You’ve heard about them on Facebook. You might have seen them on television. You may even have been solicited by one of their millions of employees promising to save your very existence.
We’re of course talking about Herbalife.
But this isn’t Herbalife as we know it. The company, self-described as a “multinational multi-level marketing corporation” (doesn’t that just stir you with confidence?) may be about to walk the straight and narrow.
That’s because last month, the conglomerate was ordered by the Federal Trade Commission (FTC) to go legit and pay a $200 million fine after falling victim to allegations of “unfair and deceptive practices.”
You’d have to have been living under a rock for the past decade or so to not be aware of just what these “deceptive practices” alluded to, with Herbalife not only promising out-of-whack results for users of their products but also lavish lifestyles for anyone cheap enough to become a distributor.
The fine may be a small dent for a company that boasts annual revenue upward of $3 billion, but as we’ll discuss ahead, every little bit helps in the fight against an international beast.
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Why Is This Good News?
Many are firmly aware of the pyramid-style scheme employed by Herbalife to market their range of nutrition products, which is essentially Uber for supplements.
Except Herbalife is potentially much more dangerous than a taxi company where anyone can be a driver, because what we’re talking about here is millions of drones selling ingestible items many of them actually have no idea about.
After the FTC made their decision, Chairwoman Edith Ramirez was quoted by ABC News and said: “The company promised people a dream — a chance to change their lives, quit their jobs and gain financial freedom, but the FTC has charged that this wasn’t true.”
Like any pyramid scheme, everyone, from the source to the middle man, is promised a portion of the piece, except ABC’s investigation revealed ‘the only real money was actually in buying the products themselves and then recruiting other salespeople to do the actual selling.’
That’s pyramid scheming at its core, summarised in one tidy sentence.
The real victory in the FTC’s decision, therefore, is not the financial hit suffered by Herbalife, but the decision forcing them to alter the ways in which they operate and thus saving many helpless customers their money.
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What Changes Can We Hope For?
It would be too much for Herbalife (and other companies operating by similar methods) to disappear altogether, but we can at least hope they’ll clean up their act to the point where they run like the company they advertise themselves to be.
Less emphasis on the millions of worker bees engineered to fill the wallets of those at the top and more focus on providing products that actually work to those who need it.
Unfit and overweight people will look to just about any method—Slimfast shakes being just one shining example—in their efforts to lose weight, and Herbalife preys on the very weakness that leads those customers to embark upon extreme and often dangerous diets.
Imagine a company of Herbalife’s magnitude—their products sold in 93 countries last year, according to their annual report—that actually offered healthy and affordable diet supplements aimed at sustained results, rather than quick crash fixes that require multiple, often endless cycles.
But that’s wishing too much in a capitalist-centric society where profit reigns supreme and the customer base’s desires fall second to all else.
Still, we can dream. Eh, Herbalife?