When I wrote about the MonaVie Scam more than 5 years ago, I was amazed to get over 6,500 comments. Over time, the indisputable information from dozens of researchers lead me to make the easy conclusion, “MonaVie is a grossly overpriced product, with little nutritional value, wrapped in a poor business opportunity that appears to be illegal pyramid scheme, fraudulently supported by nonsensical ‘scientific’ studies, and illegal medical claims from its paid salesforce.”

To make a long story slightly shorter, these articles brought in MLM distributors to defend their industry. One challenged me to come up with something bad about ViSalus. It was pretty easy to show ViSalus was a scam as well with the terrible product, terrible marketing, and the founder running what the FTC guidelines quite clearly state is a pyramid scheme.

What does all this have to do with Vemma? In the past couple of months, I’ve been getting comments about Vemma being the next big MLM scam. In particular, commenter Jeff in that ViSalus article has been giving updates of his friend adventures in ViSalus, from when he got a BMW to when he lost his business because the people under him quit when they couldn’t recruit others. Jeff explains that his friend left ViSalus and joined Vemma and how MLM has managed to destroy just about everything important in his life. Jeff also tells of how his friend has been three other MLMs and lost $10,000 in them, but what caught my attention is that the latest, Vemma, is “specializ[ing] in recruiting college and high school students to sell their energy drink” and “train[ing] their distributors how to sign up high school students without their parents knowing.” I share his conclusion: “That’s a special level of MLM scumminess.”

It’s interesting MLMers are going back to Vemma. It’s essentially the same juice scam that MonaVie was, but with Mangosteen as its “special ingredient” instead of acai berries. It’s still an obscenely expensive product that is a dollar an ounce or more… . I’m sure Vemma distributors are going to hate this comparison. However, these posts have a way of getting very long and spending a lot of words on the topic isn’t worth it. Most importantly, it’s worth noting that juice, in general, is not healthy. There’s really no need to split hairs with Xango, Xowii, Nopalea, Jusuru, MonaVie, Zrii, and Vemma distributors about the merits of their particular juice scam. If you don’t believe me, Dr. Johnny Bowden debunked them all years ago. File this article away in your memory, because we’ll be coming back to it later.

Sorry for the lengthy introduction about why I am writing the article. MLM distributors always claim that I pick on companies to personally profit from them and it couldn’t be further from the truth. It doesn’t take a rocket scientist to figure out that spending nearly $40 on a small bottle of juice and getting tricked into a scheme that costs nearly everyone thousands of dollars is exactly the kind of topic that attracts consumer advocates like me. If you are a distributor and don’t want your company picked on, grab your pitch fork and run to Vemma’s headquarters for fueling the fire.

Vemma’s Product and Marketing Scam

Remember that article from Dr. Johnny Bowden that I mentioned above? If you haven’t read it, give it a read now, I’ll wait. Done? Good. Now you are prepared to understand why Vemma’s marketing of ORAC scores is complete bunk. Vemma brags about 4800 units of ORAC per 2 ounce serving, but a small amount of cinnamon, oregano, or cloves can do the same job. They brag that “Vemma boasts superior antioxidant protection…”, but fail to mention that research is showing that antioxidants are simply not helpful as science has hoped. However, it’s a big industry, and companies like Vemma need to sell their $37 bottle of juice.

It gets worse as Vemma uses what I call the Total cereal advertising scam. Remember those funny commercials in the 80’s that it would take X bowls of Brand X cereal to equal the nutrition in one bowl in Total? If not here’s one example starting George Jefferson (okay it was the actor who played George). The logic is that brand X may only have 25% of the RDA of Riboflavin, so you’d have to eat 4 bowls to get the 100% in Total. Lost in the marketing is that you might end up getting 20 times the vitamin C, 5 times the fiber, 3 times the protein and a bunch of other good things in those 4 bowls of another brand. Raisin Bran could have pulled the same marketing trick on Total saying that you need to eat 3 bowls of Total to equal the fiber in a bowl of Raisin Bran.

