Consumer Health Digest #16-46

Your Weekly Update of News and Reviews
December 18, 2016

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D., M.P.H. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.

FTC labels nutrition MLM a pyramid scheme. Arizona-based Vemma Nutrition Company, a multilevel marketer that sells nutritional drinks, will be prohibited under a federal court order from paying distributors unless their sales are to real customers rather than other distributors. [Vemma agrees to ban on pyramid scheme practices to settle FTC charges: Health drinks marketer touted unlimited income potential, but most people lost money. FTC news release Dec 15, 2016] The order also bars Vemma from making deceptive income claims and unsubstantiated health claims. Last year, the FTC brought a federal court action against the company, CEO Benson K. Boreyko, and top affiliate Tom Alkazin. The complaint charged that the defendants (a) encouraged participants to buy products to qualify for bonuses and to recruit others to do the same and (b) the result was a pyramid scheme because it compensated participants mainly for recruiting others rather than for retail sales based on legitimate consumer demand for the products. Vemma took in more than $200 million in both 2013 and 2014. The settlement order imposes a $238 million judgment that will be partially suspended upon payment of $470,136 and surrender of certain real estate and business assets. A separate order against Alkazin imposes a judgment of more than $6.7 million, which will be partially suspended upon payment of more than $1.2 million and surrender of certain real estate and business assets. The case is additionally noteworthy because the FTC labeled Vemma's operation a pyramid scheme, which it avoided doing in its recent settlement with Herbalife, even though Herbalife's operation and compensation structure were similar.

TINA blasts another MLM. Truth in Advertising (TINA) has severely criticized Plexus Worldwide, an MLM company that sells dietary supplements and other products. [What you should know about Plexus., Dec 9, 2016] TINA's report includes these criticisms:

Wakefield addresses chiropractic group. Forbes has reported that Andrew Wakefield, who lost his medical license for unprofessional conduct related to vaccine research, was a keynote speaker at the International Chiropractors Association's Annual Conference on Chiropractic and Pediatrics in Maui. [Lee BY. Are chiropractors backing the anti-vaccine movement? Forbes, Dec 10, 2016] Noting that Wakefield was unable to provide scientific evidence to support his anti-vaccination claims, the report's author asks whether having him as a speaker is the best way for a professional association and a conference to gain scientific legitimacy. The article is also skeptical about chiropractors in general.

Previous Issue || Next Issue

This page was posted on December 18, 2016.