Herbalife @ BehindMLM

This one’s a bit of an odd story, in that for once Herbalife themselves aren’t directly involved in controversy surrounding the company. Well, sort of. Reports out of Hong Kong a few days ago detail two of the company’s affiliates milking Hong Kong residents for $50 million HKD ($6.4 million USD). How’d they pull that [Continue reading…]

On the back of a Herbalife millionaire claiming that retail sales to customers don’t matter, now comes a letter from the FDA concerning what they describe as a misleading marketing video. In a letter dated December 17th to Herablife CEO Michael Johnson, the FDA’s Michael R. Taylor, Deputy Commissioner for Foods and Veterinary Medicine, writes

In what looks like a hotel conference room, Stephan Gratziani delivers a training presentation to a crowd of a hundred or so Herbalife affiliates. The Herbalife business model at this point in time is not based on customers purchasing, it’s based on distributors purchasing volume. Several Herbalife executive managers are in the audience, including then Vice-President Mike [Continue reading…]

The Bostick class-action suit filed against Herbalife isn’t quite over yet, but a settlement agreement was filed a settlement yesterday that stipulated it would pay $15 million dollars to settle the case. An additional $2.5 million would be paid to cover “product returns”, along with “numerous changes” to its business model for at least three [Continue reading…]

We last checked in with the Dana Bostick class-action lawsuit against Herbalife almost a year ago. Bostick had accused Herbalife of ‘being an inherently fraudulent pyramid scheme’ in April, and had gone on to file a 68 page complaint under Federal corruption and racketeering laws. Herbalife moved to dismiss the lawsuit but were knocked back. U.S. District Judge [Continue reading…]

If you were going to fudge some online testimonials for a global multi-billion dollar MLM empire, you’d think some random names and carefully scripted marketing copy would suffice. Not for Herbalife affiliate though. When it came to crafting testimonials for his Herbashop marketing website, this Herbalife affiliate in Norway adtoped a “go hard or go home” approach. What you’re looking at there [Continue reading…]

Mid last year saw a number of organisations write to the FTC and ask that they investigate Herbalife. One of those organisations was the League of United Latin American Citizens (LULAC), and they’ve remained at odds with Herbalife ever since. “I’m mad,” said LULAC’s National Executive Director Brent Wilkes. “I’ve seen Latinos ripped off by banks [Continue reading…]

Due to the lack of information that usually surrounds regulatory investigations in the US, this one’s going to be brief. Last we checked in with Herbalife’s regulatory woes, the company acknowledged that they were under an FTC civil investigation. Now comes the news that the FBI and Department of Justice are also involved…

Despite the industry-wide ramification of a full-blown investigation into Herbalife, there’s surprisingly not all that much to write about. Earlier today, Herbalife shares sank as much as 15% in Wednesday trading after the nutritional supplements marketer said it is under Federal Trade Commission investigation. Kinda curious that Herbalife themselves made the announcement, although after further [Continue reading…]

In November 2011, after seven years of litigation, the Commercial Court in Belgium ruled that Herbalife was a pyramid scheme. The case was brought forward by the non-profit organisation “Test Aankoop” and claims that Herbalife breached the WPMC (market practices act) by running a pyramid scheme. Herbalife filed an appeal against the case, arguing that [Continue reading…]