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Herbalife Live Events and Testimonials RICO and Misrepresentation Class Action

Herbalife has a system which it touts as a way to success: sell its products, recruit others to do the same, and attend its live events. Events are held every month around the country, ranging from small groups to Success Training Seminars (STSs) to large events with as many as 20,000 participants, according to the complaint for this class action, and the company encourages sellers to “qualify” for special treatment at them by making large wholesale purchases of its products. The complaint quotes a speaker as saying, “If you go to all the events, you qualify for everything—you will get rich.”

The class for this action is all persons who purchased tickets and attended at least two Circle of Success events, from 2009 to the present, in pursuit of Herbalife’s business opportunity.

In 2016, the Federal Trade Commission (FTC) sued Herbalife, accusing it of basing its business on the fiction that sellers are likely to earn high incomes. In reality, the FTC said, the program’s incentives lie not in selling product but in recruiting more sellers who will buy the product in quantity. The FTC’s complaint says, “The overwhelming majority of Herbalife Distributors who pursue the business opportunity make little or no money, and a substantial percentage lose money.”

Herbalife ended up paying $200 million to the FTC and agreed to change some of its business practices. However, one thing that has not changed is its “Circle of Success” that pushes the necessity of attending its events, on a monthly or even weekly basis.

The events can cost participants thousands of dollars, the complaint says, and “[t]he event system lures and ensnares people … with the guarantee of significant income, a better lifestyle, and even happiness–all to be easily attained through event attendance.”

According to the complaint, the events are intended to be rousing and inspiring, designed with a formula where “only 25% of an event should be devoted to information … while the remaining 75% should be reserved for success testimonials.” These testimonials are what the complaint calls “emotionally manipulative” stories of “former dropouts, vagrants, bartenders, flight attendants, nurses, teachers, single mothers, used car salesmen, bus drivers, and college volleyball players–each of whom has achieved astounding success through Herbalife and through religious attendance of Circle of Success events.”

The complaint describes “[l]ong scripted days of income claims accompanied by loud music, shouting, clapping, hugging, and crying” that “move the prospect toward ‘I can do this!’” However, the complaint lays out the improper ways in which some of the successful actually make their money.

The complaint alleges that the purpose of the events is to disseminate fraudulent income claims, recruit new members, and increase the investment and engagement of those who have already signed up for it. The complaint therefore claims that Herbalife has violated RICO statutes as well as engaged in negligent misrepresentation. 

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Herbalife Live Events and Testimonials RICO and Misrepresentation Complaint

September 18, 2017

Herbalife has a system which it touts as a way to success: sell its products, recruit others to do the same, and attend its live events. The complaint quotes a speaker as saying, “If you go to all the events, you qualify for everything—you will get rich.” According to the complaint, the events consist primarily of testimonials,  which the complaint calls “emotionally manipulative” stories of “former dropouts, vagrants, bartenders, flight attendants, nurses, teachers, single mothers, used car salesmen, bus drivers, and college volleyball players–each of whom has achieved astounding success through Herbalife and through religious attendance of Circle of Success events.” The complaint describes “[l]ong scripted days of income claims accompanied by loud music, shouting, clapping, hugging, and crying” that “move the prospect toward ‘I can do this!’” However, the complaint lays out the improper ways in which some of the successful actually make their money. 

herbalife_live_event_complaint.pdf

Case Event History

Herbalife Live Events and Testimonials RICO and Misrepresentation Complaint

September 18, 2017

Herbalife has a system which it touts as a way to success: sell its products, recruit others to do the same, and attend its live events. The complaint quotes a speaker as saying, “If you go to all the events, you qualify for everything—you will get rich.” According to the complaint, the events consist primarily of testimonials,  which the complaint calls “emotionally manipulative” stories of “former dropouts, vagrants, bartenders, flight attendants, nurses, teachers, single mothers, used car salesmen, bus drivers, and college volleyball players–each of whom has achieved astounding success through Herbalife and through religious attendance of Circle of Success events.” The complaint describes “[l]ong scripted days of income claims accompanied by loud music, shouting, clapping, hugging, and crying” that “move the prospect toward ‘I can do this!’” However, the complaint lays out the improper ways in which some of the successful actually make their money. 

herbalife_live_event_complaint.pdf
Tags: Deceptive Business Practices, Deceptive Misrepresentation, Emotional Manipulation, Live Events