U.S. consumer groups slam GM for failing to put safety technologies in cars sold in developing countries – National Consumers League

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December 11, 2015

Washington, DC—Four national consumer advocacy organizations – Consumers Union, Public Citizen, Advocates For Highway and Auto Safety, and National Consumers League – are asking General Motors CEO Mary Barra to address the glaring absence of basic safety equipment – like seat belts – in GM cars sold in Latin American in a letter sent this week. The letter stated:

“We were surprised and disappointed to learn of the poor performance of General Motors (GM) in auto safety tests conducted by the New Car Assessment Programme for Latin America and the Caribbean (Latin NCAP). These results are directly related to GM’s failure to provide the same safety technologies on cars sold in Latin America as the company provides as standard equipment in cars sold in the US market. We are specifically referring to basic safety features, such as airbags, but also newer life-saving technologies like electronic stability control and pre-tensioned seat belts, all of which are fitted as standard on GM vehicles in the US.”

The American consumer groups’ letter came in response to the Nov. 16 release of crash test safety results by the New Car Assessment Programme for Latin America and the Carribbean (Latin NCAP). In those tests, GM’s Chevrolet Aveo, the best-selling car in Mexico that is sold throughout Latin America, scored zero stars for protecting adults and only two stars for protecting child passengers. Latin NCAP described the model as demonstrating a “high risk of life-threatening injuries.”

Latin NCAP tested the basic version of the Aveo, which is sold in Latin America without airbags. Despite recent commitments from GM to become an industry leader on safety, Chevrolet has performed consistently poorly in Latin NCAP tests over a number of years, and ranks 8th out of 11 leading car manufacturers in the region. Only three Chinese brands averaged worse scores over a five-year period of Latin NCAP tests.

The groups’ letter noted: 

“Auto safety cannot only be for citizens living in wealthy countries; yet GM’s practice of providing some consumers with the best safety technologies, while not even providing airbags to others, strikes us as a morally indefensible decision.”  …. [I]n your capacity as CEO you have stated your commitment to auto safety technologies and doing right by consumers, and we think this is an issue that deserves your attention.”

The four American groups are aligned with Consumers International (CI) in calling for universal adoption of minimum United Nations Vehicle safety regulations by governments and voluntary compliance by car manufacturers as soon as possible. Cars scoring zero in NCAP tests fail these internationally recognized minimum safety standards.

Research commissioned by Global NCAP found that more than 380,000 deaths and serious injuries could be prevented by 2030 in Brazil alone if it adopted key UN regulations within a reasonable timeframe.

According to the World Health Organization:

  • 1.3 million people died and 50 million people were injured on roads in 2013. Unsafe cars are a major contributor to this statistic. Fifty percent of those affected were vehicle occupants. This disparity in access to safety technologies has real consequences, and contributes to unacceptable burden of road crash deaths and injuries highlighted by the World Health Organization and referenced by Consumers International in its letter. 
  • Road traffic deaths are now the 9th biggest killer globally, and are predicted to become the 7th biggest killer worldwide by 2030 unless urgent action is taken.

The groups also told Barra, “As CEO, you can demonstrate to all consumers concern for their safety and play a leading role in ensuring all vehicles comply with these safety standards regardless of where they are sold.” 

Photos of the test results are included below. 

 

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Letter to Cordray calling on CFPB to investigate T-Mobile for abusive debt collection – National Consumers League

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December 10, 2015

The Honorable Richard Cordray
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

Dear Director Cordray:

As Executive Director of the National Consumers League, I wish to call your attention to a matter that might be of concern to your agency. A group named Change to Win (“CtW”) has recently issued a report alleging abusive debt collection practices by wireless carrier T-Mobile.[1]

NCL has reviewed some of the findings in the CtW report and while we haven’t done our own investigation, we think the matters discussed in the report warrant a close look by the CFPB. In particular, we are concerned with allegations, based on a review of consumer complaints and analysis of the company’s advertising, that T-Mobile may have engaged in the following business practices:

  • Targeting low income communities and communities of color with potentially deceptive advertising; and
  • Potentially abusive debt collection practices.

NCL is concerned that, if true and left unchecked, these business practices could become commonplace throughout the entire wireless industry. We also note that T-Mobile objects to the findings of the CtW report and argues that they are inaccurate.[2]

This makes it all the more important for the CFPB – as the expert agency with jurisdiction over consumer financial products – to review the evidence and determine whether CtW’s allegations have merit. If they do, we suggest the Bureau take steps to address any conduct that runs afoul of the Bureau’s regulatory scheme and/or consumer protection laws.

