Herbalife vs Black People

African-Americans Untapped

Herbalife-African-American-Initiative

You know who loves them some Herbalife? iStockphoto black people … they’re fucking nuts for it.

But iStockphotos don’t have wallets :: or credit cards :: or retirement accounts :: or exploitable fears about future uncertainty … so Herbalife was hoping to increase their pyramid scheme’s reach with real live black people instead.

They started the African-American Initiative :: which is just what it sounds like … equal opportunity business opportunity scamming. They take the African-American Initiative {or AAI as they call it} on tour each year :: helping distributors understand how they can better target black people with misinformation campaigns … for fun and profit.

Black America is an “untapped market” :: and Herbalife is going to tap that.

It’s like Frederick Douglass once said …

Lose weight now. Ask me how!

Utah’s former Attorney General Mark Shurtleff :: himself a white expert on America’s long-suffering black population … has endorsed MLM as one of the best ways for poor people to rise up. He would surely approve of the African-American Initiative’s explicit racial targeting.

New York City Councilwoman Melissa Mark-Viverito :: on the other hand … is a bit of a hater. Says she in a recent letter the FTC

Herbalife sells business opportunities to people in vulnerable communities. Herbalife executives have already admitted to targeting minority groups, openly boasting about the company’s “African American initiative” and “Latino business.” By recruiting vulnerable people in East Harlem and South Bronx with little or no business experience, Herbalife convinces new sellers to ignore the risks and high costs of their program. Herbalife’s recruitment techniques promise financial freedom with only a few hours of work, an enticing offer to many lower income New Yorkers.

Unfortunately, once new recruits become Herbalife sellers they most often end up in debt and unable to make a profit. Due to Herbalife’s above average costs, it is difficult for these people to sell enough of the product in order to realize a significant return on investment. Many of my constituents are ending up in serious debt as a result of Herbalife’s recruitment and illegal business practices.

High risk :: high cost :: serious debt … you’re welcome black people.

If it would make the councilwoman from the South Bronx feel any better {and I’m sure it wouldn’t} :: her constituents are fucking flush with cash in comparison to some of the African-NotAmericans targeted by Herbalife’s shenanigans … see e.g. Herbalife Zambia.

With Zambia’s per capita GDP of $1,500 :: lucky black families can enjoy the purchase of one canister of Cookies and Cream Formula 1 shake mix … for the low low price of only one week’s wages.

The African-American Initiative :: teaching white people how to scam black people … isn’t the only Herbalife instructional road show. Members of the pyramid’s top rungs also regularly go out on tour :: teaching all people how to scam all other people … in a more race neutral way.

I’m sure those leadership tours reflect a racial diversity similar to that found at the bottom of the pyramid :: where people from all races :: special emphasis on low income minorities … are getting totally lifejacked.

Right Herbalife? You have like Another African-American Initiative {AAAI} :: or something … that ensures that black people are adequately represented in leadership?

Okay … maybe not.

The Whitest Scammers U’ Know.

I emailed Herbalife’s African-American Initiative and asked them about the dearth of African-Americans at the top of the pyramid. And by “dearth” I mean :: zip :: nada :: nothing … no one. But something tells me they won’t be writing me back. I guess they’re mad at me or something :: just because I keep calling for their company to be dissolved … and their vanilla CEO arrested.

Speaking of CEOs :: here’s the HLF executive team …

… does tie color count as diversity?

>> bleep bloop

47 thoughts on “Herbalife vs Black People”

  1. Herbalife is, in my opinion, one of the most virulent of MLMs and one of the largest in the world. The entire world–not just the first and second worlds–needs for this company to go away. However, they are one of an estimated 1,000+ MLMs who prey on the vulnerable–from starving populations in the third world to housewives in the first world who just want to help with family finances without having to leave their children at home.

    SD is doing a wonderful public service by publishing his opinions and providing this forum where people like me can express theirs. Unfortunately, focusing on one particularly nasty example of MLM abuses will never solve the problem. It’s sort of like playing “Whack-a-Mole”. You knock one of the pesky critters down and another one pops up. If anything meaningful is to happen, the public, the media, our elected representatives, the courts and government administration need to be taught the reality that “Good MLM” is, to quote Jon Taylor–the longest-running activist in the anti-MLM cause–an oxymoron. The model itself is the culprit. Exponential growth potential looks great early on, but it is completely unsustainable.

    Until the sinister nature of entire MLM industry is brought out into the light of day and consigned to the same legal status as other organized criminal enterprises…and it is exactly that, we’ll see them come, make their millions at the expense of their victims, then go…only to be replaced by another MLM–often headed by the same predatory pricks that ran a similar scam under a different name. (Phew, gotta catch my breath after that interminable sentance) As the US goes, so goes the world.

