A Growing List of Coronavirus Scams
A master list of known and alleged scams.
TINA.org complaint comes four years after MLM paid $200 million to settle FTC deceptive advertising charges.
“Now is the time to boost and strengthen your immune system as much as possible!” an Herbalife distributor implored her 6,500 followers on Instagram last week, in a post that featured a photo of three of the California-based nutritional supplement MLM’s products, including one called Best Defense. Why now? If any of her followers weren’t sure, the first in a string of hashtags at the end of the caption provided the answer: #coronavirus.
Four years after entering into an order with the FTC that makes clear the MLM is responsible for its distributors’ statements, Herbalife is engaged in a deceptive marketing campaign because of its distributors’ statements. Specifically, a TINA.org investigation has catalogued more than 30 instances in which an Herbalife distributor deceptively claims in a social media post that the company’s products can treat and/or prevent the coronavirus by boosting the immune system.
On Monday, TINA.org filed a complaint against Herbalife with the FTC, urging the agency to open an inquiry and take immediate action to protect consumers as the coronavirus pandemic’s death toll in the U.S. surpasses 50,000. TINA.org’s investigation and complaint to the FTC comes four years after Herbalife agreed to pay $200 million, restructure its business model, and not make deceptive earnings claims in the future to settle a lawsuit by the agency, which all but labeled the company a pyramid scheme. Previous investigations by TINA.org have uncovered deceptive health claims used to market the company’s products and unsubstantiated income claims used to promote the MLM’s business opportunity.
While some Herbalife distributors tag posts #coronavirus, #nocoronavirus and #COVID-19, and make explicit claims that the company’s products are “good for fighting corona” and can act as a “Corona Defender Kit,” other distributors don’t mention the virus by name. No matter. In the era of the coronavirus, immunity-boosting claims, which in normal times may be considered structure/function claims exempt from FDA approval (depending on the context), are elevated to implied disease-treatment or prevention claims requiring substantiation and FDA approval. On top of this, there is no known treatment or vaccine for the coronavirus.
Herbalife isn’t the only MLM or even the only Direct Selling Association member whose distributors are taking advantage of the coronavirus. On Friday, the FTC announced that it had sent warning letters to 10 MLMs regarding health and earnings claims related to COVID-19. Andrew Smith, the director of the FTC’s Bureau of Consumer Protection, said in a press release:
MLMs and other companies that distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making. During this health and economic crisis, we are on the lookout for false income claims for work-at-home opportunities, in addition to spurious health claims that products can treat or prevent COVID-19.
The press release cited a social media post by a Prüvit distributor that said, “Got the coronavirus heebeegeebees? Boost your immunity with this amazing deal!!!!” (Prüvit was among several MLMs that received FTC warning letters that were already on a TINA.org running list of coronavirus scams.)
Of the 10 MLMs the FTC sent letters to, three — Modere, Arbonne and Zurvita — along with Herbalife are members of the Direct Selling Association, the industry trade group whose often-touted code of ethics prohibits members from making “statements or promises that mislead consumers or prospective salespeople.” In late March, DSA President Joe Mariano urged members to “be vigilant” for distributors who may seek to exploit the coronavirus.
“We have to make sure we don’t give misinformation about what our products do, about our opportunity, particularly at a time like this and not be seen, or in fact, taking advantage of a crisis situation,” he said.
A master list of known and alleged scams.
Deceptive health and income claims, including some tied to COVID-19, persist in wake of warning from the feds.
MLM’s health claims fail to stand up to an increased level of scrutiny amid a worldwide pandemic.