Jewelry Company Pays $1.9m over Pyramid Sales Claims
March 07, 25
(IDEX Online) - Paparazzi Accessories, the multilevel marketing (MLM) company that sells $5 fashion jewelry items, is to pay $1.9m to avoid legal action over pyramid selling allegations.
The money will be distributed to over 7,000 people who sold their goods.
The company, based in Hurricane, Utah, USA, will also reform its business practices, following an investigation by the Washington State Attorney General, which said it had "ended a jewelry manufacturer's pyramid scheme".
"As a result of our work, Paparazzi will send more than $1.9 million to 7,000 Washingtonians who sold its jewelry and reform company sales practices." They will each receive checks averaging $180.
"The payment is part of a resolution Paparazzi signed to avoid a lawsuit over violations of the state Consumer Protection Act and Antipyramid Promotional Scheme Act.
"Washingtonians who sold Paparazzi's products can return to the company any unsold merchandise that they purchased after January 2017 for a full refund."
The company, founded in 2011, operates primarily through a network of consultants who sell to friends and family. They recruit additional consultants and take a cut of the sales they make.
Pic shows the Paparazzi Accessories headquarters.