    No doubt, the same predators, once taken down with their lousy business model, will come back in a different guise. But the MLM industry has become the most pervasive and costly fraud in America today; and it must be dismantled.

    1. @Roger Willco ::

      Agreed :: with the caveat that focusing unrelentingly on one particularly nasty example … is a great story telling technique. None of that wider social change :: which {as you point out} is so critical … can be achieved if people’s attention can’t be attracted and retained.

    2. @Roger Willco,

      No doubt, the same predators, once taken down with their lousy business model, will come back in a different guise. But the MLM industry has become the most pervasive and costly fraud in America today; and it must be dismantled.

      I’m inclined to agree.

      As @SD has already said, Ackman made a chink in the armor of Herbalife’s faux propriety with his boastful bet. So regardless of what happens with that bet, now is the time to tell people often and loudly that Herbalife is a scam. Herbalife is fraud.

      Herbalife is killing your disadvantaged friend’s inalienable right to the pursuit of happiness one by one.

      If Herbalife, or more precisely that incredibly stupid 1979 ruling were to fall, all of MLM would come down.

      Fraud and scam are so endemic to MLM that the lawmakers should have ample reason to write laws such that MLMs must report detailed information to regulatory authorities about how many non-recruits buy the product. Absent those detailed figures, the MLM should not be allowed to continue to exist.

      It’s really very obvious. Unless you’re on the inside. Then nothing is obvious and all is obfuscation.

      (I have a feeling some of that wasn’t written clearly. oh well.)


      Furry cows moo and decompress.

  2. I couldn’t agree more. However, there have been several MLMs exposed–some bigguns and some littleuns. I suspect the problem may lie with the prevalent urban legend that there are “good” MLMs and bad ones. Whatever the case, the next step–application of lessons learned to the entire industry–seems to never happen. Public awareness is clearly key to this second step; but the commercial media, with few if any exceptions, backs away from nailing it down–prolly on accounta they’re ascared of gettin’ soood–not an unreasonable concern, given the MLM industry’s demonstrated propensity to sooo their critics.

    You and posters on your site thankfully make frequent reference to MLM’s generally skanky nature. However, it’s hard to find a thread on this topic on any blogs that don’t bore the shit out of anyone who isn’t a cemetery resident.

    How about it SD? Puleeeez?

    1. @Roger Willco, There’s a difference between legal and illegal MLMs… at least by current definition of the law, with a HUGE gray area, and that is a LOT of risk for any joiners.

      A legal MLM can backslide into illegality easily if the company don’t keep control of the affiliates, difficult when MLM practically outsourced the entire affiliate management to the affiliates themselves. And there’s no way you can know if a MLM is legal or not merely by studying past history. It takes prolonged research into actual operating model (as practiced) plus laws.

      Furthermore, a legal MLM need not be a profitable one… profitable for the affiliates, that is. Is there much profit to sell detergent or mobile phone plans? Not.

      So the risks are tremendous, rewards are small if any until you can build up your “sales empire” (their words, not mine), and it’s much easier to cheat your way up the ladder using cult tactics, if you care to try at all.

      What have I missed? Social cost? Monetary cost? Cult behavior? Anything else?

      I think I posted this before and I got laughed at, and I’m not sure why.

      Is there such a thing as “good” MLM? That may be (probably is?) an oxymoron. A ‘good’ MLM, by definition, is profitable for the affiliates, with minimal revenue due to recruiting (really should be none, with no “fudging” like self-consumption and such) is ethical and moral. That, by definition, is not MLM any more (or much of a MLM if at all).

      Was that what you were looking for? Or did I miss the mark again?

  3. Herbalife is an equal opportunity company who will happily destroy your life regardless of your race, color or creed.

    As the headline read in the Los Angeles Times in February 2013″

    “Latinos crucial to Herbalife’s financial health”

    “The Los Angeles company estimates that Latinos account for about 60% of its U.S. sales made through its network of independent distributors.”

    The newest twist on selling this crap is through home based “nutrition clubs” where you invite your closest friends in, serve them a crappy shake and then charge them four dollars for it. What a great business model! I wonder how quickly you run out of friends? Pretty damn fast, I’d think.

    So then you’re forced to invite total strangers into your home, brilliant! I’m sure nobody has ever been harmed by welcoming complete strangers into their house. And worrying about whether you’re serving a delicious shake to the next Zodiac killer isn’t your only worry, the public health department may be paying you a visit next. (you might want to comp them on that shake)

    “Operating from homes is a concern to the Los Angeles County Department of Public Health.”

