FTC v. Herbalife: full settlement record
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Get the dossier: $7 instant download →Herbalife and its affiliates deceived consumers into believing they could earn substantial money selling diet, nutritional supplement, and personal care products. It's virtually impossible to make money selling Herbalife products.
Consumers will benefit greatly from the settlement's requirement that Herbalife base its compensation structure on verifiable retail sales to end-users of the product, not recruitment of new distributors. Product distributors will now be paid based on actual retail sales rather than just buying the product for their own personal consumption. Distributors will need to provide actual receipts of retail sales in order to be paid.
Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered.
Herbalife will restructure its multi-level marketing operations and pay $200 million for consumer redress to settle FTC charges. The FTC sent checks to nearly 350,000 victims of Herbalife's multi-level marketing scheme.
This transcription covers the FTC's core findings and the specific compensation-restructuring language that constitutes the reusable legal test. Full settlement terms, compliance monitoring requirements, and the independent auditor provisions are available through the FTC's own case files.
Case: FTC v. Herbalife International of America, Inc. et al. July 15, 2016.
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