Tuesday, 4 December 2012



A European Court Rules: “Herbalife Is an Illegal Pyramid Scheme”

Posted on Jan 5, 2012 in Legal, MLM, News, Pyramid Schemes, Scheme Alerts
Home » Legal » A European Court Rules: “Herbalife Is an Illegal Pyramid Scheme” 
here are two icons of MLM that represent all the others of that “industry”. They are among the oldest and largest MLMs, and they have spread to most other countries worldwide. One is Amway. The other is Herbalife. Herbalife has just been ruled an illegal pyramid scheme by a court in Belgium. A case had been brought against Herbalife in Belgium by a non-profit consumer protection organization.
Previously, Herbalife marketers have been prosecuted in Canada, and Herbalife has been sued by individual distributors in the USA and in class action suits by American consumers who claim Herbalife is an illegal pyramid scheme.
After years of delay in the Belgian courts, a ruling was finally gained: It concludes that Herbalife is exactly what the consumer group claimed it is, an illegal pyramid scheme based on “endless chain” recruiting. Such a plan dooms the vast majority to losses, by its design and deception.
The Belgian court zeroed in on several key points that affect many other MLMs.
1.) It showed that Herbalife is not a direct selling company.
Herbalife did not offer the court any evidence that it has a base of consumers who buy the products on a retail basis from Herbalife “distributors.” In fact, the actual customers, based on evidence, are the Herbalife salespeople themselves. They buy thousands of dollars of products in order to receive promised commissions gained from recruiting other “salespeople.” It is theoretically possible to sell Herbalife goods to retail customers for a profit, the court acknowledged, but few salespeople ever do, based on evidence, and the Herbalife pay plan offers much more reward for recruiting than for retailing.

2.) The court also rejected Herbalife’s claim (which is also made by many other MLM companies) that its salespeople can be classified as “retail customers.”
The court revealed that Herbalife plays a shell game, depending on whether it is reporting to the SEC and shareholders, arguing to the court, or recruiting consumers, in which sometimes the salespeople are described as “direct sellers” or “distributors” and at other times as “customers.” Clearly, both cannot be true at the same time. Salespeople pay fees, sign legally binding contracts that define them as “contractors,” and are offered rewards based on recruiting.

Herbalife’s “direct selling” disguise and the deceptive shell game of “find the customer” were both rejected by the court, which concluded in plain language that Herbalife rewards consumer investors for recruiting other consumer investors and the rewards are based upon an unsustainable and “dishonest” system of endless recruiting.
Despite this ruling in Belgium (which took 7 years to litigate) and despite previous class action suits brought by American consumers in which Herbalife paid millions to settle, the Federal Trade Commission (FTC) in America, where Herbalife is based, has taken no law enforcement action against the scheme in recent years.
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Monday, 3 December 2012




List of Known Multi-Level Marketing Organizations

Here is a list of known Multi-Level Marketing programs or MLM's. This is not a complete list, just the most commonly encountered MLMs.  Being on this list does not mean that they are illegal or a scam; but it's CFR's opinion that ALL MLM's should be avoided. There are better, more ethical and less risky ways to earn a good living! Also see this page for a list of convicted MLM scam organizations.

External links

Warning about MLM's from the FTC

  • Plans that promise profits mainly for recruiting new members are illegal pyramid schemes. In legitimate multilevel marketing plans, profits come primarily from selling goods and services to consumers.
  • Be cautious about emails for money-making opportunities. Many unsolicited emails are fraudulent.
  • Be aware that some pyramids are disguised as “gifting clubs.” New recruits give money to current members with the promise that they will receive money from future recruits.
  • Know that all pyramids are doomed to collapse. That’s because it’s impossible to keep on getting fresh recruits who will pay to participate.
  • Legitimate multilevel marketing plans only succeed if they offer products or services that customers want. All successful businesses depend on repeat sales. If there isn’t constant demand for the products or services, the business will fail.
  • Sales to other distributors don’t count. Legitimate multilevel marketing plans aren’t based on sales to distributors. Profits should come from sales that you and any distributors under you make to the end-users.
  • Be wary of big earnings claims. No one can guarantee how much you’ll make. That depends on how hard you work and whether consumers like your products or services. Many people who work in multilevel marketing do it part-time to supplement their other income.
  • Check it out before you commit. Print out all the information, and contact your state or local consumer protection agency for advice. In some states, multilevel marketing companies must register with the government and comply with other requirements.
  • Don’t buy more supplies than you need. Some fraudulent companies try to force distributors to pay for more products than they can reasonably sell. 

