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NU SKIN STILL HAS WRINKLES TO IRON OUT IN CONNECTICUT

Nu Skin International has smoothed out conflicts over its multilevel-marketing practices with five states, while another state decided to add a new wrinkle.

The Michigan attorney general's office confirmed Thursday that it has reached a settlement in its dispute with Nu Skin.And Nu Skin announced that it has also formalized agreements with Florida, Illinois, Ohio and Pennsylvania. Those states were investigating the company's business practices.

Resolutions in those five states apparently won't work for Connecticut. That state's attorney general, Richard Blumenthal, filed a lawsuit against Nu Skin Thursday alleging the company is an illegal pyramid scheme, and that it engages in unfair and deceptive business practices. Connecticut's Consumer Protection Division takes exception to Nu Skin distributors' claims of fantastic earnings.

"We're concerned, especially during difficult economic times, that unsuspecting consumers will be lured into believing the company's claims that they can earn more than $10,000 a month as a Nu Skin distributor," Blumenthal said in a written statement.

Steven J. Lund, Nu Skin executive vice president, said he believes the company will be found to be "within the spirit and letter of all Connecticut laws."

The Provo-based firm agreed to change its marketing tactics to comply with Michigan law, Attorney General Frank Kelley said in a written statement. Kelley alleged in March that Nu Skin was operating an illegal pyramid scheme in Michigan.

Nu Skin admitted no wrongdoing in settling matters with the five states. The agreements in each state were similar.

"Nu Skin is a better company because of the reviews," Lund said. "These agreements show that Nu Skin is clearly not a pyramid."

Nu Skin officials announced the Michigan agreement last Friday, but Kelley's office said a signed settlement was not secured. On Thursday, the attorney general filed a consent judgment in Ingham County Circuit Court.

"Continuing court jurisdiction will help ensure enforcement. I have told Nu Skin that if I see any evidence that they are ignoring or avoiding their responsibilities, we will be in court again," he said.

Kelley filed a notice of intended action against Nu Skin alleging the company's marketing plan violated the Michigan Franchise Investment Act and state consumer protection laws.

"The company negotiated hard, but showed a willingness to cooperate and make significant changes that focus their marketing strategies on selling products to consumers rather than simply signing up thousands of distributors," Kelley said. Nu Skin sells personal-care products.

According to settlements reached with the five states, Nu Skin will:

- Conduct distributor training sessions.

- Offer 90 percent refunds with no time limit on unopened products.

- Monitor sales to ensure at least 80 percent of the sales made by distributors are retail sales made to at least five customers who are not other distributors.

- Review all sales aids and revise promotional materials used by distributors.