Is Avon Different From Herbalife?

By Robert FitzPatrick:

Avon (NYSE:AVP) has voluntarily joined the battle, aka the “fraud thesis”, that has engulfed Herbalife (NYSE:HLF) and, collaterally, other “multi-level marketing” -MLM- enterprises, such as Nu Skin (NYSE:NUS) and Usana (NYSE:USNA), devaluing their stocks and raising the specter of new government regulation. Avon entered this war zone by publicly resigning from the Direct Selling Association (DSA). Avon co-founded the DSA, the official voice and chief lobbyist of “direct selling.” But today’s DSA bears little resemblance to the DSA of Avon’s history. It is now a cauldron of controversy, not credibility. It is dominated by enterprises like Herbalife and Nu Skin that never operated as conventional direct sellers. Avon appears to be distancing itself from the legally-challenged MLM-world of “unlimited” incomes, cult persuasion, and “infinite” downlines, the raw material of consumer complaints of “unfair and deceptive.”

Is Avon really different from Herbalife? Or, is the public resignation from DSA another example


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