Quixtar Goes On Warpath Against Bloggers

Marketing Company Seeks IDs, Damages From Anonymous Internet Critics

(CBS/AP)  Direct-marketing firm Quixtar Inc., a sister company of Amway Corp., has sued 30 people who anonymously posted what it considers disparaging remarks about Quixtar in blogs and online forums and in YouTube.com videos.

In the lawsuit filed this past week in Ottawa County Circuit Court, Quixtar seeks an injunction and damages of more than $25,000 against the posters, identified only as John Does.

Quixtar develops and manufactures nutrition, beauty and cleaning products that are marketed in the United States and Canada through a tiered selling system, hiring entrepreneurs to sell its products. Parent company Alticor Inc. uses the Quixtar name for its U.S. and Canadian direct sales unit and sells products throughout the rest of the world as Amway Corp.

Among the products Quixtar representatives sell are Nutrilite vitamin, mineral and dietary supplements, Artistry skin care and cosmetics, XS energy drinks, and air and water purifiers.

Alticor, a $6.3 billion company based in Ada, Michigan, announced in June that it will start phasing out the Quixtar name and rebuilding its Amway brand in the U.S. and Canada.

Quixtar wants the court to approve subpoenas of various online companies to allow it to figure out who posted the materials, which also include videos posted on YouTube.com.

In one video the lawsuit cites, a man wearing a shirt that says "Property of Quixtar" rants about the company. In another, a man points out products at a grocery store priced much lower than comparable Quixtar products.

Quixtar believes the videos and other postings are part of an organized effort by former distributors who unsuccessfully sued Alticor and are under court order not to disparage the company or disclose proprietary information, according to the lawsuit.

Quixtar plans to ask for permission to subpoena various online companies to figure out who posted the materials, spokesman Rob Zeiger said.

According to the Grand Rapids Press, an Alticor representative said the court action was merely to identify anyone who might be associating with those under court order, rather than expressing their own personal opinions.

Zeiger told the paper that his company was not interested in pursuing people not associated with the former employees, and would even reimburse their legal fees if there was no connection. "An individual who is expressing their own opinion, we don't have a problem with that," he said. "They're not doing anything wrong."

The move comes a week after a federal judge in Los Angeles dismissed a suit brought against Quixtar by a group of independent business owners (IBOs) terminated by the company, who had claimed that the Michigan company is "an illegal pyramid scheme."

[spartan4l1fe]

CBS, What makes a company a illegal pyramid? Does a company have to have 10% of their products going to customers, or does the 3.4% of all their sales going to actual cutomers, that is being claimed on the internet, make them ok?
Also, last time i checked I was over here in the middle east defending my country against ALL enemies, foreign and DOMESTIC, and trying to uphold the BILL OF RIGHTS. HAS ANYONE HEARD OF FREEDOM OF SPEECH???!?!?!? Are these videos hitting so close to the truth that they don''t want them out there? Don''t ask me I''m just an IBO, a nobody, or I guess according to Quixtar lawyers, their PROPERTY.

[cpaide]

Quixtar is the *** offspring of scAmway and is more of a cult than a marketing organization. Members endure endless meetings, including late-night brainwashing sessions. They often alienate friends and family members who will not support their incredibly overpriced "stores". The only way for members to make a reasonable income is by recruiting other members (like any other cult).

The laundry detergent SAS is good quality, but 4 times the price for a similar product at Costco and 2 times the price of brand name products at grocery stores. Other products are 2 to 3 times normal retail. Members are compelled to purchase large quantities of these overpriced products, along with marketing materials and "motivational" tapes.

My opinion: thinly veiled pyramid scheme. Illegal? That''s for state authorities to decide. Quixtar has been sued in most states for illegal practices.

Am I associating with those under court order? Why don''t you @ssholes from Quixtar sue CBS News and find out?

[spartan4l1fe]

cpaide - easy. lets keep this PG. Yes, this raises my blood pressure too, but for the young readers lets keep this clean.

