If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(The Consumerist)   The FTC is investigating Herbalife over claims that it's a pyramid scheme. I know the wheels of government turn slowly, but damn   (consumerist.com) divider line 26
    More: Obvious, Herbalife, Federal Trade Commission  
•       •       •

4404 clicks; posted to Main » on 12 Mar 2014 at 6:11 PM (41 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



Voting Results (Smartest)
View Voting Results: Smartest and Funniest

2014-03-12 06:24:03 PM  
4 votes:
Pyramid scheme?  Had a couple of distant relatives who were into Amway.  They showed up at a family reunion (this was in the 80s) with a 16mm projector and the reunion turned into an Amway presentation.  I got the feeling that Amway was about 5% selling cleaning products and 95% getting all sorts of promotions like the Super Duper Three Diamond Cluster With Gold Leaf ranking.  Seriously, Mormon Scientologists look normal compared to these guys...
2014-03-12 06:13:39 PM  
4 votes:
Herbalife is still around?
2014-03-12 06:03:03 PM  
4 votes:
Um, I called this pyramid scheme out in the 90s. I figured it would have collapsed/been prosecuted by now. Geesh.
2014-03-12 08:58:14 PM  
3 votes:
Horrible-Life.

When you learn that founder of the company Mark Hughes od'd on alcohol and Doxepin (an anti-depressant) and went to multi-level heaven at age 44 a certain bell starts ringing madly.

Now they're big in third-world countries, in a rising and naive middle class with plenty of fresh disposable income. Here in Jakarta they have the ground floor on a prominent office building, and are recruiting all sorts of eager-beaver salespeople, poor saps.

CSB/: Before they lost the court case and were banned from trying to recruit passersby in airports the nicely-dressed, good-looking young ladies who were actually Children of God drones or Hare Krishna puppets or Unification Church units would waylay likely-looking suckers - lonely young soldier boys or college kids for instance.

They'd engage these innocents in friendly conversation with lots of sexy eye contact and then BAM they've sold the mark one of the Toppan-printed full-color Bhaktivedanta books for a hundred bucks, or ensnared him into a friendly session somewhere else (expect pu33y, instead get harangued at by a team of seven religious nuts).

We cult saboteurs would stroll by these setups innocently just as the vampires were reeling in a mark and start clicking little metal clackers, you know, those toy frogs or whatever that produce a sharp noise. Immediately the sucker gets distracted, the evil cultie gets an alarmed look on her face and the trance snaps. GAME OVER honey and there ain't nothin' you can do about it.

Fun times. Farkem. Moon the Moonies

"Son, a fool and his money are soon parted" - the late Lt. Col. Byron A. Black, USAF (Ret) looking steadily at me.
2014-03-12 06:23:14 PM  
3 votes:

SecretAgentWoman: Um, I called this pyramid scheme out in the 90s. I figured it would have collapsed/been prosecuted by now. Geesh.


Hell, I remember people giving my parents the pitch back in the mid-80s. Even though I was a kid, I knew they were bad news because in the 80s GI Joe comic, Larry Hama explained that COBRA got all of their funding for troops and weapons through Herbalife and Amway style pyramid schemes.

/Larry Hama actually snuck a surprising amount of genuinely useful info into that comic, especially in the early issues before the demands of the toy line pushed things to the outlandish.
2014-03-12 06:59:23 PM  
2 votes:

Adolf Oliver Nipples: ClavellBCMI: Considering the guy leading the charge against Herbalife has a $1 *billion* short against their stock, and will profit *only* if Herbalife's stock takes a tumble, there's nothing fishy going on at all concerning this investigation. Now, is Herbalife a collection of money-grubbing low-life scumbags running a pyramid scheme? Quite possible. But it sure as shiat would have helped having faith in a fair and honest investigation if this investigation hadn't been pushed so hard by the one guy certain to make a literal fortune if the company goes under.

This. Isn't this the textbook definition of the pump-and-dump, taking a position and then publicly pushing that position for your own benefit? Weird that the SEC is OK with him doing this.


