The ViSalus Scam Continues To Collapse
ViSalus which is facing a multimillion-dollar RICO class action lawsuit which alleges that the multi-level marketing company aggressively recruited people to fuel a massive pyramid scheme, plans to lay off much of its local staff on March 5, 2016 in Troy Michigan.
Started in 2005, ViSalus sells nutritional shakes and supplements through multi-level marketing. They had $623 million in sales and $69 million in profit in 2012. They then experienced a giant pop and drop and the company’s sales fell 44% in 2013 to $351 million. They no longer report sales figures. – Source Freep.com
Here is how the ViSalus scam is reported to work:
ViSalus maintains a network of “individual promoters” (“IPs”) who sell ViSalus’ weight-loss products and recruit other IPs to do the same. ViSalus pays each IP commissions and/or bonuses for selling the weight-loss products and for recruiting new IPs. The system through which IPs earn commissions and/or bonuses for sales and recruitment is the “ViSalus Program.”
ViSalus relies on its network of IPs to advertise the ViSalus Program. ViSalus encourages IPs to host “challenge parties” for friends and family to encourage them to enroll as IPs. In addition, ViSalus urges IPs to promote the benefits of becoming an IP in the ViSalus Program whenever they sell ViSalus products to a customer.
A new IP must pay an enrollment fee to ViSalus in order to join the ViSalus Program and thereby obtain the right to sell ViSalus’ products. A new enrollee can become a “basic” IP for $49, or the enrollee can pay $499-$999 for “distribution kits” that include product samples. In addition, new IPs are automatically subscribed to ViSalus’ proprietary website for $29 per month. Upon enrollment, new IPs are also given the option to purchase a recurring auto-shipment of ViSalus shakes for $49-$250 per month. – Souce leagle.com
Typically ViSalus tries to hook potential enrollees to ViSalus with the notion that they can lose weight using the ViSalus shakes and obtain a healthy lifestyle by drinking the shakes daily. This initial pitch is the excuse to then make the real pitch. While the excitement is high, potential enrollees are persuaded with the idea that they also can make large amounts of money and drive free luxury automobiles funded by the company by selling the ViSalus products to friends and family and strangers.
Prosperity is something that everyone hopes for. Unfortunately, many individuals never find a vehicle that is simple, easily learned, has little risk, and still has the potential to be extremely lucrative. With the ViSalus business opportunity, every single person with a strong desire now has a documented vehicle that can drive them to their goal or vision.
Well over 100,000 innocent people paid up to $999 for the “business opportunity” to become distributors, or Independent Promoters (“IPs”), for a soy protein and sucralose concoction. The vast majority lost their money.
ViSalus has a tremendous churn or turnover rate, estimated as nearly 200% per year. Each “churned” IP is “non-active.” A non-active IP cannot receive commissions, and has lost money with the company.
The “business opportunity” was sold with visions of large checks, a shiny new BMW, and a fancy vacation. In reality these luxuries existed only for the company insiders and those willing to convince other people to pay the company money. The only way a distributor could make a significant amount of money was to recruit others.
Professional marketers who had built up significant many-thousand strong “downlines” in other network companies, were brought over to ViSalus. One of the benefits of doing this was to be able to portray these people to the unsuspecting public as “success” stories of how much money could be made by selling ViSalus shakes.
ViSalus staged a check ritual many times. The company did not explain that the distributors waving the giant checks were brought on board through special deals. Nor does it explain, except in very small print, that it will pay the check in 10 years and only if the recipient continues to be “active” with the company, and if, and only if, it chooses to do so. – Source ViSalus Class Action Lawsuit
Here is an example of how ViSalus is sold to people:
ViSalus’ former director of security, Carlo Pacileo of El Segundo, Calif., pleaded guilty last year to conspiracy and aiding and abetting the accessing of a protected computer. A private investigator told authorities that Pacileo had hired him to gain access to computers used by employees of a a Utah company called Ocean Avenue that ViSalus feared was recruiting away its own distributors, court records show.
The security director was ultimately sentenced to three years of probation. The private investigator and another man pleaded guilty last year to conspiring to hack into the computers. – Source Freep.com