HERBALIFE Is Herbalife a Pyramid Scam?

Is Herbalife a Pyramid Scam?

Is Herbalife more focused on recruiting (and making money off of) Herbalife distributors than selling products to legitimate end-users?

Billionaire investor William Ackman claims it is… and that Herbalife Ltd. is running a blatant pyramid scheme.

Massachusetts Senator Edward Markey agrees that they may well be.

Markey is asking for an investigation into the business practices of Herbalife.

What do you think? 

Is Herbalife just another multilevel marketing investment scam? 

Share your opinion with a comment below.

A Reuters article reports that Senator Edward Markey is the most prominent lawmaker to call for a probe of Herbalife as a potential Ponzi scheme:

“There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families,” Markey, a member of the Commerce, Science and Transportation Committee, said in a press release. He said the call for a probe followed “serious complaints of improper pressure and financial hardship” from constituent.

Ackman has been outspoken in his criticism that Herbalife is using an unsustainable business model focuses more on recruiting salespeople than on selling to outside customers.

Markey joins Ackman in voicing concerns that Herbalife is a scam:

Markey wrote in the letters that his interest in Herbalife was sparked by constituents in Massachusetts who claim to have lost thousands of dollars buying supplies that they could not sell on to customers. He said one family in Norton said it lost $130,000, including its entire 401(k) retirement account, from investing with the company.

Another woman said she was pressured to recruit family members and spend more money to buy more products so that she could qualify as a “supervisor” in the Herbalife system, according to the press release.

HerbalifeMarkey’s staffers met with Ackman in Washington a few months ago, but the Senator has not met the hedge fund manager personally, a spokeswoman said.

“Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company. I have serious questions about the business practices of Herbalife and their impact on my constituents, and I look forward to receiving responses to my inquiries,” he said in the press release.

Markey asked that the SEC, FTC and Herbalife respond to his staff by February 28.

In Markey’s letters to SEC Chair Mary Jo White and FTC Chair Edith Ramirez he said he wanted regulators to “confirm that the company is acting in accordance with the federal securities laws under the authority of the Commission.”

In a very active discussion on UnhappyFranchisee.Com, many have made similar accusations about the multilevel marketing giant Amway.


Also read:

AMWAY IBOs: Why Everyone Hates You

AMWAY Addiction Kills Marriage

AMWAY Partner Store Claims Embarrass Their IBOs

AMWAY: Is Selling Amway Child Abuse? Amway Kids Weigh In.




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TAGS: Herbalife, Herbalife scam, Herbalife pyramid scheme, Herbalife ponzi scheme, Herbalife complaints, Herbalife business opportunity, Herbalife MLM, multilevel marketing, MLM, Pyramid Schemes, Ponzi Schemes, William Ackman, Senator Edward Markey, Herbalife SEC probe, NYSE:HLF, HLF

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