  • Up


    AV product:

    Pyramid Schemes:
    Names of Multi-Level Marketing (MLM) Programs that Are Pyramid Schemes

    The following schemes have been prosecuted by at least one government (USA, UK, Canada, Australia, New Zealand, Ireland, Japan, and EU country, etc.) as being pyramid selling schemes:
    • Black Magic 95
    • Joker 88
    • Maximus Intermediaries Limited
    At least one government (USA, UK, Canada, Australia, New Zealand, Ireland, Japan, and EU country, etc.) as  has issued warnings about the following schemes as being at risk of being pyramid selling schemes:
    • Accountanet Ltd
    • Alpha 2000 Ltd
    • Barclays System
    • Cash Club
    • Charity Bond
    • David Rhodes
    • David Stein scheme
    • David Stevenson scheme
    • Downline Building Group
    • Dragon Slayer
    • Edward L Green (there are also a number of "clones" of this scheme)
    • Envelope Stuffing
    • Equitynet
    • Esquire Marketing
    • Family of Eagles
    • Five Dollar Gimmick (Buzzard Holdings Ltd)
    • Focus International Credit Card Plan
    • Fortuna Alliance
    • Global Gold Marketing
    • Global Interactive Investment Club
    • Global Options NZ Ltd
    • Going Platinum
    • Grove Marketing
    • Homelend (also known as Homenet)
    • Homemailers Programme
    • International Direct Mail Network
    • International Philanthropists Society
    • Jubilee International
    • Lifetime Income Trusts Ltd
    • Life Without Debt
    • Mail Order 2000 (an envelope stuffing scheme)
    • Make Lots of $ in the Net
    • Mike Fitzgerald
    • Multipurpose Associates
    • New Inc
    • Payline
    • Perpetual Income Trust (Lifetime Income Trust)
    • Pony Express
    • Project 21
    • Project 60
    • Project Internet
    • Rapido
    • Singles Club No. 50
    • Snow Fresh
    • Star International
    • Sundew International
    • Syndicate Management Services
    • Telecard
    • Thumbs Up
    • Trans- Global Investments Universal
    • Vanilla Gold Accumulation Plan
    • Vera Corp World Netsafe (ATTM Card)
    • World Net Inc
    • Worldwide Wealth Creators Scheme
    • $7,000 in two weeks scheme
    • $50,000 scheme.

Saturday, February 19, 2011


The network members, who lost their money in the Quest Net, a multi-level marketing company, are continuing to storm the Chennai Police Commissioner’s office with complaints.
According to sources, the police who sealed the company’s office is planning to freeze its bank accounts and arrest its founder Vijayendran who is in Hong Kong.
The case is likely to be transferred to Central Bureau of Investigation (CBI) for further investigation.
Meanwhile, Quest Net officials forwarded SMS to the network members requesting them not to file their complaints against the company, as they were innocent.
After losing the hope of getting their money back, the victims lined up at the Commissionerate for lodging their complaints. Unable to tackle the crowd, a separate counter was set up in front of Commissioner’s office to issue petition copies to be filled in by the affected persons.
Meanwhile the complainants who reached the Commissionerate today had different tale of woes to reveal to the policemen. Many claimed that joining Quest Net was one of the worst decisions in their life.
An auto driver, said that he pledged his wife’s jewellery to pay the amount in gold firm a couple of years ago.
One of the network members convinced that he would be able to earn lakhs of rupees by just purchasing a gold coin and by putting little effort to sell their products to others.
Another member Lakshmi alleged that only few have benefited from the scheme, ‘while a person like me had fallen prey to lofty claims made by representatives of the company.’
The victims also alleged that they were asked to attend meetings in five-star hotels where senior men from the firm coached them how to market the products and enroll customers.
Initially, the persons who attended the meetings were asked to sign a form and later the officials from the firm pressurised them to pay the money soon.
For the Quest Net officials, the police action came like the bolt from the blue as they were yet to recover from the excitement of the attractive show in a star hotel.
It may be noted, acting on a complaint from one of the company’s network member, the police arrested seven persons on the charges of fraudulent business practices.
According to the complaint, Quest Net refused to give him the gold coin after paying Rs one lakh on the ground that he failed to enlist 10 more members.

Sunday, 2 December 2012



Herbalife Side Effects
Some people experience unpleasant side effects when using various Herbalife products. These are described and addressed in this article for your safety and well-being.