They will probably only investigate him if Herbalife does, indeed, go under and his shorting of Herbalife does, indeed, earn him his money. And then, only if his bribe money fails to materialize.
2014-03-12 05:59:11 PM  
2 votes:
Considering the guy leading the charge against Herbalife has a $1 *billion* short against their stock, and will profit *only* if Herbalife's stock takes a tumble, there's nothing fishy going on at all concerning this investigation. Now, is Herbalife a collection of money-grubbing low-life scumbags running a pyramid scheme? Quite possible. But it sure as shiat would have helped having faith in a fair and honest investigation if this investigation hadn't been pushed so hard by the one guy certain to make a literal fortune if the company goes under.
2014-03-12 10:18:56 PM  
1 votes:

yukichigai: Mad_Radhu: yukichigai: Mad_Radhu: Hell, I remember people giving my parents the pitch back in the mid-80s. Even though I was a kid, I knew they were bad news because in the 80s GI Joe comic, Larry Hama explained that COBRA got all of their funding for troops and weapons through Herbalife and Amway style pyramid schemes.

I would really, really like to see that comic if someone can find it.  I know GI Joe had some good info in their "Knowing is Half the Battle" segments, but if this is true I've gained even more respect for the comic/cartoon/line/etc.

It was scattered through the backstory, but it was first mentioned in issue #10 when Snake Eyes and Scarlett are captured by COBRA and interrogated at their secret base in a non-descript town called Springfield (funnily enough, when they escape at the end of the issue they aren't quite sure WHICH Springfield was the town they were in because it was so generic, which predates the Simpsons Springfield which is located at the four corners of Maine, Ohio, Nevada, and Kentucky). Issue 38 also dealt with it as well. This site has a pretty good run down.

That is... insane.  Wow.  I had no idea how damn insightful that comic really was.


Larry Hama was ex-military, so he took the job seriously and elevated the story beyond your typical toy tie in. It was a totally different beast than the cartoon, which made it kind of jarring when I watched it and read the comic at the same time as a kid. For example, Snake Eyes, Storm Shadow, and Stalker were buddies who fought in Vietnam together and Snake Eyes had his face burnt off in the crash that ended Operation Eagle Claw. There was even an issue of GI Joe Special Missions that even used the Skyhook extraction device shown in The Dark Knight.

One of my favorites was the issue that was one extended dogfight between a Skystriker and Rattler, which featured real tactics and systems like look down/shoot down. One interesting detail was where Ace uses a Fuzz Buster because it does a better job at detecting enemy radar than the systems built in the jet, which I just recently learned was a real thing. The USAF MiG squadron apparently had them installed in their jets to improve their chances in training engagements during Red Flag because the Soviet detection systems were kind of crappy, according to a book about the Red Eagles that I just read.
2014-03-12 10:13:22 PM  
1 votes:

Mad_Radhu: yukichigai: Mad_Radhu: Hell, I remember people giving my parents the pitch back in the mid-80s. Even though I was a kid, I knew they were bad news because in the 80s GI Joe comic, Larry Hama explained that COBRA got all of their funding for troops and weapons through Herbalife and Amway style pyramid schemes.

I would really, really like to see that comic if someone can find it.  I know GI Joe had some good info in their "Knowing is Half the Battle" segments, but if this is true I've gained even more respect for the comic/cartoon/line/etc.

It was scattered through the backstory, but it was first mentioned in issue #10 when Snake Eyes and Scarlett are captured by COBRA and interrogated at their secret base in a non-descript town called Springfield (funnily enough, when they escape at the end of the issue they aren't quite sure WHICH Springfield was the town they were in because it was so generic, which predates the Simpsons Springfield which is located at the four corners of Maine, Ohio, Nevada, and Kentucky). Issue 38 also dealt with it as well. This site has a pretty good run down.


Thanks for the clarification. I did a rudimentary search using cobra herbalife "gi joe" and grabbed the 1st relevant result.

From the #10 summary: Springfield was an ordinary town until the "soap people" arrived and began their pyramid scheme of selling cleaning products. Sales meetings soon became "indoctrination seminars" and soon the whole town was taken over. All of the buildings conceal Cobra hardware of some sort.

