A Hispanic consumer group has asked the Federal Trade Commission to investigate the Herbalife, citing concerns that the controversial company is targeting minorities.
“It is our understanding that the company’s marketing materials promise richness for a few hours of work from home,” wrote Hispanic Federation President Jose Calderon in a March 17 letter to FTC Chairwoman Edith Ramirez.
“You can imagine that for immigrants, particularly those who are underemployed or have no papers, this promise can seem like their ticket to achieving the American dream. We understand, however, that when you add expenses to acquire the product, lists and marketing materials, most distributors appear to actually lose money.”
This is the second consumer group to ask the FTC to investigate Herbalife, which hedge fund activist Bill Ackman has called a pyramid scheme and placed a $1 billion bet it will fail.
Herbalife has denied Ackman’s charges. In a statement, it said, “Herbalife maintains close ties to the Hispanic community and values its relationship with Hispanic distributors.”
In 2007, Herbalife said Latinos accounted for 61 percent of its US business. Herbalife shares rose 11 percent to close at $49.25.