Recalls & Warnings
ConsumerLab.com is keeping you informed with current product recalls and warnings.
Posted November 4, 2015
Senator Investigates Herbalife Business Practices, Calls for Reforms
The investigation found:
- Although a "new member kit" costs between $60 and $100, most new franchisees spend more (the average initial investment is $1,800 — others spend as much as $10,000)
- Herbalife recruiters claim that "supervisors" can make as much as $20,000 per month
- However, only 8 of 56 people who filed a complaint received a check directly from Herbalife for their royalty claims; the average amount received was $100
- The complaints filed included nearly $1 million in financial losses ranging from $90 to $100,000; the average amount lost was around $20,000
A bill to be introduced to the New York Senate by Senator Klein will aim to impose stricter regulations on multi-level marketing companies that distribute health products, requiring, among other things, that prospective franchisors:
- File an annual financial disclosure statement written in plain and understandable English and Spanish for the Attorney General to review, before submitting to prospective franchisees
- Provide prospective franchisees their offering prospectus in the primary language
- Get any pamphlets, circular, form letter, advertisement or other sales literature of advertising communication intended for prospective health product franchises approved by the New York State Attorney General
(See ConsumerLab.com Reviews of Herbalife products).
To read the full report, use the link below.