Friday, January 31, 2014

MLM Absurdities: When MLM Sells Not Just Woo, but Fake Woo

Back in early 2013, Waiora settled a lawsuit for selling watered down version of their own product (as full strength) That brought back some questions... how do MLM promoters, and I mean the ethical ones who really push products (instead of the scam-y ones that just recruits) actually know what they're selling is actually any good?

They rely on the company being forthright and honest of course. They don't know anything. They have to rely on company literature, genetic fallacy (this ingredient is good, so anything containing this ingredient must also be good!), pseudo-science, anecdotal evidence (which doesn't really count), and bandwagon fallacy (X users can't be all wrong!)  However, that's for another article.

What we're here to discuss is instead, what if the company's literature / promotional material is NOT the whole truth? But actually half-lies?

The Waiora case is a great example... That the product doesn't even contain what it supposedly contains (it has some... but at a far lesser concentration than labelled). According to tests done in 2010, Waiora product called NCD that allegedly has some anti-aging properties through "zeolite" (some sort of volcanic mineral that is supposed to help body purge "toxins"), is supposed to contain 2400 mg of zeolite per bottle.  Actual tests shows it has less than 150 mg... that's less than 10% of advertised strength.  The test was done at a second independent lab, which found the concentration to be even LOWER.

The lab results were presented to the company, who dismissed them, claiming the products were tested and *does* contain the advertised amount. However, a few months later, the company seem to have quietly switched suppliers and the product has a different flavor, consistency, and color than the allegedly watered down version.  A bottle of NCD (Natural Cell Defense) has MSRP of $50 per 15-mL bottle.

Class action lawsuit was launched in 2012, and was finally settled out of court in April 2013. Waiora, without admitting fault, is giving 3 bottles (full strength this time) of NCD to any one who ever bought NCD, as well as 12 million (unknown distribution).

This brings up a serious question... Whose fault was it that watered down the product? Usually a factory wouldn't cut corners like that, as it does them no good cutting corners like that. This heavily suggests there is some sort of complicity in Waiora, and their subsequent action, such as deny any wrongdoing, then quiet change factories and settle out of court would suggest (but NOT confirm) some sort of conspiracy between the factory and a senior official at Waiora.

But the real damage is how can any one in MLM trust that the product they got from the factory is real and contains whatever exotic ingredients it was supposed to contain in the right amount?

English: Mannatech logo obtained from the comp...
English: Mannatech logo obtained from the company's website at; an update to the old logo. (Photo credit: Wikipedia)
This brings up a different but related question... Can any one in MLM actually trust the studies given by the company as somehow validating the effectiveness of their product? A prime example is a tainted study for Mannatech published in 1999.

In 1999, a study allegedly studied Mannatech nutritional supplement to be effective was published by a Dr. Darryl See, allegedly partially funded by a Federal health agency, and allegedly done under the auspices of University of California at Irvine Medical School. Mannatech's president, Sam Caster, stated in an investor call, that the See study was partially funded by National Institute of Health, and "the results supports our claim as a true leader in this industry". This was then repeated ad infinitum by 400K affiliates of Mannatech.

While there is such a study, and it was published in Journal of American Nutraceutical Association, it turns out that Darryl See had lied about plenty of things in the study. Among the lies and "neglect to mention" Darryle See had told would include:

  • Darryl See did NOT get any funding from the NIH for the study (a grant was given to UC Irvine by NIH, but it had nothing to do with See's study)
  • Darryl See told JANA editor he was faculty at UCIrvine when he had actually resigned many months prior to publication of the article
  • Darryl See did not disclose that his wife had been a Mannatech distributor since 1997
  • Darryl See did not disclose that he had received $100K+ of speaker fees and research grants from Mannatech since 1998
  • Darryl See claimed that the study was supervised by the infectious disease department chair Jeremiah Tilles. Tilles said he while he frequently meet with See on various topics, he had NEVER heard about the alleged 6-year nutritional supplement study See did. When shown the study, Tilles pointed out that the study contains several violation of UC guidelines and could NOT have been under auspices of the UC Irvine. 

Checking a bit more into Darryl See's background revealed that his father Jackie See, a former associate professor, had previously resigned from UC Irvine due to violations of UC guidelines. His father, now a retired doctor, co-wrote a book on aging with the current "VP of Scientific Affairs" of American Nutraceutical Association (ANA) Gary Huber. ANA's journal was JANA, the journal that published Darryl See's study.

Darryl See made several audiotapes for Mannatech talking about the effectiveness of Mannatech products in treating various conditions, from which I quote, "The supplement is ideal and safe for immune system protection while assisting patients with diseases associated with immune suppression including AIDS, (chronic fatigue syndrome) cancer and hepatitis"  When Tilles, the department chair that allegedly supervised the study heard that, he remarked "That's 100% wrong." One cannot simply extrapolate what happens to a few cells in a laboratory (if there is any positive results to report) to "safe for human body". Yet Darryl See apparently pocketed $100K in the sales of those tapes he made for Mannatech.

Mannatech, trying to save face, hired an auditor (reportedly for $30K) to audit See's study. The auditor reported that the study is worthless and cannot be audited because none of the lab results was signed by any technicians, and See never turned in his own lab notebook. One of the technicians that allegedly worked on the study said he recall no such studies being done (or he'd have remembered).

(NOTE: Above news items comes primarily from Bloomberg report)

The situation was so serious that UC Irvine is conducting its own investigation despite the fact that Darryle See had resigned back in 1998. The study referenced use of animals and human blood for testing, but the university has NO RECORD of such experiments. Later Darryl See claimed he got those from patients who gave consent.

Despite the inconsistencies and many of the outright ethical violations and omissions of critical facts, Mannatech apparently still stands by research... Until September 1999, when they turned 180 and sued Darryl See for fraud. There was no mention of what happened to him so I guess they settled out of court.

Darryl See joined Jeuness, another nutritional supplement MLM company, who published a bunch of excuses for him. After a few years of malpractice, Darryle See was forced to give up his medical license in 2007.

All in all, Mannatech's reputation had been severely harmed by this episode, and they are a bit more careful in checking out studies that favor their product, if any. However, that doesn't seem to help them when their chosen field, "glyconutrients", was denounced by glycobiologists as "increases flatulence" because the human body can't digest them. But that's another topic for another time.

But the point is still simple... Can you really trust the "testimonials", even scientific ones, apparently made by someone with impeccable credentials, released by the company? 

What if you cannot trust the testimonials and "proof" provided by the company? What if they turned out to be bogus? Will you ask the necessary questions or are you going to just choke it down and ignore the little voice in the back of your head, and be a robot?

What if you can't trust the product? How do you know what the company said was in the product is really in it? Can you afford to trust the company? Or just rely on blind faith? 

This is business, not religion or love. Don't be blind to the realities.

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1 comment:

  1. Good analysis. MLM companies will never be taken seriously (at least by those who take the time research and dig deeper) until they clean up their act and drastically cut back on their GREED. Hyping unproven products and using fake studies is no way to do business, yet there are many who fall for it.