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Tempe-Based Vemma Nutrition Company Reaches Settlement With FTC

More than a year ago, Tempe-based Vemma Nutrition Company was ordered to stop much of its normal business operations after the Federal Trade Commission filed a lawsuit against the multi-level marketing company.

Now, Vemma has reached a settlement with the FTC.

Under the terms of the settlement, Vemma, has agreed to change the way it does business.

The company, which allegedly targeted college students, is prohibited from paying a Vemma distributor unless that person’s income comes from sales, rather than recruiting new participants. It also stops Vemma from making deceptive income claims.

While the order imposed a $238 million fine, the FTC said the settlement means the company will pay several hundred thousand dollars and surrender certain real estate and business assets. 

In a statement, Vemma’s CEO denied any wrongdoing. Vemma sells energy and supplement drinks.

EDITOR'S NOTE: A previous version of this story misspelled the name of the company.

Kathy Ritchie has 20 years of experience reporting and writing stories for national and local media outlets — nearly a decade of it has been spent in public media.