AdvoCare, Endorsed by Quarterback Drew Brees, to Pay $150 Mln for Running Pyramid Scheme

By Bryan Pietsch

October 04, 2019

WASHINGTON (Reuters) - AdvoCare International, the multilevel marketing health and wellness company endorsed by New Orleans Saints quarterback Drew Brees, will pay $150 million to settle U.S. charges that it operated an illegal pyramid scheme.

AdvoCare "pushed distributors to focus on recruiting new distributors rather than retail sales to consumers," the Federal Trade Commission said in a statement. Multilevel marketing companies such as AdvoCare typically enlist consumers to sell their products and to enlist other people as distributors for a commission, saying the opportunity can earn them money.

As part of the settlement, AdvoCare admitted wrongdoing and will also be banned from multilevel marketing practices. The company had said in May it would shift to direct-to-consumer sales and a single-level marketing model, with commissions only on product sales, not recruitment.

AdvoCare did not immediately respond to request for comment.

The Texas-based company sold health and wellness products such as energy drinks and weight loss supplements through its distributors. But consumers were charged $59 to become a distributor and had to spend between $1,200 and $2,400 on AdvoCare products to earn "all possible forms of compensation," the FTC said. Hundreds of thousands of consumers in the United States were negatively affected by AdvoCare, the FTC said.

The company is endorsed by celebrity athletes from bodybuilders to football players. None of the endorsers, including Brees, are accused of any wrongdoing, the FTC said. Brees did not immediately respond to request for comment.

In a commercial for AdvoCare, Brees encouraged consumers to become distributors, saying "the financial benefits can be just as rewarding for those who want more and decide to build their own AdvoCare business."