    “It’s against the law to prepare and sell food — even nutrition shakes — from homes, said Eric Edwards, a county environmental health specialist. The county has shut down two Herbalife nutrition clubs in the last year for operating in retail space without proper health licenses, according to health department records.”

    1. @Barbara, You can imagine the next iteration… SELF-SERVICE Herbalife diet clubs, where you are pantomined into preparing the perfect shake, but you have to throw the ingredients into the mixer yourself, where they charge you for use of the mixer!

      (half-sarcastic)

  4. From the Business Insider:

    http://www.businessinsider.com/ftc-complaints-against-herbalife-2013-2#

    A reporter obtained complaints to the Federal Trade Commission after filing a FOIA request, some are reprinted at this site. A few of the more notable, to me anyway, included the following:

    SALEM, OR CONSUMER: ‘I was never able to sell any products and sign up any distributors and ended up selling my inventory on Amazon at a considerable loss.’

    ALBERTA, CANADA CONSUMER: ‘I am concerned another hard working person will be scammed in this very elaborate system to have spend and spend and spend with promises of making a lot of money.’

    CONWAY, AR CONSUMER: ‘I was told there was much more money to be made in recruiting. I felt like I was ‘stuck’–I had invested so much money and time, I couldn’t quit.’

    FRANKLIN, PA CONSUMER: ‘Okay, so I’ve spent thousands that I did not have and have made minimal profits…I feel I’ve been taken advantage of. I believed what was stated: that if I just followed the step by step process I would be successful.’

    There were 192 complaints over the last seven years that were released. Considering how long herbalife has been around and the fact that most consumers who were cheated by herbalife would not have made formal complaints, well, the mind boggles at how many people have been scammed.

  5. From herbalife’s own paid medical spokesperson: Susan Bowerman, MS, RD, CSSD

    “Attitudes regarding body size also play a role in explaining differences in obesity rates – in many cultures, being overweight is not considered a negative trait. Black and Hispanic women, for example, report greater satisfaction with their body size than white women – which means they are less likely to try to lose weight.”

    So, Susan’s job seems fairly simple, shame those African American and Hispanic women into accepting white standards of beauty. Maybe herbalife could develop a line of hair relaxers while they’re at it.

    1. @Barbara, Black women are not into Hair Relaxers like the 80’s lol.. The “trend” is no relaxer and for that we are viewed as ghetto and no accepted. Unless you dye, fry and lay it to the side… you are a “problem” in the office.

      Natural hair is the new Black hair.. no Relaxed.

      I have locs.. so u know I must be a convict and threat.. lmao

  6. ok I would be considered an African American… um Herbal Life is crap…

    The majority of people who deal in herbal life I have seen are Latino… If they are trying to drag us back on the BOAT… I will become NAT TURNER on their A$$.

    Actually the biggest scam I have seen my brethren become slaves to is Empire Network. Sick pathetic bunch of folks.

    Wondering if my son who is African American/Irish/German + would fall for this “African-American Initiative with Herbal Life”?

    I’ll tap that market for them if I’m ever asked to be a herbal slave lmao.. i will sooo tap that fckin market on them lol

  7. Actually Herbalife seems to be trying to clean up their act with this reclassification.

    Blacks, Hispanics, the poor, the struggling single moms and desperate dads etc, at the bottom of the “chain” formerly labeled distributors are now “customers;” officially reclassified as “members.” This Juggling Act eliminates 2 million out of 2,300,000+ “distributors,” according to their calculations, thereby eliminating 86.96% of their former controversial “distributor” base.

    My replies posted on Seeking Alpha…

    My first reaction:

    “herbs4mike” – Did anybody notice that Herbalife published the amount of active distributors? Just over 300k worldwide. That means 300k independent distributors did the entire $6.5 Billion in retail sales. The other 2 million + are customers… Called members now. That’s gotta hurt Ackman.
    *******
    I believe that’s referred [to] as “juggling the books”.

    David Thornton

    Then I did some calculations – They left themselves wide open to this…..

    Aug 1 2013

    Let’s take another look –

    “herbs4mike” touts…. “Did anybody notice that Herbalife published the amount of active distributors? Just over 300k worldwide. That means 300k independent distributors did the entire $6.5 Billion in retail sales. The other 2 million + are customers… Called members now. That’s gotta hurt Ackman.
    ******
    Thanks, “herbs4life” for drawing our attention to that “wealth of truth.”

