MANA, LULAC Letter To AG Jim Hood Re: Herbalife

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MANA, LULAC Letter To AG Jim Hood Re: Herbalife

Coalition to Stop Herbalife Ltd. (NYSE:HLF): letter to National Association of Attorneys General (NAAG)’s President & Mississippi Attorney General Jim Hood.

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Coalition to Stop Herbalife’s Letter to Jim Hood

June 19, 2014

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National Association of Attorneys General (NAAG)

NAAG President & Mississippi Attorney General Jim Hood

2030 M Street NW, 8th Floor

Washington, D.C. 20036

Dear Attorney General Jim Hood:

We write to ask that the members of the National Association of Attorney Generals take immediate action to protect thousands of vulnerable people in their states from the deceptive practices of Herbalife, a multi-level marketing company that we believe is actually a pyramid scheme. Herbalife Ltd. (NYSE:HLF) recruits hundreds of thousands of people a year in the United States into a “business opportunity” using testimonials that feature six and seven figure incomes and lavish lifestyles. Yet the vast majority of new Herbalife distributors lose money and 90% of them quit within a year of signing up.

Last February, dozens of Latino and consumer advocates gathered in Washington, D.C. to meet with the Federal Trade Commission (FTC) about this issue. In March, the FTC issued a Civil Investigative Demand to Herbalife and is actively investigating the company. The FTC is taking seriously our allegations that Herbalife is using unfair and deceptive acts and practices to recruit new distributors in the United States on a massive scale.

The FTC did not enter into this issue lightly and they are opening a full investigation into the claims against Herbalife Ltd. (NYSE:HLF). While the FTC investigation is an important step in protecting our community, we strongly urge NAAG and attorneys general from across the country to join this effort. Pyramid schemes are among the most insidious and damaging consumer frauds facing our communities and we believe that they are one of the significant causes of income inequality in the United States because they often target low income people.

Many attorneys general have expansive consumer protection powers, and with hundreds of thousands of potential victims at stake, we are urging you to join with the FTC, the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ) and your colleagues New York Attorney General Eric Schneiderman and Illinois Attorney General Lisa As you may know, Herbalife Ltd. (NYSE:HLF) is a six billion dollar multi-level marketing company that sells supplements of dubious nutritional value. Yet former distributors and victims of this pyramid scheme have repeatedly told us that the only way a distributor can successfully make money in Herbalife is to recruit hundreds, if not thousands, of other people to become distributors underneath them rather than through retail sales…one of the hallmarks of a pyramid scheme. Herbalife now claims that 73% of its distributors are merely discount customers – just like Costco or other buyer’s clubs. Yet every year, the vast majority of Herbalife’s distributors do not renew—unusual behavior for a buyer’s club in our opinion.

Herbalife has also refused to provide any data about its retail sales, even though all traditional consumer product companies and even legitimate multi-level marketing companies track this information rigorously. According to the company’s own Statement of Average Gross Compensation Paid by Herbalife Ltd. (NYSE:HLF) to U.S. Members in 2013, 88% of Herbalife’s distributors earned no payments from Herbalife in 2013, and only 0.47% received more than $25,000 for the entire year gross. Factoring in operating expenses, the vast majority of Herbalife’s distributors lose money even after working long hours, full time. Although Herbalife tells consumers that it is the “best business opportunity in direct sales” and a chance to “achieve their dreams and financial freedom” while working from home, the reality is that almost none of their distributors make a net profit by actually selling Herbalife’s products.

We are also deeply concerned that Herbalife targets minority and new immigrant communities with their business opportunity pitch, knowing full well, that these communities are the least likely to complain to NAAG members after losing money to the scheme. The company has created videos, marketing materials and recruiting events tailored to specific minority communities and even hosts a nationwide “Latin Extravaganza” every year that draws over 10,000 Latino recruits. The company even admits that 60% of its U.S. distributors filled out the Spanish language version of its distributor application, but it doesn’t report the additional percentage of U.S. distributors who are English speaking Latinos or African American.

In addition to business opportunity fraud, we believe Herbalife Ltd. (NYSE:HLF) distributors routinely make false medical claims about their supplements through testimonials and even go so far as to prescribe Herbalife products for medical conditions such as diabetes, cancer, anemia, etc.

Finally, we think the bizzaare rules governing Herbalife’s nutrition clubs which prohibit club owners from displaying the Herbalife logo on the outside of the store, posting prices for their products, having an open/closed sign, having the club’s interior visible from the outside and advertising are an effort by the company to create the false impression that these clubs are not retail food establishments in order to skirt the business, health code and franchise laws that NAAG members enforce.

