doTerra (styled d?TERRA) is a multi-level marketing company based in Pleasant Grove, Utah that sells essential oils and other related products. doTerra was founded in 2008 by David Stirling and former executives, employees, and distributors of Young Living, a company which also sells essential oils, and Nuskin. Stirling is its president and CEO.
In 2014, the U.S. Food and Drug Administration issued an FDA Warning Letter to doTerra for marketing its products as possible treatments or cures for Ebola, cancer, autism, and other conditions in violation of the Food, Drug and Cosmetic Act. Distributors subsequently continued to market the products by claiming benefits for the prevention or treatment of influenza, autism, and other medical conditions.
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History
As of 2013, doTerra reported having about 450 corporate employees; 350 at the Utah headquarters, and 100 at offices in Taiwan, Japan, Europe and in Australia. As of 2017, doTerra reported having approximately 1,650 corporate employees. In 2016, doTERRA reported having more than 3 million independent distributors (i.e., non-employee salespersons), which the company refers to as "Wellness Advocates." According to the company's multi-level marketing organization, salespeople are expected to recruit other salespeople in order to increase their own profits.
As of 2014, the company sold over 150 products such as supplements, personal care items, and essential oils. Its products are marketed for usage in cooking, cleaning, and health. As of 2013, approximately 75% of the company's business was in the United States.
In 2017, the company funded a "playground and sensory garden" located at a 10,000 square-foot autism center built by Utah Valley University.
2016 distributor data breach
In April 2016, doTerra sent letters to distributors advising them that a breach in a system where personal information was stored had occurred in March 2016. Personal information acquired in the breach included: name, dates of birth, social security number, address, telephone number, email address, debit and credit card numbers, username, and passwords. The company explained that a "third-party vendor" was at fault, but refused to name the vendor. To compensate, the company offered 24-months of credit monitoring through AllClear, a credit monitoring company. Many distributors have raised concern at the amount of information that was acquired and the long-term effects.
2017 burn report
In April 2017, a woman was reported to have sustained second- and third-degree burns on her wrists and neck after applying doTerra essential oil and using a tanning bed.
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Distributor earnings
The U.S. Federal Trade Commission, citing a 2011 investigation involving about 350 multilevel marketing companies including doTerra, noted that the vast majority of the distributors for such operations end up losing money, usually because they can't manage to sell the products they're required to buy. doTerra requires its distributors to spend at least $100 a month on the company's products in order to qualify for sales commissions. According to the company, one-third of their distributors earn nothing from their sales efforts.
Prohibited marketing claims
On September 22, 2014, the U.S. Food and Drug Administration issued an FDA Warning Letter to doTerra for marketing its products as possible treatments or cures for Ebola, cancer, autism, and other conditions in violation of the Food, Drug and Cosmetic Act. doTerra marketing executive McKay Brown released a statement that attempted to distance the company from claims that its "products cure or treat disease including the Ebola virus or any other disease", and he claimed that they were working to correct marketing materials to ensure compliance with FDA regulations.
doTerra distributors have heavily marketed the company's essential oils as an adjunctive treatment for autism and ADHD, despite legal prohibitions against such claims as well as a dearth of published scientific studies on the effects of the products on people with autism. Some salespersons have offered personal stories alleging that their individual child has benefited from essential oils as a way of working around these restrictions.
Response to natural disasters
In 2017, a charity affiliated with doTerra (the doTERRA Healing Hands organization) began collecting donations from its distributors in the wake of Hurricane Harvey to cover the costs of providing relief packs containing samples of the company's products to evacuees in Dallas. However, after collecting donations, doTERRA said that they could not deliver the shipments due to weather conditions. Pacific Standard described the incident as "a modern example of malfeasance masquerading as altruism--a type of scam often found in multi-level marketing organizations". The relief packs were eventually shipped.
Subsequent to the 2017 California wildfires, it was reported that DoTerra representatives were promoting the company's products for air purification and to protect against the health effects of smoke from the fires. Air pollution experts countered that the products in fact do not clean smoke from the air, and by releasing volatile compounds they could make air quality worse and potentially dangerous for people with respiratory problems.
Lawsuits
In August 2013, Young Living filed suit against doTerra for theft of trade secrets, alleging that the company had recreated their production process illegally. Chemist Robert Pappas has said the oils, which were tested by the Centre national de la recherche scientifique, did not match any oils sold by doTerra. One unintended consequence of the lawsuit between the two companies has been a court deposition by Pappas stating that Young Living and doTerra utilize synthetic chemicals in their organic products. In October 2014 the Fourth District Court dismissed the claims made against doTerra.
References
External links
- Official website
Source of article : Wikipedia
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