Add Florida and Illinois to the list of states currently examining Nu Skin International's business practices.
Last month, the Michigan attorney general issued a notice of intended action against the Provo-based skin-care company for alleged violations of that state's consumer protection act and franchise investment law. Also, a review of Nu Skin by the Utah attorney general's office is under way at Michigan officials' request.The inquires are nothing new for Nu Skin. Nor are they totally unexpected.
"This is kind of an old story because we've been through so many states in the past," said Jason Chaffetz, a Nu Skin spokesman. "We will always be subject to review. We have been from the beginning. We will be in the future."
Legal action has not been brought against Nu Skin as a result of any of those investigations, he said. The company was founded by Blake M. Roney in 1984.
Florida bases its probe on "inflated claims of earning potential" by Nu Skin dealers, said Beth Feldkamp, an assistant attorney general. New distributors who sign up to sell Nu Skin products are "not making the types of earnings represented."
Independent Nu Skin distributors earn money by selling products and recruiting and training others to retail and recruit, according to a company brochure.
Chaffetz said that "99.9 percent of the independent distributors do the business ethically. They do it within the guidelines." Nu Skin has more than 100,000 dealers nationwide.
According to the Associated Press, the Illinois attorney general's office is also looking into Nu Skin's operation. That state's investigation centers on Nu Skin's product claims, method of distribution and "essentially just if it's a pyramid scheme," said Peter Cunningham, a public information officer.
Asked for comment on the case Wednesday, Al Manning, director of communications for the Illinois attorney general's office, said, "We have taken no legal action."
And neither has Michigan Attorney General Frank Kelley. Kelley's charges against Nu Skin have been much stronger than those in either Florida or Illinois. He accused the company of running a pyramid scheme.
Chaffetz said Nu Skin last week submitted proposed operational changes to Kelley's office that "hopefully concludes concerns" in Michigan.
Marion Gorton, a spokeswoman for the Michigan attorney general, said those documents are being reviewed. Officials have "not determined what the outcome will be," she said.
Meanwhile in Salt Lake City, Arthur Strong, chief of the state's fair business enforcement office, termed the Utah review "very broad."
"Essentially, it's a smaller part of a review of multi-level marketing firms related to general marketing."