November 5, 2024 The Best Source of News, Culture, Lifestyle for Culver City, Mar Vista, Del Rey, Palms and West Los Angeles

Century City-Based Herbalife to Pay $200 Million Over Deception Allegations

By Kelly Hertog

The Century City-based multi-level marketing company Herbalife agreed this month to pay $200 million and change its business practices to settle federal regulators’ claims that the nutrition company deceived customers into believing they could get rich by selling diet, protein supplements and personal care products.

The Federal Trade Commission (FTC) said the company misled people into becoming distributors or members by using videos and brochures showing mansions, luxury cars and boats, and telling participants they could expect to quit their jobs, earn thousands of dollars a month, make a career-level income, or even get rich.

However, the “overwhelming majority” of distributors “earn little or no money,” according to the government.

The company issued a statement saying that although it disagreed with many of the FTC’s allegations, it settled to avoid “the financial cost and distraction of protracted litigation.”

Herbalife said it will also pay $3 million to settle an investigation by the Illinois attorney general’s office as part of a separate agreement.

“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms,” Herbalife Chief Executive Michael O. Johnson said.

The FTC’s investigation began in March 2014 after billionaire investor William Ackman claimed that Herbalife was operating a pyramid scheme.

“Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices,” FTC Chairwoman Edith Ramirez said.

The settlement requires Herbalife to revamp its compensation system so that it rewards retail sales to customers and eliminates the incentives in its current system that reward distributors primarily for recruiting new participants.

However, in a conference call with investors on July 20, Ackman said that in light of the FTC settlement, he now plans to push foreign regulators to investigate the company’s practices. But he said the FTC settlement, while not labeling Herbalife a pyramid scheme, will still lead to the company’s demise, because federal authorities pointed to misdeeds by the company and ordered drastic changes in the way it operates.

“Herbalife has been shut down by the FTC. It just doesn’t know it yet,” Ackman said.

Related Posts

Early Morning Call From Community Leads to Burglary Arrest in Culver City

November 4, 2024

November 4, 2024

Police Respond To Suspicious Activity Call, Arrest Suspect With Pickaxe Culver City police arrested a man early Friday morning in...

Culver City Police Department is Prepared to Ensure Community Safety During Election Week

November 4, 2024

November 4, 2024

Enhanced Patrols, Activated Emergency Center Ready, Culver City Voting Center is Open The Culver City Police Department has announced an...

Legendary Music Icon Quincy Jones Dies at 91 in Bel Air

November 4, 2024

November 4, 2024

Celebrated Musician, Producer Leaves an Indelible Legacy By Dolores Quintana Legendary musician, music producer, film and television producer, composer of...

Academy of Motion Picture Arts and Sciences Lays Off Longtime Archive and Library Staff

November 4, 2024

November 4, 2024

Downsizing and Restructuring Continue, Affecting Employees with Decades of Service By Dolores Quintana Last week, the Academy of Motion Picture...

LA County Opens 526 New Vote Centers for Early Voting, Announces Conditional Voting for Unregistered Residents

November 3, 2024

November 3, 2024

Metro LA Offers Free Rides on Election Day to Help Residents Get to the Polls Los Angeles County opened an...

New Aviation/Century Station Opens, Linking Metro’s C and K Lines

November 3, 2024

November 3, 2024

Metro’s Newest Station Paves the Way for Future LAX Transit Center The new Aviation/Century Station officially opened this week, marking...

H5N1 Detected in LA County Wastewater, Health Officials Urge Precautions for Residents

November 3, 2024

November 3, 2024

Los Angeles County Investigates Low-Level H5 Avian Flu Detected in Wastewater The Los Angeles County Department of Public Health is...

Two Events in Culver City This Weekend: Bike Registration and Dance Performance

November 1, 2024

November 1, 2024

Put the Brakes on Bicycle Theft and Enjoy an Evening of Dance and Interactive Art The Culver City Police Department...

All You Need to Know to Attend the Dodgers Victory Parade Tomorrow in DTLA

November 1, 2024

November 1, 2024

World Champions and LA’s Team to Greet Angelenos After Win of NY Yankees The Los Angeles Dodgers announced that their...

Beverly Hills City Government Agrees to a Stipulated Judgment After Blocking Abortion Clinic Opening

November 1, 2024

November 1, 2024

City to Implement Training, Oversight on Reproductive Rights Following Legal Settlement  California Attorney General Rob Bonta announced a legal agreement...

Dia De Los Muertos 2024: Here’s Where To Celebrate The Holiday Tradition This Weekend

October 31, 2024

October 31, 2024

Los Angeles Has a Variety of Ways to Explore Latino Culture and Honor Ancestors Starting just after Halloween, Dia de...

(Video) Downtown L.A. Reacts to World Series Victory

October 31, 2024

October 31, 2024

The Dodgers Are World Series Champs For The Eighth Time https://www.tiktok.com/t/ZTFtyDDKn/

Halloween Pre-Game Party Brings Chills and Spooky Thrills to The Rose Venice

October 31, 2024

October 31, 2024

Enjoy Halloween With Festive Cocktails, Appetizers, and a Costume Contest The Rose Venice in Venice is set to host a...

(Video) Something About Her’s First Tea Time Was a Big Hit

October 31, 2024

October 31, 2024

The Next Date is November Third. Beautiful vibes, deciduous food and drink. Don’t miss it. @Something About Her @culvercitywlanews Something...

Something About Her Sandwich Shop Hosts Second Exclusive Tea Time on November 3

October 30, 2024

October 30, 2024

By Dolores Quintana West Hollywood’s Delightful Sandwich Spot by Vanderpump Rules Stars Has Tea Service Something About Her, the adorable...