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Aptly describes their practices and doesn't try to hide it behind their own shallow attempt of making themselves look better then they are.
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| parent = [[Cutco Corporation]]
| parent = [[Cutco Corporation]]
| industry = [[Multi-Level Marketing]]
| industry = [[Direct selling|Direct Sales]]
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'''Vector Marketing''' is a [[direct selling]] subsidiary company and the [[marketing]] arm of [[Cutco|Cutco Corporation]], an [[Olean, New York|Olean]], [[New York (state)|New York]]–based [[cutlery]] manufacturer.
'''Vector Marketing''' is a [[direct selling]] subsidiary company and the [[marketing]] arm of [[Cutco|Cutco Corporation]], an [[Olean, New York|Olean]], [[New York (state)|New York]]–based [[cutlery]] manufacturer. The company was founded in 1981 in Philadelphia, Pennsylvania. The company sells via individual sales representatives who sell Cutco cutlery via one-on-one demonstrations, typically through home visits.


The company has been the subject of criticism and lawsuits for its business practices and has been accused of being a [[multi-level marketing]] company. The ''[[Los Angeles Times]]'' states that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company which is "businesses that involve selling products to family and friends and recruiting other people to do the same" because they sell their product through person-to-person sales. The FTC has not publicly referred to Vector as an MLM (though they have fined the company for deceptive telemarketing practices<ref>{{Cite web |date=2004-06-29 |title=FTC Puts Halt to Fraudulent Do Not Call Service |url=https://www.ftc.gov/news-events/news/press-releases/2004/06/ftc-puts-halt-fraudulent-do-not-call-service |access-date=2025-04-07 |website=Federal Trade Commission |language=en}}</ref>).  
The company has been the subject of criticism and lawsuits for its business practices and has been accused of being a [[multi-level marketing]] company. The ''[[Los Angeles Times]]'' states that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company which is "businesses that involve selling products to family and friends and recruiting other people to do the same" because they sell their product through person-to-person sales. The FTC has not publicly referred to Vector as an MLM (though they have fined the company for deceptive telemarketing practices<ref>{{Cite web |date=2004-06-29 |title=FTC Puts Halt to Fraudulent Do Not Call Service |url=https://www.ftc.gov/news-events/news/press-releases/2004/06/ftc-puts-halt-fraudulent-do-not-call-service |access-date=2025-04-07 |website=Federal Trade Commission |language=en}}</ref>). Salespeople are generally young and recruited from high school or college; Vector's recruitment tactics have been described as deceptive, and they have faced numerous lawsuits over their pay structure and treatment of its salespeople, who are [[Independent contractor (USA)|independent contractors]] instead of employees. Vector claims they are a single-level direct selling marketing company, not a multi-level marketing company or a [[pyramid scheme]].


Salespeople are generally young and recruited from high school or college; Vector's recruitment tactics have been described as deceptive, and they have faced numerous lawsuits over their pay structure and treatment of its salespeople, who are [[Independent contractor (USA)|independent contractors]] instead of employees. Vector claims they are a single-level direct selling marketing company, not a multi-level marketing company or a [[pyramid scheme]].
== History ==
 
The company was founded in 1981 in Philadelphia, Pennsylvania. The company sells via individual sales representatives who sell Cutco cutlery via one-on-one demonstrations, typically through home visits.
 
