Wednesday, 20 May 2015

In-depth analysis of the Bostick vs 'Herbalife (HLF)' settlement ruling.

Currently, approximately 2 millions individuals are being consumed by the so-called 'Herbalife MLM Income Opportunity' per year. That's 20 millions humans per decade, but the overwhelming majority of them are not US citizens. Apart from an insignificant minority of grinning shills, virtually no one has continued in the so-called 'Herbalife MLM Income Opportunity' for more than 3 years. Since 1980, the constituent parts of this endless chain of economic cannon-fodder were arbitrarily defined (in their take-it or leave-it annual contracts) as 'Distributors.' Predictably, since 2013 (in order to dodge prosecution and compulsory closure as a closed-market swindle a.k.a. pyramid scheme), the latest excited, but ill-informed,pieces of raw meat on the 'Herbalife' menu have suddenly all been re-defined as 'Members', 'Customers' and 'End Users.'

For obvious reasons, few victims of the 'Herbalife' racket have wanted to come forward and admit that they were consumed themselves or that they were used to lure their friends and relations into the same trap. Apparently, yet another US federal judge has refused to look beyond the end of her nose and put a stop to this self-perpetuating, blame-the-victim cultic racket. That said, 'Herbalife' has  been hidden behind pseudo-medical products and dense layers of pseudo-economic jargon. To date, this has not only shut down the critical and evaluative faculties of victims, but also those of all casual observers (including judges). Thus, instead of telling the truth and admitting that even she didn't fully understand what she was looking at, the judge in question, has produced a 60 page ruling repeating (without qualification or irony) many elements of the fairy story which the 'Herbalife' racketeers steadfastly pretend to be reality.

Yet, if common-sense is applied and all the jargon removed, no one (not even the authors of 'Herbalife' fairy story and their attorneys) is disputing that every single human who has been fed through the 'Herbalife' machine has failed to generate an overall net-profit by lawfully selling 'Herbalife' products regularly to the general public (based on value and demand). In the adult world of quantifiable reality, the hidden overall net-loss/churn rate for 'Herbalife' adherents, has always been effectively 100%, because (no matter how they have been defined in their contracts) the adherents' own payments (based on the false-expectation of future reward) have been far and away the only significant source of the organization's multi-billion dollar 'sales' revenue.

In 2013, a former 'Herbalife' adherent, Dana Bostick (a California Housing Inspector), filed a lawsuit in which essentially he alleged that he, and countless other persons, had all signed up with 'Herbalife' to make money, but they had been unable to sell 'Herbalife' products for a profit, because 'Herbalife' is a pyramid scheme dissimulated behind effectively-usaleable products, in which victims have been peddled the crackpot pseudo-economic theory that endless chain recruitment + endless payments by the recruits = endless future profits for the recruits.

(The case in United States District Court Central District of California: Dana Bostick v. Herbalife International of America Inc. et al CV 13-02488-BRO).

Eventually, 7457 former 'Herbalife' adherents joined Bostick's lawsuit, but 'Herbalife' then volunteered to pay these plaintiffs $15 millions in cash + $2.5 millions in product refunds, in order to settle the matter. 'Herbalife' was also obliged to modify its activities. 

Although well-argued, evidence-based objections to this settlement were filed, in her final ruling, the judge authorized the settlement and said it seems as if the 7,457 former distributors (of the 1.5 million who were eligible to file claims) 'are unlikely to have suffered any financial losses on a failed business opportunity.' She also said that the evidence indicates that most distributors sign up for Herbalife membership for the purpose of getting discounts on products for personal consumption, which meant their reason for signing up wasn’t 'to generate or pursue an entrepreneurial enterprise.'

Yet 'Herbalife' has been just part of a criminogenic phenomenon of historic significance which has inflicted, and continues to inflict, serious financial, and psychological, damage on countless millions of vulnerable people around the world. More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Network,' or 'Multi-Level, Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, leads,' etc.).

David Brear (copyright 2015)

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