Vector Marketing - Controversy

Controversy

Some of Vector Marketing former independent contractors have accused Vector Marketing of unsavory business practices. Vector frequently advertises in newspapers and on fliers posted on bulletin boards at college campuses, but seldom do those advertisements explain the nature of the job.

Vector Marketing previously required sales representatives to make a refundable security deposit to procure a set of knives for demonstrations, however no deposit is now required. Students who work for Vector Marketing are considered independent contractors and are not reimbursed by the company for money they spend on transportation expenses and other common business expenses while working or for the time they spend at training sessions. In the 2008 case Vector Marketing Corporation v. New Hampshire Department of Revenue Administration, the Supreme Court of New Hampshire ruled that Vector employees are independent contractors and Vector is thus exempt from the state business profit tax.

Vector was sued in 1990 by the Arizona Attorney General and in 1999 by the Australian Competition and Consumer Commission. In 1994, Wisconsin ordered Vector to stop providing dishonest information to recruits. Arizona and Vector agreed to a settlement that punctuated a series of state actions against Vector's Tucson manager that spanned seven years. Vector agreed not to misrepresent its compensation system as part of the settlement.

In 1996, The Washington Post reported that of "940 Vector recruits surveyed, nearly half either earned no money or actually lost money through working with the company". A recruit who was successful in a lawsuit against Vector for failing to adhere to labor laws in New York co-founded a group, Students Against Vector Exploitation (SAVE).

In 2008, Alicia Harris filed a federal class action lawsuit against Vector. Harris alleged that Vector violated California and federal labor law by failing to pay adequate wages and illegally coercing employees into patronizing the company. The case, Harris v. Vector Marketing Corporation, is pending a final settlement approval for US$13 million before Judge Edward M. Chen.