Herbalife Settlement: $200 Million in FTC Refunds to Distributors

Who qualifies

• The FTC identified recipients from Herbalife's own records. Generally, refunds went to people who ran an Herbalife business in the United States between 2009 and 2015, paid at least $1,000 to Herbalife, and got little or nothing back from the company.
• No application, deadline, or proof of purchase was ever required. The FTC calculated each person's check amount from what Herbalife's records showed they had paid.
• Round three, in March 2023, was narrower: it went only to people who had already cashed a check in this matter and who had paid Herbalife at least $50. If you never cashed an earlier check, you were not included.
• Nutrition Club owners were specifically among the intended recipients — the FTC's complaint described people who bought large quantities of product to stock a club and lost money doing it.
• Customers who simply bought Herbalife products to use them were not the target of the refunds. The money was for people who paid Herbalife to pursue the business opportunity.
• Checks had to be cashed within the window printed on them — 60 days for the first round. All three rounds have now been distributed and those windows have closed.

The Herbalife settlement — what happened

1. 1

   What the FTC said Herbalife promised

   According to the FTC's complaint, Herbalife claimed that people who participated could expect to quit their jobs, earn thousands of dollars a month, make a career-level income, or even get rich. The order that resolved the case specifically prohibits Herbalife from claiming that members can "quit their job" or otherwise enjoy a lavish lifestyle.

2. 2

   What the numbers in the complaint actually showed

   The FTC alleged the overwhelming majority of distributors who pursued the business opportunity earned little or no money. The average amount that more than half of the distributors known as "sales leaders" received in reward payments was under $300 for 2014. In a survey Herbalife itself conducted, Nutrition Club owners reported spending an average of about $8,500 to open a club, and 57 percent said they made no profit or lost money.

3. 3

   Why the FTC called the pay structure itself unfair

   The complaint charged that Herbalife's compensation structure rewarded distributors for recruiting others to join and buy product in order to advance in the marketing program, rather than in response to real retail demand. The small minority who did make significant money, the FTC alleged, were compensated for recruiting new distributors regardless of whether those recruits could sell what they had been encouraged to buy. Unable to make money, distributors left in large numbers: the majority stopped ordering within their first year, and nearly half the entire distributor base quit in any given year.

4. 4

   July 2016 — the $200 million order and a forced restructuring

   Herbalife agreed to pay $200 million in consumer redress and to fully restructure its U.S. business. The Commission vote was 3-0 and the complaint and stipulated final order were filed in the U.S. District Court for the Central District of California. Unlike several other large FTC settlements, the entire $200 million here was consumer money — not a civil penalty paid to the Treasury and not debt forgiveness.

5. 5

   What the restructuring actually required

   The order required Herbalife to separate "discount buyers" who join only to buy product at a discount from people pursuing the business opportunity, and to make discount buyers ineligible to sell or earn rewards. At least two-thirds of rewards paid to distributors must be based on retail sales that are tracked and verified, and no more than one-third on other distributors' limited personal consumption. Companywide, at least 80 percent of Herbalife's product sales must be to legitimate end users or rewards must be cut. Participants are also barred from taking on the cost of leasing or buying premises for a Nutrition Club before completing their first year and a business training program. Herbalife had to fund an Independent Compliance Auditor, in place for seven years, reporting to the Commission.

6. 6

   January 2017 — round one, nearly 350,000 checks

   The FTC mailed checks to nearly 350,000 people who lost money running Herbalife businesses, using Herbalife's records to decide who was paid and how much. Most checks were between $100 and $500; the largest exceeded $9,000. Recipients had 60 days to deposit or cash them.

7. 7

   May 2019 — round two, and nearly $194.3 million refunded in total

   The FTC sent a second round of checks. Together, the 2017 and 2019 distributions resulted in nearly $194.3 million in actual refunds out of the $200 million judgment.

8. 8

   March 2023 — round three, for people who cashed the first one

   With money still left in the fund, the FTC mailed 42,713 additional checks totaling more than $4.2 million. This round went only to people who had previously cashed a check in this matter and had paid Herbalife at least $50 — the FTC's standard approach to a residual balance, which directs the remaining money to people it knows will collect it.

9. 9

   If you ran an Herbalife business and were never paid

   Call Analytics Consulting at 1-844-322-8146 and ask whether a payment was issued in your name. There was never a claim form and there is no late filing process. The FTC will never ask you to pay a fee, transfer money, or provide bank account or Social Security numbers to release a refund — anyone asking for that is running a scam.

Frequently asked questions

Sources and official records

Every figure and date on this page was taken from the primary records below — court dockets, agency releases, and the settlement administrator's own notices. Payout averages we describe as averages are calculated from the official totals, not reported per-person estimates.

• FTC — Herbalife Refunds page (March 2023 third round: 42,713 checks, over $4.2 million)
• FTC press release — the $200 million judgment and mandatory restructuring, with the complaint's earnings figures
• FTC press release — January 2017 distribution to nearly 350,000 people, check amounts and eligibility
• FTC case record — Herbalife International of America, Inc., et al., File No. 142-3037