| Posted 14 June 2021 A recent exposé of multi-level marketing (MLM) by Good Housekeeping includes: - stories of former distributors with links to their videos in which they criticize how MLM companies operate
- links to videos describing how distributors use their pregnancies or infertility to recruit women facing similar struggles to become distributors
- discussion of cultism in the MLM industry
- discussion of the popularity of anti-MLM content on TikTok, which has banned content promoting MLMs.
- descriptions of MLM companies’ responses to recent warnings by the Federal Trade Commission
- evidence suggesting financial success for distributors is rare
- discussion of findings from the 2018 “AARP Study of Multilevel Marketing: Profiling Participants and the Experiences in Direct Sales”
- psychological support resources offered by the anti-MLM community
Reference: Garrity A. Inside the “toxic” world of women selling you everything from supplements to skincare on social media. Good Housekeeping, May 24, 2021 Source: Consumer … Read the rest Posted 20 March 2021 A management consulting firm has characterized multilevel marketing (MLM) companies as using “fraud, deceit, and outright lies in a flawed business model.” The firm refutes an MLM promoter’s twelve reasons that people should pursue direct-sales opportunities in MLM companies. It characterizes each of those reasons as a false promise. The twelve false promises are: - “You can work from anywhere!”
- “You decide how much effort you put in.”
- “It rewards those who work hard.”
- “You get to be your own boss!”
- “The hours are flexible.”
- “Startup costs are lower than for other businesses.”
- “It provides you with extra income.”
- “You will save money on childcare expenses.”
- “It gives you goals to work toward.”
- “You’ll feel supported and make lifelong friends.”
- “You can buy high-quality products at a discount.”
- “MLMs are fun!”
An superb article on the MLM market. Quotes: “The average MLM rep earns around $400 per … Read the rest Posted 10 February 2021 Robert L. Fitzpatrick, who operates Pyramid Scheme Alert, has penned the strongest attack on multilevel marketing (MLM) ever published in book form. His book, Ponzinomics: The Untold Story of Multi-Level Marketing, explains in vivid detail why the vast majority of people who become MLM “distributors” will lose money. Even worse, those who become too enthusiastic may act as though they belong to a cult. The book also spotlights how and why the Federal Trade Commission has failed to protect the public against deceptive MLM claims. Paperback – November 30, 2020Ponzinomics by Robert L. FitzPatrick, author of False Profits, is the first comprehensive account of how “multi-level marketing” was created in America, escaped criminal and civil prosecution and spread all over the world. It is the first book to deeply investigate the multi-level marketing phenomenon and to … Read the rest Posted 30 September 2020 The U.S. Court of Appeals for the 11th Circuit has ruled that Patricia Rodgers and fellow plaintiffs can proceed with a federal lawsuit that is seeking class-action status against 44 top-level Herbalife distributors. The Court’s ruling overturned lower court rulings that Herbalife could compel arbitration.
