Letter to Ramirez on FTC’s action against Vemma and the ongoing investigation into Herbalife Ltd.

September 25, 2015

The Honorable Edith Ramirez
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580 

Re: FTC’s Action against Vemma and the Ongoing Investigation into Herbalife Ltd. 

Dear Madam Chairwoman:

Since 1899, the National Consumers League – of which I am Executive Director — has fought to protect and champion the importance of a safe marketplace for American consumers. More than a century later, NCL’s focus on and commitment to protecting consumers is unwavering. It is for this reason that we were pleased to see the Commission put a stop to Vemma’s deceptive business practices.[1] 

While some companies in the multi-level marketing (MLM) sector take clear steps to ensure that consumers fully understand their chances of success and truly focus efforts on retail sales, there remain many others that do not. As your actions against Vemma made clear, MLMs that deceive recruits with promises of easy riches with minimal risk can and will run afoul of the FTC’s enforcement authority.

The Commission’s actions to halt Vemma’s operations come more than eighteen months after the Commission opened its investigation of similar allegations against another multi-level marketing company – Herbalife, Ltd. We note that some of the very practices the FTC found problematic in the Vemma case are alleged to be occurring at Herbalife.

We would, therefore, greatly appreciate an update as to status of the Herbalife investigation so that we can be assured that it is moving forward and does not continue indefinitely with no resolution. As it stands today, consumers who have invested or may be considering investing in the Herbalife business opportunity have been left in limbo – not knowing whether the Commission considers the company to be a legitimate MLM or a fraudulent pyramid scheme. We believe that consumers have a right to expect speedy action by government law enforcement agencies when their financial well-being is at stake. 

I would welcome the opportunity to further discuss with your staff our concerns about MLM abuses  and approaches that the Commission could take going forward to further protect consumers, should that be helpful to you.

Thank you for your time and attention to our concerns. 

Sally Greenberg
Executive Director, National Consumers League

[1] Federal Trade Commission. “FTC Acts to Halt Vemma as Alleged Pyramid Scheme,” Press Release. August 26, 2015. Online: https://www.ftc.gov/news-events/press-releases/2015/08/ftc-acts-halt-vemma-alleged-pyramid-scheme