Posts Tagged ‘FTC Versus Vemma Nutritional Company’
Avoid the FTC’s Crosshairs! The Wisdom of Jerry Garcia
I went to a Grateful Dead concert in 1976. The band was at the height of cool at the time as they represented the counter-culture movement from the Haight-Ashbury district of San Francisco. Although I had been to a number of concerts before seeing the Dead, this concert was different because it was the first…
Read MoreThe FTC Wins, You Lose. The FTC Loses You Lose.
The response across the web to the court ruling on September 18, 2015 has been mixed. Some reporters have called it a “loss,” expecting the court to eventually declare Vemma a pyramid and shut them down for good. Many have seen it as a “win” for Vemma and for the industry, given the fact that…
Read MoreWhat is a pyramid scheme?
Do you remember the invitations you have received to join a multilevel marketing company? What thoughts did you have when you evaluated if the opportunity as a pyramid scheme vs a legitimate direct selling company? Unfortunately, there is not a clear universal definition of a pyramid. Instead there are general guidelines that are accepted by…
Read MoreBack to the Breakaway?
One of the key arguments in the recent Vemma versus the FTC case was about the use of personal volume (PV) requirements for compensation qualification. The FTC contends that compensation must be paid on the sale of product and not on recruitment. But if a company requires PV for compensation, it is unclear if the…
Read MoreThe Vemma Ruling is Out
Dear Friends and Colleagues, The U.S. District Court in Arizona amended its temporary restraining order against Vemma today. The order BEGS for analysis! It contains many points that will impact the direct selling channel – indeed if this order serves as the model that the FTC wants the industry to follow, direct sellers will be…
Read MoreIncome claims: Why are MLMs held to a different standard?
As InfoTrax Systems’ Vice President of commissions operations, I’ve made a career working with direct selling companies to design, develop, and execute their compensation strategies. I have seen firsthand the precautions most companies take to prevent entanglements with the many regulatory agencies that monitor our industry, especially when it comes to statements about earning potential.…
Read MoreVemma and Conspicuous Consumption: Putting Conspicuous Consumption into Perspective
One of the problems that the FTC has identified in the Vemma case is conspicuous consumption. Conspicuous consumption is defined as spending on goods and services to demonstrate one’s wealth[1]. In a New York Times article, Robert H. Frank explains conspicuous consumption and gives examples of a titanium toothbrush at a cost of $4,200. The article…
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