    Wow, 300,000 newly revamped independent distributors did the entire; the entire, massive retail sales of an incredible $6.5 billion, that’s BILLION dollars in retail sales? Really???…… But, wait a minute, “herbs4mike,” mathematically behind the “smoke & mirrors” it doesn’t appear that THAT fudging of the books really helps much.

    With this new HLF calculation, the average distributor now has sales (not “take-home pay) of $21,666.67/yr. (6.5 million / 300,000: Now, the poverty-line in the U.S. is considered to be $23,550 for a household of 4.

    So, please “herb4mike” reveal the actual net “take home pay” suffered by the average newly defined “distributor” or offer an estimate based on the P.M. [Profit Margin] less reasonable business expenses, subtracting the unreasonable millions the top “sliver” in this “pie” receive, less all the capital and maintenance expense of the actual factories, warehousing etc, not to mention the wages of myriad corporate staff and factory labourers who churn out the product (and seem oblivious to the great Herbalife opportunity that actually offers freedom from this type of mundane, subservient factory labour and ordinary clerical jobs)….. and what, “herbs4mike,” is the figure YOU come up with as a “take home pay” based on world-wide sales of a massive $6.5 billion?

    I will help you with some math on this one, “herbs4mike”. Some of this stuff just seems to escape you. The guys at very top know it’s all Smoke & Mirrors but they bank on the fact that guys like you will never figure it out and go on parroting the HLF Mantra.

    Now, simply take all the “wages” and bonuses of the of the top executives (WBTE) and top “distributors” (TD) and deduct that from the gross sales, (GS) then deduct those business expenses, corporate staff and factory labour costs (BE CS&FLC) above and divide that figure by the 300,000 newly labeled distributors (NLD) less the few top characters I mentioned, and what is the average “take home pay” (ATHP) of the massively reduced number of what are now considered “true distributors.”…. Hint…. Not a whole hell of lot!!!……

    The actual mathematical formula I’ll share with you, “herb4life” and any HLF “distributors” especially India and other such countries [and the Blacks and Hispanics in America] so you may understand the “Smoke & Mirrors” and just how the “wool” is being successfully “pulled over your eyes.” (The formula I have created no doubt, conforms to GAAP)

    ATHP = GS – WBTE&TD – BE CS&FLC. / (300,000 NLD – TE)

    What, “herbs4mike,” are you now going to rename the poor guys at the bottom of the endless recruiting chain of THIS newly redesigned, renamed and reshuffled pyramid scheme?

    David Thornton

    p.s. “herbs4mike” left this parting “shot”… “That’s gotta hurt Ackman.”…..

    Really “mike”??? Beg to differ. It seems to me it only bolsters Ackman’s position and adds a bit of levity to his day!!! Just hope young Bill doesn’t suffer a concussion ROTFL and old Icahn a heart attack when they both see this info uncovered and dragged into the “light of day.”

    http://seekingalpha.com/article/1592572-hemptons-failed-test-of-herbalife-and-still-unanswered-questions

  8. This woman is trying to stop the scams in immigrant communities in NY state
    Julissa Ferreras

    City Councilwoman

    (D-East Elmhurst)

    This is the reaction she gets:

    Steve from NY says:
    What a socialist scam this lady is! Stop with trying to keep your people poor an uneducated, let Herbalife and their people teach them the skills they need to build a business. “Ohh the more money they make and more educated they get and move from your god Forsaken left wing looserrville district.” Jessie Jackson tries to do the black neighborhoods but they fight back!

    Rene Porcile says:
    Some people want an opportunity to be healthier and/or make extra income, anything with that?

    People need to be educated about how Pyramid Schemes operate and work for only the 1-2% at the top. One scheme stops and a new one starts. Unless the population understand how this only makes the creators of these types of programs work, it is a loosing battle.

    1. @Phoebe, That’s pretty common sheeple reply to the fraudfighters. Zeek Rewards ponzi had a TON of people last year, right about this time, just weeks after ti was closed by SEC in a big raid, that says SEC just wants to protect the big banks and the 1% and blah blah blah. TVI Express sheeple in Africa had similar comment I had documented before as well.

      http://amlmskeptic.blogspot.com/2012/08/bad-argument-you-are-1-accusation.html

      The problem is you also have bogus-gurus (bogurus?) like Kiyosaki who has books like “Conspiracy of the Rich” in print that feeds into that general paranoia against the rich, coupled with pithy/useless financial advice.

      Do the big media commentators talk about frauds? It seems they don’t do at all, or nobody pays attention to them (except Ackman)

  9. You know what’s really horrible? Most of the money these hard-working, poor, disadvantaged non-whites lose to the evil white MLMer scammers comes from the $40 trillion+ that white Americans have been forced to give to non-whites over the past four decades. It’s almost as if the 40 trillion is just being wasted! Those white devils are importing a million non-whites from third world countries every year just so they can run scams on the poor innocents. When will it end?

