There have been several lawsuits filed against World Financial Group, a multi-level marketing (MLM) company that sells insurance and financial products. These lawsuits allege a variety of wrongdoings, including:
-
Misclassifying agents as independent contractors: Several lawsuits allege that World Financial Group misclassifies its agents as independent contractors, which allows the company to avoid paying them minimum wage, overtime pay, and other benefits.
-
Engaging in deceptive marketing practices: Some lawsuits allege that World Financial Group engages in deceptive marketing practices, such as exaggerating the earnings potential of its agents and falsely claiming that its products are guaranteed to make money.
-
Operating as a pyramid scheme: A few lawsuits allege that World Financial Group operates as a pyramid scheme, in which participants make money primarily by recruiting new members rather than by selling products or services.
Outcome of the Lawsuits
Some World Financial Group lawsuits have been settled out of court, with confidentiality agreements in place. However, several cases are still ongoing. In one notable case, Yeomans v. World Financial Group, a federal judge in California ruled in 2022 that the company’s arbitration agreement was unconscionable and unenforceable. This means that the plaintiffs in this case will be able to pursue their claims in court.
Implications of the Lawsuits
The World Financial Group lawsuits raise serious concerns about the company’s business practices. These lawsuits also underscore the need for greater oversight and regulation of the MLM industry.
Recommendations for Potential Agents
-
Do your research before joining an MLM company. Read online reviews, talk to former and current agents, and investigate the company’s business practices and track record.
-
Be aware of the risks involved in MLMs. The success rate of MLM agents is very low, and there is a risk of losing money.
-
Get everything in writing. Make sure you understand the terms and conditions of your agreement with the MLM company before you sign anything.
Conclusion
The World Financial Group lawsuits are a reminder of the importance of due diligence when considering joining an MLM company. Potential agents should carefully consider the risks and benefits and make sure they are not being misled by deceptive marketing practices.
