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A Lawyers Opinion on the Vemma Injunction

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I am not a lawyer, nor do I play one on television. So when digging into the social media response to current FTC versus Vemma case, I was intrigued by industry lawyer, Kevin Thompson’s response to the FTC memo supporting their reasons for an injunction. In the youtube video below, Kevin Thompson explains the process of the injunction and his first thoughts and opinions on the lawsuit.

You can learn more about Mr. Thompson on his website.

Thompson said the hearing today, September 3, 2015, may be one opportunity in which Vemma can make their case. Many distributors and industry professionals are watching this case closely. Most of the responses that I myself have read and watched show strong support for Vemma and the direct selling industry as a whole.

Thompson said people are asking him what the DSA is going to do. I read the DSA press release on the case and I can see that they are clearly distancing themselves from the Vemma situation, stating their code of ethics rather than offering any particular stance. Thompson’s response is that he is not blaming the DSA, but then he voices concern that the industry is running under a “we don’t need regulation” ideology.

I was surprised when I heard Thompson rallying for more governmental oversight and standards when in the same video he defends Vemma. He even uses a dreaded term in the direct selling industry: regulation.

I grew up with parents who worked in the corporate offices of Shaklee, Sunrider, and as consultants to many other companies. In 40 years, growing up in the industry, I have seldom heard someone say that they actually wanted more government regulation over the industry as a whole. Most organizations are global in the network marketing industry and are very aware that their costs of conducting business in various countries go up under high levels of governmental regulation. Then again, I have seen countries with little regulation and under those circumstances the business model breaks quickly as does the trust of the consumers. With no regulation, pyramid schemes flourish.

Thompson stated that he does not think that Vemma deserves this treatment. He does disclose that he is a friend of BK Boreyko. He points out that the FTC has a problem with some autoships and packs of products, and the idea of monthly quota of volume requirements. I understand why they have concerns about this, but I also believe these methodologies should not be illegal. As MLM.com Editor, Nancy Tobler mentioned in her article about the case, autoships and packs are common in many sales industries, not just direct sales.

Thompson identifies in the video that the claims and lawsuit are not against the product, the pricing, or the science behind the product. Vemma has a solid background on all of those points. At the end of the day, his opinion was that the FTC chose poorly when they targeted Vemma to try and change the industry. I agree with that part of his assessment; it is my opinion that there are far less ethical companies to select from and make an example of. So my question is, why is the government going after Vemma who did so many things right?

Sources:

YouTube,. (2015). FTC Vemma. Retrieved 3 September 2015, from https://youtu.be/pxuPCFOHP0U

Ftc.gov,. (2015). FTC Acts to Halt Vemma as Alleged Pyramid Scheme | Federal Trade Commission. Retrieved 3 September 2015, from https://www.ftc.gov/news-events/press-releases/2015/08/ftc-acts-halt-vemma-alleged-pyramid-scheme

Thompson, K. (2015). MLM Attorney | Kevin Thompson | MLM Legal Services | The MLM Attorney | Top American MLM Attorney. The MLM Attorney. Retrieved 3 September 2015, from http://thompsonburton.com/mlmattorney/

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