Thank you for your attention to our concerns.

Sincerely,

Sally Greenberg
Executive Director
National Consumers League

 

[1] Change to Win. “Groups Call for Federal Investigation into T-Mobile’s Deceptive Advertising and Abusive Debt Collection Policies,” Press Release. December 8, 2015. Online: https://callingouttmobile.com/press-room/

[2] Wang, Jules. “Legere attacks USA TODAY for reporting on alegations against T-Mobile,” Pocketnow. December 8, 2015. Online: https://pocketnow.com/2015/12/08/t-mobile-allegations

Groups call on General Motors to increase safety of cars sold overseas – National Consumers League

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December 4, 2015

Mary Barra
Chief Executive Officer
General Motors
300 Renaissance Centre
Detroit, MI 48265, 

Re: GM adding same safety technology to all vehicles made and sold anywhere per UN Car Safety Regulations

Dear Ms. Barra: 

We write as American consumer organizations with a history of working on auto safety. We wish to reference the recent letter you received from Consumers International, which is attached here.

We were surprised and disappointed to learn from our consumer colleagues in Latin America of the poor performance of General Motors’ (GM)  in auto safety tests conducted by the New Car Assessment Programme for Latin America and the Caribbean (Latin NCAP). These results are directly related to GM’s failure to provide the same safety technologies on cars sold in Latin America as the company provides as standard equipment in cars sold in the US market. We are specifically referring to basic safety features, such as airbags, but also newer life-saving technologies like electronic stability control and pre-tensioned seat belts, all of which are fitted as standard on GM vehicles in the US.

Indeed, the Chevrolet Aveo received a zero rating in Latin NCAP’s most recent independent crash test results, and was described as representing a “high risk of life threatening injury” in Latin America. In addition, the Chevrolet brand has shown the poorest performance of all the major global car manufacturers tested by Latin NCAP since 2010.  The basic model of the Aveo available to consumers in Latin American countries – such as Mexico (where the car is both manufactured and the top-selling model)- lacks even basic safety features, such as airbags, putting occupants at great risk. We find that information shocking.

As American consumers, we appreciate the enhanced protections these technologies provide in saving lives and preventing injuries in the US. But we find it hard to fathom that GM would not provide all consumers – no matter where they live around the world – with these same protective technologies.

Auto safety cannot only be for citizens living in wealthy countries; yet GM’s practice of providing some consumers with the best safety technologies, while not even providing airbags to others, strikes us as a morally indefensible decision. Ms. Barra, GM is not alone in this practice, but in your capacity as CEO you have stated your commitment to auto safety technologies and doing right by consumers, and we think this is an issue that deserves your attention.

Just last month, on the occasion of the 2nd Global High Level Conference on Road Safety, governments from around the world adopted a declaration for all new motor vehicles to meet minimum safety regulations:

“Promote the adoption of policies and measures to implement United Nations vehicle safety regulations or equivalent national standards to ensure that all new motor vehicles meet applicable minimum regulations for occupant and other road users protection, with seat belts, air bags and active safety systems such as anti-lock braking system (ABS) and electronic stability control (ESC) fitted as standard.”

At this propitious time, we are calling on each of the world’s largest car manufacturers to commit to comply with the UN Vehicle Safety regulations for all new cars, regardless of where they are sold.

This is particularly relevant to General Motors, as Latin NCAP has ranked it 8th out of 11 leading car manufacturers in Latin America, in terms of safety, and is the worst performing of any global manufacturer.

This disparity in access to safety technologies has real consequences, with an unacceptable burden of road crash deaths and injuries highlighted by the World Health Organization and referenced by Consumers International in its letter.  

The WHO has reported that:

  • 1.3 million people died and 50 million people were injured on roads in 2013. Unsafe cars are a major contributor to this statistic. 50% of those affected were vehicle occupants. This disparity in access to safety technologies has real consequences, and contributes to unacceptable burden of road crash deaths and injuries highlighted by the World Health Organization and referenced by Consumers International in its letter. 
  • Road traffic deaths are now the 9th biggest killer globally, and are predicted to become the 7th biggest killer worldwide by 2030 unless urgent action is taken.

