Friday, 22 July 2016

Herbalife need your money

By now everyone knows my feelings on Multi-Level Marketing schemes such as Amway and Herbalife. I don’t like them.

I don’t like them for one simple reason. They simply don’t work. Their distributors will tell you that they’re a way of producing income. They might talk about supplementing your income, adding a little extra money on the side or even that it’s a full-time, wage-earning job but it’s simply not true. Their own figures prove this.

For instance, the latest data for Amway that I’ve seen was from Amway’s UK business for 2013 and it makes rather poor reading. It shows that in September 2013 they had 30,415 Retail Consultants, 13,141 Certified Retail Consultants and 81 Business Consultants in the UK. The average income figures for these groups were, I'm afraid, rather pathetic.

Retail Consultants had an average income of a mere £42 per month which is about P7,000 per year. Certified Retail Consultants averaged only about P18,000 per year and the very rare (fewer than one-fifth of one percent) Business Consultants brought in about P300,000. None of these people came even close to the UK’s average national income, not even the top earners.

Most importantly, these figures are income, not profits. They don't take account of the costs involved in running their little business, recruiting people beneath them, electricity and their phone and internet costs.

It’s the same with Herbalife. The figures for their US business in 2015 are just as miserable but they show how a MLM scheme really works.

80% of the members, over 400,000, are just people who buy their products and don't have a "downline". These are the people on the bottom rung of the pyramid. They buy stuff from Herbalife but there's no evidence they sell it to other people.

The most interesting group is those people who earned commission from their downline sales. These are the "Sales Leaders With a Downline" and in 2015 there were 68,768 of them in the USA. These are the people that Herbalife offer as examples of the riches you can earn from joining Herbalife.

But there are no riches. In fact, the 10% at the top of the pyramid take nearly 90% of all the money. At the other end of the scale, the bottom 90% earn just over 10% of the money. The group earning between $1 and $1,000 in 2015 (that's 62.5% of the entire group) actually earned an average of just $303.

And again that's their income, not their profit. That's before they paid their expenses, all the bills necessary to recruit all the people below them.

So yet again it's the same old story. If you want to make money from either Amway or Herbalife you need to be at the top of the pyramid and all the money you’ll earn will come directly from the people beneath you in the pyramid.

Now there comes some more news. Just last week the US Federal Trade Commission concluded a lengthy investigation of Herbalife and reported that Herbalife "have agreed to fully restructure their U.S. business operations and pay $200 million to compensate consumers to settle Federal Trade Commission charges that the companies deceived consumers into believing they could earn substantial money selling diet, nutritional supplement, and personal care products.”

That’s right, Herbalife will be paying $200 million to the distributors who fell for the sales hype that seduced them.

The investigation found a number of things wrong with the Herbalife business model. The report observed that the “overwhelming majority of Herbalife Distributors who pursue the business opportunity make little or no money, and a substantial percentage lose money” and that Herbalife “does not offer participants a viable retail-based business opportunity. Defendants’ compensation program incentivizes not retail sales, but the recruiting of additional participants who will fuel the enterprise by making wholesale purchases of product.”

The report (268kb pdf download) also gives examples of how absurd the Herbalife model can be. It reports that “during the years 2009–14, one top Distributor paid over $8 million for product (with a total Suggested Retail Price of over $16 million) which the Distributor purchased in the names of various downline members, thereby generating additional rewards and qualifying for higher payments from Defendants. This Distributor then donated all of this product to charity, rather than attempting to sell it. The Distributor generated enough rewards through these purchases to make a net profit, without even selling the products.”

The difference between a Multi-Level Marketing scheme and a pyramid scheme is usually explained by the absence of products in a pyramid scheme. The FTC report shows that even with Herbalife the products can be irrelevant. If you can give the products away to charity and still make a profit then you have to ask which of the two Herbalife really is.

The Chair of the FTC, Edith Ramirez said:
"This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit [...] Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices."
This ruling from the FTC is yet further proof that Herbalife, like many other Multi-Level Marketing schemes, are a very good way for some people to make a vast amount of money. The few at the top do very nicely but only at the expense of the many lower down the pyramid.

Unfortunately, this ruling only relates to Herbalife’s operations in the USA but I bet we’ll still see the effects here in Botswana. They’re going to have to find that $200 million somewhere and I suspect it’ll be the victims elsewhere in the world who’ll be pressurized to raise it. Expect to see Herbalife pushing its bogus business in your direction soon.