==History==
Vector Marketing Corporation was founded in 1981 by Don Freda in [[Glenolden, Pennsylvania]], as an independent seller of Cutco Cutlery products manufactured by the Alcas Corporation.<ref name="freda">{{cite web |last1=Freda |first1=Don |title=Vector History |url=https://www.donfreda.com/vector-history.html |website=Don Freda |access-date=15 November 2021 |language=en}}</ref><ref name=":3">{{Cite web|title=WHO WE ARE|url=https://www.vectormarketing.com/who-we-are|access-date=2021-03-24|website=Vector Marketing}}</ref> It quickly became one of the top sellers of Cutco products, and in 1985, it was acquired by Alcas, which was struggling with sales following its split from former parent company [[Alcoa]] in 1983.<ref name=":3" /><ref name="freda" />  
Vector Marketing Corporation was founded in 1981 by Don Freda in [[Glenolden, Pennsylvania]], as an independent seller of Cutco Cutlery products manufactured by the Alcas Corporation.<ref name="freda">{{cite web |last1=Freda |first1=Don |title=Vector History |url=https://www.donfreda.com/vector-history.html |website=Don Freda |access-date=15 November 2021 |language=en}}</ref><ref name=":3">{{Cite web|title=WHO WE ARE|url=https://www.vectormarketing.com/who-we-are|access-date=2021-03-24|website=Vector Marketing}}</ref> It quickly became one of the top sellers of Cutco products, and in 1985, it was acquired by Alcas, which was struggling with sales following its split from former parent company [[Alcoa]] in 1983.<ref name=":3" /><ref name="freda" />  


