Herbalife Ltd. (HLF) Powerful Union Urges FTC, Nevada AG To Investigate

Herbalife Ltd. (HLF) Powerful Union Urges FTC, Nevada AG To Investigate

Herbalife Ltd. (NYSE:HLF), the highly controversial multilevel marketing company selling nutritional and weight loss products faces another foe— the Culinary Workers Union Local 226, one of the most influential unions in the country.

Geoconda Arguello-Kline, secretary-treasurer of the Culinary Workers Union Local 226, urged Nevada Attorney General Catherine Masto and Federal Trade Commission (FTC) Chairperson Edith Ramirez to investigate the allegations that Herbalife Ltd (NYSE:HLF) is a pyramid scheme

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Different Latino activist groups already called for investigation

The Culinary Workers Union joins several Latino organizations such as LULAC, Hermandad Mexicana, and the Federacion de Clubes Michoacanos Unidos de Nevada (FECMUN) in requesting inquiry regarding the business practices of the multilevel marketing company. These Latino organizations complained that Herbalife Ltd. (NYSE:HLF) unfairly targeted and recruited members of the Latino community with a promise that they will gain financial freedom, but ended up losing money.

Union believes allegations against Herbalife

In her letter to the Attorney General and the FTC, Arguello-Kline emphasized that the union believed the allegations that Herbalife Ltd (NYSE:HLF) is “unfairly targeting minority groups and luring them into a losing business deal.”

Arguello-Kline noted that the management of Herbalife Ltd. (NYSE:HLF) already admitted the fact that it is targeting minority groups because of its “African American Initiative” and “Latino business.”  She emphasized, “By recruiting vulnerable people in these communities with little or no business experience, Herbalife convinces new sellers to ignore the risks and high costs of their program.”

She emphasized that the individuals who joined Herbalife Ltd. (NYSE:HLF) failed based on the data of the company that 88% of its distributors and sales leaders do not receive any payment. Arguello-Kline said the Culinary Workers Union represents tens of thousands of Hispanic families and it is joining the increasing number of organizations calling for an investigation into the company.

“We strongly urge you to investigate and for the FTC to open a full investigation into Herbalife’s recruitment tactics and business practices.   If they prove to be biased and unfair, Herbalife would be responsible for personal harm and financial distress throughout minority communities. The Attorney General’s office has a duty to protect these consumers,” said Arguello Kline

FTC considering lawmakers’ concerns against Herbalife

Meanwhile, the FTC said it is seriously considering the concerns raised by Sen. Edward Markey regarding complaints that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme. FTC chairperson Ramirez informed the senator that the agency takes into consideration several factors such as the impact to consumers to determine its actions.

Ramired added certain rules and provisions prevent her from disclosing any information regarding the activities of the FTC regarding the issue. She said, “With respect to the allegations against Herbalife Ltd. (NYSE:HLF), a number of statutory provisions and the Commission Rules of Practice prevent me from discussing what action, if any, the Commission may take in any particular situation.”

Updated on

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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  1. Listen, I work as a tax preparer, In the office we do about 2000 income taxes, low to moderate income, and all the people that we have done taxes for a lot of them have been in herbafraud, nobody has made any money as all of them promise when they are making you yo sign up, that is my part time job and as a financial consultant with higher income clients they laugh when they hear herbalife, In a first world country it is amazing that this is allowed, o no wait mr madoff did it for so many years, but the difference how he got in jail is because he hurt rich people, who cares about main street, now a days.

  2. For your next article, explain who does recruiting and how money is lost. Independent distributors do all recruiting in their sphere of influence and Hlf has a great return policy. Your definition of targeting includes “targeting” hunger and poverty.

  3. This is Wall Street and the world of finance at its worst! Herbalife is only being protected because it is a corporation with power and money. This is another example of Wall Street vs. Main Street, Wall street wins every time. Shame on the people investing in Herbalife. Only on Wall street is the “activist” expected not to have a social conscience. Occupy Herbalife!

  4. The EU which includes Belgium, are as strict or even stricter than the US on consumer protection policies and they have in a court of law concluded
    HLF to be in complete compliance with the law.

    The Next Chapter in Recognition of Personal Use”

    “A fundamental finding by the Court of Appeal was that commissions were, in fact, paid on product destined for end consumers, even if some of
    those consumers were distributors themselves. And the Court found that
    product, which was not sold to customers or used, was subject to return
    or buyback and that Herbalife adopted a clawback or reversal of
    commissions on returned product to make sure commissions were not paid
    on product that was not sold to customers or used by distributors. In
    other words, all product was accounted for, either as resold to
    customers, used for personal use or returned to the company, subject to a
    “clawback” of commissions.”

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