Bad Propaganda: Perpetuating Myths and Misunderstandings to Deflect Criticism

Editor's Note: This is start of a new segment 'Bad Propaganda' where I will analyze bad propaganda used by various MLM promoters who, whether intentionally, or by accident, or perhaps, even ignorance, perpetuate myths, misunderstandings, half-truths, and "spin" to promote their MLM when they don't have to. I've done this several times before, but usually as some sort of rebuttal (for Wazzub, Zeek, TVI Express, and other scams). This will make it a new 'regular feature'.

When a new MLM recruit wants to express their enthusiasm for their new venture, one of the things they do now is create a web page, esp. if they wish to market online. And one of the frequently asked questions asked about many MLMs is "isn't it just a pyramid scheme?"  There's the right way to answer it (explain the Koscot test and why MLM does NOT fit the Koscot test... if done correctly)... and then there is this way... done by a Vemma Rep.

In order not to embarrass him too badly, his name will not be used, and URL will NOT be included (don't want to give him any LinkJuice), but you can see a picture of his web page below...

The title is "Vemma : Scam or a legitimate opportunity for you and your friends" by "Nick".

From here on, his stuff is in blue, and my counterpoints will be in red.

You might be wondering if there is an opportunity to make money with Vemma, or if the Vemma scam allegations are true. Don't worry you have come to the right place seeking answers so look no further.

Wow, he claims to be the ONLY place on the web to offer answers about Vemma, look no further! This guy is full of himself, isn't he?

Nick (censored) is a 21 year old adventure seeker, who went from scrubbing dishes at an old hospital for minimum wage to traveling the Northwest and has built a distribution network of close to 1,000 people in the past 12 months. He has inspired young entrepreneurs into taking charge of their lives, and isn't afraid to challenge the status quo. CLICK HERE to learn about how you can become one of the next success stories on his team, and work personally with Nick and the other leaders of Treasure (censored) Vemma.

The standard rags-to-riches underdog story that appeals to the "rebel youth" crowd. 

   There are many Vemma reviews on the internet that make claims about the company, and for someone who wants to cut straight through the BS you need answers. So lets get to the bread and butter, but know that multi level marketing scams are hard to detect so in this article I will help you swim through the sludge of information on the web.

    In order to confirm or deny if Vemma is a scam you need to understand what the company is. They are a health and wellness business based out of Scottsdale Arizona. Founded in 2004 by Bk Boreyko, Vemma has done over 1 billion dollars in sales over the past nine years. Pretty big for a scam i'de say.

First paragraph is a completely waste of space, as it said nothing. Second paragraph started off wrong. To know whether Vemma is a scam, you need to define what a scam is, not what Vemma is. That comes second.

That was segued into a "too big/old to be a scam" myth, though he did couched it as a personal opinion, bad spelling and all.  Go look up FHTM should tell you it lasted 11 years before being shut down by the FTC as a pyramid scheme. Bernie Madoff's ponzi scheme took even longer. Both are much bigger than Vemma. Clearly, Nick had NO IDEA what he was talking about. 

But wait, there's more! Lots more!

MLM Mythbusting: Does Having a real product prove business is not a pyramid scheme?

One of the most often repeated myths spoken in the network marketing industry is "we have a product, therefore we are not a pyramid scheme". In fact, this position had apparently been adopted by Direct Selling Association itself. Here's one example:

Is this myth confirmed, plausible, or busted? Let's examine a few things:

• Is there an example (or more) where a proven pyramid scheme (closed by FTC or other authorities) have real, actual, non-woo products? 
• Does the definition of pyramid scheme precludes the existence of real non-woo products? 

Let's get started.

Bad Argument: If it were a scam it would have been busted by cops long ago!

Previously we had covered the bad argument: Wall Street Legitimacy Gauge, where being traded on Wall Street, for a long time, was used as "proof" of legitimacy when it's proven that Wall Street don't care as long as the stock prices go up.

Today we'll cover a parallel bad argument: because the government(s) haven't closed them for such a long time (5 years, 10 years, or even longer) they must be legal beyond reproach.