The top ten car manufacturers accounted for 78% of all cars produced in 2013. It is clear that manufacturers like GM have an essential role to play in reducing traffic fatalities and injuries. 

The US is today one of the world leaders in providing consumers access to state-of-the-art safety equipment on all of our cars. As CEO, you can demonstrate to all consumers concern for their safety and play a leading role in ensuring all vehicles comply with these safety standards regardless of where they are sold. Applying these regulations voluntarily will help increase trust and confidence worldwide in the safety of your cars, and most importantly, save many thousands of lives. 

Thank you for your attention to our concerns. We would be happy to discuss further with you or your staff.

Yours Sincerely,

Ellen Bloom
Director, Federal Policy and Washington Office at Consumers Union
Consumers Union

Robert Weissman
President
Public Citizen

Jackie Gillan
President
Advocates for Highway and Auto Safety

Sally Greenberg
Executive Director
National Consumers League

NCL statement on FTC Telemarketing Sales Rule amendment – National Consumers League

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November 19, 2015

Contact: NCL Communications, Cindy Hoang, cindyh@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy organization, applauds the Federal Trade Commission (FTC) for its action to increase protections for consumers from telemarketing fraud. Via an amendment to its Telemarketing Sales Rule (TSR), the FTC today attacked a critical choke point that scammers have long used to defraud consumers: payment technology. By prohibiting the use of “remotely created checks,” “remotely created payment orders,” “cash to cash money transfers,” and “cash reload mechanisms,” the Commission’s action addresses key ways that con artists extract money from their victims.

The following statement is attributable to the National Consumers League’s Executive Director Sally Greenberg:

“Wire transfer, cash reload cards, and remotely created checks have long been the top ways, according to fraud victim complaint data collected by NCL’s Fraud.org, that scammers obtain their ill gotten gains. Today’s action by the FTC will not end the use of these payment mechanisms by scam artists, but it adds another tool to the FTC’s legal toolbox that the agency should use to go after fraudulent telemarketers. The FTC’s amendment to the TSR is a victory for consumers and a blow against scam artists in the fight against fraud.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our
mission is to protect and promote social and economic justice for consumers and workers in the
United States and abroad. For more information, visit www.nclnet.org.

Child Labor Coalition expresses concern about child and adult workers killed in recent factory collapse in Pakistan – National Consumers League

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November 6, 2015

Contact: Child Labor Coalition Coordinator Reid Maki, (202) 207-2820, reidm@nclnet.org

Washington, DC—The Child Labor Coalition (CLC) laments the tragic deaths that occurred Wednesday in the collapse of a plastic-bag factory in Lahore, Pakistan. At least 23 workers died in the factory, including an unknown number of child workers. Rescuers have pulled more than 100 survivors from the rubble, but dozens of other workers still trapped are thought to remain.

Although the details are still not yet fully known, a young boy working in the factory who survived the incident told reporters that dozens of children were among the 150 workers trapped in the collapsed building. Several reports mentioned children as young as 12 working in the factory.

South Asia has been the scene of a number of factory tragedies in recent years. In 2013, more than 1,100 workers died in the Rana factory collapse in Dhaka, Bangladesh. In 2012, more than 100 workers died in the Tazreen fire just outside of Dhaka. That same year, 289 people were killed in a fire in Karachi, Pakistan, and on the same day, a shoe factory fire in Lahore killed 25 workers.

“This latest Lahore collapse highlights the vulnerability of factory workers,” said Sally Greenberg, co-chair of the CLC and executive director of the National Consumers League. “Factories must be inspected regularly, and officials should be on the constant lookout for children working in these unsafe environments. Young children should not be dying in factory collapses; they should not be working in factories at all. Western consumers bear some responsibility for creating the awful conditions that lead to these tragedies because of the constant demand for the cheapest-possible products produced at great speed.” 

“The conditions that lead to these kinds of tragedies are a violation of human rights, they are avoidable, and they must stop,” said Dr. Lorretta Johnson, secretary-treasurer of the American Federation of Teachers, a co-chair of the Child Labor Coalition.  “We know that change is possible, and we call upon the government of Pakistan to press its efforts to ensure a culture of rights, not only through inspection and monitoring of factories, but also by the critical elimination of exploitative child labor.”

