Organo Gold, a multi-level marketer of coffee and personal care products, erroneously claimed to be a pending member of the Direct Selling Association (DSA), a trade group that accredits direct sales companies. The DSA asked Organo Gold to remove mentions of membership after verifying their membership had lapsed. Organo Gold has received over 50 complaints to the Federal Trade Commission alleging exaggerated income claims and ineffective products. Critics argue it operates as a pyramid scheme by focusing on recruitment over legitimate product sales.

1. Coffee marketer Organo Gold brews up controversy
Organo Gold, a multi-level marketer of coffee and personal care products that has been dogged for
years by consumer complaints, erroneously claimed on its website that it was a pending member of
the Direct Selling Association (DSA), a trade group that seeks to burnish the reputation of the $31.6
billion industry.
Members of the DSA include a "who's who" of direct-sales companies, such as Amway, Mary Kay
Cosmetics and Herbalife (HLF). Companies are given pending status in the DSA while the
organization vets them to make sure that they operate their businesses in an ethical matter, a
process that takes about a year. Organo Gold's membership lapsed around August 2013, according
to the DSA.
"Less than 50 percent of the companies that make application for membership actually become
members," said Amy Robinson, a DSA spokeswoman, in an email. "Many drop out when they realize
they are unable or unwilling to meet the membership requirements."
After being contacted by CBS MoneyWatch, the DSA asked Organo Gold to remove any mention of
the company being a pending member of its organization. The company on Monday deleted the DSA
reference. (For a cached version of the webpage, click here.)
"Organo Gold is in the process of applying to numerous DSAs" in other parts of the world, the
company said in a statement. "Organo Gold adheres to the code of conduct set out by the DSA, as
well as the rules, laws and regulations of all areas in which we conduct business."
Founded in 2008, Organo Gold has generated a fair amount of controversy in its brief existence.
Federal Trade Commission records show that the agency has received at least 55 complaints about
Organo Gold, according to a Freedom of Information Act request. The complaints allege that the
company makes inflated claims about the potential income people can earn as independent
distributors of the British Columbia-based company's wares and that it misrepresents the
effectiveness of its products.
Organo Gold is a so-called multi-level marketer, in which independent representatives can earn
income both by selling the company's products, which they must purchase, and recruiting others to
work as distributors. Although that business model has long been used by other network marketing
firms, some critics have described Organo as a "pyramid scheme," a charge the company denies.
Unlike legitimate multi-level players, operators of pyramid schemes make most of their profits by
recruiting other sellers.
"It seems to be a pyramid scheme that presents the possibility of earning thousands of dollars with
an initial outlay of $149, " according to an FTC complaint filed last year in Pennsylvania (names of
the complainants were redacted by the agency).
Other complaints allege that consumers were charged for products they didn't purchase or
experienced difficulties in getting refunds from Organo Gold. The Better Business Bureau lists 39
complaints against Organo Gold over the past three years. The BBB gives Organo Gold a C+ rating,
which is based on how many disputes it has and how quickly they are resolved. (Grades are given on

2. a scale of a high of A+ to a low of F.)
"BBB has received a pattern of complaints from consumers regarding customer service issues," the
organization says. "Consumers allege the business is difficult to contact, and there is a delay in
response times to e-mails and phone calls, specifically when canceling products or memberships."
Frank Dorman, a spokesman with the FTC, said in an interview that it is against agency policy to
comment on potential investigations.
For its part, Organo Gold denies any wrongdoing and says it is unaware of the FTC complaints. "We
act quickly and thoroughly to any complaints which are brought to our attention by either a
consumer, BBB or regulatory agency," the company said in a statement.
Starting with three employees, Organo Gold became what it says is one of the fastest-growing
network marketing companies in the world, with operations in 32 countries and sales that trade
publication Direct Selling News estimates at $170 million per year. The company's products are
infused with Ganoderma lucidum, which is derived from the reishi mushroom, grown in Asia and
known as the "supernatural mushroom," according to Organo's website.
In addition to selling coffee, tea and hot chocolate, the company also sells an assortment of personal
care items, such as soap, along with "nutraceuticals" derived from Ganoderma.
According to NYU's Langone Medical Center in New York City, some herbalists classify reishi as an
"adaptogen," a substance believed to help the body resist different kinds
http://www.california-gold-rush-miner.us/california-gold-rush-miner/ of stress. But "there is no
meaningful evidence" that proves these benefits are real, according to the medical center.
Organo Gold appears to choose its words carefully in describing Ganoderma's purported health
benefits, noting on its website that it has been "consumed for millennia in Asia because of its
perceived value." The FDA issued a warning letter
http://www.sunshineprofits.com/gold-silver/gold-market-overview/ to Organo Gold cofounder
Bernardo Chua for making misleading claims about Ganoderma when he ran another company.
Some Organo Gold dealers, though, aren't so reticent.
"Ganoderma has been known for centuries for alkalizing and oxygenating the body to establish the
foundation for a lifetime of good health, removing the basis for osteoporosis, arthritis, adult-onset
diabetes, heart disease and many other degenerative conditions including cancer," writes Alexandra
McCallister, a Montreal-based dealer, in a post last year on her website. "No disease can survive in a
super-oxygenated environment. When your body has sufficient California gold nuggets oxygen, it
thrives."
McCallister goes on to claim that Ganodemera is able to help with a litany of issues ranging from
sexual dysfunction to digestive problems. She didn't respond to an email requesting comment for
this story. Organo Gold distanced itself from the claims she made.
"Yes, we are concerned and have strict policies about these matters," the company said. "We also
have a compliance department that diligently monitors health claims and when these issues are
discovered, we take swift action to ensure the violation is resolved quickly."
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