Hans Howe

Consumer Health Digest #12-46
December 27, 2012
Current # of subscribers: 10,994

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.

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Herbalife attacked as “pyramid scheme”

Billionaire hedge fund investor Bill Ackman has mounted an attack on Herbalife that he apparently hopes will drive it out of business. The attack was launched with a 3-1/2 hour presentation at the Sohn Conference Special Event on December 20th. During his presentation, Ackman noted:

**Herbalife recruits unwitting “distributors” with the promise they can achieve lofty incomes. However, fewer than 1 in 1,000 do so.

**Herbalife’s products are overpriced but sell because they are bundled with a perceived business opportunity. However, the vast majority of new distributors make nothing.

**Herbalife is a pyramid scheme because its participants obtain their monetary benefits primarily from recruitment rather than the sale of goods to consumers. Continue reading →

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