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How does the settlement between FTC and Herbalife impact us at LifeVantage?

Although the settlement between the FTC and Herbalife technically applies to Herbalife only and is not law or statutory mandate, it can have implications for the rest of the direct selling industry in the following:

Differentiation between Preferred Customer and Business Building Distributor

  • The settlement creates the designation of a preferred customer as one who purchases product for personal use and with the intent to obtain a discount.
  • A distributor, on the other hand, purchases product with the intent to 1) resell the product; 2) obtain compensation for selling products; and 3) to recruit others to sell the product.

The settlement also imposes the requirement, at Herbalife, that any switch between the two be made in writing.

For LifeVantage’s current position on such “differentiation” please see Policies and Procedures Section 18, Definitions (pages 33-36), of “Customer”, “Preferred Customer” and “Independent Distributor”.

To be continued  . . .

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