  10. It is against the terms of use of stock photo services to use images of people to imply the use or endorsement of any product or service. Just a word to the wise (er, anyone who wants to complain about such shenanigans.).

    1. @Orenthal,
      “$40 trillion+ that white Americans have been forced to give”

      Let me give you a little history lesson. Nobody forced anyone to scam , enslave, beat up, rape, lynch, etc….

      You have a personal choice to use another individual for your own personal gains in life.

      I am majority non-white ( grandparents are another story )

      My family never got a thing from anyone without having to go through hell on earth in North America. My grandfathers still served in wars for this country, and called themselves an American ( even when they had no right to vote )

      Why don’t the scammers force themselves to go straight to hell and save the world…

      You don’t give anyone anything unless you have already raped them of everything. ( thrid world countries )

      Imagine if DeBeers had to purchase the diamonds instead of being a slave master??

      There are times when I wish I was not an American…. I personally think that unless you are not a part of the top 1%.. you are a slave , no matter what race.

      1. @Phoebe,

        The comment you’re talking about was made by Orenthal. There’s no need to give Dr. Franz a history lesson, he made a valuable comment and I don’t know why he is being voted down.

        1. @Barbara, yes Barbra, too bad i don’t have an option to delete the comment. The person was quoted and hope they read readers can see this.

          The history lesson was given to Orenthal the one who obliviously assume the shade of his flat ass will give him some special treatment if he waves a flag.

          Maybe Droid is eating carrot cakes? (if u see this Salty delete my online history lesson for bumbaclots)

        2. @Barbara,

          Dr. Franz’s comment is correct when it comes to iStockphoto’s license agreement but wrong regarding many other stock photo services.

          The first and second photos on the left in the African American Business Tools banner are available through Photos.com in the U.S. and Thinkstock by Getty in Canada, and the second photo is also available through F1online in Germany. From Tineye’s results, it looks like the third photo was available through Inmagine. John Hempton’s “Obama” photo is available through F1online and Fotosearch. None of those restrict implied use or endorsement in their licensing agreements.

          They do restrict unflattering, controversial and defamatory use, but I don’t see how the U.S. legal system can call it unflattering when they can’t even call Herbalife a pyramid scheme.

          1. @Lanna,

            “I don’t see how the U.S. legal system can call it unflattering when they can’t even call Herbalife a pyramid scheme.”

            Touche!

  11. Bronte Capital is now also writing about how Herbalife use iStock photo:

    http://brontecapital.blogspot.co.uk/2013/08/a-little-herbalife-red-herring.html?spref=tw

    …see comments to the post as well.

    But incorrectly state that Obama was unknown at that point – but in fact Obama and his family had already received national attention.

    …yes Herbalife choose to use this iStock image in their prospectus:

    http://www.sec.gov/Archives/edgar/data/1180262/000104746904030210/g73840.jpg

    1. @Random stuff,

      Yes, but as several people pointed out, the children are the wrong ages to be President Obama’s kids. I think it’s a sad attempt by herbalife to play the old “they all look alike to me” card.

    2. @Random stuff,

      John Hempton needs to stop talking about things he knows nothing about.

      First, you’re right and he’s wrong. Obama did get national attention before Herbalife filed the prospectus dated October 1, 2004. Obama gave this keynote address at the Democratic National Convention on July 27, 2004.

      Second, though, out of all the billions of stock photos out there, this one was primarily selected because it’s the right color palette, shot outdoors in natural light, and showing a smiling upper-middle-class family. Look at the other photos in the prospectus. Those are the parameters given to the junior designer who added this to the image library. That continues to be the photo style used in the Live Healthy section of Herbalife’s site, while the Our Product Solutions section uses one smiling person isolated on a white field, and the About Herbalife section uses photos of individual people in their workplaces.

      Maybe this one was the final selection because it resembled that guy who spoke at the DNC in July, but it made it through the selection process because it fit Herbalife’s photo guidelines. No conspiracy needed.

    3. @Random stuff, I also pointed out problem with Hempton’s defense of Herbalife on my blog. I’ve posted URL before so I won’t post it again.

  12. While Rep. Loretta Sanchez (D-Calif.) is trying to get members of the Hispanic Congressional Caucus to sign a letter to the FTC concerning herbalife practices there is one member she will definitely not sway.

