A Restructured Herbalife

When the FTC settles with – or sues – a company, we’re often trying to stop illegal behavior, return lost money to people as often as we can, and generally make unfair things fair and deceptive things true.

Today’s historic settlement with Herbalife goes one better: the FTC’s settlement significantly restructures Herbalife, changing – top to bottom – how it does business. And it makes the company pay $200 million back to people who lost the most money. This is a big win for anyone who paid lots of money to Herbalife, and people who might in the future.

You might know Herbalife through its extensive marketing in English and Spanish. Through print and video promotions, and glowing testimonials, Herbalife told people they could change their lives – quit their jobs or even get rich – by selling the company’s weight management and nutrition products:

“The days when I would earn a living cleaning houses are behind me…”

“When we worked in factories our earnings could only pay for basic needs, but now we can take our 12 grandkids on vacations.”

“When I got to ten thousand, I thought, well that wasn’t so hard after all, maybe I can get to fifteen, and I went from fifteen, to twenty, and then to thirty, and then even up to forty thousand dollars a month.”

Hundreds of thousands of people signed on for the Herbalife business “opportunity” – but most people made little or no money. In fact, the FTC’s complaint shows how half of Herbalife’s “sales leaders” earned less than $5 a month on average from selling the product. Instead, the incentives were to recruit more people who would then buy more product – whether or not there was a market to sell it. 

That’s why this settlement is so important for consumers. Now, anyone who tries to make money selling Herbalife will be paid based on what they sell, not how many people they recruit. The settlement also requires the company – from now on – to make only truthful claims about how much money people are likely to make. And they have to be able to back those claims up.

Watch this space to find out how the $200 million will be divided among the people who lost money to Herbalife. We’ll keep you posted.

Blog Topics: 
Jobs & Making Money

Comments

way to go!

Great job exposing this company which has been around for as long as I can remember! Just the beginning of the iceberg & avalanche of similar problematic companies!
Keep exposing! Wishing you more success in all endeavors! Go get them!

Great job!!

Can you clarify what you mean by sales? I know some MLM companies encourage selling almost exclusively to downline members, and discourage retail (non-member) sales wherever possible. Are you restructuring Herbalife to compensate their salespeople based on retail sales or any kind of sales (including internal sales)?

Under the new compensation structure, success in the Herbalife marketing program must depend on whether participants sell products, not on whether they can recruit additional distributors to buy products.

When Herbalife appeared in our community, I watched as the reps who signed on lost so much weight - especially the elderly - that they began to look ill (smiling, but ill). I looked into the ingredients in many of their products, then searched the internet for clues as to what the heck they were packing in their pills, drinks, and supplements. Wow! No Herbalife for me, thanks.

i would like to know more about your finding as i use this product

I would like to know more about your finding as well seeing as how half of it is FTA approved....

Within my first month of starting Herbalife I had an allergic/chemical reaction to it and I ended up with a rare autoimmune disease. I still to this day know that either those pills, shakes, juices or energy bars made me ill. The dumb part is that I continued to take them thinking I'd get over it but my symptoms got worse. The good thing is that I lost 40 pounds so it was hard for me to stop.

I have noticed the same thing over the last 2 years of people who are die hard herbalife consultants/distributors. Where they once looked happy and healthy, due to weightloss, but now look sick in the face..they just have a weak and exhausted look as if they are fighting off a disease or some kind of health problems..

Pages

Leave a Comment

Comment Policy

Read Our Privacy Act Statement

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.