Energy Drink Company Shut Down Amidst Pyramid Scheme Allegations
MADISON, CONN. August 26, 2015 — Vemma Nutrition, an Arizona-based dietary supplement and energy drink company, was quietly shut down by the Federal Trade Commission after the agency filed a complaint under seal accusing Vemma of running an illegal pyramid scheme. The FTC’s actions come after consumer advocacy organization, truthinadvertising.org (TINA.org), which conducted a 2-year investigation of Vemma’s marketing practices, filed complaints against the company.
TINA.org started warning consumers about Vemma in July 2013 after it received numerous complaints from college students and parents about the company’s aggressive recruitment tactics. Throughout its investigation, TINA.org published over 20 articles disclosing misrepresentations and illegal health claims made by top company leaders, and highlighted the rising number of complaints to the FTC from parents and teenagers that the company is a pyramid scheme with cult-like qualities preying on high school and college students.
The advocacy group first alerted the FTC to the company in April 2014 when Vemma was deemed a pyramid scheme in Italy. Another complaint was filed with the agency in June 2014 tipping officials to numerous deceptive health claims made by top distributors.
The FTC filed a sealed complaint against the company in federal court and obtained a temporary restraining order, as well as a freezing of the company’s assets in order to “put an immediate end to a nationwide pyramid scheme.” In an unusual move that could have a wide-reaching impact on the entire MLM/Network Marketing industry, top distributors were also named in the lawsuit. The FTC’s actions come at a time when it is also investigating Herbalife, a Calif.-based dietary supplement company accused of being a pyramid scheme.
To read more about TINA.org’s investigation of Vemma and the FTC’s legal action against the company, see: www.truthinadvertising.org/takedown-feds-move-against-vemma