U.K. judge dismisses claims against Amway

Grand Rapids Press/May 14, 2008

By Christ Knape

Amway can stay in England.

A United Kingdom judge has dismissed government claims against Amway operations there, saying major reforms last year fixed company faults that favored selling training materials over products and misrepresented earnings.

The ruling clears Amway UK, a part of Ada-based Alticor Inc., of the threat of expulsion from one of Amway's oldest international markets.

In a letter to employees around the world, Alticor President Doug DeVos and Chairman Steve Van Andel said the ruling was not a "pop-the-champagne victory."

"This is a reminder that the marketplace and regulators hold us to the highest standards. We have an obligation to meet those standards - and we intend to do so," they wrote.

The company has more than 100 employees in the UK and 10,000 distributors.

The judge in the case expressed his belief Amway allowed "misrepresentations" of its business by independent sellers in years past and failed to act decisively against the misrepresentations.

The reformed Amway business model, he wrote, is "fully formulated, comprehensive, open and transparent and capable of effective and ongoing implementation without supervision."

Spokesman Rob Zeiger said the ruling was a "solid validation" of reforms implemented by the company in the United States and abroad.

"The company takes the action seriously and continues to review business practices around the world to avoid such regulatory threats in the future," Zeiger said today from England.

English regulators clamped down on Amway over concerns the company was more focused on selling training materials and less on selling retail products to consumers.

Regulators said the company and its distributors also misrepresented potential earnings from participating in Amway.

Changes introduced last year in the UK to fend off the court action included banning non-Amway approved motivational events and materials.

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