As Latino and community advocates, we cannot stand by while Herbalife Ltd. (NYSE:HLF) continues to deceive hundreds of thousands of people every year. We are actively assisting regulators and law enforcement agencies who have already announced investigations into the company when requested; however, the scope of this fraud demands much wider action.

We respectfully ask that the members of the National Association of Attorney Generals take immediate action in their states to investigate Herbalife and determine if the company is violating state laws and regulations and if so to take the appropriate actions to address these violations and to protect the residents of your states.

Thank you for your consideration of this important matter. Please let us know if you would like to receive more information about our concerns or have any questions.

Sincerely,

The Coalition to Stop Herbalife and affiliated members

Brent Wilkes, League of United Latin American Citizens, Executive Director

Amy Hinojosa, MANA- A Latina Organization, Executive Director

Yanil Terón, Center for Latino Progress, Executive Director

Angelica Salas, Coalition for Humane Immigrant Rights of Los Angeles, Director

Adrian Dove, Congress of Racial Equality California

Mayra Esquilin, Hartford Areas Rally Together, Executive Director

Omar Duque, Illinois Hispanic Chamber of Commerce, President and CEO

Andres Mendoza, League of United Latin American Citizens – Nevada, Deputy Director

August Sallas, Little Village Community Council, President

Horace Small, Union of Minority Neighborhoods, Executive Director

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35 COMMENTS

  1. It’s been fun while it lasted Mornothing, but you’re starting to bore me now … Yawn….let me know when you can come up with something more original than tweaking your BS. LOL

  2. It’s been fun while it lasted Don Quixote, but you’re starting to bore me now … Yawn….let me know when you can come up with something more original than tweaking my phrases?

  3. How can you know my disposition from behind your keyboard? LOL

    How can you know what else I am doing to take down this scam? LOL

    I don’t want to flag your comments, they merely show how desperate and deluded YOU are. LOL

    I couldn’t care less what you think about me, we’ll see if Amway thinks I’m a joke as I continue to help lawyers in various lawsuits against them. LOL

  4. You are obviously not as calm – hate to burst your bubble but it’s quite apparent to everyone reading this! Your comments are ranging from desperate to deluded LOL. You are more than welcome to flag my comments if you think it is inappropriate – Good luck with that LOL. Your blog is even more a joke – must say your hissy fit quest is quite entertaining though …reminds me of Don Quixote …LOL!!

  5. It’s only defamation if it isn’t true. LOL

    My blog argues in a sensible manner, and I’m as calm as can be. LOL

    Leave your garbage messages in the gutter where they belong. LOL

  6. Careful careful now texie. Calling people jerkwad, liars, scam artists, etc. makes you guilty of defamation. You clearly cannot argue in a sensible manner & are obviously close to popping an artery. Leave your child minded antics in the play park.

  7. Herbalife is an awesome nutrition compnay!

    Herbalife, a leading global nutrition company, is pleased to join LATINO Magazine
    as a sponsor of the third annual NO MAS HAMBRE Summit in Washington,
    D.C. on Thursday, June 19th. This summit will feature important
    conversations about the hunger challenges in the Latino community and
    policy solutions with government officials, community leaders and
    advocates. Angela Arboleda, Herbalife vice president of government and
    community affairs, will be a featured speaker on a nutrition panel at
    the event.
    “Latinos are twice as likely to go hungry compared to
    other Americans,” said Alfredo Estrada, LATINO Magazine Editor-in-chief.
    “It is the most glaring health disparity facing our community as food
    insecurity leads to other health-related problems, particularly among
    children. Herbalife is a company that understands the importance of
    access to good nutrition and we are fortunate to have their support in
    raising awareness of hunger in the Latino community.”

    “Herbalife is dedicated to helping people improve their nutrition, make healthy
    choices and lead active lives within the social environment of our
    Nutrition Clubs in communities across the country,” said Angela
    Arboleda, Herbalife vice president of government and community affairs.
    “Herbalife shares the LATINO Magazine’s commitment to addressing food
    insecurities in the Latino community and we are pleased to support the
    NO MAS HAMBRE summit to engage policy makers in Washington, DC for a
    discussion focused on combatting the nation’s hunger crisis.”
    Google – Herbalife Joins LATINO Magazine for NO MAS HAMBRE Summit

  8. My blog doesn’t address only my experience, it reflects the experience of millions of others as well. Millions of data points! LOL

    HLF and Amway are nearly identical when it comes to the overpriced products and tool scams.

