Robert Fitzpatrick and his views on MLM Income disclosures MLM and Network Marketing News and Information


  • The income proposition for Herbalife and other multi-level marketing companies is the engine that drives the business. It is presented as real by major authorities, for pay, and without evidence.
  • In reality, Herbalife and other MLMs offer zero opportunity. Loss rates among new recruits are, effectively, 100%. The MLM income promise is part of a monumental deception.
  • HLF engages in deception in the promotion of its income proposition on such a scale, and in so many ways, the FTC has abundant regulatory means to cripple its recruiting.
  • The primary tool of deception used by Herbalife, Nu Skin and other MLMs is the “income disclosure statement.”
  • Eight measures are used in MLM disclosures to present a false picture of “income opportunity” and to conceal the reality of zero chance for new recruits to make a profit.

Even in the fog of hedge-fund warfare over Herbalife (NYSE:HLF), verifiable truth is still critical to the investor community for guidance purposes. It is surely not acceptable, for example, that reputable fund managers would support a known Ponzi scheme, purely on the bases that federal regulators took no action, the public was unaware, and the fund “grew.” And surely analysts are not proponents of the view that a lie becomes truth by being repeated often enough or can be so big no one in authority dares acknowledge it, making it “true.”

Toward truth-based guidance, then, this article addresses the truth about “multi-level marketing” – MLM – companies like Herbalife. The analysis is not directed at merely deceptive marketing practices, but at the very foundation of the business contained in its Main Street financial prospectus, known as the “income disclosure.”

Specifically, it is my conclusion, for which I will offer hard evidence here, that the major multi-level marketing companies, such as Herbalife and Nu Skin (NYSE:NUS), among hundreds of others, are engaged in appalling and calculated cover-up, diversion and deception regarding the “income opportunity,” in which they solicit millions of people to invest. This “income opportunity” is the engine of their businesses, making deception not just a marketing practice, but the very mission of the enterprise.

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