Furthermore, according to a report released by a news station back in 2013, nearly 600 independent distributors of the diet and nutrition sales brand Herbalife were disciplined by the company and instructed to make various untrue medical claims so that they could sell the company’s weight-loss shakes and supplements easier. Although many people point to Herbalife’s business model and consider it being similar to a pyramid scheme, when asked about it, FTC declared that they were not focused on “labels”.
FTC Chairwoman Edith Ramirez told reporters that “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”. Herbalife officials agreed to pay the $200 million fine as well as a $3 million settlement with the Illinois Attorney General, as victories. According to the company the settlement is nothing more than just “an acknowledgement that its business model is sound”, as it was claimed by Herbalife CEO Michael Johnson.