MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

On August 17, 2015, the FTC filed a complaint in U.S. District Court in Arizona, seeking a permanent injunction against Tempe-based Vemma International Holdings, Inc., a long-time direct selling marketer of health-related products. The FTC was successful in obtaining a temporary restraining order, which shut the company and froze its assets. Further proceedings for a hearing on a preliminary and permanent injunction and other relief were set to the future.

Such a scenario has been a common approach for the FTC. The most recent actions resulted in permanent injunctions against BurnLounge and Fortune Hi-Tech Marketing. For a summary of the most significant federal actions during the past few decades, please see:

Herbalife: What Short Sellers Missed on the Way to the Press Conference…

Jeffrey Babener (2013)

The primary accusation against Vemma is that its program focused on recruitment rather than sale of product to the ultimate user, thus rendering the program a pyramid scheme and a deceptive practice under FTC legislation. In addition, the FTC has charged that Vemma is deceptive in its earnings representations.

FTC vs. Vemma Litigation Bullet Points:

  1. (a) This case affirms the BurnLounge standard requiring emphasis on sales to ultimate users, which includes nonparticipant retail customers and personal use in reasonable amounts. Primary motivation for distributor purchases should be destination to ultimate users and not to qualify in the plan for compensation.

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Make sure you’re not the last to know about top MLM news stories, or to hear about the latest scam reports. Our timely headline reporting will keep you up-to-date on stories that affect everyone in the network marketing industry.

We will also make sure you receive a “Video of the Week” on industry educational topics, such as distributor education, industry Q&A, executive interviews, MLM startup, and pyramid schemes.

Each newsletter features the profile of a direct selling company, like Avon, Mary Kay, and Amway, or perhaps a startup multilevel marketing company that you haven’t heard about yet! MLM News Global also highlights two featured articles on industry-related topics, such as pyramid schemes, compensation plans, recruiting, lead generation, legal analysis, software, and more.

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Trademark of Herbalife

A Belgian appellate court declared December 3, 2013 that Herbalife is in fact operating in compliance with Belgian law, reports Yahoo! news. This ruling is in response to previous claims by the consumer organization, Test-Aankoop, that the international nutrition company was operating as a pyramid scheme.

Herbalife was established in 1980 and operates in over 75 countries. The company is the world’s fifth top direct selling company, with 2.7 million salespeople in roughly 79 markets, reports

For additional information, read the following articles:

Herbalife:  Belgian Appeal Court: Herbalife is No Pyramid:  Validates Legitimacy: The Next Chapter in Recognition of Personal Use

**See a translated copy of the actual Belgian Court of Appeal Herbalife ruling.

Herbalife Statement Regarding Belgian Appeal Court Ruling

Herbalife: Belgian Court Overturns Pyramid Ruling

Herbalife says Belgian appeals court reversed pyramid scheme finding

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Silpada Designs Logo - Trademark of Silpada Designs, Inc.

Silpada Designs Logo - Trademark of Silpada Designs, Inc.

On July 2nd, several media outlets, including Kansas City Business Journal, announced that the original founders of Silpada Designs – Bonnie Kelly and Teresa Walsh – are reacquiring Silpada Designs from Avon Products, Inc.

In July, 2010 Avon agreed to purchase Silpada Designs for $650 million. At the time of the agreement of purchase, Silpad Designs was making $230 million in annual revenue and operated in the United States, Canada and the United Kingdom.

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Visit and for MLM news headlines anytime. and offer a vast collection of MLM news headlines. offers news stories going back over ten years. offers headlines organized by month and year.

Here are a few MLM news stories that we’ve recently highlighted from the beginning of this year:

Ackman, Herbalife and Celebrity Short-Sellers (1/1/13)

Activist Takes on Ackman Over Herbalife (1/2/13)

UPDATE: Herbalife completes
purchase of former Dell plant (1/3/13)

How to balance traditional, online, and social media (1/3/13)

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According to the Direct Selling Association (DSA), shares of wellness and services products have gradually increased over the past several years. This, of course, doesn’t mean that wellness and services are always going to be the most successful products in an MLM business model but they are right now. The DSA states the following about current MLM product success:

Wellness (including weight management products, nutritional supplements, health foods and beverages, etc.) and Services (including utilities, and financial products) has steadily increased for the last several years…

Easy access to information about health and wellness has contributed to increased consumer interest in such products… Direct sales not only offers desirable products in this category, but has the value-added benefit of personal interaction with a knowledgeable representative to help the consumer make their purchasing decisions.

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Direct Selling News (DSN) recently posted the 2011 winners of the Bravo Awards. A round of applause goes to Amway, ViSalus and Nu Skin!

Doug DeVos, President of Amway, won the Bravo Leadership Award for putting people first. This includes Amway’s three million independent business owners. Direct Selling News offered the following statement as to why Amway and President DeVos were honored:

It is for this unwavering commitment to the people of Amway and his leadership role within the direct selling industry on the local, national and international levels, that Direct Selling News presented DeVos with the 2011 Bravo Leadership Award.

“Any time you’re recognized in your industry by your peers, it’s a tremendous honor,” says DeVos. “You want to be part of the team. So this is kind of like my teammates having a vote and saying ‘thanks’ in a very special way.”

ViSalus Science was honored with  the Bravo Growth Award. The founders were honored for saving the company from certain death. The DSN stated:

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The Securities and Exchange Commission (SEC) shut down for conducting Ponzi scheme activity. News outlets are reporting that ZeekRewards raised over 600 million dollars from over one million customers. Here are some links to the news reports:

SEC Shuts Down ZeekRewards as Scam – Wall Street Journal

U.S. SEC says shuts $600 million Ponzi scheme – Reuters

Investors in Lexington Ponzi scheme confused, upset – Fox8

Read the official SEC Complaint [PDF]. Or, read the official SEC Complaint online (i.e. text only).

Be sure to visit the blog at to read MLM Attorney Jeffrey Babener’s article, And the Leaves that are Green Turn to Brown – MLM Penny Auctions, of ZeekRewards’ recent allegations and to learn more about illegitimate direct selling companies.

You may also be interested in reading the following articles which help to identify pyramid schemes vs. legitimate MLM companies:

Is it a Pyramid or Legitimate MLM?

Identifying Illegal Pyramid Schemes

Pyramid: Yes or No?

Tired of reading? Attorney Jeff Babener will explain pyramid schemes to you on video:

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