    Only tools scam others. LOL

  9. fyi – I stored my inventory at my upline’s Nutrition Club, so I was always using fresh product over a 2 year period. I finished consuming my $3k order last year, re-joined HLF this year & reordered new product at 35% discount, with no minimum purchase. Facts. Nothing in common with your ATS experience. LOL

  10. My real ID is on my blog, genius. LOL

    One data point is meaningless, and don’t believe others, they lie. LOL

    So, you still have a bunch of inventory of expired product? LOL

    Most people get fat after they quit a program, I doubt HLF is any different. LOL

    I blame HLF as another example of an MLM scam, and their actions over the past 2+ years have confirmed they are a scam. LOL

  11. So you don’t make HLF money as a distributor, but as an investor?

    I’ve gone on record as saying I don’t know whether HLF will go to zero.

    I’m not nearly as interested in the stock price gyrations as I am in bringing attention to MLM scams in general, and the Amway Tool Scam in particular.

  12. Everyone is a joke to you. What is your real ID?
    My comment is factual, based on my personal experience & the experience of other members I have met. Facts:
    1) In order to maximize my discount, I bought 2 years’ worth of F1 protein mix. No need to rejoin in Yr 2. Did not “quit” because I was dissatisfied with HLF or its products.
    2) Members also learn about healthy llfestyle and good nutrition from their sponsors or at Nutrition Clubs or Fit Clubs. They workout & lose weight together in a group setting. They do not have HLF shake in the morning, then greasy fries & burgers at night. They do not “get fat again” right after they “quit.”
    If you “tex2” had a bitter experience with Amway, don’t blame others or HLF. Blame yourself.

  13. fools lose money everyday,,hence the phrase,,,a fool and his money are soon parted…..the way I look at is you fools are going to give your money to someone so it might as well be me….

  14. I make money each month when the puts expire worthless that ackman has been telling everyone to buy….you are causing thousands to lose money every month by telling these idiots that hlf is going to zero…I sell those same idiots the puts and each month the pputs expire worthless..so it is you and ackman who are causing thousands if not millions of people to lose money in hlf…I am the one making the money

  15. That’s the point, jerkwad. 10s of millions of people have lost money to HLF and other MLM scams, such as Amway, some a lot of money, others less money….and you don’t care. YOU AND OTHERS LIKE YOU ARE THE JOKE. LOL I’m sure you’re making money at HLF. LOL

  16. That’s the point, 10s of millions of people have lost money to HLF and other MLM scams, such as Amway, some a lot of money, others less money….and you don’t care. YOU AND OTHERS LIKE YOU ARE THE JOKE. LOL

  17. tex you lost over 100,000 dollars in amway before you figured out you could not make any money in it, yet you call me and david k s a joke…..we are making money, you lost over 100,00 so who is the JOKE. not only that but you have admitted you are not short hlf nor do you own any puts ,so you are either broke or do not believe what you write. anyone who writes as much as you about hlf going to zero would have a bet on it..UNLESS THEY ARE BROKE

  18. The surveys are fake. People are shown a marketing plan to be rich, and you expect us to believe 3/4s of them join for discounted products? LOL Why do 90% quit if they just want discounted products? Nowhere near that number quit Sam’s Club or Costco. Is their goal to get fat again, just so they can skip a year and buy the products at discount a year later? LOL You’re a JOKE, David, and not the funny kind.

  19. Surveys found that 70% members joined HLF to buy product for themselves at a discounted member’s price. Therefore the 90% that “quit” is a meaningless/misleading statistic touted by Ackman & spread by the misinformed executives at LULAC. Most HLF members who don’t renew their membership have met their weight-loss goals (do AA & Weight Watchers want their members to return every year?) and are perfectly satisfied with HLF & HLF products.

  20. this letter is a joke, these people only care about one thing[themselves] they want more negative news about hlf hoping the stock will quit going up…..ackman and all his followers are losing their ass shorting this stock and buying puts…..Icahn, soros, stiritz and several other billionaires have done there own investigation and found that hlf is NOT illegal in any way……if you want to make a lot of money sell some puts at a 55 strike price or less or simply go long the stock…as soon as FTC completes its investigation stock will go through 100 like a hot knife through butter…it is true that thousands of not so bright lazy people invested in amway and hlf thinking they would make some easy money, but like anything it requires hard work and a long time to build up any business..

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