Vemma Declared Pyramid Scheme by Italy’s Competition and Markets Authority
MADISON, Conn., April 24, 2014 — An analysis by advertising watchdog truthinadvertising.org (TINA.org) has determined that Vemma Nutrition Company’s new compensation plan is not significantly different from one that Italian regulators found to be a pyramid scheme. TINA.org today announced its findings and published an official translation of Italy’s Competition and Markets Authority’s recent ruling that determined that Vemma, which targets college students and young adults, is operating an illegal pyramid scheme in that country.
The Italian authority sanctioned Vemma €100,000 (approximately $140,000 US) and ordered the company to stop spreading or continuing its unfair business practices in Italy. Vemma is appealing the decision.
Shortly after the ruling, the company issued a new compensation plan that founder and CEO Benson K. Boreyko claims would help Vemma “to be more like Amazon.com and less like Amway.”
“None of Vemma’s changes to its compensation plan really address the key issues raised by the AGCM’s decision,” said TINA.org Executive Director Bonnie Patten, referring to Italy’s Autorita Garante della Concorrenza e del Mercato.
TINA.org will be forwarding the Italian decision to federal regulators, including the FTC. The agency announced in March 2014 that it will pursue an investigation of another multi-level/affiliate marketing company, Herbalife. It has been reported that several prominent members of Herbalife have left the company to join Vemma.
The Arizona-based dietary supplement company has been the subject of a number of investigative articles critical of its marketing and business practices by TINA.org, an independent, non-profit advocacy group.
Vemma is reportedly expecting 10,000 affiliates at its U.S. national convention now underway at the Mirage in Las Vegas. Joining the conference via Skype is television personality Dr. Oz, who has had a long-term affiliation with Vemma and says his charity, HealthCorps, has received nearly $1 million from Vemma.