Now that we’ve established the ridiculousness and deceptiveness of this type of advertising here are some examples from Vemma’s marketing page:

1. “55 eggs to equal the amount of Vitamin D”
2. “62 oz of cheddar cheese to equal the amount of Vitamin B-12”
3. “61 cups of tomatoes to equal the amount of Folate”

That sounds impressive, right? Let’s take the first one, the 55 eggs for the vitamin D in Vemma. If you look up Vemma’s Supplement Facts (note that they aren’t Nutritional Facts, because it’s marketed as a supplement, not a food or juice), you’ll find that Vemma has 1,000 IU of Vitamin D per 2 ounce serving (16,000 IUs per 32 ounce bottle). Sounds incredible until you realize that this Liquid Vitamin D has 2,000 IU per drop and is $20 for 900 servings. That’s 2.2 cents per serving for double of what’s in Vemma. Vemma is effectively putting 8 drops, or less than 18 cents worth of Vitamin D supplement in every bottle. You can bet that Vemma is getting better bulk pricing than we are on Amazon.

Vemma has 15 mcg of Vitamin B-12, per 2 ounce serving (that’s the 62 ounces of cheddar cheese). Amazon has 100 lozenges, with each having 2,000 mcg of B-12 for $8. One lozenge alone would be enough to supplement 133 servings (8 and a third bottles) of Vemma.

I shouldn’t need to go further into these examples. The bottom line is that a good multivitamin could supply all this for a fraction of the cost. Notonly that, but you shouldn’t be buying vitamins and supplements anyway.

One final product thought , in all the food mentioned there, there’s a lot of calcium (cheese, spinach, etc.) and I couldn’t find any on the Vemma label (though Vemma does list that there’s calcium in their FAQ). Score one for the food.

Vemma’s “Paid at Home” Scam

One (or more) Vemma distributor(s) has copied the Income at Home Scam that was covered by PT Money (and of course the previous link in extensive detail). These people created a 85% for example (PDF).)

Here I’ll take a break an address a big problem with this disclosure. It uses the words “generate a profit”, when it should say, “earns an income.” The numbers used are clearly from Vemma’s Income Disclosure Statement (PDF). No MLM even attempts to track distributor profit, because they don’t care about these expenses… they vary from distributor to distributor. So those people earning an income between $667 and $1326 will likely end up spending more than that in juice, conferences (fees for the conference, hotel, flight, food, etc.), training materials for themselves and their downline, samples, and other associated costs. That’s not a profit, but a loss.

So to put this in perspective, let’s imagine 100,000 people in at a football stadium and they all decide to become Vemma distributors. If we apply the MonaVie’s 85% inactive number, since Vemma doesn’t seem to give their own, only 15,000 would make the income disclosure statement at all. From there some 75% would earn an income between $667 and $1326, which likely isn’t profitable after expenses. Of the original 100,000 you are now left with 3750 people or 3.75% that might be actually generating a profit for their time spent. I would classify the other 96.25% as people who are wasting their time not generating a profit – a minimum wage employee at McDonalds would be more profitable.

And if you are looking to replace your own income, your odds are much, much lower – obviously depending on your income. The Paid at Home site mentions that this “require[s] hard work, desire, diligence, leadership and talent.” So why anyone would want to take such an incredibly risky gamble to hopefully get to where they already are while still working hard is beyond me.

Finally don’t get me started on how the website displays a “Positive SSL Secure” logo on its website without actually using SSL. Can you say positive fraud? I thought so.

Vemma’s Business Opportunity

I went into this in more detail than I originally intended in the Paid at Home section above. That example should give you a good idea of what to expect. However, I suggest you read this article on the business of MLM to truly understand how bad of a business opportunity Vemma, an MLM, is.

