Young Living Accused of Running Illegal Pyramid Scheme in New Lawsuit

Young Living Accused of Running Illegal Pyramid Scheme in New Lawsuit April 19, 2019

A new class-action lawsuit filed in Texas accuses Young Living of running an illegal pyramid scheme. The lawsuit filed on April 12, 2019, alleges the Multi-Level-Marketing company violated federal racketeering laws and lied to members about the possibility of becoming rich.

In the court filing, plaintiff Julie O’Shaughnessy of Texas alleges that Young Living runs an illegal pyramid scheme. According to the suit filed in Texas Federal court, Young Living lures new members to the company with cult-like promises of wealth and alternative income. Media, emails, and conferences held by Young Living promote a life of “abundance” to new members.

O’Shaughnessy joined Young Living in 2015 after attending a party hosted by a friend. She purchased a starter kit for $100.00. After her initial purchase, she was persuaded to sell the products to offset the money she spends on oils for herself.

Believing she could earn commissions, she attempted to sell the oils. However, the suit states that she could not sell the oils successfully. Additionally, she says that the commission structure only compensated her for enrolling new members and creating a downline.

To be eligible for monthly commissions, Young Living required that she spend a minimum of $100 per month. The suit states that federal laws prohibit MLM’s from forcing members to purchase inventory to earn a commission.

“And Young Living’s Members’ losses are compounded by its structure, which requires its Members to continuously purchase (and as a result, hold) an ever-growing inventory of unused product, in direct violation of the 70/30 rule established in the FTC’s 1979 Amway ruling.”

Basically, Young Living forces people to stockpile inventory to be eligible for commission. The suit alleges that the company knows that members are unable to sell their stock and enact no quality control to ensure that members have sold 70% of the inventory they purchase.

The suit accuses Young Living of compensating distributors only on the purchase of new member enrollment kits. Members that sell oils do not receive commission checks unless they enroll new members and create a downline. Uplines instruct new members to recruit more members to earn money.

The entire structure of the commission relies on new recruitment and not product sales. Because MLM laws state commissions must be paid based on the products they sell and not recruitment, the suit alleges that Young Living runs an illegal pyramid scheme.

In the suit, attornies allege members must pay to play and then recruit to earn money. However, with nearly 3,000,000 members there is no feasible way for new members to make money.

In fact, a 2016 income statement showed that the average Young Living member made $25.00 in annual income. New members must purchase $100 starter kits and $100 per month to be eligible for commission. Julie O’Shaughnessy says in the three years she attempted to sell Young Living she lost nearly $5,000.00.

Perhaps most telling in the suit is the wealth inequity between the bottom and the top of the pyramid. With more than 3,000,000 members in the company, only 46 people have ever made it to the top of the company. To achieve that rank they must have 15,000 members in their downline.

Also, the suit alleges Young Living continually commits acts of racketeering, wire fraud, and violating interstate commerce laws. The lawsuit says the company publishes fraudulent material, promotes the company as an opportunity to become wealthy, and charge members hundreds a month to remain active.

Attornies in the case are asking that Young Living reimburse the losses of each member of the lawsuit. Additionally, they are requesting that Young Living be barred from promoting the scheme in the future.

For years critics of Young Living have accused the company of running an illegal pyramid scheme. However, the suit filed in court is the first by members to support these claims.

Young Living has not commented publically on the lawsuit.

If you want to read the full details, read the 36-page document here.

Watch my video “Is Young Living Essential Oil MLM a Scam?”

*Katie Joy is a columnist and hosts Without A Crystal Ball on Patheos Non-Religious Channel. She writes articles on parenting, disability advocacy, debunking pseudoscience, atheism, and crimes against women and children.

She co-hosts the YouTube show, “The Smoking Nun,” with Kyle Curtis on The Non-Sequitur Channel. The show airs weekly and tackles pseudoscience, current events, and crime stories.

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What Are Your Thoughts?leave a comment
  • persephone

    The only people who make money in these MLM schemes are the founders and maybe the first level. Everybody else just scrambles for scraps and loses their money.

  • CRS

    I appreciate what you are doing in the video, but your facts regarding the starter kits are wrong. I signed up for YL the same year the named plaintiff did. There was a “Basic Kit” for $45, which included only 1 5ml oil, samples, and materials. There was a midlevel kit for $75 which was the Basic Kit plus a diffuser. Then there was the Premium Starter Kit, which cost me $150, and included 11 5ml oils, a diffuser, samples, and informational materials. The kits have undergone changes in the last few years. They no longer sell the $75 kit, they may still have the Basic Kit, and they’ve expanded the Premium Starter Kits, which now range in price from $160-$260, depending on your diffuser option, or on which theme kit you want (Thieves, NingXia Red, etc).

    In order to qualify for unilevel bonuses and commissions, you must be on the monthly autoship program, called Essential Rewards, with a minimum 100 PV purchase every month.

    Jared Turner is their President, not their son. He’s an attorney who worked in their global legal department before heading their sales department.

    Lastly, he didn’t hold the child down (that would have been homicide). The news source that reported the death noted that he left the child in the water. I agree, it was absolutely wrong and disgusting, but that difference is important.

    I hope this helps!

  • There is a lot of misinformation in this article….including different aspects of the levels of the compensation plan. I am an Executive with YL, which is no where near the top of the line (only the 3rd level up actually). I do make money every single month however, and one of the perks of doing this business is that I don’t have to have any inventory. I just help people work on their wellness goals either as retail customers, or wholesale members.