Reference: Alpert B. Herbalife faces a fresh legal hurdle. Barron’s, Sept 25, 2020 The Appeals Court order summarized Rodgers’ situation this way: Patricia Rodgers filled out the paperwork to become an Herbalife member in June 2010. Some six months later, she claims, she traveled over a hundred miles to Orlando, Florida, to attend her first large Herbalife recruiting event, the “January Spectacular.” According to Patricia, the keynote speaker at this event was a highly successful distributor who told the attendees that if they simply put in enough time, money, and effort, then they, too, could achieve life-changing financial success. . … Read the rest Posted 02 September 2020 Multilevel marketing company Herbalife Nutrition, Ltd. has entered into a deferred prosecution agreement to resolve federal charges that it conspired over a ten-year period to bribe to Chinese officials and falsify its accounting records to promote and expand its business in China. Under the agreement, Herbalife admitted to violations of the Foreign Corrupt Practices Act and promised to pay penalties totaling more than $123 million. By 2016, Herbalife’s business in China accounted for $850 million, which was about 20% of its worldwide annual net sales. Reference: Herbalife agrees to pay $123 million to resolve Foreign Corrupt Practices Act case. US Attorney’s Office for the Southern District of New York news release, Aug 28, 2020 MLM Watch has an archive of information about Herbalife collected over more than 30 years that includes regulatory actions and lawsuits against the company. Source: Consumer Health Digest #20-34, August … Read the rest Posted 21 October 2019 Oct 10, 2019 Harriet A. Hall, MD Science-Based Medicine A case of fatal liver failure in India was attributed to Herbalife products, adding to many other reports from around the world. Analysis showed Herbalife products contain heavy metals and other contaminants. The products have not been scientifically tested, and in the absence of evidence of benefit to human health, they can’t be recommended. Herbalife is a multilevel marketing company that sells nutritional and weight loss supplements in 94 countries. After many complaints, the Federal Trade Commission (FTC) investigated the company. In 2016, they described Herbalife as a scam disguised as healthy living; the company was fined $200 million and ordered to restructure its business and issue refunds to 350,000 Herbalife distributors. Herbalife has also been sued in Belgium and Israel. There have been over 50 reports of liver toxicity attributed to Herbalife products in Spain, Israel, … Read the rest Posted 05 May 2019 Abstract Herbalife® is a global nutrition and weight management company selling and marketing nutritional and weight loss supplements. The United States Federal Trade Commission described Herbalife® in 2016 as a scam disguised as healthy living. Herbalife®-associated liver injury was reported from multiple countries in the West. India is fast becoming the largest growing market for Herbalife® products, expected to surpass the United States in sales revenue. We report the first case of a fatal acute liver failure from the Asia-Pacific region, in a young woman who consumed Herbalife® products over 2 months. We also present unsettling data that showcase heavy metal contamination, toxic compounds, psychotropic substances, and pathogenic bacterial contamination in similar Herbalife® products in India. The growth of Herbalife® in India and expansion of its nutrition clubs in major cities that promise fake health benefits portend a serious public health concern. Slimming to the Death: … Read the rest Posted 05 September 2018 Eight former Herbalife distributors have filed a class action complaint against Los Angeles-based Herbalife in the U.S. Southern District Court in Florida. The complaint states: - The company uses misrepresentation to sell access to emotionally manipulative events that have 200 to 20,000 attendees.
- The events use labels such as “Circle of Success,” as a guaranteed pathway to life-changing financial success with Herbalife’s multi-level marketing business opportunity.
- Each of the plaintiffs distributors has spent thousands of dollars attending events, but they received no benefits from doing so contrary to frequent claims by Herbalife that: “If you go to all the events, you qualify for everything – you will get rich.”
- The plaintiffs are seeking damages and injunctive relief against “the corrupt organization of individuals and entities who sell, operate and compel participation in the Circle of Success.”
An Associated Press report states that the case might eventually involve … Read the rest Posted 16 April 2018 “South African actor has us in stitches with this Herbalife parody” “The comic mind behind the video pokes fun at the pushy sales reps, their “get rich quick” beliefs and the sheer volume of problems the product claims it can solve”. “Director Matt Keeson and actors Vere and Emma Tinsdale also deserve props for their role in this clip, filmed entirely in a Newlands flat. There’s singing, dancing and even some partial nudity”. The Erbalife Song Phillip Black, the man who created this shared the one piece of advice he would give the Herbalife distributors: “Please stop pretending to be my friend and selling me shit I don’t need.” Source: The South African … Read the rest Posted 19 October 2017 Herbalife, a Los Angeles-based MLM company that sells nutrition products and weight-loss supplements, and dozens of its top-earning distributors were sued this week in a class action complaint over alleged civil racketeering (RICO) violations. The 82-page complaint, filed in federal court in Florida, claims: [t]he Herbalife success story is a fraud; a predatory scheme intentionally rigged against newcomers playing by the rules. The success claimed – and promised – by Defendants at Circle of Success events across the country is impossible to attain under its own terms.
A little over a year ago, Herbalife agreed to a $200 million settlement with the FTC that required it to revamp its compensation system to reward distributors for sales to customers rather than for recruitment. According to the complaint filed Monday, But untouched by the FTC’s action . . . is the single most effective fraud in the
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