The debate over whether or not nutrition, skin care and weight management products giant Herbalife is a legitimate company that actually enables someone to become an entrepreneur, work from home and create their own financial success or if it is a pyramid scheme is once again very much in the news.
If it’s the latter, then Herbalife may be destined for trouble sooner rather than later as the pressure to prove itself is on once again, not to mention the fact that so-called “pyramid schemes” are not a legitimate multi-level marketing (MLM) business model and are illegal.
It’s a topic we’ve tackled more broadly before in an effort to guide and educate prospective business opportunity and other work-from-home or other small business entrepreneurs as they do their homework, especially where MLM is concerned. But we also covered the more specific Herbalife debate as it was really heating up starting back in January of this year when the very public and really nasty argument between hedge fund goliaths Bill Ackman and Carl Icahn dominated the airwaves and had everybody talking.
Now, however, the assertion isn’t just that it’s a scam, but that the company actually targets minorities of various groups in what has been termed a “methodical and calculated manner.” While whether or not Herbalife’s stock is worth a dime might be important to Wall Street types, real people—oftentimes those who are most vulnerable and can least afford it — are taking a beating.
That was the position taken by the National Executive Director of the League of United Latin American Citizens (LULAC) Brent A. Wilkes in his Huff Post opinion piece that ran on Monday anyway. Among the other choice terms he used to describe the company? How about lured, predatory, fraud and duped, to name just a few?
Those are some pretty bold assertions, to be sure, but Wilkes and his group aren’t the only once making them right now.
In fact, a coalition of Latino and African American civil rights organizations, LULAC among them, are currently urging the state of California to launch what they believe to be a long-overdue and full investigation of Herbalife, a company they claim is not about selling product so much as it is scamming its distributors.
Having done his own impressive yet somewhat anecdotal research into this issue, Wilkes’ claim is that the Latino community in particular is actually being targeted by Herbalife, with many neighborhoods now at the saturation point for distributorships. While some distributors do well, it’s only because they have become “recruiting machines,” Wilkes writes. “Ninety-nine percent of…distributors will lose money in the scheme.”
According to Herbalife’s own estimates as cited by Fox News Latino, at least 60 percent of its more than half a million distributors worldwide are Spanish-speaking Hispanics, but because that number does not include bilingual or non-Spanish speakers, it could be as high as 80 percent. However, Herbalife North America’s senior director of corporate communications, Marco Antonio Gonzalez, maintains that the assertions of Wilkes and the coalition are misleading and don’t tell the whole story.
“The difference between a pyramid scheme and Herbalife is we don’t pay distributors to recruit—end of story,” he asserted in his interview with Fox News Latino. “An attack on Herbalife (by these groups) is…a disservice to the (very) community they are trying to protect.”
If you’d like to read Wilkes’ opinion piece in its entirety, and we highly recommend it, get the entire story here…or to learn more about the Herbalife debate and how it’s heating up on the West Coast, we encourage you to read this Fox News Latino article titled, “Latino Groups Urge California to Investigate Herbalife as a Pyramid Scheme” by Bryan Llenas now!