    Rep. Xavier Beccera (D-Calif.) not only has herbalife headquarters located in his district they also contribute to his campaign coffers. They were third of the top five contributors in the 2011-2012 campaign giving $20,643 in total. That is according to Open Secrets.

    http://www.opensecrets.org/politicians/summary.php?cid=N00009774&cycle=2012

    “It’s totally appropriate for Members of Congress to be vigilant in protecting the rights of their constituents and consumers,” Becerra said. “But to do that, we need to have the facts.”

    And not just any old “facts”. The facts should be those of Herbalife’s CEO’s.

    I wonder what Dr. Carolina Reyes, wife of Rep. Becerra, would think of herbalife? Do you suppose she would give it to their own three daughters?

    I’d like to know.

  13. I don’t know where to put this, so I am gonna put it here, since it could be called “NuSkin vs Chinese People”

    Citron Research just posted this:

    http://www.citronresearch.com/nu-skins-dirty-secret-exposed/

    Can anyone read Chinese? I can’t read the linked articles. Is there a translation program that would work? According to Ctron, the articles expose NuSkin’s operations and explosive growth in China as a pyramid scheme.

      1. @K. Chang, Well, there are two links in the Citron article. Here is one:

        http://www.azhixiao.com/a/toutiaohehuandeng/shouyeyoucenarong/2013/0710/68959.html

        I should clarify…in China, MLM itself is illegal. Let’s not get into the mind fuck of arguing about this again,…. in China, you don’t have to pretend, like we do in America, that MLM is not a pyramid.

        NuSkin has been operating in China under the pretence of being a non-MLM Direct Selling business. So this recent development in China is that NuSkin is operating as an MLM, which China has already had the foresight and intelligence to see as a selling-disguised pyramid scheme.

      2. The first article is actually from dswind, which is “China Direct Selling Net”. This is the direct link, not the forwarding ADDR:

        http://www.dswind.com/a/toutiaohehuandeng/shouyeyoucenarong/2013/0710/68959.html

        Most of the stuff is about absolutely irresponsible health treatment claims, like cured cancer, fixed a chronic nasal sinus infection, and crap like like that. Even NuSkin (in Chinese, 如新) reps admit that some of their reps goes overboard with the claims.

        They also caught the same “success story” claimed by multiple reps, with same wording, so it’s clearly fake and copy/paste crap, sent by different people over Weibo (Chinese twitter) and SMS spam

        So one reporter went undercover, to multiple NuSkin reps looking for some nutritional supplements as gifts to elderly relatives. And they started claiming bull**** like lung cancer, leukenia, intestinal cancer, uterine cancer, patients all recovered due to NuSkin’s nutritional line (Pharmanex Lifepak) Then it’s heavy sales push of a triple combo of LifePak, Fish Oil, and Gandorama capsules. “Just imagine you taking these as monthly maintanence, never worry about cancer again!” (rough translation)

        Reporter then went to the Chinese FDA (National Drug Monitoring Bureau 国家药监局) and found the products to be classified as “nutritional supplement” 国食健字, not drug, does not treat symptoms or disease. Then the reporter cited “18th National Anti-Cancer Campaign Week” where experts specifically warned people “Absolutely Against any sort of nutritional supplement to fight cancer”, and it’s clear that NuSkin’s reps have went over the acceptable line.

        It’s also rumored that some reps went as far as dressed up in doctor’s white coats, conduct various “free health exams” (I hate to say I was the victim of one such free exam in the US, I’ll post link later) and make fraudulent claim of “I used to be doctor over at **** Hospital but I found this to be helping more people”.

        The article ends with long recitation of applicable laws and concludes that while there’s no physical harm done to the body by taking worthless supplements (except to the wallet), some supplements can cause problems. Some new reps, eager for results, make fraudulent claims and can cause huge damage.
        —-

        From reading this, the blame seem to be clearly on the distributors, not NuSkin / Pharmanex themselves. Not making excuses for them, but checking the official websites, there is no such extraordinary claims. It seems NuSkin China have a serious “compliance” crisis on their hands.

        1. Oops, just read the headline, and DSWind reposted it from Beijing Youth Daily Web, or 北青网. So I guess you can find it directly on Beijing Youth Daily’s website somewhere.

        2. @K. Chang,

          Thanks for translating!

          What are the spreadsheets in the photos? Google Translate is giving me the idea they are a NuSkin rep’s lists of serious diseases and corresponding “curative” NuSkin products, lists that are shown to prospective recruits. Am I on the right track with that?