Hopefully you have a door that you can show them?

The Voice - Consumer's Voice

Can I trust this publisher?

I received an email from Omniscriptum Publishing Group, a "publishing house" in Germany concerning work that I had submitted to present at a conference last year. They have just sent me a follow-up email to find out if I am still interested to have them publish a book on my work on the subject. On the surface, the proposal looks interesting because I would not have to spend on editing and publishing costs but I would like to know if I can trust them with my intellectual property, because I don't know if the publishing house really exists or it is one of those fake ones which disappear soon after you have given them your work.

If they are genuine, what would you advise in terms of agreement concerning my work. In the latest email, they have said that after evaluation of submitted manuscripts, they edit where necessary and give back the edited version for the owner to approve before publishing. They then publish and market the books worldwide on behalf of the writers and pay royalties on sales, at between 10% and 15 % of the book price. A formal contract would have to be signed between them and the writer of the book.

What do you think?

When I first saw your email I was suspicious. Now, having done a little research, I’m even more suspicious. These people are a deeply dubious, so-called publishing house. They have a terrible reputation.

Their approach is to bulk email students and academics who have written dissertations, offering to publish them. In order to get published the author is required to hand over all rights to their work, meaning they can never publish that piece of work again themselves. Yes, as you say, they offer you 10-15% of any income they earn when they sell your paper but there’s a minimum value you have to reach before you get anything. One source I found said that you only get paid if the publisher makes €50 (about P500) every month for a year. Realistically, that’s not going to happen.

To make matters worse, one report I read said that the publisher will then try and sell you copies of your own work for P500. Remember that they now own it, they can do as they please.

If you sign a deal with this bogus publisher I’m afraid all you’ll be doing is handing over your hard work to a suspicious stranger who’ll likely never give you a thing in return. Do you really want to do that?

Why won’t they repair my sofas?

I and my wife bought leather sofas in late December last year by credit at a certain furniture store in Gaborone amounting to P22,000 with a deposit of P700 and in February this year we noticed that the sofas are starting to crack or tearing off. We informed the store to come and see the situation because we feel it was so soon for sofas to start to wear out, again it was our second instalment of payment.

The furniture people did not come to see the situation but told us to bring pictures of the sofas to them to send them to their supplier and we did that by using our cell phones cameras, but on our arrival we were told that the pictures are not clear we have to find a better camera or cell phone to bring the better pictures which we did not have. We told them that our cell phones can only show that kinds of pictures and ask them if it cannot be better for them to come and take pictures, and they told us that they do not have transport. Now we are stalk we do not know what to do. Every month we pay an instalment of P700 sometimes they call to remind us to pay but when we talk about the sofas they say we must bring pictures. Please advise us on what to do next?

This is simply not good enough. You’ve done everything right and the store seem to be trying to do everything wrong. You’ve given them evidence that there’s a problem with the sofas and their argument about picture quality sounds like a delaying tactic to me.

I also congratulate you for continuing to pay your instalments. Many people stop paying in situations like this which can be the worst possible thing to do. That just enables the store to repossess the goods, sell them and still hold you responsible for the debt. Remember that repossession doesn’t mean you can walk away. You can even end up owing more after the goods have been taken away.

We’ll get in touch with the store and see if they can’t exercise a bit more care for their valuable customer!

Friday, 15 July 2016

Herbalife is poorer by $200 million

Herbalife have a long history with US government enforcement agencies.

The latest is a notice from the US Federal Trade Commission who report that Herbalife:
"have agreed to fully restructure their U.S. business operations and pay $200 million to compensate consumers to settle Federal Trade Commission charges that the companies deceived consumers into believing they could earn substantial money selling diet, nutritional supplement, and personal care products."
FTC Chairwoman Edith Ramirez said:
"This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit [...] Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices."
The evidence has been around for many years that very few people actually make any money from Herbalife. Their own income figures, the ones that regulators like the FTC have insisted they publish every year, show this clearly.

This ruling from the FTC is yet further proof that Herbalife, like many other Multi-Level Marketing schemes, are a very good way for some people to make a vast amount of money. The few at the top do very nicely but only at the expense of the many lower down the pyramid.

Yet another reason to avoid them and anything similar.

[Thanks to for the alert.]

