School is back in session and dorm room refrigerators are once again stocked with energy drink favorites like Red Bull and Monster.
But in recent years, a third brand, Verve, is trying to elbow its way into student life.
The brainchild of Benson K. Boreyko, the founder and CEO of Vemma, a nine-year old multilevel marketing company, Verve is two years into a marketing plan that focuses on young people selling the caffeine-rich drinks.
While Vemma is far from the first company in the $30 billion direct-selling industry to enlist college students to hawk their product, its marketing strategy of trashing college as a pathway to success may be.
Boreyko also uses fancy cars like BMWs and Mercedes to lure students. He has top salesmen arrive at recruitment meetings in the flashy wheels and the message is clear: in just a short period of time, you, too, can be driving this car.
“College doesn’t guarantee anything but students loans,” 23-year-old Alex Morton, one of two salesmen who launched the college drive about two years ago, told a Las Vegas recruiting session last spring.
“You can be driving a new BMW within 90 days,” Boreyko boasts in a YouTube video. Vemma gives its top distributors, which it calls brand partners,” a bonus of $400 towards a monthly payment on BMW, Mercedes or a mini-Cooper.
Boreyko told The Post the college-focused marketing campaign amounts a young people’s revolution of those unhappy with this “crappy economy” who are willing to try a new approach to making a living.
He declined to give the total number of participants, but said 745 people have earned the car bonus.
Vemma’s success also has sharpened the focus of consumer groups on its practices. Some, noting the heavy emphasis on recruitment, have called Vemma a pyramid scheme.
Boreyko, not surprisingly, disagrees. “Don’t call us a frickin’ pyramid scheme because we’re not,” said Boreyko, who said the controversy over Herbalife has fueled the critics of companies such as his.
To be sure, the odds of getting a car are long. About 75 percent of Vemma’s “active brand partners” make under $1,327 per year, according to the company’s 2012 Income Disclosure Policy of US Brand Partners.
“I couldn’t afford the $150 every five weeks,” said Eric Muldoon, a 21-year-old senior at SUNY Oswego. Muldoon said he lost $500 in the four months he tried Vemma. Part of the problem was a complicated formula that forced him to recruit in a new geographic area to qualify for commissions, he said.
A student at Arizona State University even wrote a column in the school paper warning against Vemma. “Gullible people continue to invest and lose money to this company,” wrote Morgan Chan.
James Tomasullo, a 20-year-old sophomore at The College of New Jersey, said he left after losing $1,000 in a few months because “the incentive is to recruit rather than get end user customers. Veema was clearly doing that.” The Federal Trade Commission has said an emphasis on recruiting is a hallmark of a pyramid scheme.
A consumer group, truthinadvertising.org, criticized Vemma’s promotion of its affiliation with the NBA’s Phoenix Suns and TV health expert Dr. Mehmet Oz. Some young salesmen told The Post those two affiliations proves Vemma is on the up-and-up. But neither the team nor Oz endorse the company. Vemma donated money to an Oz charity, according to truthinadvertising.org, which said many consumers have complained to the FTC that Vemma is a pyramid scheme targeting high school and college students.
In addition, The Post has learned that MLM expert and pyramid critic Bill Keep, the dean of business at the College of New Jersey, recently sent out a note to other business deans around the country alerting them to the suspect marketing plan.