Herbalife think FTC will fine them $200 million
Personally I’m bit over following the FTC Herbalife saga… at least until we get something concrete.
BehindMLM first covered a “pending law enforcement action” back in 2013, and it’s been nothing but speculation ever since.
In what may be more speculation, Herbalife are now claiming they expect the FTC to hit them with a $200 million dollar fine.
“While there are a number of open issues, these discussions have progressed to an advanced stage, and the range of outcomes now includes litigation or settlement,” Herbalife CEO and Chairman Michael Johnson said of the FTC talks as he spoke with Wall Street financial analysts during a Thursday conference call.
Apparently “injunctive and other relief” is also on the table, which could see monetary damages pushed higher. And if Herbalife are busted for being a pyramid scheme, an injunction would also prohibit them from doing it again.
Personally I wouldn’t have much confidence in that. I mean Herbalife are big and everything, and no doubt they’d be under a microscope… but let’s be honest, it’d probably take another three year investigation to find them in breach of injunction.
Meanwhile what of the damage done during that time?
What I’d rather see, or in addition to the usual injunction + fine, is stipulations that Herbalife be upfront about their actual retail sales volume.
This should be included with the Income Disclosure Statement and be an accurate reflection of retail sales volume across the company.
No more of this “affiliates who don’t recruit are retail customers” crap, just give us the numbers. And if they’re not on par with what they should be, that’s on Herbalife to continue to change until they are.
As Vemma recently found out, in this day and age anything less is unacceptable.
I hope everyone would find this an interesting read.
It’s well known that Herbalife’s top fliers have promo companies that places these radio ads on conservative radio shows (such as Hannity’s) to create leads, and any leads generated are “sold” to members.
The leads are actually non-free DVD teasers disguised as “opportunity kit”.
This was documented to belong to Shawn Dahl, who’s mother (I think that was, and aunt?) was CONVICTED in Canada of running such a feeder pyramid scheme… also for Herbalife, IIRC, that is. I don’t remember ALL the details, but that should be mostly correct.
Guys like Hannity get paid to advertise/do voiceover commercials for products and services which may or may not be of 100% integrity or above board.
They’ll advertise virtually any product or service as long as the check clears the bank.
I found it interesting. I focused on Shawn Dahl / Online Business Systems in 2013 and 2014. Shawn Dahl left Herbalife in June 2013, as a result of the “cleanup process” Herbalife had in early 2013.
Herbalife itself was more like an organizer for multiple pyramid schemes — “an organized system where pyramid scheme organizers (like Online Business Systems) could operate relatively freely with low risk”.
I case anyone is wondering, I was also part of the Bostick vs Herbalife lawsuit last year.
About a month ago, I received a settlement check in the mail for about $3000.00. But if you ask me, it was not enough for the damage they caused me.
I don’t like being played for as a fool!
You should probably try to see it as “necessary experience”?
Shawn Dahl & Co had a lot of experience about what people can be willing to pay for and how to get them on the hook. He got some of your money and you got some of his experience. You probably won’t fall for the same types of sales tricks in the future?
“Income At Home” used many popular radio hosts in its advertising. People see them as trustworthy. People simply can’t believe that a famous radio host will promote something questionable. Or they believe that the radio station carefully will check everything before they accept advertisers.
The reality is that famous people often are being used to promote “junk” of different types to people who are looking for trustworthiness of the promoter rather than for technical qualities of the product.
You fell for it partly because you trusted Sean Hannity and Fox News. You didn’t keep your guard up.
If the FTC would’ve done their job, we wouldn’t be having this conversation.
MLM as we know it, with endless chain recruitment, defaults to a pyramid scheme.
Let’s hope the FTC is better late than never.
Herbalife Will Restructure Its Multi-level Marketing Operations and Pay $200 Million For Consumer Redress to Settle FTC Charges
Dammnit, I just got home from a Friday night out. Guess I won’t be going to bed anytime soon.
Stay tuned for an analysis… need some Milo to wake up first.