A delegation from the Center for Latino Progress – CPRF in Hartford traveled to Washington DC this week to join a coalition of Latino organizations and consumer advocates from across the US in asking Congress and government regulators to look into Herbalife’s business model.
The Connecticut representatives joined the League of United Latin American Citizens (LULAC) and other civil rights and consumer advocacy groups in claiming that Herbalife is running an illegal pyramid scheme that uses deceptive business practices to target disadvantaged communities, particularly Latinos, with false promises of wealth and success. In reality, the coalition claims, the vast majority of Herbalife distributors earn no income and most end up losing money.
CTLatinoNews.com has been following this story since, July, 2013 when we first published a story on Herbalife, raising questions about a pyramid scheme targeting Latinos. http://ctlatinonews.com/2013/07/30/does-alleged-pyramid-scheme-target-latinos/.
Yanil Teron, Executive Director of CPRF said, “Herbalife has planted themselves quietly within our communities in nondescript storefronts with unfulfilled promises of good health products and a great business to invest in. There are mountains of evidence that their promises are deceptive and empty. It is known that 88% of their distributors failed during the first year, and less than 14% have $1,000 in receipts within the same year. Herbalife is a business that should adhere to the same standards of multilevel marketing corporations such as Avon, Amway, and Tupperware, or they should be held accountable for their pyramid practices. Such practices hurt the most vulnerable members of our communities.”
Also on hand, were representatives form the Hispanic Federation which now represents numerous Latino organizations in Connecticut. Jose Calderón, president of the federation said, ” More than 60% of Herbalife’s U.S. distributors are Latino – that’s more than three times the proportion of the Latino population of the country.”
Brent Wilkes, LULAC National Executive Director, said ” I have spoken directly to a number of Herbalife’s Latino distributors and have listened to their stories about the aggressive recruitment techniques used to lure them into investing their savings. Herbalife is a pyramid scheme that takes advantage of Latinos in our community.
The groups also met with legislators from their home states to discuss their concerns about Herbalife. The Connecticut contingency met with representatives of Senator Richard Blumenthal and Congressman John Larson.
Among the groups that traveled to Washington to voice their concerns are The National Consumers League, Hispanic Federation, MANA, Make the Road, Centro Sin Fronteras, Federacion de Michoacanos, Center for Latino Progress, Hartford Areas Rally Together, BraceroProa Binational Alliance, Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA), Vamos Unidos, Southern Christian Leadership Conference of Southern California, Community Association of Progressive Dominicans Inc, Northern Manhattan Coalition for Immigrant Rights, Union of Minority Neighborhoods, and Chelsea Collaborative.
In the July, 2013 CTLatinoNews.com story, Herbalife issued a company statement in response to our request for an interview. They stated that the profits made from retail sales are not paid by the company to the distributor. Instead, retail profits are made when distributors mark-up the products. They also strongly asserted that “the majority” of their distributors do not make their profits through the people they recruit. The statement went on to state, “As we have reported, Lieberman Research found that over 70% of former distributors said that they joined to be able to purchase products at a discount for their own use.”