Herbal Life: Another Pyramid Scheme?

I’ve always been skeptical of anything that requires me to put out money upfront to purchase a product prior to selling. Not to say that these “entrepreneurial” opportunities can’t be lucrative, it just takes a certain type of person to sell a product. I can recall a company called Cut Co. that became very popular back in my sophomore year of high school (sometime around 2003/2004). Not sure if this had become a national craze but the company certainly targeted teens in the Philadelphia area. I saw excitement skyrocket and plummet within a matter of minutes when my peers were told how much money they could make only to find out $300 was needed to start. Similar to that situation, there have been claims that Herbal Life has been preying on “poor Latinos,” who are not just in need of money, but who are less likely to understand the specifics of the contracts presented to them. Reports on an investigation prompted by claims made by hedge fund manager, Bill Ackman.

They share the story of 68 year old Miguel Calderon. He says that an Herbal Life Distributor swindled him into spending $30,000 of life savings on protein shakes that he has not been able to successfully sell. Calderon has a sixth grade education. Apparently he is only one of 16 who have made similar accusations. The question is now whether Herbal Life is encouraging this presumably illegal activity(taking advantage of a specific demographic) or if there is one or more individual distributors to blame. Hopefully the investigation will unveil an answer.