          1. @Lanna, if you mean the photos of a page with tables of chinese text, it’s a bit too small, but I’ll explain what each one says:

            First
            http://www.dswind.com/upfiles/allimg/130710/0TITI3-4.jpg
            Caption: 如新华茂产品生理反应说明
            Trans: NuSkin Pharmanex product biological reaction explained

            The is a table of symptoms of possible reactions to Pharmanex products, and how the reps are supposed to spin them. It’s a little fuzzy so I can’t read it that well, the first column has stuff like dehydrated, nausea, and so on, with explanations, and what to do (drink more water, reduce dose, eat some sugar as it’s possible diabetes, etc.)

            Second
            http://www.dswind.com/upfiles/allimg/130710/0TIT450-5.jpg
            caption: 如新华茂产品及其对应病症:针对癌症
            Trans: NuSkin Pharmanex product and matching diseases and symptoms, esp. cancer

            It’s a list of sypmtoms like “sweaty palms”, “inconsistent blood pressure”, and what sort of products you’re supposed to push that will fix those problems.

            The third picture is the same, albeit a different page of the same table, continued.

        3. @K. Chang, Thanks! I have been so curious about what is going on with this company lately.

          Re your comment: “From reading this, the blame seem to be clearly on the distributors, not NuSkin / Pharmanex”

          IMHO:

          When Nu Skin was Nu-er….the company itself was getting into a lot of hot water over false claims….of both varieties, health claims and wealth claims. In the 1990’s they were fined for this twice by the FTC for a total of $2.5 million. Ouch. So now, they have gotten savvy about using the the old tried and true “independent business owner/distributors plus Plausible Deniabilty” MLM technique to quarantine themselves from false claims. Only when it gets uncomfortably dangerous and threatening for the parent MLM (eg. Ackman on HLF last December) do they suddenly get very interested in what those naughty IBO/Distributors are up to.

          Oh my heck, Nu Skin Brass, I bet you had no idea what shenanigans were going on in China, did you? I am sure you are as shocked as we all are. *Sarcasm*

          1. @2+2=4, They seem to be aware of the problem, as they’ve released multiple press releases. Here’s one, copied on DSWind

            http://www.dswind.com/zxzl/dt/68647.html

            June 14, 2013 NU SKIN has not recently appointed or contract ed any spokesperson, nor has NUSKIN authorized any organization or individual managers to conduct/sign endorsement business. Do not cite the name of another person or exaggerate the effect to mislead consumers, to avoid breaching laws and regulations. Please, partners, perform strict self-discipline, integrity, and together, we can safeguard the brand image of NU SKIN

          2. @2+2=4, This one, however, is basically cult speak

            http://www.dswind.com/cxzh/sd/68779.html

            I’m a bit busy so I’ll translate just the first two paragraphs:

            As the old saying goes: don’t neglect small acts of benevolence just because it small, and don’t commit small acts of evil just because it is small. Good/benevolence is an emotion that can be passed, but also a moving force. NUSKIN “force for good” identity is joined by more and more honest and talented people, to create a new chapter in this enterprise.
              NUSKIN founder Blake Roney said: “When we wake up every day first thing is to think how can we help at least one person, to improve his quality of life that day” NU SKIN use this philosophy as guide, backed by high-quality products, to provide sustained commitment to the cause of providing the best career opportunities for business partners, thus helping them and their families to achieve the dream of success. At the same time, NU SKIN focus on the development team “talent of four emotions”, namely ambition, faith, love and enthusiasm, it is not only for personal well-being and growth, but also commitment to the sustainable development of the company, in the process , it is more beneficial to be able to make contributions to other colleagues, truly self-worth, for the benefit of society, nation and humanity.

            Sounds grandiose, doesn’t it?

      3. Regarding the 2nd article, it’s an article by an ex-NuSkin Rep exposing the cult tactics used, which takes NuSkin from direct sales to cult-sales.

        Reporter found some of the promotional material used for recruiting, and the most prominent terms are: replicate/copy, success, million, Dubai, Dream, which leads to that poster in the Citron article, which is basically “If you can dream it, you can achieve it”. They even have a slogan “even a moron can earn a million a year 傻子一年都能挣百万”

        The whole thing apparently is run like a cult, according to the report. The steps are

        Use products — keep buying and using the products… but also push all your downlines to do the same

        Study hard — keep accepting the brainwashing message of success, that you can be rich in an instant, then parrot the messsage to your downlines

        Set goals — keep repeating the goals for the downlines, and keep reminding them they cannot succeed unless they accomplish their goals

        Write Lists — keep coming up with more people you can push the products on, drag to recruiting events, seminars, etc. Friends, family, whatever.

