Vemma Nutrition Versus FTC: The United States Federal Trade Commission (FTC) froze the assets of the Vemma Nutrition Company on August 21, 2015 alleging that the company is an illegal pyramid scheme.
If you're new to network marketing in Nigeria, you probably wouldn't have heard about the Vemma Nutrition company. So, let me give you a brief introduction.
The Vemma Nutrition Company is a USA network marketing company that manufactures liquid nnutrition and weight management products.
The company's products include . . .
The Vemma Nutrition Company was doing business in over 50 countries of the world prior to the FTC allegation against the company as mentioned above.
The company had . . .
. . . and yet, it was accused of running an illegal pyramid scheme by the FTC?
Why? What was the basis for the allegation?
The FTC's pyramid scheme case against the Vemma Nutrition Company was based on the following key issues:
1. The company was accused of focusing on recruiting new members instead of focusing on selling products
2. The FTC claimed that the Vemma Nutrition company falsely claims that affiliates can earn as much as $50,000 per week whereas the vast majority make little and some
make no money at all
3. The company was also accused of selling large pack sizes called affiliate packs, which cost between $500-$600 USD. And urges new distributors that start their business with this large pack size.
4. Another issue raised is the question of autoship. The company was alleged to require affiliates to buy $150 of Vemma products every month to remain eligible to
5. The company was also accused of not providing sufficient training to affiliates with regard to selling the company's products. Instead, they were taught to give out
products purchased with their own money as free samples to recruit new members.
6. The company was accused of not encourage retail sales of the product because no meaningful discounts or incentives were given to affiliates to encourage that
7. The ftc also alleged that the company gave false affiliate earnings claim by not disclosing to potential affiliates that majority of affiliates did not make money
So, is Vemma shut down?
Short answer . . . No.
As mentioned above, the FTC secured a temporary restraining order (TRO) and froze Vemma Nutrition Company assets on August 21, 2015. In addition, a temporary receiver was appointed to manage the Vemma operations pending trial.
Preliminary hearing was heard on September 15, 2015 after which the TRO was lifted and Vemma was to reach a settlement with the FTC.
In the interim, the Vemma Nutrition Company had to re-structure and re-align its compensation plan to something that passes the FTC's test of how a genuine network marketing company should operate.
The consequence of that re-structuring meant that Vemma had to downsize its operations while it made the needed changes.
As at the time of this writing, Vemma had reopened his business in just two countries . . . the USA and Canada.
WOW! From over 50 countries to just two countries!
The first casualty of the FTC's case against Vemma was the income of the thousands of Vemma distributors worldwide.
For example in Nigeria, some distributors were already earning over one million Naira per month. And over-night, their income crashed to zero.
That is heart-breaking!
Think about it.
How would you have felt if you were earning over a million Naira from the Vemma networking marketing business opportunity and then, the company had issues with the FTC and your income was reduced to zero?
The Vemma Nutrition Company's demise was a terrible experience for distributors, especially the distributors or affiliates who were earning huge sums of money every month.
Don't want that kind of disaster to happen to your mlm business?
Simple. Partner with a network marketing company that passes the FTC criteria for a legitimate network marketing company.
Read and re-read the seven items above brought against the Vemma Nutrition Company by the FTC and make sure your company is not guilty of the same thing. Because if you're partnering with an mlm company that is running the same business model as Vemma previously ran, one day the FTC will clamp down on that company and you risk losing the income from your business.
Don't let that happen to you!
Learn from the Vemma Nutrition versus FTC case study.
Remember . . . very few companies survive and go on to prosper after they have been hit by the FTC.
Therefore, your best bet is to choose to partner with an mlm company that is on the right side of the FTC rules for network marketing companies so that your business building effort will not all go to waste when the ftc beams its regulatory lights on your company.
Yes, learn from the Vemma experience!
Choose to work with an mlm company that meets the legal requirements for legitimate network marketing companies!