Also, the DS Edge Conference is right around the corner. It’s February 4th & 5th, 2016 in Newport Beach, California.
And last but not least, Richard Brooke, founder of Life Matters, and long-time ethics committee member of the DSA (Direct Selling Association) has launched a direct selling legal defense fund. The first recipient is Vemma Nutritional Company.
Here are a few points of interest Richard shared on the site, which I think are worth pondering.
Here are some mistakes that Vemma made which the FTC convinced a judge were worthy of an ex parte action
no due process, no notice, just seize and shut down the company.
Vemma had zero distributor enrollment fees, so most “customers” were also “affiliates” depending on the box they checked. The FTC and judge ruled them, as a result, NOT CUSTOMERS.
Vemma traded ethics and public reputation for immediate sales growth in a segment of the sales force edifying obnoxious behavior.
Vemma allowed distributor videos suggesting significant success by recruiting without appropriate disclaimers.
“And here are the results of the government’s actions.”
* Vemma was entirely shut down worldwide for almost a month while the receiver went about dismantling the company. The receiver repatriated international company bank accounts.
* By the time BK resumed partial control of the company, Wells Fargo had withdrawn his merchant account, placed his name and company name on a watch list (black list), making it impossible to obtain a domestic merchant account, and his sales leaders had cut deals to move to competitive companies.
* The court required Vemma to change its compensation plan to one whereby a sales leader could not be paid on their team sales unless Vemma could prove that 51% of that team’s sales came from customers with the title customer. Affiliate personal purchases cannot qualify them for bonuses, only personally sponsored customer and distributor purchases. That compensation plan is still not effectively programmed and functional as of me writing this almost four months after this event.
* Legal fees have already reached $1.4 million and are expected to reach $3+ million before the case is final.
* Vemma has to get court approval for any compensation, incentive, and/or marketing campaigns it wants to initiate.
You can learn more by visiting Vemma Defense Fund