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Through a FOIA request, New York Post’s Michelle Celarier has obtained 192 complaints about Herbalife filed with the Federal Trade Commission over the last seven years. According to the Post’s report, the FTC is probing the multi-level marketing company that sells nutrition products.
Herbalife has been one of the most controversial stocks lately.
Bill Ackman, the founder of Pershing Square, has publicly said he’s shorting more than 20 million shares of the MLM. Ackman gave a presentation in December saying that he believes the company is a “pyramid scheme” and has a price target of zero.
Herbalife responded Ackman‘s thesis calling it a “malicious attack” and accused him of using “outdated” and “inaccurate information.”
After Ackman publicly declared his short, hedge fund heavyweight Daniel Loeb, the founder of Third Point LLC, took out a 8.24% stake in the company on the long side. Some other fund managers have also gone long Herbalife after disagreeing with Ackman’s short case.
Right now, it looks like Ackman is winning the hedge fund war.
Herbalife’s stock is getting hammered today on the FTC news. The stock was last trading down more than 5.9%, well below the pre-Ackman short levels.
We combed through the 729 pages of complaints available on the FTC’s website, which have been largely redacted, and have included some of them in the slides that follow.
That being said, a lot of the customer complaints were requesting a refund of the $9.95 they paid for an introductory DVD into the company, while others complained about receiving spam emails and unwanted telephone calls.
BRISTOL, CT CONSUMER: 'There was so much deceit...I made zero dollars as a 'Supervisor' I made no money with Herbalife.'
CHESAPEAKE, VA CONSUMER: 'everything about Herbalife from prescreening and watching initial videos to sign up, through the training process have been nothing but a scam...'
146 of 192
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.'
(2 of 2) 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.'
(2 of 3) CONWAY, AR CONSUMER: 'I felt like I was 'stuck'--I had invested so much money and time, I couldn't quit.'
(1 of 3) FRANKLIN, PA CONSUMER: 'I'd rather be poor and honest than rich and honest and manipulative.'
(2 of 3) FRANKLIN, PA CONSUMER: 'OK, 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.'
(3 of 3) FRANKLIN, PA CONSUMER: 'I'm left in an awful predicament. If I quit I have no hope of paying off the $7,000 Ieft on the credit card (from trying to get this off the ground)...'
(1 of 2) BRITISH COLUMBIA CONSUMER: 'I want to ensure others are not harmed the way I was'....'I was told to lie to others (mostly US citizens) to recruit members for the pyramid.'
(2 of 2) BRITISH COLUMBIA CONSUMER: 'I did receive a refund of approximately $2,900.00 for my returned products from Herbalife but that was a battle unto its own.'
(2 of 2) WALLA, WALLA WA CONSUMER: 'She told me that I would receive a complete refund if I was dissatisfied and that I would work very part-time. All lies.'
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