Source: United States v. Nu Skin International — FTC Consent Decree (1997)

Summary

The consent decree settling United States v. Nu Skin International, Inc. in the U.S. District Court for the District of Utah: a $1,500,000 civil penalty paid to the Treasury, plus a permanent injunction against further violations of a 1994 FTC cease-and-desist order (Docket No. C-3489).

The underlying allegation is set out in the notification letter the decree required Nu Skin to send its U.S. distributors, attached as Exhibit B — specifically those who received a commission check or ordered from the company in the year before entry of the decree, plus current and future distributors thereafter. The FTC alleged that Nu Skin lacked the competent and reliable scientific evidence the 1994 order required to substantiate claims — made by the company and its distributors — that chromium picolinate and L-carnitine reduce body fat or promote muscle development, in advertising for Metabotrim, OverDrive, Glycobar, Appeal Lite and Breakbars. Nu Skin withdrew and destroyed the materials, and the letter tells distributors "We suggest that you do the same" — a suggestion, not a directive.

This is a civil-penalty action for violating an existing order, not a first offense — which is what makes it the load-bearing document in the Utah direct-selling cluster's compliance record. It is also the structural pattern the 2020 FTC warning letters repeat 23 years later: claims travel through a distributor network, and the FTC holds the company to them.

Useful Claims

• Nu Skin International, Inc. agreed to pay a civil penalty of $1,500,000 to the U.S. Treasury within ten days of entry, under Section 5(l) of the FTC Act, 15 U.S.C. § 45(l).
• The penalty was for violating the Commission's own prior order — FTC Docket No. C-3489 (1994) — not for a standalone deceptive-advertising count.
• The decree permanently enjoins Nu Skin, its successors, officers, agents and employees from ever violating any provision of that 1994 order.
• The FTC alleged the company lacked required substantiation for claims that chromium picolinate and L-carnitine reduce body fat or promote muscle development, in materials for Metabotrim, OverDrive, Glycobar, Appeal Lite and Breakbars.
• Nu Skin had to send a court-specified notification letter to every U.S. distributor who received a commission check or placed an order in the preceding year, within 30 days, and to each new distributor within three days of signing for five years.
• Nu Skin had to keep compliance records available to the Commission on 30 days' notice for five years, with the court retaining jurisdiction to enforce.
• The settlement carries no admission: it was entered "without adjudication of any issue of fact or law and without defendant admitting liability."
• The case was brought in the District of Utah, Central Division, by DOJ's Office of Consumer Litigation for the FTC — the company's home district.

Verbatim

"the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendant admitting liability for any of the matters alleged in the Complaint" — Preamble

"Pursuant to Section 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), defendant Nu Skin International, Inc., its successors and assigns, shall pay to plaintiff a civil penalty of One Million Five Hundred Thousand Dollars ($1,500,000)." — Paragraph 4, Civil Penalty

"are hereby enjoined from ever violating, directly or through any corporation, subsidiary, division, or other device, any provision of the Commission's Order." — Paragraph 5, Injunction Against Order Violations

"The FTC now alleges that NSI did not have competent and reliable scientific evidence, as required by the Order, to substantiate certain claims made by NSI and its distributors that chromium picolinate and L-carnitine reduce body fat and/or promote muscle development. These claims have appeared in advertising and promotional materials for Metabotrim, OverDrive, Glycobar, Appeal Lite, and Breakbars." — Exhibit B, required notification letter to U.S. distributors

"Accordingly, NSI has withdrawn and destroyed all prior materials containing the contested claims. We suggest that you do the same." — Exhibit B

Reliability Notes

The captured copy is unexecuted. The FTC's posted PDF is the consent decree as submitted: the signature lines are blank and the date reads "Dated this ________ day of _______________, 1997." So the document proves the agreed terms, not the date of entry. A page that needs the exact entry date should cite the court docket instead.

The Published: day is the weakest field on this page. The FTC's case-file path (/cases/1997/08/) gives a month, not a day, and the document is undated. 1997-08-06 should therefore be read as a month-precision date carrying a placeholder day until the docket is pulled.

Nu Skin International, Inc. is not Nu Skin Enterprises, Inc. The defendant is the operating company as it was structured in 1997 — the decree gives no address for it, so this page does not place it in a city; the only geographic trace in the document is an (801) phone fragment in Exhibit B. The SEC registrant that files today is Nu Skin Enterprises, Inc. (see FY2025 Form 10-K). The corporate history between them is not in this document, so do not attribute the penalty to the present-day registrant without a source that traces the succession — though note the decree binds "successors and assigns."

No admission, and a specific violation. The decree explicitly disclaims any finding of liability. What it does establish is unusual and should not be softened: the government sought civil penalties because the company had already been under an FTC order, and the injunction now runs forever.

Consumer redress is absent. The $1.5 million went to the Treasury as a penalty. Nothing here compensates purchasers of the named products, and the decree says nothing about how much was sold.

A 1997 record, cited for pattern rather than status. This says nothing about Nu Skin's current compliance posture. Its value is that the Utah industry's substantiation problem is documented across three decades, from this decree to the 2020 warning letters.

Related Pages

• Utah's Direct-Selling Industry
• Nu Skin Enterprises FY2025 Form 10-K
• FTC Announcement of Warning Letters to Ten Multi-Level Marketers (2020)