Herbalife is a 40 year old company that was started by Mark Hughes in 1980. He sold nutritional supplements in Los Angeles, California, from the trunk of his car but today, the company has evolved into a multi-billion dollar one, selling a range of products in over 90 countries through a network of independent distributors.
There are a lot of controversies surrounding Herbalife’s MLM scheme and its business model. We have listed some of the most significant ones for your enlightenment so that you can make more informed choices regarding health, nutrition, and fitness, instead of falling headlong into empty claims. Take a look —
Controversies Associated with Herbalife MLM Scheme
Pyramid Scheme Allegations — Herbalife critics believe that the business runs on the pyramid scheme where top distributors create a downline of distributors by recruiting new ones. The system runs on monetary incentives and commission incomes rather than selling products. The top line earns by recruiting more people rather than by selling company products.
Misleading Income Claims — The naive people joining as the company’s new distributors were lured into believing that they can earn a significant amount of money from Herbalife to live a dream life in quick time just by selling products and recruiting people than by any other traditional methods known. This led many to set unrealistic monetary goals which many failed to achieve in the timeframe they had originally set for themselves.
Some distributors even claimed that they were promised large sums of money if they succeeded in signing people up for the business, but the reality was far from this. Many of them even lost a lot of money by purchasing Herbalife products and failing to sell them to potential customers in the market.
Product Safety Concerns — Despite hailing from the industry of health and nutrition, Herbalife’s products are doubtful and experts have raised serious safety concerns over their consumption. Some of its supplements have even been found to contain potentially harmful ingredients, and there have been reports of adverse reactions and even deaths.
The quantity of the ingredients listed on dietary products and supplements also does not match the minimum standard required to achieve optimum health. They have been accused of overstating their health benefits claiming to cure venereal disease, congestive heart failures, tumors, bed-wetting, and even making pregnancy possible for women in their 40s.
Targeting Vulnerable Population — It is often argued that Herbalife Company targets vulnerable populations such as low-income individuals and immigrants with an extreme need for money, and who are susceptible to tall (and often false) claims of making quick and easy money through MLM schemes.
Following a famous documentary in 2012 that exposed Herbalife’s unsafe business practices that put millions of lives at risk, the Federal Trade Commission (FTC) initiated an investigation. 4 years later in 2016, after several investigations and lawsuits against them, Herbalife agreed for a $200 million settlement with the FTC. As part of the settlement, it also agreed to restructure its compensation plan and provide refunds to distributors who lost their money.
How to Report Herbalife False MLM Scheme
The section here has information on escalating your concern and getting help from agencies. However, before you approach, we also suggest you to connect with folks at Herbalife and seek a resolution. If you want to write, you can send a postal mail to 800 West Olympic Blvd., Suite 406, Los Angeles, California 90015. You can also call the HQ on 866-866-4744.
- Report to the Federal Trade Commission: The Federal Trade Commission, or the FTC, is responsible for regulating these MLM companies and preventing deceptive and unfair business practices. If you have been a victim or suspect that Herbalife is engaged in false or misleading schemes, you reserve the right to register a complaint with the FTC either by calling at their toll-free hotline number 1-877-382-4357, or by submitting an online complaint at their official website.
- Report to Better Business Bureau: The BBB is a non-profit organization that helps consumers avoid scams and by finding them trustworthy businesses. As with the FTC, so can you file a complaint with the BBB if you feel something’s awry with Herbalife’s claims and business practices. The BBB will investigate your complaint and will work with Herbalife to resolve the issue. You can submit an online complaint by visiting their official website, or by informing them over the phone by calling your local BBB office.
- Report to Your State Attorney General: The Attorney General’s office in your state is responsible for enforcing state consumer protection laws. You can file a complaint with your State Attorney General’s office regarding Herbalife’s malpractices or its compliance issues if you suspect so and have valid evidence to substantiate your claims. To find the contact information for your State Attorney General’s office, visit the National Association of Attorneys General website.
