Last July, we told you about the FTC’s settlement with Herbalife, which made the multilevel marketing company not only restructure how it does business, but also pay $200 million to people who lost money trying to run an Herbalife business. Today, we mailed checks to about 350,000 of them.
Are you thinking about a multilevel marketing (MLM) business opportunity? Every year, many people join MLM plans – and many also leave. Before joining any MLM company, do some research. Your time and money are too valuable not to. Here are a few things to consider:
- Can you realistically see yourself selling to your network of friends and family? Selling is work, and not everyone is good at it.
- What about the product? Would people you know buy it repeatedly and consistently? Or would they only buy it once as a favor? Can people buy comparable products for less?
- What will it cost you to run this business? You might get pressure to buy a lot of product – in fact, people have lost a lot of money buying more product than they can sell. Also consider things like gas, shipping and packaging costs, sales aids, trainings, and your time. Does that math add up for you? Lots of people leave multilevel marketing programs without making any money, and many lose money.
If the person who recruited you into the business tells you not to worry about selling because you can make money by recruiting others – walk away. In a legitimate MLM program, you need to be able to make money by selling the product, not by recruiting others to join and buy the product.
So, what about the money back from the Herbalife settlement? Well, the settlement covered people who worked with Herbalife between 2009 and 2015. If you were an Herbalife distributor who paid at least $1,000 to Herbalife during those years, but got little or nothing back from the company – and we were able to locate a valid address for you – you should be seeing a check. The check is a partial refund of the money we estimate you lost while trying to run an Herbalife business.
If you get a check refunding some of the money you lost in Herbalife, cash it. If you have questions about why you didn’t get a check, learn more on our refunds page. Thinking about whether a business opportunity is right for you? The FTC has resources for evaluating business opportunities, including MLMs.