Vemma’s Young People Revolution Scam

As mentioned in the beginning, Vemma is now purposely targeting high school and college kids. The idea is that these minds are easy to mold and they likely haven’t been subjected to MLM scams before. As MLMs churn through millions of people each year, the older generations have already been burnt, they need fresh blood and the next generation or expanding to a new country is the only place to get it.

The aforementioned ViSalus really went after the youth market with it’s The Pyramid Thing video essentially flaunting their scheme. However, in the past year (as I write this in August 2013), ViSalus has lost half it’s distributors from a year ago and haven’t been able to replace the churned people.

You don’t have to do any real research to figure out that Vemma’s Young People Revolution is an illegal pyramid scheme. The first 30 seconds of this video makes it quite clear:

“The person who invited you today… is not trying to sell you two cases of anything. I can guarantee you that. They are just trying to present you with an opportunity to get you out whatever financial situation you are in into the one you want.”

Why does that make it clear it is an illegal pyramid scheme? Here’s the FTC words:

“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”

So yeah, the Young People Revolution isn’t going to bother you by being legal and selling a product. Instead they are going to focus on recruiting you into an “opportunity” where the money you make is based on the number of people you recruit and your sales to them. Boom illegal pyramid scheme.

You’d think that the FTC would shut down Vemma, but they simply don’t have the federal funding to fight these companies as the New York Post points out. The FTC can’t even fight Free Credit Report due to financial constraints.

Because of this, there’s a big chicken vs. egg problem that allows these schemes to continue. The FTC only acts when a number of people complain they’ve been defrauded by these schemes. People believe that if the schemes were fraudulent they would have been shut down by the FTC long ago and don’t waste their time complaining about it.

Pyramid Scheme?

A Vemma distributor in the comments wanted to make the point that the products are a good value. Specifically Doug Boyd wrote:

“Its easy to toss the word pyramid around and I can tell you the real reason why all these companies are NOT pyramid schemes; they have a real product and in the case of Vemma’s Verve there is a demand for it.”

MLMers tell themselves that a company with a product can’t be a pyramid scheme. They are wrong and simply lying to themselves. The FTC has an educational page about MLMs and pyramid schemes, which says:

“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”

Note that there is no mention about whether the product is real. The question of demand is important though. Are the people making money from recruiting people who sell to those recruits (i.e. making money from the downline) or are they selling the product to the average person not involved in Vemma? It’s not likely you’ll get that data from Vemma. If you see them tout someone making a million dollars, they must really be hustling to do those sales outside of Vemma or it would seem to be a pyramid scheme according to the FTC.

Vemma’s Excessive Product Prices

To understand why pricing is important it helps to read: The $100 Pen Pyramid Scheme. I’ll wait. Back? Good.

So now that we understand why overpriced products can lead to pyramid schemes, it’s worth looking at Vemma’s pricing of the Verve product. I did a little math using the publicly available and well-known Amazon.com website (pricing as of 2/3/2014):

• Red Bull Energy Drink, 8.4-Ounce Cans (Pack of 24) – $38
• 24- 8.3 Oz Cans Vemma Verve Bold Energy Drinks – $65

The price for Vemma is almost twice as much as the most expensive energy drink I typically can find in the store. If you read my article Save Money on Energy Drinks (and Caffeine), you’ll know how you can energy drinks, such as the popular brand Amp, with twice the serving size for only a dollar. That’s ~6 cents a ounce vs. ~33 cents an ounce for Verve. One can certainly see why the FTC suggests, “Many companies that market their products through distributors sell quality items at competitive prices. But some offer goods that are overpriced… Find out what will you be selling. Are similar products on the market? Is the product priced competitively?”

Is the Vemma Verve, like the $100 Pen Pyramid Scheme? Let’s put it to a challenge and see if Verve sells in stores at 33 cents an ounce. Let’s see if there is natural demand for the product when purchasing product isn’t a de facto requirement for entry into a “business opportunity.”