    My 100 PV ( I also earn 25% back from that order every month because I joined the rewards program) I spend a month is for my personal use oils, supplements, household products, beauty supplies, make up…etc. The only way to be able to share about how oils and products benefit you in your life is to use them. I have ditched and switched toxins out of my home and just replace them with the YL alternative.

    I also frequently sample stuff out to my friends when we are hanging out…who have a specific need that I know I can help. When you decide to make YL your career….that is just part of your tax write offs at the end of the year anyway.

    I have also watched friends rise to Silver, Gold, Platinum, Diamond, and RCD in the span I have been a part of the company. YL actually has one of the most generous compensation plans I have seen in network marketing. I see it changing peoples lives. I have never been encouraged to “stockpile” oils or products. I am also healthier than I was 4 years ago when I started this journey and using YL oils and products has helped my entire family…including our pets.

    If you want to do the business…you have to work. You have to treat it like a job every single day. You do trainings and personal development. It’s not a get rich scheme and has never been promised as one. I was told from Day 1 about the income potential, but I was also told that it would take work if I wanted it as a career vs. a hobby. I was never “pressured” to sell. I chose to begin sharing about how the oils and products were benefiting my family, because I discovered the true value. I wanted to help others too.

    My disabled spouse is the entire reason I joined YL in the first place. The doctors didn’t have anymore options and I refused to accept “bed bound” as a lifestyle. It was the best decision I have made for my family. My advice….don’t look at sensationalized news as your truth source. Reach out to the company and ask questions, or the millions of people who are experiencing huge changes in their lives because of the healthy lifestyle changes being a YL member makes it easy for us to make.

    Much love and healing I am sending out to all.

  • Lisa Cybergirl

    But do you have to have to get downline people to make a profit? I can see selling something that you think is a good product, but I could NEVER recruit people to do that.

  • Yep

  • Lisa Cybergirl

    Of course, and of course she did not answer.

  • Lisa Cybergirl

    Lastly, he didn’t hold the child down (that would have been homicide).
    The news source that reported the death noted that he left the child in
    the water.

    Oh, that’s so much better!

  • CRS

    While I appreciate the sarcasm, I do agree that what he did was atrocious, and I wish he had been charged with something, even if negligent homicide.

    However, the official cause of death was ruled an accident, and I’m sure they took into account the emergency that occurred when his wife hemorrhaged after giving birth. It was a huge crap shoot, and that poor baby suffered because her father was an absolute… well, you can finish that sentence.

    So, no, I’m not defending him. But it is still an important distinction to make. Even if it shouldn’t have mattered at the time.

  • RachelandHarp Samra

    This kills me. The committment to spend the 50PV is a choice for doing business. But this woman is a liar..flat out..suggesting she has “inventory”. Young Living has everything from vitamins to oils, to personal products like shampoo and toothpaste.. to cleaning products and make up. So as long as she is using toothpaste, shampoo, conditioner, make up, laundry soap, lotion, vitamins, and even food such as pasta, flour, and cereal…she cant possibly have inventory…lol.

  • RachelandHarp Samra

    you can’t lose money when you are buying products! lol. Thats like me saying “I lost my money” because I bought make up at the drug store or groceries at the grocery store.. Its not a “loss” of money when you are BUYING products.

  • phatkhat

    It is if you can’t resell the products you purchased to sell.

  • persephone

    The point is to SELL the products. If you’re not SELLING the products, then it’s a failure.

  • JessieJones

    It is if you are forced to buy products that you don’t need or want just to receive your commission check. I work at a hospital and I receive my paycheck every other week. Period. I am never forced to go buy services from the hospital before I get paid.

  • Laura Mazzoccoli

    No, the point is to sign up new members, not sell products. You cannot sell products because anyone can go on the Young Living website and purchase the products on their own. They have very cleverly created road blocks in order to make it so that your ONLY way to make commissions is if you sign up new members for $160 starter kits! And your commission on that is only $25! And you are REQUIRED to spend $100/month to even make your stupid $25 commission! THAT is a pyramid scheme. Hence the lawsuit which will hopefully be approved for a Class Action with thousands of other Plaintiffs.

  • Laura Mazzoccoli

    You have to recruit and get new members to make a lousy $25/$50 commission and then on top of it, they have the audacity to require you to spend at least $100/month just to get any commission that you have earned. So you are paying to earn your own commissions. So even if you signed up 1 person per month, you are still losing money.

  • Laura Mazzoccoli

    What about the 100PV that you have to order every month in order to even get your commissions? $50 is required to stay on Essential Rewards, not earn commissions. And who said she was using the products?? You are REQUIRED to spend at least $100 every single month in order to make your commissions. They call this an “investment” in your business, but you cannot resell it on your own, so its not an investment at all.

  • RachelandHarp Samra

    If you have an issue spending 100pv as an investment in your biz, then it’s not for you. Just leave the biz. No losses if you use your products. As for me, I have no issues because I use my vitamins, essential oils, tooth paste, laundry soap, cleaners, and make up. In fact, my personal monthly cost is over 100PV just to keep up with my own personal use. But hey, if you would rather buy your make up at the drug store, your laundry soap and cleaners with the weekly groceries, and your vitamins at the health food store..go for it. YL has offered you a chance to get compensated for recommending their products but if you arent being loyal to their brand by using the products yourself, then don’t do the biz. It’s pretty simple.

  • RachelandHarp Samra