- Oral Care
- Sun Protection
- Cosmetics
- ageLOC Youth
- Weight Management
- ageLOC R2
- ageLOC Vitality
- LifePak Family
- g3
- Pharmanex E2
- Heart Health
The hearth health category captured my attention, so I checked out one of their products Marine Omega.
I found that gelatin, glycerin, caramel color, vanillin, and mixed tocopherols are added to their MarineOmega. Caramel color is linked to cancer and vanillin is cheap imitation typically made from petrochemicals and wood pulp. It doesn’t contain all of the antioxidants found in real vanilla extract.
Nu Skin products do not “remove” “reduce” or “eliminate” wrinkles, and the Galvanic Spa is not a “wrinkle iron”… Business support materials cannot, however, state or imply that any product can make a person younger or make them live longer… Nu Skin products do not address any disease or health conditions, including any skincare conditions… When making a “structure/function” claim, the claim must be accompanied by the following disclaimer: ‘These statements have not been evaluated by the U.S. Food and Drug Administration, This product is not intended to diagnose, treat, cure, or prevent any disease.’”- NuSkin
Do to all of this, I don’t think Nu Skin is worth your money and there are many other pure products that are better for you.
Income Disclosure
The average commission paid to U.S. Active Distributors each month was $176.00 or $2,112.05 per year. In 2013, the average monthly commissions was $1,240.12, or $14,881.48 per year which doesn’t include all other business expenses. On a monthly basis, an average of 14.19% of Active Distributors earned a commission check. Active Distributors represented an average of 39.17% of total distributors- Nu Skin Income Disclosure
2018 Update:
Distributors earned an average of $151.34, or $1,816.10 per year. In 2018, the average was $786.40, or $9,436.79 annually.- Nu Skin Income Disclosure
Nu Skin Refund Policy
They deduct an administrative fee that’s 10% of the price and refund the rest minus applicable Bonuses and tax to the distributor on unopened and resalable products, except for business support materials that are returned within twelve (12) months from the date of purchase.- Nu Skin
My Final Opinion of Nu Skin
Nu Skin is a product based endless chain recruitment scheme and this is how distributors advance and make the most commissions, rather than customer sales. There is no demand in the products and new recruits and victims are the reason Nu Skin is a multi-billion dollar company. Nu Skin’s breakaway compensation plan is six levels deep, making it a major pyramid designed to benefit those on top.
For years, they have used deceptive sales practices and false income claims to get people to join . Retail sales information to new distributors are not disclosed. Over 85% of active distributors don’t receive commissions and end up with thousands of dollars of unsold products in their basements, in debt, and find they have ruined relationships with their friends and family.
Instead of being involved with multi-level marketing and pyramid schemes like this, I recommend you join Wealthy Affiliate where you will be given all the awesome training, tools, and support whenever you need it to become an expert affiliate marketer and build a successful online business.
To Your Success,
Summary
- Reviewer: Jennifer
- Review Date: 2015-01-24
- Reviewed Item: Nu Skin
- Author Rating:
