Shaklee, a direct selling company with a history of internal fraud, recently acquired the collapsed assets of competitor Modere, prompting a closer look at its current business practices. This follows a period where Jack Cranney, a top distributor, ran an $12 million Ponzi scheme on fellow affiliates.
Shaklee claims a significant shift in its compensation plan. It eliminated mandatory affiliate purchases, a common practice in multi-level marketing. The company also introduced minimum customer volume requirements for its business leaders. These adjustments suggest a move towards a more retail-focused model. But the changes do not extend to all areas of its operation.
The company's origins trace back to Forest C. Shaklee's mineral supplement business in 1915. Its ownership changed hands multiple times, including a period under Japanese control, before Roger Barnett acquired it in 2004. Barnett remains Shaklee's chairman and CEO. This year's acquisition of Modere marks another chapter in its 108-year journey. Modere itself faced significant financial difficulties before the acquisition.
Jack Cranney joined Shaklee in 1967. Over eleven years, he exploited his position as a top earner to operate a Ponzi scheme. Cranney defrauded other Shaklee distributors, siphoning over $12 million from them. Massachusetts regulators began their investigation in 2012. Shaklee terminated Cranney and stated it was unaware of the fraud. In 2018, Cranney was convicted and sentenced to five years in prison. He died in custody on July 18, 2021, at age 79. The case highlights the vulnerabilities within MLM structures that can be exploited by bad actors.
Shaklee's product lineup still includes nutrition, protein, beauty, and home items. However, the "Prove It Challenge" marketing campaign has been replaced. The company now promotes Meology, its personalized nutrition program. This program asks customers health and lifestyle questions, then uses an algorithm to generate a "personalized plan in just a few seconds."
Customers selecting Meology choose between "Essentials" or "Essentials Plus" plans. They receive daily-dose supplement packs each month. Getting started with a Meology plan costs $70.80. The company does not publicly disclose the ongoing monthly subscription costs for either plan. This lack of clear pricing information creates a barrier for potential customers to understand their long-term financial commitment.
The structural reforms enacted by Shaklee appear to address some common criticisms of multi-level marketing. They ended forced product purchases and expanded sales commissions. They also set customer volume minimums for leaders. These changes could indicate a shift toward greater emphasis on direct retail sales. But key details, like the actual price customers pay month after month for a subscription, remain opaque.
This consistent lack of transparency is a concern. A company with a track record that includes its own top distributor defrauding affiliates of millions should operate with full disclosure. The Federal Trade Commission often examines clear pricing and disclosures in direct-to-consumer sales. More information on Meology's subscription costs could be found by contacting Shaklee directly at 1-800-SHAKLEE.