Herbalife Ltd. (HLF): Alleged Victims Meet With FTC, Call For Probe


A coalition of Latino groups, consumer advocates and alleged victims converged on Washington today to meet with lawmakers and regulators and demand an investigation into Herbalife Ltd. (NYSE:HLF)’s business practices. ValueWalk has learned that some former distributors of Herbalife products met with the Federal Trade Commission and members of Congress to talk about the company and push for action against it.

Today’s meetings come about a week after it was revealed that Canadian regulators launched their own investigation into claims that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme.

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Herbalife drew in distributors in Los Angeles

Hector Cruz of Los Angeles, a former Herbalife Ltd. (NYSE:HLF) distributor, spoke with ValueWalk this afternoon. He told us that the company basically told him that if he worked hard, he could buy a big home, an expensive car, and become a “rags to riches” story. He said he was told that he could earn $20,000 a month selling Herbalife products.

According to Cruz, he was pulled into the scheme by someone on the street who initially offered him a three-day nutritional shake to try. After he tried it for a couple of days, she told him if he paid $180, he could become a distributor of Herbalife Ltd. (NYSE:HLF) products and that a percentage of that would go to a boy’s club. Cruz said he paid the $180 to become a member and filled out the application.

“I filled out the paper and go to membership for Herbalife, and later on I don’t have too much money,” Cruz told ValueWalk. “I working little by little money because I don’t have any money for buying more shakes for Herbalife to sell to the people, but normally, the real thing is, I have to make the people come to the company and sign the paper. That’s the thing for them. Recruit people.”

Former Herbalife distributor said he wasn’t paid

Cruz also told ValueWalk that Herbalife Ltd. (NYSE:HLF) promised him a lot of money to recruit more people and said that if he recruited enough other distributors, he could become a supervisor. However, he said he never received a check for recruiting others, even though he recruited about 15 people. According to Cruz, he got the “check’s in the mail” excuse whenever he complained.

He stopped selling Herbalife Ltd. (NYSE:HLF) products in either 2006 or 2007 after working for a total of three years as a distributor. He said at times, he was pulling 60 hours a week, but he made very little money.

DISCLOSURE: I have no position in Herbalife Ltd. (NYSE:HLF).