Herbalife Under Fire From State Senator Seeking Crackdown
- Proposed N.Y. bill would impose rules on multilevel companies
- Investigation said to show company maintains a pyramid scheme
Herbalife Ltd. has come under attack from a New York state senator and public advocate, who called the company a pyramid scheme and proposed cracking down on its sales practices.
State Senator Jeff Klein, working with Public Advocate Letitia James and advocacy group Make the Road New York, said in a report on Tuesday that they compiled data on 56 victims, who filed complaints against Herbalife since 2004, they lost an average of $20,000. The investigation also looked at 60 so-called nutrition clubs -- the groups that help sell Herbalife’s weight-loss shakes and supplements -- in the Bronx, Queens and Brooklyn. Klein and James plan to introduce a bill in the coming weeks that will impose stricter regulations on multilevel marketing firms like Herbalife, which rely on independent distributors.