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Affidavit for Quixtar Pyramiding Suit |
 Recently, as
reported earlier on this site, a class
action suit  was filed against Quixtar by seven Quixtar diamonds and
IBOA Board members claiming Quixtar to be a pyramid scheme. They are not suing
for money, but to be released from the non-compete agreement that was implemented in 2004.
Many distributors targeted certain products with attractive $/PV ratios so they could minimize the dollars spent on products while at the same time qualifying for their group's MRMP. Some of the more attractively bonused products included XS Energy drink, Nutrition bars, Green Tea, and coffee. Distributors had little competitive chance to retail these products, but since the products were consumable and they were the ones, which would minimize their monthly expenditure on products, they thus payed the required admission price to participate in the pyramid scheme. Other distributors bought product to get their minimum points, and then sold it for less than distributor cost on Ebay They did this no doubt so they could recoup some of their money and lower their out of pocket cost to buy their MRMP so that they could participate in the pyramid scheme.
I contend that most distributor's intentions in buying the Amway/Quixtar products is so that they can participate in the pyramided compensation scheme. I made up this little form for you current and former distributors. Here is your chance to give your input about your intentions in buying the Amway/Quixtar products. If enough people say they bought the products only to participate in the compensation scheme, maybe the FTC will finally take a second look at Amway and a first time look at Quixtar. Please fill out the affidavit
AFFIDAVIT OF _______________________ STATE OF ___________ ) ) ss COUNTY OF __________ ) I, ______________________, being duly sworn upon oath, state and affirm as follows: 1. I am over the age of eighteen years, and have personal knowledge of the facts set forth herein. 2. [Witness tells story. Please include each point in a separate paragraph. Have you been able to retail the products successfully? Do you feel the Quixtar products are overpriced? Why do you purchase the Quixtar products? Do you purchase just enough Quixtar products for your PV, and buy the rest from your local store? Do you have to "self report" in order to qualify for your bonuses? Do you check the "customer order" box when you place your order? When you’ve "self-reported" or "checked the box," did Quixtar ever ask for customer receipts to substantiate the report? Do you feel that Quixtar takes advantage of its IBOs by selling overpriced products to IBOs knowing them to be unsellable at retail? Do you feel that the IBO price is consistently placed well above the retail price of its competitors’ products? Do you have any concerns about building the Quixtar business?] 3. FURTHER AFFIANT SAYETH NOT. Dated this ____ day of __________, 2007. __________________________ [Name] On this ____ day of _________, 2007, before me personally appeared [witness], to me known to be the person who executed the foregoing instrument in my presence and acknowledged to me that he/she executed the same as his/her free act and deed. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written. ___________________________ NOTARY PUBLIC My Commission Expires: |
The suit by
seven diamonds including Billy Florence, Randy Haugan, Chuck Goetschel, Don Wilson and
three others, claims that Amway/Quixtar is no more than a pyramid scheme, since the
majority of the products are consumed by those who also wish to participate in the Amway
pyramided compensation structure. This type of pyramid is termed by many a "
The class
action suit also claims that the product prices are so high that people cannot retail them
to normal customers and that many people only bought the products to participate in
Amway's highly leveraged compensation scheme. Amway proponents cite a letter from
Mr. Kolm at FTC to the DSA and interpret it to mean that any type of a product pyramid
scheme is legal, since a "product is sold". The corporation takes
this position as well. 
I called Mr.
Kolm in Washington one day and asked him about the letter. He stated that each case
has to be looked at on its own merits. He stated that one has to look at the
intentions the participants have in buying the products. Are the
products bought because the people want them, or do the people buy them so that they can
meet some sort of minimum to participate in the leveraged compensation scheme? 
Certainly
some percentage of Amway products are purchased by people who truly like the products and
would probably continue to buy they even if there were no pyramided compensation scheme
associated with them. This class action suit makes the assertion that the majority
of the products are purchased not out of desire for the product, but rather in order to
meet their group's minimum recommended monthly
purchase (MRMP). These minimums are usually 100 or 150 PV so that
one qualifies for a bonus payment from the pyramided compensation scheme. The Amway
pyramid scheme would not work if no one bought the products, so a certain percentage of
people reluctantly buy the products only to meet some group set minimum. As long as
people can be convinced to buy the overpriced products, which they may or may not want,
the Amway scheme can continue to pay bonuses to those at the top of the pyramid. 
There
were even anecdotes from Tim Foley that even if you bought the product and buried it in
your back yard, the bonuses would be more than enough to cover the costs of the products
you buried earlier in your Amway/Quixtar career. I guess from the picture on
the left, you could even have burned the produts for the same result as burying them!
If you only recruited enough people to do the same, you could eventually get
your products for free due to the bonuses you made on all the people you recruited.
This clearly shows significant intention to buy product only to participate in the pyramid
scheme. 
and
then send it to the attorney for the plaintiffs at: 