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==Business model==
==Business model==
Vector Marketing is a [[direct selling]] company that has built its sales force through advertising via newspapers, [[word-of-mouth]], posted advertisements, [[mail|letters]] and various media on the internet.<ref name="PS">{{cite news|last1=Moret|first1=Darrin|date=September 6, 2013|title=Did I Participate In A Pyramid Scheme?|publisher=[[Popular Science]]|url=http://www.popsci.com/science/article/2013-09/did-i-participate-pyramid-scheme|access-date=May 31, 2017}}</ref><ref>{{cite news|last=Kellman|first=Beth Robinson|title=Better Business Bureau offers advice on multilevel marketing|url=http://www.theoaklandpress.com/articles/2010/04/02/news/local_news/doc4bb6bcef66c20482812527.txt?viewmode=fullstory|access-date=May 19, 2011|newspaper=[[The Oakland Press]]|date=April 2, 2010|location=[[Oakland County, Michigan]]}}</ref><ref name="carolinian">{{cite news|last=Deal |first=A. Matthew |title=High wages for student work – but beware |work=Campus News |page=1 |publisher=The Carolinian |date=September 26, 2006 |url=http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |access-date=June 5, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20110815175911/http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |archive-date=August 15, 2011 }}</ref><ref name="Wall Street Journal">{{cite news|last=Gunn|first=Eileen|title=Summer Job: Nice Pay, if You Can Cut It|url=https://www.wsj.com/articles/SB121789140861111649|access-date=April 21, 2011|newspaper=[[The Wall Street Journal]]|date=August 5, 2008|page=D4}}</ref> The ''[[Los Angeles Times]]'' claims that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company because they sell their product through person-to-person sales, but Vector argues that they employ single-level marketing and don't meet the FTC definition of "businesses that involve selling products to family and friends and recruiting other people to do the same"<ref name="FTC">{{cite web |title=Multi-Level Marketing Businesses and Pyramid Schemes |url=https://www.consumer.ftc.gov/articles/multi-level-marketing-businesses-and-pyramid-schemes |website=Consumer Information |publisher=Federal Trade Commission |access-date=4 November 2021 |language=en |date=18 May 2021}}</ref> because higher-level employees don't profit from the revenue of people they recruit.<ref>{{Cite web|title=Is Vector a Scam? No. {{!}} Vector Marketing|url=https://www.vectormarketing.com/app/vector-truth|access-date=2020-08-08|website=Vector Marketing (US)|language=en}}</ref><ref name=":2">{{Cite web|author=David Lazarus|date=2020-06-23|title=Column: Beware of this 'important opportunity' for job-seeking students|url=https://www.latimes.com/business/story/2020-06-23/cutco-knives-job-letter|access-date=2020-08-08|website=Los Angeles Times|language=en-US}}</ref> The company has paid millions of dollars in lawsuits alleging deceptive recruiting practices.<ref name=":2" /> Cutco does sell products, but they derive a large portion of their sales from new employees, their families, and friends.  
Vector Marketing is a [[direct selling]] company that has built its sales force through advertising via newspapers, [[word-of-mouth]], posted advertisements, [[mail|letters]] and various media on the internet.<ref name="PS">{{cite news|last1=Moret|first1=Darrin|date=September 6, 2013|title=Did I Participate In A Pyramid Scheme?|publisher=[[Popular Science]]|url=http://www.popsci.com/science/article/2013-09/did-i-participate-pyramid-scheme|access-date=May 31, 2017}}</ref><ref>{{cite news|last=Kellman|first=Beth Robinson|title=Better Business Bureau offers advice on multilevel marketing|url=http://www.theoaklandpress.com/articles/2010/04/02/news/local_news/doc4bb6bcef66c20482812527.txt?viewmode=fullstory|access-date=May 19, 2011|newspaper=[[The Oakland Press]]|date=April 2, 2010|location=[[Oakland County, Michigan]]|archive-date=August 25, 2012|archive-url=https://web.archive.org/web/20120825115810/http://www.theoaklandpress.com/articles/2010/04/02/news/local_news/doc4bb6bcef66c20482812527.txt?viewmode=fullstory|url-status=dead}}</ref><ref name="carolinian">{{cite news|last=Deal |first=A. Matthew |title=High wages for student work – but beware |work=Campus News |page=1 |publisher=The Carolinian |date=September 26, 2006 |url=http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |access-date=June 5, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20110815175911/http://www.carolinianonline.com/2.7350/high-wages-for-student-work-but-beware-1.1030148 |archive-date=August 15, 2011 }}</ref><ref name="Wall Street Journal">{{cite news|last=Gunn|first=Eileen|title=Summer Job: Nice Pay, if You Can Cut It|url=https://www.wsj.com/articles/SB121789140861111649|access-date=April 21, 2011|newspaper=[[The Wall Street Journal]]|date=August 5, 2008|page=D4}}</ref> The ''[[Los Angeles Times]]'' claims that Vector meets the [[Federal Trade Commission]] (FTC) definition of a [[multi-level marketing]] company because they sell their product through person-to-person sales, but Vector argues that they employ single-level marketing and don't meet the FTC definition of "businesses that involve selling products to family and friends and recruiting other people to do the same"<ref name="FTC">{{cite web |title=Multi-Level Marketing Businesses and Pyramid Schemes |url=https://www.consumer.ftc.gov/articles/multi-level-marketing-businesses-and-pyramid-schemes |website=Consumer Information |publisher=Federal Trade Commission |access-date=4 November 2021 |language=en |date=18 May 2021}}</ref> because higher-level employees don't profit from the revenue of people they recruit.<ref>{{Cite web|title=Is Vector a Scam? No. {{!}} Vector Marketing|url=https://www.vectormarketing.com/app/vector-truth|access-date=2020-08-08|website=Vector Marketing (US)|language=en}}</ref><ref name=":2">{{Cite web|author=David Lazarus|date=2020-06-23|title=Column: Beware of this 'important opportunity' for job-seeking students|url=https://www.latimes.com/business/story/2020-06-23/cutco-knives-job-letter|access-date=2020-08-08|website=Los Angeles Times|language=en-US}}</ref> Vector Marketing is also listed on the state of [[Hawaii|Hawaii’s]] “State Authorized Multi-Level Marketing Agreements” registry, which records companies that have entered into a tax collection agreement with the Hawaii Department of Taxation for MLM-related activity.<ref>{{cite web |title=State Authorized Multi-Level Marketing Agreements |url=https://tax.hawaii.gov/geninfo/a2_b2_8mlm/ |website=Hawaii Department of Taxation |access-date=2025-04-07}}</ref> The company has paid millions of dollars in lawsuits alleging deceptive recruiting practices.<ref name=":2" /> Cutco does sell products, but they derive a large portion of their sales from new employees, their families, and friends.