Very often, the fact that the network marketing company had been around for more than 5 years was touted by some of the most junior reps as a sign of legitimacy (both to themselves and to others), with an implied corollary "If they were illegal government would have shut them down long time ago!"

If you put it in the A therefore B form, it would be

a) company has not been deemed illegal for X years
therefore
b) company will never be deemed illegal in the future

Logically, this doesn't fly, as it's "appeal to age/tradition" fallacy.  It is... because it always had been. That's not a reason, that's just a statement.

Frankly, there is one example in 2013 that easily disproves this bad argument... Fortune High Tech Marketing, otherwise known as FHTM. FHTM was founded by Paul Orberson in 2001, and closed by FTC and several state attorney generals in January 2013. Took the authorities 11 years to close this pyramid scheme.

However, the problem apparently was even more endemic than that... the problem is the authorities... In that the victims have to complain for the authorities to act... and Pyramid/Ponzi schemes are very good in keep its victims in the dark with the mushroom treatment.

Paul Orberson dead at 57, best known for his pyramid scheme FHTM

English: Paul Orberson speaking at a convention. (Photo credit: Wikipedia)

Paul Orberson, controversial head of Fortune High Tech Marketing (FHTM), is dead at age of 57 from his kidney cancer, diagnosed in 2003, as reported by the Kentuckian.

Orberson start out humbly and went to college on a baseball scholarship, before eventually returning to his hometown as a high school basketball coach. During that time, he started doing Excel Communications that sell long distance phone service through MLM. He claimed that after doing Excel for 4 years he made a million dollars and retired to Florida in 1996. but boredom drove him to start a new company in 2001... Fortune High Tech Marketing. He signed up a couple famous companies such as Cingular (now AT&T Wireless) and GE Security in order to offer their products, and 12 people paid $299 to join. A month later, sales force grew to 1200 (each of whom paid $299). From there the company grew very quickly across the US, Canada, and UK.

In 2003, Orberson was diagnosed with kidney cancer but apparently forced it into remission.

Over the years, FHTM was charged by several states such as Texas, Montana, and North Carolina as pyramid schemes, and settled with each with fines and promises to reform certain practices.

English: Fortune Hi-Tech Marketing, Inc. (FHTM) Logo (Photo credit: Wikipedia)

That came to an abrupt end in January 2013 when the Federal Trade Commission, along with multiple states, including his home state of Kentucky, brought suit and killed the company as a pyramid scheme. Later audits revealed that while Orberson and his top lieutenants shared over 40 million in profits average ANNUAL commission of a typical FHTM affiliate is about 1000 dollars (not counting expenses).

BREAKING NEWS: What is TelexFree US Doing In Bed With ex-FHTM Joseph "Joe" Isaacs?

Logo of the United States Federal Communications Commission, used on their website and some publications since the early 2000s. (Photo credit: Wikipedia)

Recently some TelexFree fanatics, desperate to find ANY shred of legitimacy for that suspect Ponzi scheme, found that TelexFree US (not Brazil, mind you, where it's actually called Yimpactus, and has NO license to operate telecom in Brazil) has gained preliminary FCC Approval in the US (ITC2142013082200236;) as of September 2013.

For timeline, TelexFree Brazil was shut down in June 2013 by court injunction, and has been in a limbo since. Its lawyers launched appeal after appeal to no avail, while telling affiliates that they should register with TelexFree US and get paid by TelexFree US.

It is also interesting to note the timeframe... late July is when Gerald "I see no Ponzi" Nehra said TelexFree is legal in the US, at a TelexFree event in Newport Beach, California. Presumably, that's when they started applying for the FCC license, not that there's any proof that TelexFree actually OWNS any "telecom facilities", as specified in the FCC license it had obtained. They went through "streamlined" FCC approval process where the public was given a few weeks to comment, and voila: "authority granted".

Can you BUY any TelexFree service and use it? Good question. I haven't found ANYONE that claimed to done so that is believable.

What's surprising the the other name that appeared on TelexFree's FCC license... Joe "I love then hate FHTM" Isaacs.