Messages from a multi-level marketing settlement

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You might have read about the FTC’s case against Vemma Nutrition Company, a business “opportunity” with pitches that promised big money from selling energy, health and wellness drinks. In 2015, the FTC filed suit, alleging that Vemma was running an illegal pyramid scheme and targeting college students.

Well, today, Vemma settled with the FTC. Under the settlement, the company’s business cannot be based on recruiting more and more people to join the Vemma network as distributors. Instead, the business has to be driven by real sales to real customers outside the Vemma network. In fact, the company will be able to pay distributors only if the majority of the money generated in that sales period came from sales to people outside the Vemma network. And the company can’t mislead people about how profitable the business could be – or about the so-called health benefits of the product.

If you’re considering going into a multi-level marketing business, or know someone who is, do yourself a favor. Start with some research, which could save you time and money down the road. And consider these questions:

  • Can you see yourself selling to your friends, family, and other people you know?
  • Will the people you know like this product? Will they buy it once as a favor? Would they buy it repeatedly and consistently? For how long, and at what price?
  • How much will it cost you to make those sales? Consider not just the cost of the product – but also other things like gas, shipping and packaging costs, sales aids, trainings, and your time. What does the math say about the costs versus your realistic sales and income projections?

Keep in mind that, in a legitimate multi-level marketing program, you make money by selling the product, not by recruiting others to join and buy product. Remember: if you can’t make money selling the product, others probably can’t either. 

If you spot a business “opportunity” that you think crosses the line, report it to the FTC.

Blog Topics: 
Jobs & Making Money

Comments

Thank you for your post, what is about SISEL, They have a recruiting system and a very high price level and the same is Young living. IS that correct for the USA People, i have some friends in Utah, they ask me for this

Never seen any health related MLM out of Utah that wasn't hokey. Young living has been fined repeatedly by the government for making false health claims (which they are doing again because the fines pale in comparison to their profits).

I do believe that the company had violated my computer user record system as described by the Federal Trade Commission. Due to the fact I do believe that the Telecommunications Privacy Act was violating either when I was a student that wants me to college at Eastern Michigan University or Wayne State University. I can provide document stating that I can come up to court to testify. If this has anything with the banking system in Eastern Michigan University the system was called Eagle one and I won that lawsuit. I also won a class action against Perkins if that helps. Let me know what else I can do so I can be an active member and participate in the trial are there any documentation that you need I am available to give you it's all this position as well as proof. I it also won a lawsuit against Perkins due to a violation the tcpa as well as several other companies I get turned I get further prove Your Case by giving a disposition on the fact that I had received several opportunity to invest several ideas what does the inside for the month one of them was on one or more of them was on my phone number calling me about this company along with several other companies that want to invest and get my money. Since my major is law enforcement and we were highly trained on pyramid schemes Ponzi schemes wire fraud. Now in attempt to do this they were unsuccessful in getting me to invest. Does that include me as a class-action what does the parent or can I be the administrator what is my role in this case? Also if I have to go to the court are you going to compensate me for my time as well as part of the lawsuit. I also want to know can iPhone record documentation what kind of documentation do you need? The phone numbers take me to be asking for pertinent to the case are the three phone numbers 810-xxx-xxxx,810-xxx-xxxxand last but not least my home number which would be 810-xxx-xxxx the cases in Michigan if it's in Michigan is the Michigan Supreme Court what are we going to buy that was the case in Michigan

Why hasn't xzotto been shut down?

Probably because it isn't on the FTC's radar yet. Amway should be next in line, it's by far the largest and most abusive MLM.

I lost money in a start up online business with Veema. My rep was not honest with me. I bought his lies. He then was too busy to offer me live coaching during my last weeks of training. When I tried to do it on my own without coaching, I failed at my first 20 marketing calls. With no sales and right out of the gate, I could not afford the monthly fees or shipments. So I was forced out with no money and almost $2000 in credit card debt. The trainer felt so bad about that. that he said he felt the need to give me $200.00 the next week. I accepted it in order to put food on the table for the holidays. I was flat broke at the end of 2015.
I am going to gather facts and report to the FTC.

Where can I get further information or ask more detailed questions to find out if I should report the mlm I am working I have some complaints but don't want them public yet.

The FTC has an article about multilevel marketing and articles for people who are thinking about going into business.

Those articles may give you some ideas about whether the business you're looking at is legitimate. If you see something that doesn't look right, you can report it to the FTC at FTC.gov/complaint. The information you give goes into a secure government database. Law enforcement will use it for investigations. You can choose how much personal information to give.

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