The company recruits sales representatives from high schools and [[college campus]]es in the United States and Canada, sometimes through misrepresentation of affiliation with the school.<ref name="LP">{{cite news|last1=Behm|first1=Carly|title=Students Question Company's On-Campus Recruiting|url=http://loyolaphoenix.com/2016/10/students-question-companys-campus-recruiting/|access-date=May 31, 2017|publisher=[[Loyola Phoenix]]|date=October 19, 2016}}</ref><ref name="SB1">{{cite web|url=http://www.independent.com/news/2011/aug/02/company-cuts-both-ways/|title=The Company that Cuts Both Ways|author=Robbins, Rebecca|date=August 2, 2011|publisher=Santa Barbara Independent|access-date=August 2, 2011}}</ref> Sales representatives are employed as [[independent contractors]] to sell Cutco products (mainly [[kitchen knife|kitchen knives]]) to customers, typically their friends and family members, via one-on-one demonstrations.<ref name="SB1" /><ref name="cbc">Episode 10. [[Street Cents]], January 14, 2002 [https://web.archive.org/web/20120618131050/http://www.cbc.ca/streetcents/archives/guide/2001/10/s02_01.html Online copy] at the [[Internet Archive]]</ref>
The company recruits sales representatives from high schools and [[college campus]]es in the United States and Canada, sometimes through misrepresentation of affiliation with the school.<ref name="LP">{{cite news|last1=Behm|first1=Carly|title=Students Question Company's On-Campus Recruiting|url=http://loyolaphoenix.com/2016/10/students-question-companys-campus-recruiting/|access-date=May 31, 2017|publisher=[[Loyola Phoenix]]|date=October 19, 2016}}</ref><ref name="SB1">{{cite web|url=http://www.independent.com/news/2011/aug/02/company-cuts-both-ways/|title=The Company that Cuts Both Ways|author=Robbins, Rebecca|date=August 2, 2011|publisher=Santa Barbara Independent|access-date=August 2, 2011}}</ref> Sales representatives are employed as [[independent contractors]] to sell Cutco products (mainly [[kitchen knife|kitchen knives]]) to customers, typically their friends and family members, via one-on-one demonstrations.<ref name="SB1" /><ref name="cbc">Episode 10. [[Street Cents]], January 14, 2002 [https://web.archive.org/web/20120618131050/http://www.cbc.ca/streetcents/archives/guide/2001/10/s02_01.html Online copy] at the [[Internet Archive]]</ref>
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==Lawsuits==
==Lawsuits==
{{Excessive citations|section |date=February 2024}}
{{Excessive citations|section |date=February 2024}}
In 1990, Vector was sued by the [[Arizona Attorney General]].<ref name="SB1"/> 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.<ref name="WaPo1996"/><ref name="SB1"/>
In 1990, Vector was sued by the [[Arizona Attorney General]].<ref name="SB1"/> 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.<ref name="WaPo1996"/>


In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.<ref name="SB1" /><ref name="WaPo1996">{{cite news |last1=McKay |first1=Peter |title=For vector marketing, the question of the hour |url=https://www.washingtonpost.com/archive/business/1996/07/01/for-vector-marketing-the-question-of-the-hour/27351801-eb79-49c0-93e9-ca9c73cc648e/ |access-date=November 7, 2018 |newspaper=[[Washington Post]] |date=July 1, 1996}}</ref><ref name="WSJ1994">{{cite news |last1=Johnson |first1=Paul |title=Vector suspends recruiting |url=https://newspaperarchive.com/madison-wisconsin-state-journal-apr-21-1994-p-51/ |access-date=November 7, 2018 |publisher=[[Wisconsin State Journal]] |date=April 21, 1994}}</ref>
In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.<ref name="WaPo1996">{{cite news |last1=McKay |first1=Peter |title=For vector marketing, the question of the hour |url=https://www.washingtonpost.com/archive/business/1996/07/01/for-vector-marketing-the-question-of-the-hour/27351801-eb79-49c0-93e9-ca9c73cc648e/ |access-date=November 7, 2018 |newspaper=[[Washington Post]] |date=July 1, 1996}}</ref><ref name="WSJ1994">{{cite news |last1=Johnson |first1=Paul |title=Vector suspends recruiting |url=https://newspaperarchive.com/madison-wisconsin-state-journal-apr-21-1994-p-51/ |access-date=November 7, 2018 |publisher=[[Wisconsin State Journal]] |date=April 21, 1994}}</ref>


