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Amway Forever: The Amazing Story of a Global Business Phenomenon by Kathryn A. Jones

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The Other Side

Behind the glitz, the money, and the celebrated lifestyles, though, jealousy and animosity can lurk as well. Like Amway itself, mega-distributors have been the target of numerous lawsuits brought by former IBOs who claim to have decimated their savings, ruined their marriages, and alienated family and friends because they spent so much money on motivational tools they were told they needed—and still they failed. For example, in 1994, Amway distributors John and Stacy Hanrahan were the lead plaintiffs in a class-action lawsuit they filed in U.S. District Court in Pennsylvania against Britt and Yager, their motivational sales organizations, and Amway. The suit contended that Britt and Yager “routinely and intentionally misrepresented” potential earnings to sales recruits, “coerced” them to buy motivational materials such as audio tapes and pay to attend rallies, and engaged in practices of “customer allocation and price fixing in connection with the sale of their motivational materials.”19 The Hanrahans also alleged that Amway was a pyramid scheme and that they and other IBOs lost money selling Amway products and that their income didn’t cover the cost of their expenses of buying the tapes and attending the sales rallies. Amway and the codefendants “vigorously denied” the allegations. In 1996, the defendants paid $375,000 into a cash fund to cover court costs and expenses for the plaintiffs and offered coupons for discounts on Amway products. “The proposed settlement ...

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