The US Federal Trade Commission said it has reached a settlement deal with Herbalife to compensate its victims who lost various sums of money to the multi-level marketing scheme that ended up becoming a pyramid scheme.
A minimum of USD100 was paid out to each victim of the scheme. They will all get their payments via mail.
Herbalife will also reassure the FTC that it will engage in a retail structure to qualify as a legal MLM company
In a statement issued by the FTC on the 10th of January, 2016, the FTC said:
The Federal Trade Commission is mailing checks to nearly 350,000 people who lost money running Herbalife businesses. The checks are the result of a July 2016 settlement with the FTC that required Herbalife to pay $200 million and fundamentally restructure its business. This represents one of the largest redress distributions the agency has made in any consumer protection action to date.
“We are pleased to announce that hundreds of thousands of hard-working consumers victimized by Herbalife’s deceptive earnings claims will receive money back,” said Jessica Rich, Director of the agency’s Bureau of Consumer Protection. “Along with changes the company will make to its business structure, this is a win for consumers.”
The FTC used Herbalife’s records to determine who would receive a refund and the amount of each check. Generally, the FTC is providing partial refunds to people who ran an Herbalife business in the United States between 2009 and 2015, and who paid at least $1,000 to Herbalife but got little or nothing back from the company. Most checks are between $100 and $500; the largest checks exceed $9,000.
Also today, the FTC released Redress checks and compliance checks: Lessons from the FTC’s Herbalife and Vemma cases, which, for multi-level marketing companies, provides guidance drawn from the FTC’s cases against Herbalife and Vemma, including four key principles on compliance.
Recipients should deposit or cash checks within 60 days. The FTC never requires people to pay money or provide account information to cash refund checks. If you have questions about the case, contact the FTC’s refund administrator, Analytics Consulting LLC, at 844-322-8146.
To learn more, read about the Herbalife redress program. For tips on what to look for when joining a multi-level marketing company, read Money back for 350,000 Herbalife distributors.