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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.

  • September 29, 2015

    What 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 ge... Read more ›

  • September 23, 2015

    Back 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... Read more ›

  • September 22, 2015

    The 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,... Read more ›

  • September 14, 2015

    Income 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 m... Read more ›

  • September 14, 2015

    Vemma 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 titaniu... Read more ›

  • September 4, 2015

    Vemma and the BurnLounge Case

    As I said in my previous article about the current Vemma case, I am not a lawyer. I am the editor for MLM.com. I must also state that InfoTrax Systems sponsors MLM.com, that Vemma is a client of InfoTrax Systems, and that BK Boreyko is a personal friend of InfoTrax Founder and CEO, Mark Rawlins. This article ... Read more ›

  • September 4, 2015

    A Lawyers Opinion on the Vemma Injunction

    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 t... Read more ›