In 2003, 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).<ref name="Gripenstraw">{{cite news| last=Gripenstraw| first= Kelsey| title=Beware of Campus Scams|url=http://thebottomline.as.ucsb.edu/2011/04/beware-of-campus-scams|access-date=May 18, 2011|newspaper=The Bottom Line|date=April 20, 2011|location=[[University of California, Santa Barbara]]}}</ref><ref name="ConsAff">{{cite web |title=Student Group Wants to Slice Up Vector |date=August 12, 2003 |url=https://www.consumeraffairs.com/news03/save.html |publisher=Consumer Affairs |access-date=June 16, 2020}}</ref><ref name="SB1"/><ref name="LP090212">{{cite news |title=Vector marketing makes false promises |url=http://loyolaphoenix.com/2012/09/3a1ec4ae-6ed2-5172-a201-c7cc82660248/ |access-date=June 16, 2020 |publisher=[[Loyola Phoenix]] |date=September 2, 2012}}</ref><ref name="Sehawk">{{cite news |last1=Gore |first1=Alisha |title=Students unite against Vector |url=https://theseahawk.org/9355/uncategorized/students-unite-against-vector/ |access-date=June 16, 2020 |publisher=The Seahawk (UNC Wilmington) |date=September 29, 2004}}</ref><ref name="DEN1">{{cite news |last1=Stallings |first1=Ashley |title=Group trying to warn others |url=https://www.dailyeasternnews.com/2004/09/23/group-trying-to-warn-others/ |access-date=June 16, 2020 |publisher=Daily Eastern News (Eastern Illinois University) |date=September 23, 2004}}</ref><ref name="TCDS">{{cite news |title=Cutco Knife Distributor Finds Protests Close at Hand |url=https://cornellsun.com/2003/10/23/cutco-knife-distributor-finds-protests-close-at-hand/ |access-date=June 16, 2020 |publisher=[[The Cornell Daily Sun]] |date=October 23, 2003}}</ref><ref name="UPFAU">{{cite news |title=The truth behind the poster |url=https://www.upressonline.com/2009/09/the-truth-behind-the-poster |access-date=June 16, 2020 |publisher=University Press (Florida Atlantic University) |date=September 14, 2009}}</ref>
In 2003, 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).<ref name="ConsAff">{{cite web |title=Student Group Wants to Slice Up Vector |date=August 12, 2003 |url=https://www.consumeraffairs.com/news03/save.html |publisher=Consumer Affairs |access-date=June 16, 2020}}</ref><ref name="UPFAU">{{cite news |title=The truth behind the poster |url=https://www.upressonline.com/2009/09/the-truth-behind-the-poster |access-date=June 16, 2020 |publisher=University Press (Florida Atlantic University) |date=September 14, 2009}}</ref>


