Nerium claimed it sold startup kits at cost. A new lawsuit says that's a lie—and the company pocketed substantial profits while owner Jeff Olson took kickbacks on the side.

Kimberly Gerdo signed up as a Nerium Brand Partner in February 2013. The company told her the $499.95 startup kit came at cost, nothing more. She left the company later that year but rejoined in January, paying another $499 for the same kit. That's when she started asking questions about where her money actually went.

The proposed class action, filed July 13 in Riverside County Court, alleges Nerium explicitly misled recruits about kit pricing. Company policies stated the Brand Partner Launch Kit was purchased "at Company cost" and described the $499.95 fee as strictly covering educational and business materials—not a franchise or service charge.

According to the lawsuit, that representation was false.

Nerium sourced its kit materials from Success Partners, a Texas-based marketing company. Gerdo's legal team contends that Olson deliberately negotiated inflated prices with Success Partners and personally received kickbacks on every kit the company purchased. On top of those kickbacks, Nerium then marked up the kits far above actual cost before selling them to recruits.

The result: double-dipping profit for both Nerium and its owner.

The lawsuit identifies specific violations of California Business & Professions Code, accusing Nerium and Olson of engaging in unfair business practices through material misrepresentations about kit value and pricing. The fraud centered on telling Brand Partners they were paying cost when the company was actually making money at multiple points in the supply chain.

Gerdo seeks class-action status for anyone who purchased a Brand Partner Launch Kit since January 1, 2010. That could encompass thousands of recruits who believed they were buying at cost while unknowingly padding both the company's bottom line and Olson's personal take-home.

This isn't the first time a multi-level marketing company has faced accusations of starter kit markup schemes. What distinguishes this case is the explicit written promise of cost-based pricing—a promise the lawsuit claims Nerium systematically violated while pocketing the difference.

🤖 Quick Answer

What allegations does the lawsuit make against Nerium regarding startup kit pricing?

The proposed class action alleges that Nerium misrepresented the cost of its Brand Partner Launch Kit to recruits. Despite claiming the $499.95 kit was sold at company cost, the lawsuit contends Nerium profited substantially from kit sales while company owner Jeff Olson received additional kickbacks, contradicting official pricing policies.

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