Get the basics right

I have a theory that in every industry there is a single test of whether a particular outlet is doing a good job.

For instance, I think the test of a bar should be that if beer is cold. If they can’t get that right, then they probably can’t get anything else right.

So what should the test be with a hotel?

It’s simple. They should give you somewhere to sleep. That’s what any hotel does, whether it’s a basic guesthouse or the fanciest 5-star place, it’s all about having somewhere to sleep at night.

Ok, before you comment, I know there are hotels that cater for what we might call the non-nocturnal customer-base, those customers who have a need for a very short-stay during daylight hours, accompanied but a recently acquired good friend. But that’s a completely different market. They should just supply free condoms.

We heard from a reader last week who encountered a hotel that managed to fail the basic rule of providing somewhere to sleep. She’d been working in Palapye and had been staying quite happily in a hotel for a few days. However, one morning the housekeeping staff asked for room key as she left so they could clean the room. Why didn’t they have their own key? You’ll find that out later.

It was later that evening when things started to go wrong. When she got back from work the reception desk was empty and the only person present was a security guard. He told her he had room keys but hers wasn’t there, presumably it was still with the housekeeping staff.

So there she was, locked out of the room that contained her clothes, toiletries and personal belongings. No other member of staff could be found.

Luckily she had a friend who was staying in another hotel in Palapye so she had a roof for the night but what if she’d been in Palapye alone? It would have been a night spent in her car.

The next morning things weren’t any better. First thing in the morning she went back to the hotel only to find there was still no manager to be found and the other staff were no more able to help her than the poor security guard had been the previous night. No other key to her room could be found.

Don’t forget that this woman was working in Palapye, she had a client to see and every moment wasted was a potential threat to her business.

Eventually the staff identified a solution to her problem. Force.

Brute force eventually removed the lock from the door to her room and by mid-morning she’d had a shower and had been reunited with her clean clothes.

But still no manager. Apparently he “couldn’t come to the site”, presumably because something more important or entertaining was occupying his attention. But that was a mistake. Maybe he was unaware of her profession or didn’t realize that it might be relevant. No, she wasn’t a hotel inspector or a reporter from a tourism magazine. She was something infinitely worse.

She’s a lawyer. In fact, she’s a really pissed-off lawyer. A really pissed-off lawyer who spent the previous night sleeping on a floor, despite paying a hotel P1,200 for a bed. Ouch. Not only does she want a refund of the P1,200 she paid for the bed that night, she also wants compensation. Even though I doubt she’ll get anything more than a refund, she’s going to make him suffer.

Clearly this hotel has to consider a number of things. Firstly, a hotel should always have spare key. These days most hotels have switched to electronic key cards that can be reprogrammed in seconds but even if they still adopt the old-fashioned approach surely they should have backup copies in the safe? It’s also not good enough for the manager to just be absent. If he can’t be there, then he should have a deputy manager on duty at all times. They’re called “Duty Managers”. It’s not a new idea.

None of this is rocket science or brain surgery. A hotel manager who can’t get this sort of thing right shouldn’t be running a hotel.

Photographers. That’s another very simple one. Photographers should supply photographs.

A couple of times a month we get a complaint from someone who hired a photographer for their wedding and months, sometimes even years later, they still don’t have their photos. Two weeks ago a woman contacted us and told us about the photographer she hired for her wedding in 2014. Two years later, she still hasn’t received her photos. The photographer now claims that his laptop crashed and he’s lost everything but when she offered to employ a technical specialist to try and recover the lost data he refuses to hand the laptop over.

Again the solutions are simple. He should hand over the laptop to the expert to see what he or she can recover. He should look through the backups he took from the camera and the laptop. He should examine the other memory card from the camera because all responsible photographers use at least two cameras and two memory cards.

Or maybe he didn’t do any of these things? No laptop? No backups? No other memory cards? Then he shouldn’t call himself a twenty-first-century photographer. He failed the test.

I don’t think it’s too much to ask for some basic standards. It doesn’t matter whether it’s a bank, an insurance company, a bar, a restaurant, a photographer or a hotel. If they can’t get the basics right, then they shouldn’t be in that line of business.

The Voice - Consumer's Voice

Is this loan real?

I received an email from offering me a loan offer from Swiss Financial Group Loan Department Easypay Loan Services.

