WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) announced Dec. 15 that Arizona-based Vemma Nutrition Company will end alleged pyramid scheme-inducing business practices.
Vemma allegedly targeted college students and other young adults, promising them that becoming an affiliate was a good alternative to traditional employment. The company purportedly failed to disclose that the program’s structure ensured most affiliates would not earn substantial income. Vemma also provided affiliates with false and misleading materials for recruiting others, the FTC said.
Vemma has been banned from compensating affiliates for recruiting new participants, tying an affiliate’s compensation to that affiliate’s purchases, or paying an affiliate compensation related to sales in a pay period unless the majority of the revenue generated came from sales to general consumers.
A $238 million judgment will be suspended upon payment of $470,136.