One important thing that I should mention. As a quixtar IBO, I am called an ''Independent Business Owner.'' We are not hired and are not employeed by Quixtar/Amway/Alticor. We were told we own our own business.

[monette8]

I have been in Amway/Quixtar since 1969 and I am very embarrased and sad that Amway/Quixtar are acting this way. I have known the founders, admired them, stood up for them. The IBOAI members who resigned from the board, should of never been terminated. How do you terminate an Independant Business Owner? Well, Q/A did terminate all who resigned on Aug 9th, but one resigned later and he was not terminated..??. A/Q sent out to all North America, I think, a letter, a very negative letter on or about Aug 13th saying these certain 15 were terminated, listed them by name. These 15 were people who my group of IBO''s have trusted, have admired, Q/A has promoted as wonderful successful people for years. I have had many IBO''s resign who have been part of my group, some for 10, 20 & 30 years and most of what is left will not renew because of the negative from Amway/Quixtar on the Alticore Blog.. This was income that we were supposed live a nice retirement on and to be left to my children when I am gone. It has been my only source of income since 1976 except for my SS of less than $500.00 a month. So yes, I am mad, ashamed and scared for thousands of people.

[coffeedrinker56]

Amway/Quixtar are not pyramid schemes. They are worse.

In selling themselves as a "business opportunity", they neglect to mention the fact that their primary customer base isn''t Joe and Jane Doe who buy Amway products from some IBO. Their market bases are their IBOs.

In other words... it''s a legal scam...

[tompayne70]

Quixtar is in contempt of a Michigan Circuit Court Judges restraining order, the evidence of which will become public knowledge on November 2 during an evidentiary hearing held in the Oakland County Courthouse. Stay tuned.

[acdd]

Anybody know the URLs for the blogs? I gotta check this out

[perrycbs1]

Quixtar/Amway offers a place to shop for products online for some, and a business opportunity for others.

Unfortunately, some people and even organizations chose to ignore those rules and there are real stories out there of people were not treated correctly. Of course - there are the same horror stories out there for other MLM''s as well. Quixtar / Amway has to enforce the rules in order to keep what they do a legal business opportunity %u2013 and has been criticized in the past for not being aggressive enough
But, that does not change that many IBOs and organizations do follow the rules. Quixtar & Amway get so much attention, good and bad, because they are so huge and have been around for so long.

The Amway produced products (about 400 out of over a million available online products) tend to be high quality or niche market items. Some are truly great deals %u2013 and some are not. Buy accordingly. This is typical of any store. Most of the other million products are through %u201Cpartner store%u201D websites %u2013 and these are usually better deals than going to those sites directly.

Please do not tar all the legitimate distributors (IBO%u2019s) and organizations based on the actions of those who have decided not to follow the rules. It is a legitimate business or shopping opportunity %u2013 if you personally do it right. I have no sympathy for those who chose not to do it right.

I own my own business %u2013 and I have chosen to use Quixtar as a key supplier.

[monette8]

PerryCBS1... you had better be careful saying, "I have chosen to use Quixtar as a key supplier". That was a term TEAM is in trouble for saying." That is a No NO!
They would like for you to say, "I am an Amway saleman and I am under contract with Amway to sell Amway products." If some of you think the blogs are bad, set in on some of the court hearings and listen to what the Amway/Quixtar Attorneys say about you and the contract you have signed at renewal time. The Judges cannot understand why anyone would sign something with out reading all of it. I will ask the IBO''s out there, have you read it? I had not seen it since 1969 until recently...altho I have renewed each year... what a shock! I was never made aware of any changes being made.

[perrycbs1]

Monette8

Thanks for your concern. It has been a couple of years since I last read the contract; but, I am not worried. The key product line I focus on is not going anywhere; and I tell any business prospects that they will have to have customers to have a legitimate business, and that they have to follow the rules (and point them out).

