Cagey Consumer

Consumer Alert: 2Xtreme Performance International

Can FTC Make Pyramid Charges Stick?

The FTC filed charges against 2Xtreme Performance International on December 9, 1999. It's about time!

2Xtreme Performance International came to the attention of the Better Business Bureau more than a year before. During that time, thousands of additional customers lost millions of additional dollars, most of which will never be recovered.

Looking at the FTC's complaint, it's understandable why the FTC took so long: Not satisfied to prove that 2Xtreme was running a pyramid scheme, they wanted to be able to present explicit evidence of misrepresentation, such as claims of specific earnings and failures of significant number of participants to achieve those earnings.

Why? One explanation is that the FTC was burned 20 years ago when it tried to put Amway out of business. The end result of that action was some procedural changes that had little effect on Amway's questionable practices.

The FTC can bring actions against pyramid scheme operators without having to prove specific misrepresentations, as long as it can show that the operation is a pyramid scheme.

While the FTC's approach may be more likely to result in a successful prosecution, it creates an atmosphere in which pyramid scheme operators seem to have a low likelihood of running into legal problems. The many additional consumers who are defrauded as a result is a high price to pay.

Related links:

Web pages of a few 2Xtreme Distributors:

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December 14, 1999