From the #84 summary: CC clarifies that while they'll sell vitamins and cleaning products...they're actually selling the IDEA of selling vitamin and cleaning products. "Vitamins" have now been added to Cobra's evil schemes. So stuff like HerbaLife and other door-to-door vitamin schemes of the 80's are now included. They're EVIL!

http://www.option38.com/comics/gijoe/10.asp
2014-03-12 09:45:17 PM  
1 votes:

yukichigai: Mad_Radhu: Hell, I remember people giving my parents the pitch back in the mid-80s. Even though I was a kid, I knew they were bad news because in the 80s GI Joe comic, Larry Hama explained that COBRA got all of their funding for troops and weapons through Herbalife and Amway style pyramid schemes.

I would really, really like to see that comic if someone can find it.  I know GI Joe had some good info in their "Knowing is Half the Battle" segments, but if this is true I've gained even more respect for the comic/cartoon/line/etc.


It was scattered through the backstory, but it was first mentioned in issue #10 when Snake Eyes and Scarlett are captured by COBRA and interrogated at their secret base in a non-descript town called Springfield (funnily enough, when they escape at the end of the issue they aren't quite sure WHICH Springfield was the town they were in because it was so generic, which predates the Simpsons Springfield which is located at the four corners of Maine, Ohio, Nevada, and Kentucky). Issue 38 also dealt with it as well. This site has a pretty good run down.
2014-03-12 08:59:18 PM  
1 votes:

Rodeodoc: Now he was rolling in dough (turned out that wasn't quite true, the dough part.)


Ah, "fake it till you make it".  I asked my cousin about that (can't remember if it was Arbonne, Xango, or Genesis Pure... she's a repeat-sucker).  I said, if your 'national vice president' (upline) is suggesting you make yourself out to be more successful than you are, maybe she isn't very successful either.  She was constantly re-tweeting this person... who I'm not entirely convinced really existed (may have been a fictional corporate face).

Sim Tree: With Herbalife, Amway, etc. you can't make the real money merely by selling; you need to convince OTHER people to sell things WITH you. Then they realize they don't get paid big money unless THEY sign someone else up to work with THEM, who in turn needs to sign someone ELSE up, and right pronto you have a pyramid.


A lot of the money is also in selling "how to grow your X business and generate more leads in six easy steps" books, seminars, audiotapes, retreats, etc, etc, etc.
2014-03-12 08:52:22 PM  
1 votes:
A friend I met in an online game suddenly turned to Herbalife; he went from being ultra popular to being avoided by everyone. Last i checked he was still at it.
2014-03-12 08:24:09 PM  
1 votes:

interstellar_tedium: My wife has knows two people into the Pampered Chef and they both seem to be selling to other people and not doing recruitment, either that or they really know my wife.  We have a few things from them and they have all been very good, especially the can opener which I love and use all the time.

My sister did Avon for a little while while she was working at an entry level job just out of college and she seemed to be all sales and not recruitment, but that was in the 1970's so it has probably changed. Haven't really hear much about them in years until someone just donated some Avon products to a charity silent auction my wife helped to run.

On the other hand everyone I know touched by Amway has turned into a complete loon, and you are a mark to be their "downline" or you are a source of negative energy and they cut you off.  I had a close friend who went through this and ended up bankrupt instead of rich, at least he is out of it now and we can be friends again.



Gotta love how "questions the BS" means "negative energy".  Scientology and other cults have the same MO.
2014-03-12 08:20:09 PM  
1 votes:
My wife has knows two people into the Pampered Chef and they both seem to be selling to other people and not doing recruitment, either that or they really know my wife.  We have a few things from them and they have all been very good, especially the can opener which I love and use all the time.

My sister did Avon for a little while while she was working at an entry level job just out of college and she seemed to be all sales and not recruitment, but that was in the 1970's so it has probably changed. Haven't really hear much about them in years until someone just donated some Avon products to a charity silent auction my wife helped to run.

On the other hand everyone I know touched by Amway has turned into a complete loon, and you are a mark to be their "downline" or you are a source of negative energy and they cut you off.  I had a close friend who went through this and ended up bankrupt instead of rich, at least he is out of it now and we can be friends again.
2014-03-12 08:03:19 PM  
1 votes:

Lawnchair: Valiente: /it's MLM and Mormonism!

They go together like bread and butter.  There are hundreds of MLMs out of Utah.  I also know people who got into these life-sucks through Jehovahs' Witness, Christian Scientist, and Seventh-Day Adventist networks.

I figure, you've got a lot of people who, besides being good at swallowing bullshiat, have lots of practice with bugging people, having door slammed in their faces, and having people look at them like they were short-bus riders.



