How immigrants are redefining 'American' in Southern California

Latino, consumer groups push for Herbalife investigation

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Several Latino and consumer groups continue to pressure federal regulators to investigate Herbalife, the Los Angeles-based nutritional products supplier.

They claim that the company, which sells products via independent distributors, relies on a pyramid scheme for its profits - and that working-class Latinos disproportionately lose out.

Representatives from groups like the League of United Latin American Citizens, the Coalition for Humane Immigrant Rights of Los Angeles and many others have been in Washington, D.C. this week, meeting with lawmakers and representatives of the Federal Trade Commission.

The groups claim the company targets low–wage communities, with vulnerable immigrants who hope to earn extra cash investing in Herbalife's inventory to sell,  but often finding they can't.

"We're looking at populations of low-income families who are doing what they can to support their families and make ends meet," said Rita Medina, a policy advocate with CHIRLA. "These folks, some of them who are undocumented and can't work legally here in the U.S., they are looking for ways to be entrepreneurs."

Latinos make up a large share of Herbalife vendors in the U.S. Medina says many of those who invest wind up losing money.

But Herbalife spokesman Marco Gonzales says this isn't the case. He says the company has a buy-back policy, that among distributors, there have been many success stories.

"The allegations are that people are investing thousands of dollars," Gonzales said. "It is false. The point of entry – membership for Herbalife - is $59.75 or something like that. It's like sixty dollars, the initial package in membership. You are not required to buy product, you are not required to bring anyone into the business. That is why we are not a pyramid scheme."

Gonzales added that close to three-fourths of Herbalife members but the company's products for themselves and their families, and aren't trying to turn a profit. He partly blames the campaign against the company on a hedge fund intent on devaluing the company's stock.

Last month, Latino and consumer groups met with the staff of the California Attorney General, also in hopes of opening an investigation.

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