Nu Skin International distributors in Georgia who were ordered to stop work Thursday are back in business after the state's Office of Consumer Affairs lifted a cease-and-desist order Friday afternoon.
The office issued the order against the Provo-based multilevel marketing company Thursday afternoon for violating Georgia's Fair Business Practices Act by not properly registering with the state.Consumer affairs officials in Atlanta and Nu Skin attorneys worked out an agreement Friday afternoon. The company will adhere to Georgia law as stipulated in the act.
A conflict over how Georgia wanted Nu Skin to administer its refund policy led to the company's failure to meet a July 24 registration deadline, said Carolyn Southern, a consumer affairs spokeswoman. Southern said the state has since February 1989 sent Nu Skin "letter after letter after letter" seeking compliance.
"The cease-and-desist order was our last resort," Southern said.
Steve Lund, Nu Skin executive vice president, said the order was issued because of "technical differences" over Nu Skin's application to operate in Georgia.
"After nearly two years of refinements to Nu Skin's application, the state of Georgia raised new questions about the company's refund policy," Lund said in a written statement.
Nu Skin intended to fully comply with Georgia multilevel marketing refund policy but simply failed to submit the paperwork on time, said company spokesman Jason Chaffetz.
"We weren't paying attention and it's a regrettable mistake that's embarrassing," Chaffetz said.
Southern said Nu Skin, which markets personal-care products through a vast network of independent dealers nationwide, had failed to comply with two points of Georgia law.
First, Nu Skin limited a distributor's refund to an amount equal to what the distributor has purchased from the company over a two-month period. Georgia law says multilevel marketing firms can't limit the amount of the refund.
Second, Nu Skin didn't issue 90 percent refunds on items ordered more than 60 days earlier. State law requires 90 percent refunds no matter when the products were ordered.
"We did not agree with that," Southern said of Nu Skin's policy.
Lund said the refund policy was never in question; only the timing of such refunds in light of Georgia's multilevel marketing law.
Meanwhile, Chaffetz said Nu Skin's regional warehouse in Marietta, Ga., which was holding product orders for about 24 hours, is again busy filling distributors' requests. The company also has warehouses in Toronto and Provo.
Coincidentally, the Georgia order came one day before Nu Skin ran its first full-page ad in USA Today as part of its aggressive new advertising campaign. The ad titled "What about Nu Skin" gives consumers an introduction to the company.