My brief review of the TEAM materials now available on the web indicates that the real problem was that TEAM promoted stacking of distributors, did not use approved prospecting materials, and misrepresented income potentials. I note that I have in the past obtained approval for my own marketing materials (which including a discussion on what I could and could not do).

Web search also turned up several articles, one of which claimed the following statistics: TEAM represented about 10% of US Registered IBOs; but had the lowest PV/BV payout average per IBO of any US organization (cited as verified information); cited as unverified information was that TEAM represented less than 2% of US Quixtar volume.

Quixtar is a supplier for products I do sell; just as any business has suppliers for their products. Some of my customers know, and some do not. That is how all business is done: for example: do you know where your hardware stores buy their stuff from, and does it matter.

I note that the FTC considers a non-active downline who is only buying products at wholesale as a customer. Many people do not understand this point.

[perrycbs1]

Monette8

I missed this part in my previous answer:

Your quote: "They would like for you to say, "I am an Amway saleman and I am under contract with Amway to sell Amway products."

That is absolutely false and clearly prohibited in the business rules. The last thing they want is claiming any formal relationship with Amway; other than that you are a distributor (similar to how your local auto dealer is say a GM dealer, under contract with GM to sell GM products).

One of the hot new introductions this past year was the use of "personal" websites that Quixtar sets up for you for 4 common market options. I can send people to those sites and they will see in big bold letters a name associated with my business. They will only see the name Quixtar if they dig into the fine print on some of the other pages.

As a distributor, I am of course under contract with Quixtar, just as any distributor of many products are under contract. You agree to the rules when you sign. Last I looked I thought the rules were very fair (about 2 years ago). I doubt you will find another major company who does not have a list of terms for their distributor contract.

In the end though each person can chose what to do with their own business. I don%u2019t care if anyone becomes a Quixtar distributor or not. I can only say that it is a very legitimate opportunity for those who follow the rules and do a little independent research on how business works.

[acdd]

Perry - I looked into the blogs and it appears to me that Quixtar manufactured fake issues with Team when Team took a stand against high prices and the name change back to Amway.
Here is what I found:

1. Team was the fastest growing and largest distributor of Quixtar for many years before they recently resigned in August. Quixtar publicly recognized Team''s success and even invited their leaders to join the company board.

2. Team''s training materials had Quixtar''s official stamp of approval when Quixtar came out with all this anti-Team press.

The Team leaders were never listened to on the board when Quixtar execs made business changes. Quixtar''s press appears to be a big cover-up for the real issues the leaders on Team attempted to address with Quixtar. Reading these blogs makes me think Team wasn%u2019t the one at fault at all.

From what I can tell it all boils down to Quixtar being unwilling to lower their profit margins and wanting to profit on the training. I mean really, why take issue with your #1 distributor that you already approved their materials?

[spartan4l1fe]

Don''t get me wrong, I understand where you are coming from. Quixtar has done a great job at trying to make Orrin and Chris the scapegoats on this one. I also understand that we may never agree, that''s fine too. That''s what makes this country great, to be able to not agree and still get along! That is what I fight to defend. I don''t fight to silence the information. All I would say is let all the facts out in the open, so that the IBO''s can make educated decisions. That is what upsets me the most, trying to silence people that are getting the facts out there. Here''s to FREEDOM OF SPEECH!!!

[spartan4l1fe]

Also, the way TEAM builds, has been recognized as actually working, and Orrin and Chris were praised for it. You see, how we build is that if you have two brothers and you put them in two seperate legs of your organization, then now they are in compitition aginst one another. If you place them both on one TEAM then they can work together. That''s where our name comes from, Together Everyone Achives More. This concept is not new, it has just never been done this well, and has never been combined with the fastest growing, more respected, most effective, Leadership Development program in the country. We turn out leaders faster, better, and more duplicatable than any other organization. That is why all of us at TEAM have taken it upon ourselves to carry the sword and sheild, and defend TEAM, because we have thousands of leaders. That was the big mistake that Quixtar made, they thought that we were all just mindless drones that followed Orrin and Chris, and the other leaders. They thought that if they cut off the head (terminated our leaders) that the leaderless organization would just leave things alone and not worry about the price of the products anymore. They were wrong.
Bottom line, TEAM wanted a supplier that offers competitive prices, to make this the best opportunity for everyone. That is why Orrin and Chris have continued to fight. All the want is for Quixtar to lower there profit margins. My understanding is they run at 17% markup and Wal-Mart runs at 3%.

