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  • Topic: Vemma Shut Down and Assets Frozen

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    • August 26, 2015 9:11 AM PDT
    • Vemma Shut Down and Assets Frozen

      Stunned. Imagine a world where any company that has an autoship program, and reps or affiliates who encourage others to join because they may earn some income, is potentially subject to being shut down by the FTC.

      I think that covers virtually every nutritional company operating in the direct sales space.

      Companies like Jusuru, where you must buy a minimum amount of product each month to remain commission qualified, and who promote their business as an 'opportunity' would seem to technically be subject to the same kind of action.

      Will the DSA need to change their entire rule structure, or with the FTC use the DSA list as a road map to each and every company that needs to be targeted next?

      This is an industry wide game changer.



    • August 29, 2015 10:00 AM PDT
    • Vemma Shut Down and Assets Frozen

      Here's the FTC's press release

      Here's the actual FTC complaint

      After reading the above links, it seems the FTC's main issue was the 'luring college students' part, and making it more about recruiting and making money than sales of product. It's possible that if the leadership hadn't focused on marketing to college students, they might not have been scrutizined by the FTC.

      I've been in a lot of MLMs in the past and two were shut down. A company will normally be scrutinized by the FTC due to a number of consumer complaints. Many times those are by ex-reps/affiliates who are disgruntled because they had to spend a lot of money buying products to join/qualify, yet didn't earn the income they were hyped about, and instead loss money.

      Here's Jewelway's FTC complaint. The below snippet is what normally gets a company in trouble ...

      "Legitimate multi-level marketing plans are a way of making retail sales of products or services to consumers through a network of representatives. However, in an illegal pyramid scheme the main focus is not on sales, but on recruiting new representatives into the program. Typically, each new representative must buy a certain amount of products and must recruit a specified number of new participants in order to earn money in the program. In a pyramid scheme there is almost no emphasis on making retail sales of products to persons who are not participants in the program."

      "In its complaint against JewelWay, the FTC alleged that the defendants were operating a pyramid scheme because their promotional efforts focused primarily on recruiting and not on retail sales to non-participants. The FTC further alleged that the defendants made deceptive earnings claims in order to induce consumers to make a token purchase of jewelry and become a JewelWay representative able to recruit additional participants for the company."

      The best way to stay out of the FTC's eye, is for the leadership of each company to make it more about the product than just about making money. Also, don't target college students.

    • August 29, 2015 11:17 AM PDT
    • Vemma Shut Down and Assets Frozen

      I need to go through and read the complaint in detail. I picked up bits and pieces from Vemma reps, some said there were complaints because students were encourages to walk over to one of the tables on campus where you can essentially get an instant Visa card, then use that card to buy into the Vemma program.

      A month or two later they are calling their family to bail them out on the card payment.

      I got my first visa card in college. I used it to buy beer. Lots of beer. Kegs of beer. Bad decision. But the FTC didn't shut down the brewing company. I'm big on personal responsibility.

      I do agree that it's problematic if students were being targeted for the program, but wasn't that done by a specific rep? Or was it part of a company-wide program?

    • August 29, 2015 2:19 PM PDT
    • Vemma Shut Down and Assets Frozen

      I totally agree about taking personal responsibility, because in the end, we all make our own decisions and nobody forces us to do anything we don't want to do (well, unless a gun is pointed at our heads).

      But some people blame others for their misfortune, so that's when they start complaining to the authorities. There must have been a lot of complaints to have the FTC step in and investigate.

      Companies like Herbalife, Amway, and a host of others, have had many complaints by disgrunted ex-reps/affiliates, but they're still around because the FTC can't find fault with the leadership doing what they consider pyramid-scheme practices. That 'pyramid scheme' aspect is what companies have to watch out for.

      WatchDog said: I do agree that it's problematic if students were being targeted for the program, but wasn't that done by a specific rep? Or was it part of a company-wide program?

      According to the FTC Complaint against Vemma, Section 19 states ...

      "Vemma's marketing efforts included a campaign called the "YPR," "Young People Revolution" or "Young Professional Revolution," which targets young adults, including college students. Defendants visit college campuses ..."

      They list Benson K. Boreyko (an officer of Vemma) and Tom and Bethany Alkazin (#1 Top Earners) as the Defendants, so this Complaint specifically cites them (see Section 8 and 9. They are being accused of participating in the acts and practices set forth in the Complaint).

      I doubt the FTC would shut down a company due to what a few reps/affiliates do, but when the leadership is responsible for the direction it takes their reps/affiliates, that's probably when the FTC has a case for shutting them down.

      Everyone should read the actual FTC Complaint PDF, because it's a good reminder of what to look for in the leadership of a company you join. The focus should be on sharing it others because of the benefits of the product rather than recruiting them for the money you (or they) can make. The FTC should have no complaints about a company who does that.

      This post was edited by Leigh S at August 29, 2015 2:22 PM PDT
    • September 2, 2015 11:00 AM PDT
    • Vemma Shut Down and Assets Frozen

      The FTC thugs got out their dart board to make an example using their cookie cutter BS pyramid argument, and as usual, they will win for the only companies who can battle back are the ones with deep pockets like Amway and Herbalife.  So now we see a company with products and many years in business get brought to its knees and when a company is attacked by FTC which is civil, company is considered guilty until they prove themselves innocent. Hard to do when you are flat on your back with all funds seized, and that is their game, easy pickens to feed the pig, while distributors lose it all and that is the most sad part of all.


      Success to all,





    • September 2, 2015 1:25 PM PDT
    • Vemma Shut Down and Assets Frozen

      Maybe if Vemma reps/distributors put out a petition and get as many of their downlines to sign, that could help. The FTC Complaint cites the acts with quotes of what seemed to be actually said at meetings and such, so the Defendants would need to prove that they weren't making the recruitment aspect the main focus.

      Vemma reps/distributors could ban together and help disprove the FTC's complaints. That's the best way to help their leadership (the Defendants) lift the shutdown, in my opinion, if the Defendants don't have the resources to fight the Complaint themselves.

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