If you experience bloating, try changing the portion size to reduce this feeling. Enjoy healthy snacks during the day and smaller meals to assist your digestion. If you are using the shake mix as a meal replacement you may want to reduce the portion size or frequency. 
Dry Mouth:

Some people report that their mouth is dry after black or fruit tea. Detox products often produce thirst so you can try increasing your intake of water. Dryness from using the shakes can be caused by acid reflux since it contains guar gum and psyllium husk. These have expanding properties, which can cause reflux. Guar bean is high in protein and oil and guar gum is used worldwide in many beverages, foods and supplements. In significant quantities, guar gum dehydrates the body and can cause some serious side effects. However, it is regulated by the FDA who only permits extremely small quantities of it in food. Guar gum in the shake mix is used to emulsify or bind the particles and has been determined to be of insignificant quantities.
Heart Palpitations:

Palpitations may be from caffeine sensitivity. The tea does have caffeine in it so you could either stop using the tea or eventually you will get used to caffeine and the palpations should recede. The shake mix does not contain any caffeine.
In the nineties it was found that Ephedra caused increased heart rate and Herbalife discontinued using Ephedra in any of its products.
Upset Stomach, Headache and Fevers:

 In the first few days, many years of accumulated toxins and waste in the body begin to be expelled. Diarrhea, headaches, fever or nausea can arise.
These are temporary symptoms and will subside whether you continue the diet or not. The discomfort is not very common but happens to some people. Once you are detoxified you should feel great however. The body has toxins or free radicals surrounded by fat molecules, and when burning these fat molecules, the toxins are released into the bloodstream for elimination. They circulate through the body and are filtered out by the kidneys and liver. This can take up to 2 weeks. Areas where toxins and pollutants are expelled from the body can display reactions. You can first use a detoxification program to cleanse your system before starting the weight loss program if you wish.

Unpleasant-Smelling Urine or Perspiration:
 This is another possible reaction to the body cleansing that is not caused by the products, but the waste you are cleaning out. The products are working just as they should.
Allergic Reaction and Blocked Sinuses:
 People who are very allergic to fish need to know that some Herbalife products contain fish oil. See a medical specialist to determine if this is an allergic reaction. Sinuses are especially sensitive because they are soft tissue. Sinus irritations should clear in 1 to 3 weeks but if they get worse, discontinue using the product and consult a medical professional.
Beware of nutrient deficiency when losing weight. The Herbalife ShapeWorks program recommends that along with the 2 shakes and one healthy meal, you should add the Multivitamins and Cell Activator to ensure that you are getting enough nutrition. Cell Activator helps increase your nutrient absorption from food.

 Caffeine in green tea is not the same as in coffee. It is slower-acting and has a calmer quality. But if you feel too stimulated try half a cup instead of a whole cup for a while.
Swollen Legs:

 This might indicate an allergic reaction to an ingredient in the Herbalife products. Please show your doctor the product labels and ask his advice. It would be best to discontinue using the product until you know what the cause of your swelling is.
Stomach Acidity:

If you are using Cell-U-Loss, try discontinuing it and see if that reduces your symptoms. If so, then Cell-U-Loss is not for you. If acidity persists when you are not taking it, there is some other cause. Cell-U-Loss contains 3 ingredients which may be causing the acidity: Apple Cider Vinegar, Vitamin C and Iron. It also contains herbs that have diuretic properties such as couch grass and corn silk extract.
Total Control (the metabolism booster) carries a warning to not be used by the pregnant, lactating (or those that want to get pregnant). Rapid weight loss and stimulants during breastfeeding can release too many toxins into your blood stream and thus into your milk. This can cause a decrease in your milk supply and be unhealthy for your baby. Avoid the stimulants in Total Control and the Herbal Tea, which contain caffeine. Herbalife products have nutrition labels that show warnings to guide women who are pregnant, nursing or who may become pregnant.

These are the most commonly reported side-effects that happen when the body is de-toxifying. Redness, blotchy skin and irritation can arise. Your skin being the largest organ, has the most cells to repair and also discharges toxins. It takes about 2 weeks to cleanse the blood stream and during this time the departing toxins can be irritating. Exercise produces sweat and will release toxins that can irritate the skin. Herbal Aloe Soothing Gel can provide symptomatic relief.

Hair Loss or Breakage:
 Formula 1 Nutritional Shake Mix has been shown to improve skin, hair and nail growth. If you experience hair loss early in your weight loss program, this is because damaged cells are being repaired or replaced. When beginning a weight loss program, your body will target the most damaged cells. Hair usually has the oldest cells and is thus the first target for renewal. Hair soon becomes healthier than before so you need not worry about this.
General Detoxing Effects:
It is very well known that at the beginning of a diet or fast there may be some adverse side effects. These usually subside within a few weeks however. If you detoxify for a few days using plain water, fruit or vegetables you will also experience some side effects. When we have better nutrition, or when toxic substances such as coffee, tea, chocolate, tobacco, salt, and pepper are discontinued, amazing changes take place. Our bodies discard the lower grade materials and tissues to make room for newer, healthier ones.
Weight Gain:

 An ideal weight-loss rate is between 3 and 5 pounds per week. If you lose weight gradually and are getting proper nutrition, it will stay off. Moderate exercise like walking is necessary to get the fat burning process going. Adequate hydration (drinking water regularly) is essential to flush the toxins.
Do not try to stop any Herbalife side effects by taking drugs. Either let the healing take its natural course or stop using the product if you experience an allergic reaction.