“In Pakistan, according to data provided by the U.S. Department of Labor, only 72 percent of children between 5 and 14 attend school,” said Reid Maki, CLC coordinator. “Two and a half million children between 10 and 14 are estimated to work. Tragic deaths of children like those in the factory collapse in Lahore will continue without a concerted effort to remove children from exploitative work and get more children into school.”

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About the Child Labor Coalition

The Child Labor Coalition, which has 35 member organizations, represents consumers, labor unions, educators, human rights and labor rights groups, child advocacy groups, and religious and women’s groups. It was established in 1989, and is co-chaired by the National Consumers League and the American Federation of Teachers. Its mission is to protect working youth and to promote legislation, programs, and initiatives to end child labor exploitation in the United States and abroad. The CLC’s website and membership list can be found at www.stopchildlabor.org.

NCL statement of support for FDA nominee Dr. Robert Califf – National Consumers League

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October 30, 2015

Contact: NCL Communications, Cindy Hoang, cindyh@nclnet.org, (202) 207-2832

Washington, DC-The National Consumers League (NCL) has issued the following statement on the President’s nomination of Dr. Robert Califf to serve as the new head of the U.S. Food and Drug Administration (FDA). The statement can be attributed to NCL Executive Director Sally Greenberg:

Dr. Califf will be responsible for ensuring the safety, efficacy, and accuracy of marketing of the products the FDA regulates. He offers an impressive academic background and is an internationally recognized expert in cardiovascular medicine and quality of care.

We have met with Dr. Califf on several occasions, including as part of a larger meeting with consumer and health care groups, where he has repeatedly stated his commitment to the FDA’s crucial role as an independent agency charged with regulating companies that make drugs, medical devices, food, and cosmetics.

We look forward to working with Dr. Califf to ensure that patient and consumer protection remains paramount under his tenure as commissioner.

NCL and FDA have a longstanding relationship. We’ve worked closely with FDA on NCL’s Script Your Future Campaign to raise public awareness of the importance of medication adherence. In addition, I serve on the Reagan Udall Foundation Board, a nonprofit private public partnership established by Congress to help carry out the mission of the FDA.

We’ve also worked closely with former commissioners, including Dr. Margaret Hamburg, who received our highest honor, the Trumpeter Award, in 2011. Commissioner David Kessler was also a Trumpeter Award recipient in 1994. We look forward to learning more about Dr. Califf during his Senate confirmation hearings and to welcoming him to his new role at FDA.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL calls on Senate to oppose Cyber Information Sharing Act – National Consumers League

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October 22, 2015

Privacy and consumer advocates say CISA is not the answer to cybercrime

Contact: Cindy Hoang, National Consumers League, cindyh@nclnet.org or (202) 207-2832

Washington, DC—Calling it “the wrong solution to the problem of cybercrime,” the National Consumers League (NCL), today joined six other privacy and consumer advocacy organizations to urge the Senate to reject the Cyber Information Sharing Act (CISA). In a letter to Senate Majority Leader Mitch McConnell (R-KY), the groups called the bill “fatally flawed,” and urged Senators to oppose the bill unless it is significantly improved through the amendment process.

CISA, which is currently pending before the full Senate, would significantly expand the ability of intelligence agencies such as the National Security Agency to collect information about American citizens in the name of improving cybersecurity. Advocates at NCL believe that there are significantly better ways to improve consumers data security protections, including a comprehensive national data security standard and a strong national data breach notification law.

“CISA seeks to combat a real problem: the continuous and serious incidence of data breaches that raise the risk of identity theft and other fraud for millions of consumers,” said John Breyault, NCL vice president of public policy, telecommunications and fraud. “Unfortunately, in CISA’s case, the cure is worse than the disease. The bill, as proposed, would allow for even greater collection of consumers’ personal data without adequate safeguards against abuse by intelligence and law enforcement agencies.”

The letter cited an amendment offered by Sen. Ron Wyden (D-OR) as one way to address advocates’ concerns. That amendment (#2621) would require, to the extent feasible, that all entities remove personally identifiable information not necessary to describe or identify a cybersecurity threat before sharing cybersecurity threat information under the bill.

