Senator Markey on the Mark for Calling Investigation on Herbalife
LULAC Lauds Probe into Suspicious Business Practices
January 24, 2014
Contact: Paloma Zuleta, pzuleta at LULAC.org, (202) 812-4477
WASHINGTON, D.C. – LULAC congratulates Senator Ed Markey (D-Mass) for calling on the Securities and Exchange Commission and Federal Trade Commission to investigate whether Herbalife is operating a pyramid scheme or a legitimate business. LULAC, the largest and oldest civil rights organization in the country, maintains that Herbalife’s business model is a pyramid scheme where profits are generated through fraudulent arrangements which take advantage of its distributors across the country.
“Herbalife’s claim that it provides an opportunity for regular people without any background in business to become millionaires with an initial investment of $4,000 is outrageous,” said Brent Wilkes, LULAC National Executive Director. “I’ve spoken to many victims who confirm that the only way a distributor can succeed with Herbalife is to recruit new distributors and that the most successful distributors are the ones that become “recruiting machines” – this is Herbalife’s actual business model.”
According to Herbalife’s statement of average gross compensation paid by Herbalife to United States distributors in 2012, 88% of Herbalife’s distributors earned no payments from Herbalife in 2012, and only 3.67% received more than $1,000 for the entire year. The vast majority of income generated by Herbalife is from the products purchased by new distributors.
In addition to the federal investigations called upon by Senator Markey, state attorney generals across the country are also beginning to investigate Herbalife’s business practices. In fact, today, LULAC members in California and former Herbalife distributors will meet with California Attorney General Kamala Harris to discuss how they were scammed into becoming distributors and in the process lost nearly all their savings.
The League of United Latin American Citizens (LULAC) is the nation’s largest and oldest civil rights volunteer-based organization that empowers Hispanic Americans and builds strong Latino communities. Headquartered in Washington, DC, with 900 councils around the United States and Puerto Rico, LULAC’s programs, services and advocacy address the most important issues for Latinos, meeting critical needs of today and the future. For more information, visit www.LULAC.org.