Vemma's FTC Settlement Points Out Pyramid Scheme Charge
This article was originally published in The Rose Sheet
Executive Summary
FTC makes clear in the settlement that Vemma was charged with violations including "operating an unlawful pyramid scheme" and that it agreed to compensate its independent distributors only for retail sales. "There have to be real sales to real people," says FTC attorney Lois Greisman.
You may also be interested in...
Supplements Mixed With Direct Selling A Recipe Ripe For Cooking US FTC Regulation Violations
Doesn’t take long to find health and wellness product marketers on list of direct sellers or find firms offering those products in the FTC's history of enforcement actions in the sector.
Advocare Out Of Pyramid Scheme, Into Single-Tier Sales Under FTC Settlement
Advocare "is admitting that it operated as a pyramid and they are agreeing to no longer operate in multi-level marketing," says FTC Consumer Protection direct Andrew Smith. Firm is marketing sports, weight-loss and wellness products on a single-tier model with distributors' compensation based on selling directly to end-users.
Supplement Sector Settlements Frame FTC Guidance On Direct Sellers' Compensation Claims
Guidance notes settlements Herbalife and Vemma Nutrition made in 2016 as examples of its enforcement policies. FTC prohibition against misleading claims extends to requiring direct sellers to base claims of distributors' compensation on sales to consumers, not on measures such recruiting more distributors.