FTC vs. Vemma

In September of 2015, the FTC placed a Ex Parte Temporary Restraining Order and Asset Freeze on Vemma Nutrition Company. The reasons for the case focused on income claims, marketing videos, public statements from company leaders, and the company's young target market, but the repercussions land squarely on compensation norms across the industry. Our coverage of the case provides a detailed picture of the legal landscape before the case, the rhetoric behind the case, and the long-reaching effects the case may have on the industry.

March 26, 2017

Eight Tips for Avoiding Legal Battles

No one can tell you with certainty how keep your direct sales business out of the crosshairs of regulatory bodies. No two rulings (or settlements) are identical. As circumstances change, regulators change their focus. But we see regulators going after certain practices again and again, and from that we can dr... Read more ›
March 20, 2017

Do the Vemma and Herbalife cases impact party plans?

An interview with Karen Tobin and Bob Hipple

What insights can Party Plan companies learn from the Vemma and Herbalife court cases? One of the findings seems to be problems with use of autoship? Bob: In a call with DSA, I learned that it wasn’t so much a problem with autoship as it is a problem with who are the retail customers, and how much are th... Read more ›
December 20, 2016

Vemma settles with the FTC

On December 15th 2016, Vemma and the FTC reached a settlement. The settlement contains no admission of fault or any finding that Vemma operated unlawfully or operated as a pyramid scheme and it “imposes a $238 million judgement that will be partially suspended upon payment of $470,136 and the surrender of c... Read more ›
August 13, 2016

The Case for a Chief Compensation Officer

In the August issue of Direct Selling News, InfoTrax Systems Vice President of Commissions Operations, Kenny Rawlins, makes a compelling argument for the inclusion of a chief compensation officer (CCO) on the executive team of every direct selling company. Last year’s Vemma injunction and the recent Herb... Read more ›
January 7, 2016

Vemma Back in Business

Vemma’s website is back up. They are once again taking orders. No doubt several of our readers have been holding their breath, waiting for this moment. The brief asset freeze and TRO ended a few weeks ago, but it’s taken them some time to get operations back up after the court appointed Receiver closed th... Read more ›
January 6, 2016

What the Vemma case means for the network marketing industry

The FTC’s lawsuit against Vemma continues. With the FTC insinuating that binaries are illegal, going after practices as common as personal volume requirements, and, so far at least, having their arguments upheld, there’s plenty of reason for unease in the industry. As I wrote in a recent article for the D... Read more ›
January 5, 2016

New rules, big questions

We, as an industry, don’t yet know the repercussions of FTC v. Vemma. We can’t know which, if any, of the new restrictions placed on Vemma will become industry standards, or if this case is even about industry standards. Most of the new restrictions influence Vemma’s compensation options; however, co... Read more ›