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The Herbalife Settlement

 

Is Herbalife a pyramid scheme?

 

the herbalife settlement

 

The Herbalife corporation has been under investigation, by the FTC, over the past few years. The FTC has alleged that the Herbalife corporation has been operating what amounts to an illegal pyramid scheme.

 

Herbalife is one of the oldest and biggest network marketing companies. They have annual gross revenues totaling well over $3,500,000,000.

 

It seems that new distributors were being asked to buy into the company in order to rank advance. Many people bought over $1,000 worth of products to enter the company. They were also told that they didn’t have to sell the products because they just needed to recruit people who would buy into the opportunity with thousands of dollars. The fact that a distributor was making most if not all of their money due to people being recruited into the business makes it a pyramid.

 

The FTC reached a settlement with Herbalife that made Herbalife restructure their entire business model and Herbalife agreed to pay former distributors $200,000,000. In all, there will be refunds given to 350,000 people. The average refund is about $571.00.

 

I know that $200,000,000 sounds like a lot of money and it is to you and me, but to Herbalife it’s a mere 6% of their annual revenues. It’s no wonder their stock has been surging. They started mailing out the refund checks as of January 2017.

 

This article is only partially about the Herbalife settlement.

 

The FTC published an article about the settlement and they are kind enough to have a comment section below the article. I’m going to add in some of the comments that have been left for this article. The comments should give you an idea of not only how people see Herbalife, but how they see the network marketing industry, as a whole.

 

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!”

 

“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)?”

 

How is any “multi-level marketing” not really a pyramid?”

 

“Please make these rules/regulations for all MLM’s (Primerica, Amway, NuSkin, Mary Kay) Herbalife is just one of them. They need to be stopped. Thanks!”

 

I want my money back.”

 

Herbalife settled

 

“Considering the money I spent to join Herbalife as a Supervisor, and the amount spent buying leads for their products the check I received is very minimal this is not to down their products by no means. I’d like to Thank the FTC For your efforts to protect the consumers, with all the marketing scam today we need much more attention from the FTC.”

 

Invested more than $6,000. We just find out today about this mess. That’s what I’m talking about. We want our money back as well…gas events, meetings and time. We even sold out of USA soil to family members in another country AND bought products in that country to sell over there and spend over $300.00 USD.”

 

Those are but a handful of the comments left for the FTC. As you can see there aren’t a lot of good feelings about the network marketing industry or Herbalife. Many people are calling for Herbalife and companies like them to be shut down completely.

 

As a network marketer, I can see why we face an uphill battle. The public and especially former network marketers have such a negative perception of our industry. The perception is that only the people “at the top” make money.

 

In defense of network marketing, I’d like to say that the people at the top are there because they are making money. They didn’t start out on top and then the money flowed up to them. If they weren’t making money they would be at the bottom, too.

 

I was a distributor for Herbalife when they first got started. I wasn’t asked to buy a lot of products in order to join the company. In fact, it was just the opposite. I was told that I had to go out and sell a lot of products in order to make the big bucks.

 

In fact, I’ve never been asked to buy a “garage full” of products by any of the companies that I’ve been involved with. I know that some people are asked to do just that, but not me.

 

 

I hope you found this article valuable!

 

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