        Invite and Sell — use every means at disposal, ethical or not, to push sales to downline or customer

        Studious Effort in Plan — follow the plan, dedicate ALL efforts to push products.

        NuSkin apparently also used “benevolence” as a selling point. Another slogan is 相信善的力量、做好复制传承 or Believe in Power of Benevolence, Do proper Replicating Heritage/downline.

        While MLM is illegal in China, there definitely are ranks in NuSkin China, like Q, SR, SM (sales manager?), SSM, SD, NSD (national sales director?), TE

        There’s a horror story in Beijing. Woman was at home, having given birth not long ago and taking maternity leave. She said her mother was in NuSkin for over a year, during her pregnancy, and basically NEVER asked the pregnant girl how goes the baby. The mother spent at least 30K RMB buying NuSkin products. Any one in the family raising any questions gets yelled at, with slogan like “Use NuSkin will take you to a new world, if you don’t you don’t believe in power of benevolence” 用如新的产品能去新世界、不用就是不相信善的力量. The family believes she’d been brainwashed, but is powerless to stop her. The new mother lamented that because she’s pregnant, her own mother did not drag her off to NuSkin sales seminars, for that she’s secretly pleased and ashamed.

        1. @K. Chang ::

          Dude … thanks! So interesting.

          Massive false health claims … that’s one way to retail the products I guess. Used to be a bigger part of the game over here too.

          “you don’t believe in the power of benevolence” … wow

          1. @SD, how can they take a lovely word like “benevolence” and do that with it. It’s word rape. Take your filthy paws off of “benevolence”, Nu Skin. I despise them for that alone.

            MLM is “the power of benevolence”. Sheesh. Talk about 2+2=5.

            ***

            It’s interesting that China seems to really “get” the cult aspects of MLM, where for some reason here in America, there seems to be a hurdle in getting the message across that cult tactics really exist, that this really is a Thing…a real, troubling significant Thing in our culture.

            Maybe it is because in China there is a real-life, working, intimate familiarity with Totalitarianism, which I would assert is pretty much cult tactics, on a grand scale.

            1. @2+2=4, while your observation about totalitarian regime’s similarity to cults is correct, there’s one thing totalitarian regime won’t tolerate: competition.

              MLM in China is regarded as COMMERCIAL CULTS. There’s a reason why MLM in China is called 传销, or pass-on- selling. Proselyze is 传教 or pass-on-religion.

              China is also remarkably fast in their arrest and prosecution of financial crimes, and some of the harshest sentences. Pyramid scheme PARTICIPANTS, esp. those who recruited a lot of downlines, are routinely sent to jail for years, and it seems investigation and prosecution only took a year. TVI Express scam entered China in early 2009, bloggers dug up dirt on it by May 2009, and reporters jumped on by June 2009, and arrests started. By September 2009 TVI Express is pretty much dead in China.

              There are even instances where Ponzi scheme leaders are given death penalties in China.

  14. Slightly unrelated news… Apparently hiring someone to goldplate your reputation has spread to China. Here’s an article where some Chinese nutraceutical company claimed legitimacy by getting some sort of “certificate of enterprise credit/trust” from 信用评级与认证中心 Trust/Credit Evaluation and Confirmation Center in China, with emphasis on trustworthiness, legality, and so on.

    Reporter went to that center’s parent agency 商务部国际贸易经济合作研究院 (Bureau of Commerce International Trade Cooperative Study Institute), and got back “that new center is a for profit enterprise we launched as an experimental venture. It is NOT related to us and cannot use our name. If they do we’ll investigate.

    The center itself, however, gave a somewhat different answer… conflicting answer.

    What’s even more hilarious is the said certificate claimed by such company… does not exist.

    A DS industry pundit/insider told the reporter that it’s much easier for a company to BUY publicity that gives appearance of trust-worthiness. Big companies like Amway do charity events. Small companies pay these centers $12000 RMB for this worthless certificate and tell their underlings to advertise the heck out of it.

    http://www.dswind.com/a/toutiaohehuandeng/shouyeyoucenarong/2013/0703/68901.html

  15. First, disclosure. I have NOT used, sold, or otherwise touched any NuSkin / Pharmanex product in my life, except this one time where I got scanned. I never was in MLM. I did say my aunt had, once upon a time, sold some Nu Skin stuff. She also did Amway, Market America, and a few other MLMs. That’s more than 10 years ago. I haven’t seen her in ten years. She’s in China somewhere, probably selling Amway crap.

    Anyway, here’s my personal experience on Pharmanex scanner, now part of NuSkin.

    http://randomrantsbykc.blogspot.com/2010/11/pharmanex-scanner-money-making-machine.html

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