Before You Know It Thats 155 Supervisors
Herbalife Launches 'Re-Preparation' In Response to ABC News Undercover Investigation
New manual, hotline come afterward distributors' medical claims caught on tape.
May 5, 2014 — -- The nutrition and diet shake company Herbalife has undertaken a "pregnant re-training initiative" in response to incidents captured by ABC News undercover cameras in which some of the visitor'south contained distributors were seen making medical claims near the products and boasting most the potential for riches.
"In direct response to the interview where Brian Ross brought to calorie-free instances of members making unauthorized production claims, the company began a significant re-training initiative," Herbalife spokeswoman Barb Henderson said in an email Monday.
With every product society, the visitor is now aircraft a guide book that contains detailed examples of what distributors tin and cannot say near Herbalife products, Henderson said.
During the ABC News investigation into Herbalife, two reporters went undercover as Herbalife recruits and recorded interactions with independent Herbalife distributors in the New York area. They attended entry-level training seminars run past local distributors and national corporate-run Herbalife conferences.
All of the sessions featured personal testimonials from distributors touting the nutritional and weight loss benefits of Herbalife's products and the business concern opportunities presented past distributorship. But in some instances, the underground investigation found examples of distributors boasting to potential customers that the company's products helped treat maladies ranging from diabetes to heart disease.
A Staten Isle, N.Y., Herbalife distributor even told a potential client -- who was really an ABC News reporter wearing a hidden camera -- that a woman with a brain tumor became symptom gratis subsequently starting on Herbalife products.
"She used to shake similar this because she lost control of her motor skills to the tumor and she said part of her cerebellum was deteriorated," he said. "If you meet her at present, she's similar one of us hither… Any it is that the product did, it helped her a lot."
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Herbalife executives told ABC News that the company had taken pains to prohibit such tactics.
"I am appalled to hear you say this," said Herbalife President Des Walsh, when confronted with ABC News findings in an interview. "What is happening at that place is a consummate and absolute violation of our rules."
At the fourth dimension ABC News recorded the medical claims, Herbalife was distributing training materials that instructed its members to avoid such claims. "Nutrition club members may share their experiences from using the products, but the products are not intended to diagnose, treat, forestall or cure any illness or medical condition, and under no circumstances should there exist any statements, advertisement or implications to the contrary," i such alarm says.
At present, Henderson said, Herbalife has established a hotline through which members and consumers tin written report potential violations.
"Nosotros are also exploring additional options including engineering that will allow the company to randomly record testimonials at company-supported meetings and also independent member meetings promoted by the visitor to place claims violations, which will assist in speedy application of sanctions up to and including termination," she said.
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Walsh said during his interview with ABC News that based on the feedback the company gets from "hugger-mugger shoppers" who deport compliance inspections for Herbalife, the instances of improper medical claims are rare. But ABC News reporters encountered them multiple times. At one session in Queens, N.Y., a parade of members rose to talk about their personal experiences with the products. One distributor said earlier she started with Herbalife she was suffering from early congestive heart failure.
"Nothing worked, I tried everything before Herbalife," she said. "I had to finish three or four times on a flight of stairs. I got on these products, and in nearly three days that dry coughing that a heart patient has started to go away. And you tin can meet, I have incredible energy, and I honey these products."
Another said, "Thank you to the production, I don't accept any issues at all – I don't become sick at all during the year with a flu or common cold or nothing."
A distributor elicited thanks when she appear that Herbalife had helped her get pregnant.
"Before Herbalife, for my bad nutrition, my trunk developed a tumor, and for ix years I did not have my menstruation," she shared. "Then I met Herbalife, I start using the product, my menstruation problems go away, so I'chiliad forty years old, I have my showtime pregnancy."
In another Queens grooming session, there were similar claims. One woman, speaking to a large group of trainees, said she had been "taking the Herbalife products for a year."
"With these products I have been able to alleviate my bug with headaches, anemia, and my face numbness," she said.
Herbalife is a multi-level marketing company. The company'south products are non sold in supermarkets or retail stores only by people who sign upward every bit contained distributors and sell the products from their homes or through "nutrition clubs."
Concluding month, the Federal Merchandise Commission confirmed it is investigating the California-based diet-milkshake company's practices. The visitor has also been the target of year-long short-sale campaign by the hedge fund Pershing Foursquare, which gambled $ane billion on the prospect that the publicly-traded company would neglect. Pershing Square made that "short" investment arguing that regulators would determine that the visitor was operating every bit an illegal pyramid scheme -- a claim the visitor has long refuted.
ABC News recorded Herbalife distributors talking about the potential for big amounts of income that could come from signing upwards new distributors, fifty-fifty though the company'due south own figures show the vast majority of Herbalife distributors do not make anything beyond what they make from selling the company's products themselves. Just 199 of all distributors – a tiny fraction of one percent -- brand over $250,000 a yr.
During ane local preparation event for newly recruited distributors, an Herbalife distributor said, "Last month, I made most, about $viii,000." Another said, "Because of Herbalife, I'one thousand able to purchase my house, a million dollar house, all cash paid for."
At the aforementioned training session, a loftier-ranking Herbalife distributor explained that "you don't have to be some sort of super salesman" to earn a very big income as a distributor who signs upwards other distributors.
"Before you lot know it, not merely volition you exist a supervisor, but you'll have supervisors under yous, who'll have five supervisors under them, who'll have five supervisors under them," the teacher explained at the Herbalife seminar in Flushing, Queens. "That's 155 supervisors and if they're each doing about 2,000 to 2,500 volume points a calendar month, you're going to be making somewhere in the neighborhood of $42,000 a month."
That would be over $500,000 a year.
Henderson said Herbalife is "first and foremost a nutrition company where three quarters of our members bring together to be able to eat our products at a discount and one quarter of our members are so passionate about our products that they likewise choose to resell."
She said the visitor has done studies that "have clearly shown that the vast majority of Herbalife members have realistic expectations and a positive feel."
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Source: https://abcnews.go.com/Blotter/herbalife-launches-training-response-abc-news-undercover-investigation/story?id=23595674
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