HerbaLIE: Herbalife Must Pay Consumers $200 Million
Multi-level marketing (MLM) company Herbalife is in hot water. It’s going to pay $200 million to compensate consumers to settle Federal Trade Commission charges. the charges state that the company deceived consumers into believing they could earn substantial money selling diet, nutritional supplement, and personal care products. Let’s just say Herbalife made some promises they couldn’t exactly keep.
Here is what an MLM company is: A company that takes advantage of innocent people looking to make extra income, stay home with their kids more, or the biggest lie, “own their own business and be their own boss.” These innocent people become “distributors” who are rewarded for recruiting other innocent people to join their “team” and sell a product which there is no actual demand for. Your modern day snake oil salesmen, if you will. The product is almost always some sort of obscure miracle treatment with little to no FDA research or approval.
“This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit,” FTC Chairwoman Ramirez said. “Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices.”
This is a step in the right direction. Many people fall victim to these schemes. It is not necessarily the distributors or their recruits who are at fault. The CEO and other higher ups in the company raking in millions off of their backs are the ones to blame for this crooked, deceptive business. According to the FTC’s complaint, Herbalife claims that people who participate can expect to quit their jobs, earn thousands of dollars a month, make a career-level income, or even get rich. But the truth, as alleged in the FTC complaint, is that the overwhelming majority of distributors who pursue the business opportunity earn little or no money. Pretty shady if you ask me.
There are quite a few companies like Herbalife out there who will hopefully fall under FTC investigation and will be forced to stop taking advantage of people. We also won’t get depressed seeing the status updates from friends and family—with a single like or two—desperately trying to get others to join their team or try their miracle product.
Marnie Slater is a freelance writer for Weekend Collective and performs stand up comedy in Kansas City. Follow her @marnieslaterkc for upcoming gigs and a whole lot of shenanigans.