[spartan4l1fe]

PerryCBS1 - Interesting. In my extensive research of TEAM material I have found that it was all approved by Quixtar, prior to Aug 9th. Not only did they approve of the material, they commended us for it. We have been the fastest growing organization to use Quixtar as a supplier. (yes I am using that term, ''cause that is what they are!) We have also had the highest retention rate, meaning the people that joined TEAM stayed with TEAM more than any other organization. TEAM was so respected and looked up to that different organizations joined TEAM, ie. Legacy. The biggest problem with tools that TEAM has had was they kept wanting to let the new IBO know up front what the tool profit was, however, Quixtar would not allow them to share that information.
As far as your stats go, that is what Quixtar would like you to believe. If TEAM really only represented 2% of their business, then why would there be all the legal battles over TEAM IBO''s? Quixtar would have just let us all go. However, when you have a TEAM that represents over 40% of your US business, that is cause for some fighting. Think about this... Half the legal and ethics commity of the IBOIA is gone now. That''s a little more than 10% don''t you think?

[sjw1253]

This sounds to me as though it is a corporate issue and possibly "dirty politics" - one company taking advantage of blogs to sound as though they are customers angry with the one company.

As I can see from the different posts - there is clearly something going on as a competitive nature. I know there are many tactics that companies use that border on illegal to compete and try to knock the other company down.

I guess what will happen here is that Quixtar will be able to either prove their hypothesis - or find that they are wrong. Sounds to me that there is reason for them to suspect this - and to me - if it is a corporate strategy - misrepresenting themselves and using using consumer resources to shoot the other company down - they should be stopped.

Any false advertisement/statements need to be nipped in the bud so that the consumer has fewer issues to mistrust.

[sjw1253]

This sounds to me as though it is a corporate issue and possibly "dirty politics" - one company taking advantage of blogs to sound as though they are customers angry with the one company.

As I can see from the different posts - there is clearly something going on as a competitive nature. I know there are many tactics that companies use that border on illegal to compete and try to knock the other company down.

I guess what will happen here is that Quixtar will be able to either prove their hypothesis - or find that they are wrong. Sounds to me that there is reason for them to suspect this - and to me - if it is a corporate strategy - misrepresenting themselves and using using consumer resources to shoot the other company down - they should be stopped.

Any false advertisement/statements need to be nipped in the bud so that the consumer has fewer issues to mistrust.

[lajinito]

For anyone interested in reading the lawsuit (which has a complete list of the blogger sites) go to http://www.bestsharing.com/f/uMRDPO9347589 and click on the link that says "Lawsuit against bloggers1.tif."

[lajinito]

For anyone interested in reading the lawsuit (which has a complete list of the blogger sites) go to http://www.bestsharing.com/f/uMRDPO9347589 and click on the link that says "Lawsuit against bloggers1.tif."

[liaisonsus]

Hellooooooooooooooooooooooooo! What happened to free speach!
We are not in Nazi Germany or are we?

[perrycbs1]

Before I became involved I researched organizations and then chose which one to become associated with. Based on that research and information shared by very high level people in the business since; here is what I know and suspect to answer various claims made:

TEAM was the fastest growing. I have no doubt because they reached about 10% of registered distributors in the US as a relatively new organization.

TEAM was the largest distributor of Quixtar for many years (40% claimed by another). That would be false and not even close. The largest distributor organization by far is based on the East Coast and has roots back to the beginning of Amway.

