FDA: Company Failed to Report Serious Health Problems
Market America learned about two customers who ended up hospitalized after using its products. Federal law required the company to notify the FDA within 15 business days. It reported neither case.
The FDA detailed both incidents in a February 2020 warning letter. In March 2018, someone drinking the company’s TLS Nutrition Shake became unable to walk and required six weeks of physical therapy. In January 2019, another person landed in the hospital after using the TLS 21-Day Challenge Kit, which contains Isotonix OPC-3. That customer reported stomach pain, vomiting, dizziness, weakness, and several other symptoms.
FDA inspectors found the problems during a May 2019 inspection of Market America’s North Carolina headquarters. The company had received both complaints but never filed the mandatory adverse event reports.
The Reporting Law
Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act in 2006. It requires supplement companies to report any serious adverse event within 15 business days. Serious means death, hospitalization, a persistent or significant disability, or a birth defect. Companies face potential legal action for failing to report.
Labeling Violations Across Multiple Products
The same FDA inspection turned up labeling problems with Isotonix OPC-3, Isotonix Multivitamin, Heart Health Essential Omega III, and other products. The issues ranged from incorrect serving sizes to missing information about botanical ingredients.
Isotonix OPC-3’s label told customers weighing 150 pounds to take two capfuls daily for the first week. But the nutrition facts listed one capful as the serving size. Regulations require companies to list the maximum recommended dose as the serving size.
Distributors Sue Over Pyramid Scheme Claims
Two former Market America distributors filed a class action lawsuit in May 2017, seven years after joining the multi-level marketing company. Chuanjie Yang and Ollie Lan alleged they lost tens of thousands of dollars in what they described as a pyramid scheme.
Yang claimed losses exceeding $35,000. The lawsuit laid out how Market America’s business model worked: new distributors paid $399 to start, then $129 every month, plus they had to buy $130 to $300 worth of products. The complaint stated 90% of distributors lost money.
What the Lawsuit Alleges
Case: Yang v. Market America, Inc. (Case No. 1:17-cv-00897)
Filed: May 2017, U.S. District Court, Central District of California
Claims: Pyramid scheme violations, RICO violations, false advertising about income potential
Specific allegations: The company targeted Chinese-American immigrants with promises of financial independence while most participants lost money
Status: Moved to North Carolina in April 2019, sent to arbitration, still pending as of January 2025
The case moved to a North Carolina federal court in April 2019 because Market America is headquartered there. By late 2019, a judge ordered the dispute into private arbitration. More than five years later, no settlement or decision has been announced.
Market America has denied all allegations. The company maintains it operates legally and that distributors can earn money by selling products and recruiting others.
Watchdog Documents Hundreds of False Income Claims
TruthInAdvertising.org, a consumer protection nonprofit, started tracking Market America distributor marketing in 2020. TINA found more than 450 misleading income claims in the first nine months alone.
The organization sent its findings to Market America. The company then removed 750 marketing claims from distributor websites and social media accounts.
The income claims typically showed photos of luxury cars, expensive homes, and exotic vacations. Distributors posted about quitting their jobs and earning six-figure incomes. The Yang lawsuit argues these claims don’t match reality for most participants.
Company Founded by Ex-Amway Distributor
JR Ridinger left Amway to start Market America in 1992. The company grew through its multi-level marketing model and acquired Shop.com in 2010. Market America has claimed annual revenue above $800 million.
Ridinger died in August 2022. His wife Loren Ridinger now runs the company as CEO.
This wasn’t Market America’s first regulatory trouble. The Securities and Exchange Commission reached a $300,000 settlement with the company in 1999 over stock sale allegations.
Where Things Stand Now
The FDA gave Market America 15 working days to respond to the February 2020 warning letter and explain how it would fix the violations. The agency’s warning letters are public, but company responses and follow-up actions often aren’t disclosed unless the FDA takes additional enforcement steps.
The Yang lawsuit remains in arbitration with no public updates since it left the court system. Arbitration proceedings are typically confidential, so the allegations and Market America’s defense aren’t available for public review.
Market America continues selling Isotonix supplements and operating its multi-level marketing business. The company still recruits new distributors and promotes the same income opportunity that sparked the 2017 lawsuit.
For anyone considering joining as a distributor, the court documents in Yang v. Market America lay out the costs and income statistics that two former participants found deceptive. For customers using Isotonix or other Market America supplements, the FDA warning letter shows the company’s history with product safety reporting and labeling compliance.
The FDA maintains a public database of warning letters at fda.gov. Consumers who experience health problems after using any dietary supplement can report them through the FDA’s MedWatch program.
