Hundreds of thousands of Herbalife distributors lost money trying to sell the company's wares, but many of them will soon be getting a little of their lost earnings back as the Federal Trade Commission mails checks to nearly 350,000 people.
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. It's 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.”
In its complaint, the FTC charged Herbalife's compensation structure was unfair because it rewarded distributors who recruited other distributors more than those who moved the merchandise. The same charge is levied at many "multi-level marketers," businesses that sell through a network of independent distributors instead of through normal retail channels.
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.
What to do
The payments are being determined from the FTC's examination of Herbalife's records. If you were a Herbalife distributor, you do not need to take any action.
You should deposit or cash checks within 60 days. Beware of scams: don't believe anyone who says you must pay a processing fee or provide any personal information to get your refund check.
If you have questions about the case, contact the FTC’s refund administrator, Analytics Consulting LLC, at 844-322-8146.