Quixtar would not let TEAM tell distributors what the tool profits were. False. I have known for years what my organizations tool profits are and where they start being paid out. This is an issue internal to each training organization.

TEAM turns out leaders faster and more effective than any other organization in the US? Sounds like hype to me. Do you even know who the other organizations are and what they are doing?

Quixtar Prices not competitive: 5 to 6 billion in sales in North America per year says otherwise. Nor do I think reducing prices would increase business much.

Name change back to Amway. Pros & Cons: I doubt it will affect my business much.

The facts: Quixtar has easily won two major legal battles with minimal presentation of evidence. I predict they will win this and future ones as well.

[perrycbs1]

liaisonsus:

"Hellooooooooooooooooooooooooo! What happened to free speach!"

There is no absolute right to Free Speech. Everyone cites the example that you cannot yell "Fire" in a crowded place (unless there is a fire).

Have you ever heard the legal term of "Slander"

In this case the key players are under a court order not to say and do certain things that would slander Quixtar. They do not have the legal right to ignore that order %u2013 not that they had any legal right to slander in the first place.

I am always amazed that people do not understand the balance of rights that is in the US Constitution. I do admit that sometimes the courts get it wrong; but, this case is not about free speech. It is about preventing slander.

[monette8]

PerryCBS1.. I heard the Quixtar Lawyer tell a Judge that all IBO''s are owned by Quixtar and can be terminated at will. The Judge asked, what did these people do that is against the rules that you are threating to terminate them with letters? The QA attorney answered, "we are not sure, we are investigating to find out." The rules were 90 pages in Aug. 2007 but looks like to me if you print all the rules today it will be 144 pages. If you are truly wanting to be honest with your prospects, they should be able to read all the rules before signing an application to become an IBO. So guess you have not sponsored anyone in a couple of years. Yes, Team''s tools were approved, so was Chuck Goetschel''s. I also thought we had exclusive products we could sell to customers, they could only get from us as an IBO. Have you checked EBay lately? Also several other sites. The company I fought so hard to build and promote to a successful pin over almost 40 years is not the company it has become today. If was so small and so bad, why didn''t Quixtar just let them go? This is not good for any of us!

[andor3]

"... a court order not to say and do certain things that would slander Quixtar. "

truth is the classic and irrefutable defense against a slander allegation. And there is plenty of truth in the Quixtar allegations. I had a friend ask me for advice on joining, and after ten minutes of research on ther Internet it was clear this was not an organization that benefited the majority of its members, in fact many end up spending rather than earning cash.

There is nothing wrong with spreading the truth and true experiences. So this organization has to use lawyers to quell negative press and change its name. That alone tells you a lot!

[ov442]

Did you all know that the very wealthy Mr. Prince - CEO/founder of blackwater is the brother in law to the family that owns Amway and the Billionaire/Political donor and influential corporate fellow Richard DeVoss?
Wherever there is scandal, corporations taking as much advantage of the consumer as possible, you''ll see heavily involved republicans or actually running the operation.
Nice christian conservative values there.
"lets build our empire on the backs of poor people, and fool them into thinking they can be successful with our model, then later in life we''ll donate a bunch of the unneeded tax-deductible profits from our empire so we can put our name on stuff just like the Rockefellers did in the early 20th century."

Whooopeee!

[jaina_heart]

I would love to see where you all get your research from...
I grew up with Amway and Quixtar products and have yet to find comparable products in what you all would call the "normal" market. A lot of the negative remarks comes from people who either do not get facts or just don''t like this style of marketing. You can look at IBO''s (Independent Business Owners) as franchisers when it comes to Quixtar and Amway.

BTW if a court orders previous employees not to say anything about the company, the company has every right to find out if these "anonymous" bloggers are those (or related to them) that have the court order against them.

[perrycbs1]

You are correct that TEAM tools in the past that were approved.