Big personal networks (ie, families) where people are familiar with each other are MLM territory.  Herbalife's turf is often in hispanic communities.
2014-03-12 07:35:24 PM  
1 votes:
The Mormans, JW's, and others  of their ilk like to do business with each other, so they have a pretty guaranteed market for most of this stuff.  I'm sure there's a bible verse they mis-interpret that commands them to do this.

Not a CSB:  We had very good friends year ago that lived in another city.  From time to time we'd make a weekend out of heading off to visit each other.  So off we go to their place and discover that he has sold off his share in daddy's business and bought in at a mid to high level of Amway. First night with them we had to go to a meeting.  It was lie a religious revival.  The speaker had been a down in the dregs wino but Amway saved his soul and delivered him to the Altar of Consumerism.  Now he was rolling in dough (turned out that wasn't quite true, the dough part.)  My friend thought this was the best way to spend an evening.  He mocked me my 9 to 5 job.  When he wanted to take off in the middle of the day to play golf, he just went.  he was his own boss.  I had to pay homage to the man, what a sucker I was.  So later, like 3 in the morning, I hear the phone ring.  One of his "downline" in having marital problems and kept my friend on the phone past our 8 AM breakfast crying on his  shoulder.  When he finally was free, I told him I may have to put in a full 8 hours, but I don't have to play marriage counselor at 3 AM.

When we left, my wife felt obligated to buy something.  She got the run proof pantyhose.  They didn't last through the first wearing, and cost triple what she used to pay.  Within a year, he had lost pretty much everything he had and was back working for his dad as an employee, not a part owner.   And we never saw them again.  #sadstorybro
2014-03-12 07:17:52 PM  
1 votes:
I have lost a couple for what i thought were good friends over this, they surprise drop the pitch on you and then you point out that the profit model forms the shape of a pyramid and while it may not be a scheme per say it is.

They get so mad and honestly it takes a certain personality to want to sell things like this anyhow and I dont have it and they try to tell you that it will change once you see all the money coming in.

Like an odd vitamin pushing group of cults.
2014-03-12 07:11:49 PM  
1 votes:

Oh-Blonde-One: I was going to ask how Herbalife is different than Amway, Mary Kay, Avon, Origami Owl, Princess House, Party Lite, Pampered Chef, Thirty-One, Lia Sophia and all the other stuff people are hocking so they get their wholesale discount.


If people are hocking the stuff for the wholesale/employee discount, it's scummy and desperate but legal.

If people pay to join the so-called business -- whether directly as a "membership fee" or mandatory "training", or indirectly through a required purchase -- and earlier joiners only get paid out when they recruit enough people below them, it's a pyramid scheme. In situations like this it's pretty clear that the whole thing will collapse when the scheme runs out of recruits.

Unfortunately there's a big grey area in the middle. Most MLM businesses have a mixture of recruiting fees and actual product; and many modern outright scams have a nominal product specifically to disguise the true nature;  and there's no hard and fast rule that says that when a business makes more money selling courses and manuals and training to its own employees than it makes selling product to end customers, then the FTC will pay attention.

But for my money, any time people are getting paid more for recruiting new members than for selling product, it's fishy. (And frankly I would stay away from any MLM business on principle.)
2014-03-12 07:05:54 PM  
1 votes:

ClavellBCMI: Considering the guy leading the charge against Herbalife has a $1 *billion* short against their stock, and will profit *only* if Herbalife's stock takes a tumble, there's nothing fishy going on at all concerning this investigation. Now, is Herbalife a collection of money-grubbing low-life scumbags running a pyramid scheme? Quite possible. But it sure as shiat would have helped having faith in a fair and honest investigation if this investigation hadn't been pushed so hard by the one guy certain to make a literal fortune if the company goes under.


Yeah. But hes a democrat. Only rich conservatives are evil.
2014-03-12 07:02:24 PM  
1 votes:

Adolf Oliver Nipples: ClavellBCMI: Considering the guy leading the charge against Herbalife has a $1 *billion* short against their stock, and will profit *only* if Herbalife's stock takes a tumble, there's nothing fishy going on at all concerning this investigation. Now, is Herbalife a collection of money-grubbing low-life scumbags running a pyramid scheme? Quite possible. But it sure as shiat would have helped having faith in a fair and honest investigation if this investigation hadn't been pushed so hard by the one guy certain to make a literal fortune if the company goes under.

