Resources

Herbalife

Details


Industry: Direct Sales
Underlying Misconduct: Unfair Methods of Competition
Matter Type: Federal Trade Commission
Relevant Jurisdiction(s): US District Court for the Central District of California
Penalties: Fine
Fine Amount: $200,000,000
Reporting Agencies: Federal Trade Commission
Resolution Form: Court Order
Agreement Date: July 15, 2016
Monitor Reference Term: Independent Compliance Auditor
Monitor Identity: Affiliated Monitors
Monitorship Term: 7 Years
Monitor Selection Process:

FTC solicited applicants publicly. It initially made the applications public, but took them down after press reports. Those applications included proprietary information of the applicants, such as rates and methodologies.

Time to Propose Monitors: 60 days
Time to Engage Monitor: 60 days
Time to First Report: 6 Mos.
Reporting Frequency: Semi-Annual
Monitor Required Qualifications:

Not specified in Order/Agreement. Applications may shed light on required qualifications.

Summary of Monitor's Scope:

Review, assess and evaluate Host Organization's compliance with certain requirements of the Order.

Summary of Monitor's Activities:

Host Organization is: 1) paying multi-level compensation only in accordance with Order; 2) differentiating between Preferred Customers and Business Opportunity Participants; 3) collecting and maintaining retail sales information; 4) taking all reasonable steps necessary to monitor and ensure that Profitable Retail Sales and Preferred Customer Purchases are genuine sales of Products, rather than an attempt to manipulate the programs compensation plan; 5) taking all reasonable steps necessary to monitor and ensure that Profitable Retail Sales in fact occurred as reported in the information collected and maintained; 6) complying with the requirements and limitations relating to claimed Profitable Retail Sales; 7) complying with the requirements and limitations relating to Rewardable Personal Consumption; 8) complying with the limitation thresholds, targets, and requirements; 9) complying with and enforcing the requirements and limitations on leased or purchased business locations.

Monitor's Restrictions:

None specified in Order.

Documents Uploaded: Herbalife-FTC-Settlement-Agt-15July2016.pdf