Two former affiliates have filed a proposed class-action against embattled MLM company Tori Belle Cosmetics.
At issue are $9 a month replicated website fees, which Plaintiffs claim Tori Belle charged even after affiliates left the company.
As alleged by Plaintiffs Theresa Johnson and Steven McKnight;
Tori Belle … enjoys significant profits, completely untethered from the success of its Affiliates.
The company is, in fact, making a large portion of its revenues quietly charging current and former Affiliates significant fees and
Most notable is the Tori Belle website fee (or access fee) of $9 per month.
BehindMLM hasn’t reviewed Tori Belle Cosmetics. I took my first look at the company yesterday when we covered its recent Chapter 11 bankruptcy.
I wanted to verify if the company was upfront about joining costs and sawr there’s a $9 fee to “start your business”. I’m assuming maintaining Tori Belle Cosmetics affiliate membership is $9 a month, which is the fee referenced in Plaintiff’s Complaint.
MLM companies typically, but not always, charge monthly or annual fees to participate in the MLM opportunity.
The issue raised in Plaintiff’s Complaint is that former Tori Belle Cosmetics affiliates are still being charged.
This fee is inconspicuous in most credit card bills, and, for years, was accompanied by no notification that it was being charged.
Of course, active Affiliates sign on for this and should reasonably expect it. But former Affiliates do not.
According to Tori Belle’s latest affiliate agreement, introduced in 2020,
if sales volumes dipped below certain targets, the Affiliate would be downgraded to an Affiliate Shopper.
This would divest the individual of the right to earn commissions and bonuses, though the $9 website fee would remain.
But the Term Section made it clear that this would only last for three months of nonpayment of website fees; or four months of inactivity.
Either of these things would trigger a termination or downgrade to Junior Affiliate, a status liable for no ongoing monthly service fees.
Go inactive, get downgraded, stay downgraded for four months (or stop paying for three months), and Tori Belle Cosmetics stops billing you. Or at least that’s how things are supposed to work.
The problem is that Tori Belle never voluntarily stopped charging anybody due to inactivity or periods of nonpayment.
They continued charging former Affiliates, either until they complained, or until they changed their credit cards.
On information and belief, Tori Belle even charged dead people from time to time.
Despite being former affiliates, both Plaintiffs Johnson and McKnight claim they “recently learned that they were being charged monthly website
fees by Tori Belle.”
The Complaint also details what appear to be specific instances of incorrect billing earlier this year;
Earlier this year, Tori Belle charged former Affiliates three or four (and in some cases, even more) website fees in the same month.
If people complained, they were offered partial reimbursement.
On information and belief, this is because the company is hemorrhaging legal fees due to its own illegal conduct and bullying former Affiliates with specious federal lawsuits.
Tori Belle Cosmetics currently has two open federal lawsuits against former affiliates, both filed in early 2021.
One case is titled Tori Belle Cosmetics LLC v. McKnight. Defendant Cynthia “Cindy” McKnight is from the same state as class-action Plaintiff Steven McKnight, but I wasn’t able to verify a connection.
Update 22nd August 2022 – Turns out Steven McKnight is the husband of Cynthia McKnight. I suspected as much but didn’t want to assume till I’d confirmed.
Cindy McKnight joined Tori Belle Cosmetics earlier on. This is from Tori Belle’s lawsuit against her;
Tori Belle agreed to pay Defendants commissions based on their sales, as well as additional bonuses for achieving specified levels of sales, performance, or promotional activity. Tori Belle did thishandsomely in McKnights case paying more than $250,000 a year during the relevant time period.
The lawsuit goes on to accuse McKnight of raiding her Tori Belle downline to promote another company (typically this is referred to as “cross-recruitment).
That’s a separate issue but what struck me as odd is this claim from the class-action;
Both Mr. McKnight and Ms. Johnson are former affiliates whose active involvement with the company was short-lived.
I’m not defending Tori Belle allegedly improperly charging McKnight but I’m wondering why he had an account at all. His wife was the successful affiliate, was he just there to double up on commissions?
I didn’t see this addressed in the class-action or Tori Belle’s Complaint against Cindy McKnight. /end update
Getting back to the class-action, Plaintiffs accuse Tori Belle of
violating the Consumer Protection Act;
breach of contract; and
fraud and negligent misrepresentation.
Plaintiffs allege the proposed class will “number in the hundreds, if not, thousands”, and seek to establish
Whether Tori Belle engaged in per se deceptive or unfair conduct by misrepresenting and violating its own Affiliate Agreement;
The legality of Tori Belles assessment of fees to individuals who had separated from the company;
Whether Tori Belles deceptive or unfair practices have caused economic harm to Plaintiffs; and
The amount of damages to Plaintiffs and the Class.
The total number of allegedly affected Tori Belle affiliates and improper fees charged is yet to be determined.
Plaintiffs Johnson’s and McKnight’s Complaint was filed on August 2nd in the Superior Court of Washington.
As I understand it, pending resolution of Tori Belle Cosmetic’s August 3rd filed bankruptcy, the proposed class-action is subject to an automatic stay.
Unfortunately, being a state-level case, I’m unable to track individual filings going forward. If we hear anything further on the Washington Tori Belle class-action, we’ll keep you posted.
Update 22nd August 2022 – The following is a corporate response received from Tori Belle, in relation to the $9 a month website fees;
The allegation is that we knowingly over charged people a $9 fee after they cancelled the affiliate agreement, or it should have lapsed and that we took in millions of dollars doing this.
They also allege that they had no real way of knowing they were being charged. All of these accusations are categorically denied.
The case continues.