Here is my theory of what happened:

Amway/Quixtar has allowed individuals & organizations to develop their own tools for decades; as long as they were approved. Different organizations teach different approaches to building the business. So, presenting a new approach would likely be approved.

However, in the end the proof is in the results: The information I found on the web says TEAM built to about 10% of all North American IBOs, but had much lower average PV per IBO (and one source cited TEAM with only about 2% of North American Sales).

That means that the organization was very good on recruitment but very poor on sales.

A key distinction between legal and illegal is the ratio of sales per IBO.

Quixtar claims that if TEAM had continued that it would bring the Quixtar system under legal and regulatory review. If those numbers are even close to accurate (10% of people, 2% of sales) I suspect this would be a true statement.

Quixtar claims that they worked for months to get TEAM to change their approach and materials; but that TEAM refused. TEAM has to my knowledge not refuted that claim.

In essence; I believe that Quixtar realized that the previously approved materials and methods did not produce clearly legal business result, and decertified them. The fact that TEAM then sued in California and used their own TEAM materials to claim they were an illegal pyramid really demonstrates the point.

[perrycbs1]

Thanks jaina_heart:

I too belive that several of the product lines cannot be matched in the "normal" market place at any price. The Amway Mfr plants focus on high quality products; and in many cases these high quality products also turn out to be a good value too.

There is a large segment of the US population who does not buy the cheapest products around for a variety of reasons (and quality being one key factor). Just look at all the retail stores to see many examples. Tiffany does not sell the best cut most brilliant diamonds. They do sell better than average cut diamonds (cut referring to the geometric proportions to maximize brilliance; not the shape). But, people pay very high markups to get a Tiffany diamond.

[spartan4l1fe]

PerryCBS1-
Your right. There is a percentage of people that don''t look at price when they buy a product. That is how K-Mart got to be such a big company... oh, wait... That was Wal-Mart, the one who came in with the less expensive products and passed that on to the customers. It is totally fine if you would like to have a business that caters to the high end. You will get some volume in your business. However, that is not what the TEAM wants. We don''t want to be ''just another MLM'' we want to be the BEST MLM out there, and that means having a competing price and product in comparrison to other corporate businesses, not just MLM''s that sell their ''go-go'' juice for $200 a month ''cause it''s the best product out there. The TEAM sees the trends, the future is not about who has the best high price products, it is about who builds the biggest community, to drive down the price of products.

[spartan4l1fe]

PerryCBS1 - Please quote where you are getting your 2% figure from. I do not believe that is a pre-August 9th figure. I know that my downline has almost completely stopped buying waiting for all this to end. That 2% figure is current, that is how much business has been lost by Quixtar in the current month. You see, I didn''t know what would happen, so I kept buying in September, then, when I made my decision that I needed to leave the ''Big Q'' I didn''t buy anything for the month of October. Every month I personally bought hundreds of PV worth of product, not to mention the PV that flowed thru my business. All that is almost completely dried up now, due to Quixtar calling us property, and the negitive PR there legal dept is creating. So there''s your 2% compared to my 40%.
Also, Quixtar does not do 6 - 7 billion in sales. That is Alticor, who own Amway and Bussiness Access Group. Quixtar does just over 1 billion in sales. Same as Amway in North America in 1981! 26 years, no growth. Great business model!

[spartan4l1fe]

Taking all rumors away, here is what was said under oath.
On the stand, Woodward denied he was breaking Quixtar''s rules, and his lawyers provided a 2003 letter from Quixtar praising him for his business practices: "By growing right, you create a solid business foundation upon which you can continue to build."

He said he never heard anything different until he was fired in August.

Guess Quixtar didn''t have a good reason to ''fire'' him other than he and others wanted to resign because Quixtar was not lowering their prices, even though they said for over two years that they were ''working on it,'' but never showed any proof of that.
So much for the ''building the business wrong'' argument.

[spartan4l1fe]

*Please note that I got that from WoodTV8 - I want to give credit to them for sharing the truth.