Nu Skin International has settled a conflict with the Federal Trade Commission concerning the company's claims about ingredients in some of its nutritional products.
The Provo-based multilevel marketing firm will pay $1.5 million as part of the settlement, although it believes the dispute over chromium picolinate is a matter of scientific disagreement. At least six other nutritional companies face similar charges by the commission regarding the substance developed and patented by the U.S. Department of Agriculture.Nu Skin decided to come to terms with the FTC to protect its 600,000-strong sales force and 2,000 employees from the negative effects of costly and lengthy court battles.
"We have chosen to settle now rather than prolong this dispute for several years and spend millions of dollars on litigation," Steven J. Lund, executive vice president, said in a prepared statement. "We are happy to have the settlement behind us and concentrate our complete efforts on Nu Skin's core business of providing our customers and distributors with quality products."
The FTC disputes Nu Skin's claims of energy production, body fat reduction and preservation of lean muscle mass made about chromium picolinate and L-carnitine - ingredients found in 13 of the company's 38 Interior Design Nutritional products.
Nu Skin said it based assertions about chromium picolinate on studies by former and current USDA researchers. Both ingredients were subject to research by current patent licensees and sole suppliers, according to the company.
In January 1994, Nu Skin settled a long-running dispute with the FTC over distributors' inappropriate earnings and product claims. The company and a few distributors paid a combined $1.2 million in that matter. Nu Skin admitted no wrongdoing.
Nu Skin sells personal-care and nutritional products through a world-wide network of distributors. The 13-year-old company and its affiliates boast more than a billion dollars in annual sales.