They said “We are private investors operating in several areas (Banking, Finance, Insurance). We have the legitimate ambition to invest in all business in any country economically and politically stable, whose laws and regulations protect and secure foreign investors. It is for all these reasons that we want a frank and sincere collaboration in all profitable activities in the private or public sector. We are willing ? finance any individual or private or public company who desires it. Our finances are between 500,000 Euros minimum and maximum 500 million Euros at a fixed interest rate of 3% per year.”

Do you think this is real?

No. This is undoubtedly the beginning of a scam.

The clues are there. Firstly, and perhaps most importantly, real lenders don’t approach potential customers like this, by email and without knowing their name. Lenders suggesting they’re in Switzerland certainly don’t do so from a free email service based in Latvia (did you see the .lv at the end of the email address?).

It’s also unbelievable. Real lenders don’t offer vast amounts of money (500 million Euros is about P6 billion) at ridiculously low interest rates. They simply don’t. They also don’t lend across borders and indeed continents as easily as these people say they do.

There’s the issue of language quality. Do you really think that a company that offers billion Pula loans can’t express itself properly in English?

This is actually the beginning of another advance fee scam. Sooner or later, probably just before the day they’ve convinced you that you’re about to get the money, they’ll demand a last-minute fee of some sort. Sometimes it’s a legal fee, other times a tax or duty payment. Whatever it is, that’s the “advance fee” that gives the scam its name.

Just delete the email and any others like it.

Can I get my money back?

I made a booking online with to a hotel yesterday and the system requested me to input my banking details so to keep a reservation for me and it went ahead and debited my account P940. When I tried to cancel the money has gone already. I tried getting hold of the hotel and I was taken from pillar to post till this morning I spoke to the owner and she made it clear to me she won’t refund me as I needed 5 days to cancel. My issue was where would I get 5 days from if the booking was for that day and when I was requested for banking details it so I make a reservation?

I’ve spoken to the hotel in question and also looked at the web site you used to book the hotel and unfortunately there’s not much that can be done. The hotel’s cancellation policy is that you get a full refund if you cancel a booking more than five days before you stay. After that nothing is refunded and they’re not prepared to reconsider that. I don’t know for certain but the hotel might have lost a booking from another customer because you cancelled your booking. is also very clear. As you go through the booking process you see a warning saying “You can cancel free of charge until 5 days before arrival. You will be charged the first night if you cancel in the 5 days before arrival.” It also says: “100 percent of the first night will be charged at least 5 days before arrival.”

I know it’s frustrating that there weren’t five days between you booking and your planned arrival but that isn’t really the hotel’s fault, is it? I know a lot of hotels only actually charge you when you check out but a lot do demand some financial commitment up front to hold the booking, particularly if you’re booking online.

Sorry I don’t have better news.

Thursday, 14 July 2016

Trévo, yet another MLM. Can it really kill cancer?

Here comes another multi-level Marketing scheme offering wealth and health.

This time it's Trévo, which they say is:
"not just another fruit drink, nor is it just another multi-vitamin. In a world of sugar-filled juice drinks and caffeine-saturated energy shots, Trévo stands alone as a complete health system in one bottle. Containing 174 of nature’s finest nutraceutical ingredients from around the globe, Trévo is unlike any other nutritional supplement you will find on the market. This remarkable formula provides you and your family with a quick, delicious and easy way to restore, renew and revive your bodies."
Sounds good, doesn't it?

As often happens, the manufacturers are cautious. They say that consumers of their product might:
"enjoy increased energy, enhanced mental focus, vibrant good health and even weight management support".
However, they are also cautious. They publish a disclaimer that warns:
"This product is in no way intended to diagnose, cure, treat, or prevent any disease."
Their distributors aren't always as cautious. One in Botswana made some very clear claims on Facebook.

After posting a picture of herself holding a bottle of Trévo she said "Trevo has this weapon!" and posted this image claiming that it can kill cancer:

She also posted this:

Both of these claims are illegal in Botswana. Sections 396-399 of the Penal Code outlaw what are called "prohibited advertisements" that offer treatments for cancer and a range of other illnesses and disorders.

They're also completely without any supporting evidence. None at all. The only detailed endorsement they have comes from a "Certified Chiropractic Wellness Practitioner". So the best they can offer is a proponent of bogus, pseudoscientific nonsense? That says something.

This is really all about a Multi-Level Marketing scheme, a cousin of the pyramid schemes we've come to know. This is how Trévo describe their "monthly commission compression":

What does that look like to you?

