Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.
Herbalife Organization Pleads Guilty in Canada
November 23, 2004
According to the Industry Canada website, one of the motivational organizations associated with Herbalife, Global Online Systems, Inc., has pleaded guilty and paid a $150,000 fine.
An investigation by Canada's Competition Bureau led to the admission of guilt on two counts.
In violation of the deceptive marketing provisions of the Competition Act, participants were paid to recruit, and were required to purchase specific amounts of product in order to participate. (This is known as a "pay to play" feature of a pyramid scheme.) GOLS and its participants also used exaggerated income claims in their recruiting.
This is the second legal hit that Herbalife and its associated organizations of participants have taken recently. The "Newest Way to Wealth" organization and Herbalife in the US settled a class action lawsuit for $6 million in July.
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