In addition to NCL, organizations represented in the letter included the Center for Democracy & Technology, the Center for Digital Democracy, Consumer Action, the Consumer Federation of America, Consumer Watchdog, and Privacy Rights Clearinghouse. The full text of the letter is available here.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

National Consumers League and Shape Up America! applaud new Crown Royal Serving Facts labels – National Consumers League

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October 7, 2015

Contact: Cindy Hoang, National Consumers League, cindyh@nclnet.org or (202) 207-2832 or Alex Colcord, Shape Up America!, alex.colcord@gmail.com, 406 686-4844

Washington DC—The National Consumers League and Shape Up America! today applauded the appearance in the market of alcoholic beverage packaging with Serving Facts labels. Diageo, the maker of Crown Royal whiskey, has announced that their packaging now features a Serving Facts label like the ones the two organizations have advocated for more than 10 years.

“The National Consumers League and many allied organizations have waited a long time for this day,” said NCL Executive Director Sally Greenberg. “I applaud Diageo for its willingness to place in consumers’ hands the serving facts information they want and need—right on the package. Now is the time for all manufacturers of beer, wine, and spirits to follow this lead by providing consumers with easy access to the information they need to help them to drink responsibly.”

“Serving Facts labeling is an important tool for consumers looking to make informed decisions about drinking,” added Dr. Barbara Moore, President and CEO of Shape Up America! “Complete serving information is especially important today, when so many adults are either overweight or obese. As the US Dietary Guidelines Advisory Committee highlighted earlier this year, 21% of calories from beverages in the average diet come from alcoholic beverages (DGAC Scientific Report, Part D, Chapter 1, p. 47). For the sake of good health, for weight management and for the sake of safe driving, consumers need this information to make the responsible choice the easy choice.”

Alcoholic beverages are one of the very few consumer goods for which nutrition or serving facts are not required. The National Consumers League, the Center for Science in the Public Interest, and more than 70 other organizations petitioned for such labeling on beer, wine, and distilled spirits products in 2003. The petition called for the Serving Facts labels to include alcohol per serving and servings per container, as well as calories, carbs, protein, and fat per serving. After a protracted regulatory process, the Alcohol and Tobacco Tax and Trade Bureau issued a rule in 2013 that allowed (but did not require) Serving Facts labels for alcoholic beverages. The new Crown Royal Serving Facts label is a result of that lengthy campaign.

“Both of our organizations are engaged in helping educate the public about responsible decision-making about what they eat and drink,” said Greenberg and Moore. “This is an important step forward in providing vital information to consumers.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

About Shape Up America! 

Shape Up America! was founded in 1994 by former U.S. Surgeon General C. Everett Koop to raise awareness of the health effects of obesity and to provide responsible information on weight management to the public and to health care professionals. The organization maintains an award winning website – www.shapeup.org – accessed by more than 100,000 visitors each month.

Klobuchar, FTC’s Ramirez to receive highest honors from oldest American consumer watchdog – National Consumers League

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September 30, 2015

Contact: NCL Communications, Cindy Hoang (202) 207-2832, cindyh@nclnet.org or Carol McKay (724) 799-5392, carolm@nclnet.org

Washington, DC—The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy organization, will honor Senator Amy Klobuchar (D-MN) and Federal Trade Commission Chairwoman Edith Ramirez, with its highest honor, the Trumpeter Award, on Tuesday, October 6 in Washington, DC. The award has honored consumer and worker leaders for more than 40 years, and past honorees include: Senator Ted Kennedy, the award’s inaugural recipient, as well as Labor Secretaries Hilda Solis, Robert Reich, and Alexis Herman, American Federation of Teachers President Randi Weingarten, Senators Carl Levin and Paul Wellstone, Delores Huerta of the United Farm Workers, and many others. Last year’s recipient was Richard L. Trumka, AFL-CIO President.

“The Trumpeter Award is NCL’s highest honor, given to leaders who have dedicated their lives to improving the rights of consumers and workers. Senator Klobuchar and Chairwoman Ramirez embody these values, and their impressive careers have had a measurable impact on the marketplace for consumers,” said NCL Executive Director Sally Greenberg. “Senator Klobuchar’s leadership on regulation to strengthen consumer product safety legislation, on ensuring a fair and competitive marketplace, and increasing accessibility to communications, specifically in the wireless space, made her a perfect candidate for the award. Chairwoman Ramirez was chosen for her tireless efforts to combat deceptive debt collectors and advertisers, to ensure the privacy and security of consumer data, and to promote competition in the marketplace. We are delighted to honor these remarkable women with this year’s awards.”

