Well-known manufacturer of products balanced nutrition Herbalife may lose about $1 billion in legal claims, if his activities are found signs of a financial pyramid, says WSVN.
Herbalife Ltd. one of the ten largest companies operating on the principle of direct sales. Its products are distributed outside of the stationary retail outlets. Worldwide Herbalife only 8.3 thousand employees and 2.3 million distributors. Sale «from the distributor to the buyer» annually bring in about $4.5 billion.
For distributors, a special program of Circle of Success to convince them that going through all the stages of cooperation with the company, the seller is sure to be a success. Believing the promises of Herbalife, Patricia and Jeff Rogers have invested in this program about $100 thousand, not counting the $20 million spent on travel and various accompanying events. Now a disillusioned wife accused partner in the fraud and want to sue all the money spent on the «cult» of Herbalife.
In 2015, distributors were able to sue the Corporation a total of $17.5 million And in 2016, the Federal trade Commission (Federal Trade Commission — FTA) Herbalife ordered to pay the victims compensation totaling $200 million due to the fact that the company earn more by attracting new distributors, rather than by increasing production and sales. By the way, a pyramid scheme back in 2012 she was named an American financier bill Ekman.
According to FTA, to make distribution possible for only a small part involved in the Herbalife people. And the benefits from its products for end consumers are often questioned. Moreover, some independent studies have shown that the products of the company have a destructive effect on the liver.
