Is it a Pyramid Scheme?

What is a pyramid scheme?

What is a pyramid scheme? A pyramid scheme is an illegal, unsustainable business model where participants make money primarily by recruiting new members, not by selling actual products or services. I’m sure there are plenty of pyramid schemes online but Neora is not one of them.

Is Neora a pyramid scheme?

No, Neora is not a pyramid scheme. Based on a September 2023 ruling from the United States District Court for the Northern District of Texas, Neora is not legally classified as an illegal pyramid scheme. Judge Barbara Lynn denied all of the Federal Trade Commission’s a/k/a FTC claims against the company, finding that Neora operates as a legitimate direct-sales organization.

Neora’s pyramid scheme lawsuit

If you haven’t heard about the FTC and Neora lawsuit, here are some factors which assisted in the court’s decision that Neora is not a pyramid scheme:

• Background: The FTC sued Neora in 2019, alleging it was a pyramid scheme, but after a seven-year battle and a 2022 trial, the court ruled in favor of Neora.
• Legal Victory: The 2023 decision marked the first time in decades that a direct-selling company defeated the FTC’s pyramid scheme allegations in a court trial.
• Focus on Sales: The court found that Neora’s business is primarily driven by sales to real customers (including Preferred Customers) rather than just inventory loading or rewarding recruitment.
• Rejection of FTC Claims: The court rejected the FTC’s argument that “Brand Partner” purchases (for example, my own personal purchases) could not be counted as legitimate sales, noting that many brand partners join Neora for personal use and discounts.

The final verdict: Neora is not a pyramid scheme

The final verdict – Neora is not a pyramid scheme. This verdict marked a significant victory for Neora, making Neora the first direct-selling company to defeat the FTC’s pyramid scheme claims in a court trial. Neora’s historic victory over the FTC pyramid scheme allegations isn’t just a triumph for the company – it’s a turning point for the entire direct-selling industry.

The takeaway – do your research when joining a direct selling company. Since Neora’s defeat of the FTC pyramid scheme allegations, many companies switched to affiliate marketing or shut their doors because they may have been operating under an illegal, unsustainable business model. Gone in an instant, in some cases overnight – with no warning – pulling the rug out from thousands of leaders vs. putting up a fight to protect the very people who spent years building and growing the company.

Neora is not a pyramid scheme

The takeway – Neora is not a pyramid scheme.

If you are looking for a safe space in the direct selling industry, one that will not take away your team commissions, is a safe, sustainable company with a solid and legal compensation plan and products that customers actually want because they deliver significant results, Neora may be for you. Let’s chat.