“I’m honored to join the late Senator Paul Wellstone, my friend from Minnesota and a champion for American consumers, as the recipient of the National Consumers League’s Trumpeter Award,” said Klobuchar. “In this complex economy, people need strong advocates who will fight to ensure the safety and integrity of the goods, products, and services they buy. They also deserve fair and competitive marketplaces and accessible communications networks. I am proud to receive this award and will remain vigilant in my work to protect the American consumer.”

In addition to the Trumpeter Award, NCL will honor Maria Elena Durazo, International Union Vice President for Civil Rights, Diversity and Immigration with UNITE HERE! with the Florence Kelley Consumer Leadership Award, named after an early leader of NCL.

“Durazo is a passionate advocate for workers, a visionary for America’s national and local labor movements, and a pioneer among male-dominated union leadership,” said Greenberg. “We celebrate her inspiring role as a driving force in the fight for working class Americans in Los Angeles and across the nation—she is a truly deserving recipient of an award named for our pioneering Progressive Era leader, Florence Kelley.”

I’m delighted to accept an award named for Florence Kelley, a pioneer for consumer and worker rights, and it will be an honor to share the stage with Senator Klobuchar and Chairwoman Ramirez,” said Durazo. “I accept this award on behalf of brave hotel and food service workers. Now more than ever, America’s working families need allies and advocates who help give them peace of mind, ensure a fairer marketplace and workplace, and provide the security that will allow our economy to thrive in ways that benefits all—not just businesses, but also the workers whose blood, sweat, and tears make them successful.”

The event will feature a reception, dinner, and speaking appearances by NCL leadership and the honorees, as well as:

  • Senator Richard Blumenthal (D-CT)
  • Tefere Gebre, Executive Vice President, AFL-CIO

Media Advisory
What: National Consumers League’s 2015 Trumpeter Awards
When: Tuesday, October 6, 2015 | 7 p.m. Dinner and Presentation of Awards

Where: Hyatt Regency Washington on Capitol Hill, 400 New Jersey Ave NW, Washington, DC 20001

Members of the media are welcome to cover this event but must RSVP. For questions or to RSVP: Call Cindy Hoang, National Consumers League, (202) 207-2832 or Carol McKay, (724) 799-5392

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Letter to Ramirez on FTC’s action against Vemma and the ongoing investigation into Herbalife Ltd.

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September 25, 2015

The Honorable Edith Ramirez
Chairwoman
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580 

Re: FTC’s Action against Vemma and the Ongoing Investigation into Herbalife Ltd. 

Dear Madam Chairwoman:

Since 1899, the National Consumers League – of which I am Executive Director — has fought to protect and champion the importance of a safe marketplace for American consumers. More than a century later, NCL’s focus on and commitment to protecting consumers is unwavering. It is for this reason that we were pleased to see the Commission put a stop to Vemma’s deceptive business practices.[1] 

While some companies in the multi-level marketing (MLM) sector take clear steps to ensure that consumers fully understand their chances of success and truly focus efforts on retail sales, there remain many others that do not. As your actions against Vemma made clear, MLMs that deceive recruits with promises of easy riches with minimal risk can and will run afoul of the FTC’s enforcement authority.

The Commission’s actions to halt Vemma’s operations come more than eighteen months after the Commission opened its investigation of similar allegations against another multi-level marketing company – Herbalife, Ltd. We note that some of the very practices the FTC found problematic in the Vemma case are alleged to be occurring at Herbalife.

We would, therefore, greatly appreciate an update as to status of the Herbalife investigation so that we can be assured that it is moving forward and does not continue indefinitely with no resolution. As it stands today, consumers who have invested or may be considering investing in the Herbalife business opportunity have been left in limbo – not knowing whether the Commission considers the company to be a legitimate MLM or a fraudulent pyramid scheme. We believe that consumers have a right to expect speedy action by government law enforcement agencies when their financial well-being is at stake. 

I would welcome the opportunity to further discuss with your staff our concerns about MLM abuses  and approaches that the Commission could take going forward to further protect consumers, should that be helpful to you.

Thank you for your time and attention to our concerns. 

Sincerely,
Sally Greenberg
Executive Director, National Consumers League

[1] Federal Trade Commission. “FTC Acts to Halt Vemma as Alleged Pyramid Scheme,” Press Release. August 26, 2015. Online: https://www.ftc.gov/news-events/press-releases/2015/08/ftc-acts-halt-vemma-alleged-pyramid-scheme