Betting on Zero Page #8
- NOT RATED
- Year:
- 2016
- 99 min
- 325 Views
I'm quite comfortable
the government
is gonna do its job.
Narrator:
With ackmanpressing regulators
to investigate,
Herbalife executives launched
a series of reforms.
Reducing shipping costs,
simplifying product returns,
And cracking down
on distributors
With questionable
side operations.
Richard:
They outlawedthis deceptive system
Which is referred to
as lead generation.
Distributors would run ads
in television, on radio.
"be your own boss,"
"make unlimited income,"
And no details.
I had about $200 to my name
And so I found
an ad that said,
"work from home,"
And I called on it
and it happened
to be herbalife.
But a big part of it was to
spam out your message.
That was the real income.
The big players
Knew how to send out
a million emails.
And they were doing that
once a month.
Somebody would be sitting
on their computer,
All of a sudden
something would pop up.
And it would say,
"lose 30 pounds,
30 days for $30.
"put in your credit
card number. Click here."
And the top
distributors would sell
These names and
numbers of people
To existing
herbalife distributors
For as much as $130 a name.
And they would be
brand new leads,
Someone clicked on this
five minutes ago,
And here's your information,
Call the person,
they're ready to go.
They pick up the phone.
"hi, mary, this is aaron.
"don't you want to earn
an extra $500 a month?"
Richard:
Distributors were told,
And at some point
you're gonna start
recruiting enough people,
Who will recruit
enough people
That you will make it to
the president's team.
These lead generation systems
Were so
financially devastating.
Because people would
not just have to
buy the products,
But they would buy,
in some cases,
Thousands of dollars
of leads a month.
So people lost
their retirements,
and they lost their savings
Following this system.
When herbalife shut this down,
Wall street said,
"too bad if
people lost that money.
"as long as they
clean it up,
"you know,
we're fine with it."
Johnson:
Build it betterevery single day,
And building it
better means
Changing a few
philosophies in the company.
Get rich quick.
That's for someone else to do.
Get healthy now.
That's for us to do.
Kirby:
We opened fivenutrition clubs,
Kind of spread out
around northern oklahoma.
And when I achieved the g.E.T.
Team level,
Then the pres team
How the payout system
really works.
I'll never forget
we had a meeting
At tim files' nutrition club.
He's like the head honcho
here in oklahoma of herbalife.
He was actually my upline.
30k executive
president team member,
Tim files.
I'm telling you
every one of you guys
Have an opportunity to
live this kind of life.
Whatever you want,
just dream big...
Kirby:
Tim was sayingThat we used to just
make commission
Off of our top three,
But now we're
also going to make it
Off our fourth,
fifth and sixth.
And once you got past
your sixth downline,
Once you got to your
seventh, eighth and ninth,
There was still a pay out,
it was like half a percent.
So, I mean, essentially,
what he told us was,
It never stops.
And this was his
little hand motion
he would do.
Because he says it
just keeps going down.
Because it goes
down on everybody.
No matter where it goes.
I mean,
I got a degree in business.
It's pretty obvious...
That's a pyramid.
It's not sustainable.
Ackman:
The idea here isyou're gonna
build this business
Only recruiting six people
and each of them
recruiting six people.
But you're coming in at
nearly the bottom
of the pyramid.
And by the time
you get to level 13,
your prospects are pretty dim.
'cause you have to
recruit more than twice
the population of the world.
Kirby:
That's when Istarted to learn more about
The different ways that
they use to recruit people.
Right before I got
into the company,
it was selling leads.
I'm like, "okay,
in a phase right now.
"I'm in the nutrition club
phase."
And I was like, "and I'm
on the tail end of it."
I'd made a mistake.
But I've signed
a three-year lease
for five clubs.
Most people will
recruit a new distributor,
And convince them to
actually take over the lease,
And then they'll skate off
and draw commission off
Of the person
they'd just scammed
The kind of people
that can do that,
I mean, they're crooks.
When you know,
when you're trying
To get somebody
into a business
That you know they
are going to fail,
that is a crook.
I did have a close friend,
roommates through college,
And his
nutrition clubs failed.
We had a pretty much
complete falling out
Over the deal because
I'm the one that
introduced him to herbalife.
It was clearly
a pyramid scheme,
But when you're
that heavily invested,
It's kind of hard
six months in to say,
"oops, screwed up."
Keep:
Herbalife isa company with a business
model in an industry
That has been subject
to criticism for years.
But even
the federal trade commission
doesn't know the difference
Between
an illegal pyramid scheme
And a legal multilevel
marketing company
Without having
a fact intensive inquiry.
Fitzpatrick:
They hadThat gave multilevel
marketing a loophole.
But far more important,
the government,
Starting with
the reagan administration,
Adopted a position
of deregulation
And the industry
started pouring millions
into our political system.
All with one goal.
The same goal
the cigarette industry had
Because like
the cigarette industry,
It had an existential need
to prevent regulation.
It has one advantage though,
That the cigarette
industry didn't have.
Until now,
there has really been
no voice of the victim.
Douglas brooks:
A lot of times, people think
the reason they fail
Is that they
didn't try hard enough,
Or that they weren't
suited to the recruiting
that you have to do.
But once they find
out that other people
are in the same situation,
Then they realize that
it wasn't their fault.
that prevented them from
Having the kind of success
that was portrayed to them.
hi, mr. Brooks.
Ackman:
In an attempt torecover their losses,
The herbalife
distributors from chicago
Retained
attorney douglas brooks
To represent them
Bostick vs. Herbalife.
Instead of going to trial,
Lawyers for
herbalife and bostick
Had agreed to
a cash settlement
of $15 million.
On the eve of
the federal court's approval,
The chicago group
has come to california
To object to the settlement.
Fairly early on,
when I heard
about this settlement,
I realized that this
was a very bad deal.
How many of you
have ever played the lottery?
when you became
herbalife distributors,
You were buying
a lottery ticket
For a lottery that
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"Betting on Zero" Scripts.com. STANDS4 LLC, 2024. Web. 23 Dec. 2024. <https://www.scripts.com/script/betting_on_zero_3967>.
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