Market America started in 1992. Jr. Ridinger and his wife, Loren, launched the company. They wanted to change how people shop and earn.
The company sell a wide range of products. These include cosmetics health supplement skincare personal care item and auto product. It promotes popular brand like Isotonix and Motives.
Market America uses a multi-level marketing model. Sellers make money by selling products and recruiting others. Each new recruit becomes part of a larger team. Earnings come from personal sales and team activity.
The company run it operations from Greensboro North Carolina. In 2016 it had 800 employees. That year, it earned $791 million in revenue. Market America describes itself as a mix of Amazon and QVC. It focuses on online retail and one-to-one product promotion.
The company operate worldwide. It has office in the United Kingdom Hong Kong, Australia and Indonesia. Its global reach helped it grow fast. Thousands of independent distributors work under the brand in many countries.
Market America built its identity on the “UnFranchise” system. It claims this model allows ordinary people to start a business without the usual risks. Critics argue that most people lose money instead of making it.
Why the Market America Lawsuit Matters
In 2017, two distributors sued Market America. Their names are Chaunjie Yang and Ollie Lan. They accused the company of racketeering. They said Market America misled people.
The company promised big profits. It told sellers they could earn $560,000. That was false. Only top-level distributors made money. About 90% earned nothing.
New sellers had to pay $399 to join. Then they paid $129 each month to stay active. They also bought products each month. That cost between $130 and $300. On top of that, they paid to attend company events. Yang said he lost more than $35,000.
The lawsuit asked the court to stop the company’s unfair practices. The plaintiffs also wanted three things:
Cancel the arbitration agreement in the distributor contract.
Punish the company under the RICO Act.
Hold the company accountable for false ads.
Court Response and Arbitration
The case first appeared in California. Market America responded with a legal motion. The court agreed and moved the case to North Carolina.
In 2020, the court paused all proceedings. Arbitration had to happen before anything else. This decision shocked many observers.
The plaintiffs had signed distributor agreements. These contracts included arbitration clauses. Those clauses blocked them from using the court system. The court ruled that the contracts must be honored. This meant no public trial.
Instead of a full court hearing, both sides had to settle the issue in private. Arbitration sessions often stay behind closed doors. That limited exposure of the case details.
Later, the court merged this lawsuit with a similar one. That decision grouped both cases under one legal path. All future filings now fall under a single case. The merger slowed things down but kept the legal process unified.
This stage of the lawsuit left many questions unanswered. It also showed how fine print in contracts can silence serious complaints.
Past Legal Issues
Market America had legal trouble before 2017. In 1999, the SEC launched an investigation. The founder, Ridinger, made a secret deal with a stockbroker. His name was Gilbert Zwetsch.
They split profits from stock sales between 1994 and 1995. They did not tell investors or company members. The SEC called this a violation. Ridinger and Zwetsch settled. They paid $1.2 million in profits and a $350,000 fine.
In 2012, another lawsuit appeared. That case claimed Market America’s products contained lead. Lan said his mother got sick from using them.
In 2020, the FDA issued a warning letter. The company failed to report serious side effects from one of its supplements. Some customers ended up in hospitals. They had taken part in a 21-day challenge. They experienced pain and dizziness.
What the Lawsuit Tells Us
This lawsuit exposed deep issues inside Market America. The company promised wealth, freedom, and success. Most sellers saw none of that. They lost money, time, and trust.
Market America pushed people to believe in fast rewards. The business told them they could earn thousands by selling products and building teams. But real profits stayed at the top. New sellers faced constant pressure. They had to pay sign-up fees, buy monthly stock, and attend paid events. These costs added up fast.
Many sellers stayed loyal because they feared missing out. They hoped for a breakthrough. They believed success was just one more sale away. Instead, they sank deeper into financial loss.
The system worked well for those above. Their income depended on recruiting others. That made the model less about product sales and more about constant enrollment. People at the bottom kept spending but saw little return.
The court did not hear the full case. Arbitration blocked public trial. This move silenced the sellers. It also shielded Market America from broader exposure. Many never got their chance to speak.
This raises big questions. Can MLM companies operate without real oversight? Can sellers ever challenge contracts that favor the company?
Other facts show a troubling pattern. The SEC investigated Market America in the past. The company had to pay fines but never admitted guilt. The FDA issued a warning in 2020. Some customers got sick from company supplements. Another lawsuit claimed lead in the products.
Each case adds to the concern. These are not small mistakes. These are repeated failures in safety, honesty, and business ethics.
The lawsuit sends a strong message. Read every document. Understand every rule. Question every promise. Legal language can strip away your rights.
This case is more than a personal loss. It shows what can happen when fine print hides big risks. Companies may protect themselves through contracts. But consumers and sellers need protection too.
Final Thoughts
The Market America lawsuit serves as a wake-up call. Big promises often hide big risks. Many new sellers joined with high hopes. They paid fees, purchased products, and attended events. Most never saw a return.
The business model favored those at the top. People at lower levels lost time and money. The promise of financial freedom led many into debt.
Legal action hit a wall. Arbitration clauses blocked their access to court. This move kept key facts and complaints out of public trials. Sellers who suffered had no voice in front of a judge.
Buyers and investors should stay alert. Always read every agreement. Always research the company before signing anything. Ask how real the earning claims are. Ask who truly benefits from the system.
The Market America case shows how legal contracts can silence victims. It also shows why transparency matters in business.
Smart decisions come from knowledge. Protect your money. Trust facts, not hype.