 Ok, half of one.

Like all MLMs, only the people at the very top of the pyramid make any money from the scheme. Even the largest ones, Herbalife and Amway, concede this in the income statements they are required to publish.

Please don't waste your time, money and effort either drinking a bogus cancer cure or investing in yet another pyramid-structured Multi-Level Marketing scheme.

Saturday, 9 July 2016

Search or molest?

Yet again we get THAT question. Can security guards insist on searching you when you enter or leave a store?

A member of our Facebook group recently asked again. I’ve removed the name of the store for now.
“On Saturday I went to store XXX in Francistown. There is a writing by the door which you will not see when not careful which reads something like "we have the right to search any bag or luggage that gets in or out of these store". You will not see this writing if you are not careful as it is small. Most people were shown that writing when they were trying to resist being searched. When I asked about it they said their search was legal, and they even said the writing was known by the authorities and was approved. They even said the consumer affairs people knew about it and there is nothing they could do. How true is it? Anyway I do not think I will ever go back there since I really, really hate it when someone goes through my handbag as I feel its just too personal. Anyway I just want to know if true the small writings make it legal for them to search us. Just curious. Thank you in advance.”
We get this question every couple of months, usually after some unfortunate person has been mistreated by a security guard. They ask what powers security guard have. Can they, for instance, ask to search our bags as we enter or leave the store they’re guarding? Can they insist on doing so? Can they detain us if we don’t want to let them search us? What exactly can they do?

Our advice has always been simple. Security guards aren’t police officers, they’re just normal civilians like the rest of us. They don’t have any powers that we don’t have.

On the other hand, stores are private property, just like our homes. You have the right to prevent me from entering your house as well as from entering your store if you don’t want me there. In exactly the same way the owner of a store can refuse you entry unless you play according to his or her rules, so long as they’re legal ones. A store is entitled to refuse you admission unless you volunteer to leave your bags at the counter or volunteer to be searched. But how many stores are really prepared to do that? How many are really ready to turn away people with the money they so desperately want?

But why do security guards behave this way? Is it because they’ve been told they can by their managers?

In May 2011 a woman went shopping in Pick N Pay at Riverwalk with her three daughters and some of their friends. As they were leaving the store a security guard from Scorpion Security blocked her way and demanded to search through her handbag. Rather than asking nicely he just grabbed the bag from her in a manner she described as “violent and physical”, searched through it and, finding nothing, handed it back to her. She claims that she felt “belittled and humiliated” by his treatment of her in front of her children and their friends but being a strong character she decided not to take this lying down. Her later complaint to the security company about the way their guard had treated her was met with a promise of an apology but this never came.

So she dragged Scorpion Security to court.

And she won.

When the case was heard in the High Court in Francistown the Managing Director of Scorpion Security gave evidence in defence and told the judge that his “security guards could search. That they had the authority to do similar to that of Police Officers.”


In his judgment the judge found that “indeed the Defendants searched the Plantiff without her consent and it was unlawful. […] The Plaintiff has proved her case on a balance of probabilities and I accordingly grant judgment in her favour.”

He went on to say that she had suffered “humiliation embarrassment and impairment of her dignity as an honest member of society” and that she deserved compensation for that. He forced the security company to pay her P60,000 in compensation.

Maybe you think this case was a very rare event? Unfortunately not. Last year we did a large-scale survey of security guard behaviour. 82% of the people we questioned said that they had, on at least one occasion, been stopped by a security guard as they left a store and almost 90% of them had been asked to show their belongings to the guard to be searched. 83% of people had indeed allowed the guard to do so.

62% of the people who’d had their belongings searched said they were “offended or upset” by the experience and I can imagine why.

Then we went further. How many people had been searched themselves? Not just their packages, but their bodies?

Only one in six people had been stopped by a security guard who then wanted to search their person and 70% of these people had felt obliged to permit the search. Almost all of them said they had been offended or upset by the experience.

And the worst thing? In over half of these situations it was a male security guard searching a woman.

This suggests that one in seventeen adults in Botswana is a woman who has been molested by a male security guard.

The situation is out of control and we do not deserve to be treated this way. I urge you never to shop in any store that allows its guards to mistreat and molest you.

Next time a guard tries to search you or your belongings I suggest you ask them if their MD can afford P60,000 in damages. And to be seen as an employer of molesting perverts.