This. Isn't this the textbook definition of the pump-and-dump, taking a position and then publicly pushing that position for your own benefit? Weird that the SEC is OK with him doing this.


Well, the man traded on public knowledge and has taken a public position calling for a public investigation. The fact he waited until the company wore out even the hispanics and the company is about to stumble is questionable. Shoulda stopped over a decade ago.

If the SEC is going to go after someone for dissing a company and taking the position, then they'd have to go after people who cheer on a company and take the position.
2014-03-12 07:01:03 PM  
1 votes:
i.imgur.com

The government process.
2014-03-12 06:53:52 PM  
1 votes:

Kinetic King: Pyramid scheme?  Had a couple of distant relatives who were into Amway.  They showed up at a family reunion (this was in the 80s) with a 16mm projector and the reunion turned into an Amway presentation.  I got the feeling that Amway was about 5% selling cleaning products and 95% getting all sorts of promotions like the Super Duper Three Diamond Cluster With Gold Leaf ranking.  Seriously, Mormon Scientologists look normal compared to these guys...


Amway exists so that the family idiot can support himself. Everybody needs to buy toothpaste and detergent, why not buy it from cousin Billy-Joe who failed third grade?
2014-03-12 06:48:34 PM  
1 votes:
             I
           was
         under
       the idea
      Herbalife
     was totally
    a legitimate
  non-pyramidal
 scheme and not
a criminal  racket.
2014-03-12 06:48:08 PM  
1 votes:

TheDirtyNacho: The worst date I ever went on started meeting a girl in the toothpaste aisle at the supermarket and ended being pitched a MLM scheme over coffee.

Things got awkward when I questioned how it was not a pyramid scheme, and no, it's not a franchise like McDonalds and Wendys...


Similar thing happened to me.

CSB: I was picking up this hot, older woman (I was 19 and she was 27) and she ended up taking me to a pyramid marketing pitch meeting run by some smarmy guy. They asked if anyone had any questions at the end so I raised my hand... and proceeded to pick their business model apart. It wasn't hard... we were supposed to buy their "eco friendly" cleaning products from the company, then sell them and sign up our customers to sell them with each successive level of sales people getting a percentage of the sales below them.

I asked how it was going to be a sustainable business without infinite growth - which is impossible - and how all these ever growing levels of sales people (each taking a percentage) would not inflate the product prices to end users until the products were swiftly unsustainably expensive. Then before he could answer I added, "And furthermore, how will the company survive in the long term being that it is clearly a pyramid marketing scheme - which is illegal?"

The sales guy just was shocked for a few seconds... the pulled himself together, told me that this "fantastic opportunity" was obviously not for me and asked me to leave. The woman who tricked me in to going was mortified and I felt like I'd paid her back for the indignity. Neither of us ever called each other again of course.
2014-03-12 06:17:31 PM  
1 votes:
The products work. The problem is that you have to play the selling game to get the price to a not-insane level, and by that point the person who signed you up is breathing down your neck to get you signing others up so you and him earn income to further reduce the cost of the products, which actually just recently increased by 3 percent. That's why most people sell, anyway, to reduce their costs for using the stuff. Very few people are doing selling Herbalife for "income."
2014-03-12 06:16:19 PM  
1 votes:

ClavellBCMI: Considering the guy leading the charge against Herbalife has a $1 *billion* short against their stock, and will profit *only* if Herbalife's stock takes a tumble, there's nothing fishy going on at all concerning this investigation. Now, is Herbalife a collection of money-grubbing low-life scumbags running a pyramid scheme? Quite possible. But it sure as shiat would have helped having faith in a fair and honest investigation if this investigation hadn't been pushed so hard by the one guy certain to make a literal fortune if the company goes under.


This. Isn't this the textbook definition of the pump-and-dump, taking a position and then publicly pushing that position for your own benefit? Weird that the SEC is OK with him doing this.
 
Displayed 26 of 26 comments

View Voting Results: Smartest and Funniest


This thread is closed to new comments.

Continue Farking
Submit a Link »
On Twitter





In Other Media


  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.

Report