CAMcheck

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

Posted 20 January 2015

Pershing Square Capital Management, whose president, Bill Ackman, is urging government regulators to shut down Herbalife, has produced a brilliant 6-minute video explaining why many multilevel companies (MLMs) should be considered pyramid schemes. The video states:

Most companies that sell products make money by selling them to consumers. But many MLMs make money by selling overpriced, difficult to sell products to their own distributors who are typically aspiring entrepreneurs hoping to fill the business. To qualify as a distributor, you must buy a minimum amount of product from the company. This can cost you hundreds or even thousands of dollars. Once you purchase enough of the product to qualify for commissions, you will soon realize it is difficult to resell the inventory you purchased and generate retail profits. At that point, you will learn that recruiting others to become a distributor is the only way to … Read the rest

Posted 31 December 2012

From: Consumer Health Digest #12-46, December 27, 2012

Herbalife attached as “pyramid scheme”  

Billionaire hedge fund investor Bill Ackman has mounted an attack on Herbalife that he apparently hopes will drive it out of business. The attack was launched with a 3-1/2 hour presentation at the Sohn Conference Special Event on December 20th. During his presentation, Ackman noted: