LULAC Celebrates FTC Ruling on Herbalife Business Model
July 18, 2016
WASHINGTON, D.C. – Last week, the Federal Trade Commission (FTC) ordered Herbalife to restructure its multi-level marketing operations and pay $200 million to compensate consumers to settle Federal Trade Commission charges. The FTC determined that Herbalife deceived consumers into believing they could earn substantial money selling diet supplements and personal care products. The FTC charged Herbalife with having an unfair business practice that based a distributor’s compensation on the recruitment of other distributors causing them substantial economic injury.
In response, Brent Wilkes, national executive director of the League of United Latin American Citizens (LULAC), issued the following statement regarding the decision of the FTC to settle its complaint against Herbalife:
“For the past few years LULAC has maintained that Herbalife directly targeted low-income individuals for its pyramid scheme. We were always confident that a full FTC investigation would confirm that fact and that the FTC would formally find that Herbalife engaged in deceptive business practices.
We are pleased with the FTC’s decision which also recognized that Herbalife harmed countless Latinos in the United States who were seeking a better life for themselves and their families. Its action is a historic step to protect these consumers and aspiring entrepreneurs from the company’s destructive and misleading business practices. The decision is also a vindication for the hundreds of victims who have bravely come forward to alert regulators and share their stories. Herbalife must now fundamentally restructure its business in a way that no longer exploits low income individuals. With today’s ruling, the FTC sent a powerful message to the direct selling industry: companies that scam consumers and target Latino communities will be held accountable.
LULAC, along with other community-based organizations across the country, will continue to work to educate minority consumers so that they do not fall prey to these kinds of predatory business practices. In addition, we will provide assistance to those consumers who were harmed by Herbalife’s deceptive practices and thus, may be eligible to receive funds out of the $200 million settlement fund. “