Were you victimized by Herbalife? Tell us about your experience.
Are you having trouble with this company, and now you think they might be a pyramid scheme just after your money? If so, you aren’t the only one. You might have a problem with the customer service, a billing issue, a promised refund that never appeared, and now you’re not sure what to do.
Herbalife has been operating in the United States and around the world for 30 years. They offer nutrition and weight control products that use only organic ingredients. They currently have tens of thousands of marketers around the world selling these products.
In 2015 the company had to settle with some distributors to the tune of 15 million dollars over allegations that these distributors were unable to sell the products for a profit and the company had a very restrictive return policy and wouldn’t take the unsold products back.
The FTC settled a lawsuit in 2016 with Herbalife requiring them to pay $200 in fines and fundamentally restructure the way the business worked. Checks were paid to people who ran an Herbalife business between 2009 and 2015 and paid a minimum of $1,000 to the company but received little or nothing back from the company. This lawsuit was the result of hundreds of thousands of people signing on for the business opportunity but making no money. The FTC complaint indicates that half of the sales leaders earned less than $5 a month by selling Herbalife products.
By comparison the incentives to recruit more people to buy the products were much higher and it is for this reason that the company was asked to restructure the otherwise illegal pyramid scheme hierarchy at the time. A big part of the lawsuit was that Herbalife targeted immigrants and forced them to invest in the weight loss shakes that they were to sell as distributors, investing a large part of their own money up front.
Two years later a federal judge in Miami oversaw a class action lawsuit. Eight former Distributors filed complaints against the company for their illegal business practices and the deception of attending events that cost thousands of dollars. The participants were told that they had to attend these events if they wanted to be successful and that they had to qualify for special treatment at the events by making significant monthly purchases of the products. One of the couples in this lawsuit says that they spent over $100,000 attending the events for four years and made no money.
Herbalife was given the opportunity to change the illegal structure of its company by the FTC as part of the lawsuit settlement in 2016. Unfortunately the class action lawsuit two years later indicates a company has done nothing to change. They are considered a pyramid scheme at this point because they forced their distributors to purchase products and pay for events on a regular basis.
By comparison, legal MLM companies would not do this. They also place a greater financial benefit on recruiting other people who are then required or strongly encouraged through deceptive sales techniques to purchase products regularly from the company. Again, legitimate companies do not force their distributors to purchase products on a regular basis, and only have them restock on inventory when they run out. The company stipulated that people could earn outlandish levels of financial success which were untenable and were unachieved by most distributors.
Finally, the 2015 lawsuit proves that the company has a very restrictive return policy for unsold products, not accepting the unsold products from distributors who quit or cannot sell, but legitimate companies will have very lenient and easy-to-use return policies for unsold products.
If you had a problem with Herbalife, whether as a distributor or a consumer, and you tried to settle the issue but to no avail, you still have options including consumer arbitration.
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