Business Blog
FTC sends $149 million in refunds to people harmed in alleged AdvoCare pyramid scheme
The FTC is returning more than $149 million to people who lost money to AdvoCare International, a former multi-level marketer that the FTC says operated a pyramid scheme disguised as a business opportunity and swindled hundreds of thousands of people who signed up to be distributors of its health-and-wellness products.
The FTC sued Texas-based AdvoCare, its former CEO, and its top promoters in 2019, alleging the defendants deceived people into believing they could earn unlimited income, attain financial freedom, and quit their regular jobs by becoming distributors for the company. In reality, the FTC alleged, the vast majority of AdvoCare distributors either earned no money or lost money.
According to the lawsuit, AdvoCare’s compensation plan required distributors to buy thousands of dollars’ worth of AdvoCare products to be eligible for cash bonuses and other rewards and, in classic pyramid scheme style, compensated the distributors for bringing new recruits into the business, rather than for selling products to customers.
Image
To recruit people, the FTC alleged, the defendants told distributors to make exaggerated claims about how much money ordinary people could make — as much as hundreds of thousands or millions of dollars a year. The FTC alleged that distributors were told to create emotional narratives about how they gained financial success through AdvoCare and to instill fear in potential recruits that they would suffer from regrets later if they declined to invest in AdvoCare.
Under a landmark settlement, AdvoCare and its former CEO were banned from multi-level marketing. AdvoCare is the largest company to be banned from multi-level marketing due to an FTC law enforcement action.
As a result of the settlement, the FTC is sending payments to more than 224,000 people who lost money to the alleged scheme. The payments are being distributed by PayPal and by check.
- If you get a PayPal payment, please accept it within 30 days. If you don't have a PayPal account and would prefer to get a check, call 1-855-744-1802.
- If you get a check, please cash it within 90 days.
- Visit the AdvoCare Refunds page for more information. The refund administrator, Analytics, is available at 1-855-744-1802 if you have questions.
- Find answers to common questions about FTC refund payments on our Refund Program FAQ page.
One thing to know: The FTC never requires people to pay money or provide account information to get a refund or to cash a refund check.
It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.