Death To Herbalife IG Hustlers: FCC Rules Company Must Pay $200 Million In Misrepresentation Settlement

July 15, 2016  |  

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We guarantee you have at least one person on your IG timeline that’s an Herbalife ‘gram hustler, constantly posting before and after weight loss pics, singing the praises of the nutritional supplements offered by the company and urging you to get in on the goods. And we’re also sure those posts annoy the mess out of you. Well good news, they annoy the Federal Trade Commission (FTC) too, which, in a settlement, is now forcing the company to drastically change its business model.

According to the New York Times:

The Federal Trade Commission, in announcing the settlement with Herbalife on Friday, had strong words for the company that call into question some of its longstanding distribution practices.

“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,” Edith Ramirez, the F.T.C. chairwoman, said in a news release announcing the settlement and the filing of a complaint in federal court seeking a permanent injunction and other relief against the company.

But that’s not all. In addition to completely changing its compensation for customers and how sales of its products are recorded, as part of the settlement with the FTC, Herbalife has agreed to pay $200 million in “consumer relief.”

In filing their complaint against Herbalife in federal court, the FTC stated “the overwhelming majority of Herbalife distributors who pursue the business opportunity make little or no money and a substantial percentage lose money, which is why that relief payment has come in to play.

Despite this blow, the company is confident their business is here to stay. In a statement, Herbalife said:

“We announced a settlement with the F.T.C. that does not change our direct selling business model and will set new standards for the industry. We agreed to the terms and to pay $200 million because we simply wanted to move forward with our mission.”

Are you or anyone you know an Herbalife distributor?

 

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