Vemma Deemed A Pyramid Scheme And Shut Down By The FTC

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If you haven’t heard of Vemma – good for you. If you do know what Vemma is, you probably already have a strong opinion about them (most likely a negative one). In this post I will talk about Vemma, its pyramid scheme, and the dark future of this failing “company”.

 

Vemma Pyramid Scheme Scandal

 

What is Vemma?

Vemma advertizes itself as a nutrition company that sells its products via MLM (multi-level-marketing), just like WakeUpNow did. Their overpriced products, such as Verve energy drink, are usually sold through distributors network. Of course, you have to become a member at $500-600 and keep paying $130 per month in order to be able to sell Vemma’s product.

However, no one really wants to buy some random energy drink when companies like Red Bull and Monster are taking up the biggest share of this market. Vemma’s main income is generated from recruiting new members. When you recruit a new paying member you make a commission. When that member recruits more paying members – you make a commission from that too. And it goes on and on and on. Yes, Vemma is a pyramid scheme where the main goal is to recruit as many “distributors” as possible, the products are there for one single reason – to seem less like a scam.

 

Vemma scandal Pyramid Scheme
Somehow Vemma distributors don’t see a pyramid scheme in this…

For the longest time Vemma concentrated on recruiting college students as their “brand partners”. A fellow student would come up to you with a free sample of the energy drink, then he’ll tell you how you can start earning 6 figures per year and even get a brand new BMW as a sales bonus. If you’re still skeptical, they will proceed showing you videos where “average” Vemma partners are sailing on beautiful yachts, drive fast cars and party like DiCaprio in The Wolf of Wall Street. Unfortunately these kind of promises are enough to lure naive, broke students into spending their last dollars to join the “Verve Revolution”.

These poor folks are so excited by the potential easy success that they don’t even bother looking for real income numbers where LESS THAN 0.5% of Vemma partners make $100,000 per year or more. 78% will not earn more than $1,600 in a year. 20% will make between $1,600 and $12,000 in a year.*

*Vemma income disclosure

Is Vemma a Pyramid Scheme?

Vemma has been accused of running a pyramid scheme for years. I always start laughing whenever I read or hear Vemma’s reps screaming: “Vemma can’t be a pyramid scheme, those things are illegal”! And although I often try to explain why I see it as a pyramid scheme, MLM reps refuse to listen and often resort to personal insults, as they are incapable of explaining how Vemma is not a pyramid scheme.

  • In March 2014 Vemma Italy was fined 100,000 euros as the Italian consumer protection agency found that Vemma was acting as a pyramid scheme.
  • In August 2014 Australian Chamber of Labor’s Consumer Protection said it will pursue criminal proceedings against Vemma for being a pyramid scheme.
  • In April 2015 The State Secretariat for Economic Affairs (SECO) of Switzerland said it will pursue criminal proceedings against Vemma for being a pyramid scheme.

source: Vemma in Wiki

The biggest blow to Vemma came on August 21st 2015 when FTC (Federal Trade Commission) decided to temporarily shut down the company’s operation on allegations that Vemma is running a pyramid scheme.

On September 18, 2015, U.S. District Court Judge John Tuchi forbid Vemma from resuming normal operations. Vemma now has to report all its activities to the FTC. The company is also no longer allowed to recruit new members, pay commissions to its distributors and try to use the multi-level-marketing style distribution.

“Rather than focusing on selling products, Vemma uses false promises of high income potential to convince consumers to pay money to join their organization,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We are also alleging that Vemma is an illegal pyramid scheme.”

The vast majority of participants make no money, and most of them lose money.

source: Federal Trade Commission

 

Vemma free BMW scheme

The Future of Vemma

Recently Benson K. Boreyko aka B.K.,CEO of Vemma Nutrition published a very optimistic update on his Facebook page, calling the court ruling a “Victory for Vemma”. Lots of distributors got all excited and congratulated B.K.
I imagine that none of these people actually read the judge’s decision or simply didn’t understand the ruling. Sure, Vemma is allowed to stay in business but only as a retailer. They can keep selling Verve – but no one wants it.

There is a much darker side to it all and top distributors understand it very well. If you would try to reach out to some of the most important Vemme “brand partners” they will probably refuse to comment on the situation, simply because most of them have quietly left the company and joined some new hot pyramid scheme. (I mean “business opportunity”). We’ve seen it happen time and time again with multiple MLM companies that get shut down every year.

So why is Boreyko all excited? Simply because he wants to grab whatever leftover money he can before Vemma goes under. He wants to motivate remaining Vemma members to keep paying and pushing the product (hence making more income for B.K.).

I fully understand that this news is really hard to swallow for some Vemma representatives. Especially those who put in all their savings into this scheme hoping for a bright future and a free BMW. A person who makes such a horrible decision would probably never be able to publicly admit it, even to themselves. This person would blame the FTC, call people negative, stupid, maybe even blame the CEO for making wrong decisions but that person would never admit they got scammed by yet another shady MLM.

The sad part is that this person is likely to join yet another amazing easy money MLM business opportunity. And the vicious circle keeps going on and on and on…

 

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Vemma Conclusion

Vemma Nutrition is not fully shut down and they remain a functional company as I am writing this blog post. However, they cannot survive by selling their energy drink. Vemma now has 2 choices. The first is to keep recruiting new brand partners ignoring the ban imposed by FTC. This will eventually cause an ugly scandal and a permanent forced shutting down of Vemma, accompanied with huge fines and possibly jail time for some execs. Second option: Vemma simply ceases all its activities and closes the company.

Either way, Vemma Nutrition will close down in the near future.

 

 

 

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