Some History on the Vemma’s Founder, BK Boreyko

This isn’t the first time that BK Boreyko has scammed people. The FTC has caught him defrauding people in the past. That time it was New Vision International (sounds like Young People’s Revolution, right?) and the product was God’s Recipe. In that case Boreyko was caught pitching the product as treating ADD and ADHD without the necessarily scientific evidence.

Given all the above, is this really the kind of person you think will make you rich, legally?

Vemma Declared a Pyramid Scheme in Italy

Consumer website, Truth In Advertising, has reported that Vemma Was Deemed Pyramid Scheme in Italy. They’ve also noted that Vemma Affiliates’ Health Claims Violate FTC Order.

It is a great article and a must read for anyone considering it in any country. Here are some interesting statistics from the article:

• Only 27% of associates were eligible for bonuses by regularly ordering products from Vemma.
• Fewer than 100 individuals on average generated six-month sales commissions higher than €1,000 (about $1,300 in June 2013), while nearly all the other associates received quite low or even paltry compensation.
• A significant portion of the orders consisted of purchases made by associates themselves, presumably for their own consumption, which in the network are known as “autoship” sales.
• Approximately 20% of the total income generated from product sales was obtained from the sale of expensive Vemma packages called “Builder Packs” that cost €599 or €999 (about $700 to $1,300 in June 2013), and over 60% was generated from autoship sales.
• Only about 16% of the income was generated from the sale of products to third parties.
• Only 24% of associates had a VAT number, which would enable them to sell products to third parties.

Remember that FTC quote above? With only 16% of sales coming from third parties it is clear that the money people make is not based on such sales. Instead it seems to come from the 80% of “Builder Packs” and monthly autoship to distributors. Using those guidelines, it is easy to why Italy would declare it a pyramid scheme.

Truth in Advertising further reports that the watchdog organization found, “A synergistic role in enhancing the effectiveness of Vemma’s pyramid scheme is generally the misleading representation of the supplements, so as to make them more attractive by attributing to them properties they do not possess…”

These claims are so common in the world of MLM health products, that I wrote an article about it, No, Your MLM Health Product Doesn’t “Work”, which was republished by the doctors at AITSE.org.

Truth in Advertising also quotes the Vemma saying two contradictory statements:

“If your goal is to become a household brand, it only makes sense to make a few more necessary operational and compensation plan changes to complete the move. To be more like Amazon.com and less like Amway.”

followed by:

“Vemma’s Compensation Plan won’t change; we’ll just describe it differently in updated terms to better explain how we do business.”

Truth in Advertising’s final conclusion was:

“Truth be told, as a practical matter Vemma’s new compensation plan still suffers from many of the multiple faults that Italy’s AGCM found with the old pyramid plan.”

Final Thoughts on Vemma

Typically when I write about MLM, I’ll get a distributor who tries to find one area where the article isn’t 100% accurate, points it out, and then suggests that I shouldn’t write about things that I don’t know about or haven’t researched. Typically, the article is accurate and the distributor is the one mistaken about his/her own business. Secondly if one minor piece of information is incorrect, it doesn’t mean the article as a whole is incorrect. Third Vemma, like all MLMs seems to purposely make its compensation difficult to understand with its own terminology not used in other businesses. Finally, this space is intended as a place where we can all learn more about Vemma. As you can tell, I’ve put a ton of research into Vemma. I shouldn’t even have to write this, but I’ve found that people who get tricked into being MLM distributors often lack the critical thinking skills to understand this.

I could go on and on, but anyone with an IQ over 80 should have known more than a thousand words ago that this is a huge scam and to stay away from it. I took the expression beating a dead horse to the ultimate level with this one.

Update: There’s a great article on Vemma on Cincinnati.com.

Update: Now NBC News is writing about Vemma: Controversial energy drink company targets students as sellers. Interestingly the person the news team interviewed told a typical story of recruitment and got immediately suspended by the company. That’s what happens if your claims are high profile to an undercover news team. If it had been to you or me, Vemma would never have known or suspended him.