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.<ref>{{Cite journal|last=Chen|first=Edward M.|title=Order Granting in Part and Denying in Part Defendant's Motion for Summary Judgment|url=http://docs.justia.com/cases/federal/district-courts/california/candce/3:2008cv05198/208948/71/|journal=Harris V. Vector Marketing Corporation|publisher=[[United States District Court for the Northern District of California]]|date=September 4, 2009}}</ref><ref>{{cite web|work=Harris v. Vector Marketing Corporation| title=Court opinion|publisher=Justia.com| url=http://dockets.justia.com/docket/california/candce/3:2008cv05198/208948/ |access-date=May 14, 2011|date=May 5, 2011}}</ref><ref>{{cite web| title=Preliminary approval of $13 million settlement granted despite concerns|publisher=AllBusiness.com| url=http://www.allbusiness.com/north-america/united-states-west-usa-california/15613799-1.html |access-date=Feb 5, 2012|date=May 31, 2011}}</ref><ref>{{Cite journal|date=March 2003|title=Levine v. Fair Political Practice Commission, 222 F. Supp. 2d 1182 (E.D. Cal. 2002)|url=http://dx.doi.org/10.1089/153312903321139103|journal=Election Law Journal: Rules, Politics, and Policy|volume=2|issue=1|pages=121–129|doi=10.1089/153312903321139103|issn=1533-1296|url-access=subscription}}</ref><ref>{{Cite web|title=Harris v. Vector Marketing Corp. - Casetext Smarter Legal Research|url=https://casetext.com/case/harris-v-vector-marketing-corporation-11|access-date=18 May 2021}}</ref> In 2011, Vector settled the lawsuit, "Harris v. Vector Marketing Corporation", for $13 million.<ref name=":2" />
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.<ref>{{Cite journal|last=Chen|first=Edward M.|title=Order Granting in Part and Denying in Part Defendant's Motion for Summary Judgment|url=http://docs.justia.com/cases/federal/district-courts/california/candce/3:2008cv05198/208948/71/|journal=Harris V. Vector Marketing Corporation|publisher=[[United States District Court for the Northern District of California]]|date=September 4, 2009}}</ref><ref>{{cite web| title=Preliminary approval of $13 million settlement granted despite concerns|publisher=AllBusiness.com| url=http://www.allbusiness.com/north-america/united-states-west-usa-california/15613799-1.html |access-date=Feb 5, 2012|date=May 31, 2011}}</ref><ref>{{Cite web|title=Harris v. Vector Marketing Corp. - Casetext Smarter Legal Research|url=https://casetext.com/case/harris-v-vector-marketing-corporation-11|archive-url=https://web.archive.org/web/20201112020111/https://casetext.com/case/harris-v-vector-marketing-corporation-11|url-status=dead|archive-date=November 12, 2020|access-date=18 May 2021}}</ref> In 2011, Vector settled the lawsuit, "Harris v. Vector Marketing Corporation", for $13 million.<ref name=":2" />


In 2014, a lawsuit alleged that a girl was violently sexually assaulted by one of her customers while working for Vector and sued the company for not providing her with adequate training to prevent the situation.<ref name="Quad2018"/><ref name="CNS2014">{{cite news |last1=Bonner |first1=Jonny |title=Door-to-Door Saleswoman Alleges Rape|url=https://www.courthousenews.com/door-to-door-saleswoman-alleges-rape/|access-date=November 7, 2018 |publisher=[[Courthouse News Service]] |date=August 22, 2014}}</ref>
In 2014, a lawsuit alleged that a girl was violently sexually assaulted by one of her customers while working for Vector and sued the company for not providing her with adequate training to prevent the situation.<ref name="Quad2018"/><ref name="CNS2014">{{cite news |last1=Bonner |first1=Jonny |title=Door-to-Door Saleswoman Alleges Rape|url=https://www.courthousenews.com/door-to-door-saleswoman-alleges-rape/|access-date=November 7, 2018 |publisher=[[Courthouse News Service]] |date=August 22, 2014}}</ref>
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[[Category:Companies based in Cattaraugus County, New York]]
[[Category:Companies based in Cattaraugus County, New York]]
[[Category:Multi-level marketing companies]]
[[Category:Multi-level marketing companies]]
[[Category:Privately held companies of the United States]]
[[Category:Retail companies established in 1981]]
[[Category:Retail companies established in 1981]]
[[Category:1981 establishments in New York (state)]]
[[Category:1981 establishments in New York (state)]]

Latest revision as of 01:24, 17 December 2025

Template:Short description Template:Use mdy dates Script error: No such module "Infobox".Template:Template otherScript error: No such module "Check for conflicting parameters".Script error: No such module "Check for unknown parameters".

Vector Marketing is a direct selling subsidiary company and the marketing arm of Cutco Corporation, an Olean, New York–based cutlery manufacturer. The company was founded in 1981 in Philadelphia, Pennsylvania. The company sells via individual sales representatives who sell Cutco cutlery via one-on-one demonstrations, typically through home visits.

The company has been the subject of criticism and lawsuits for its business practices and has been accused of being a multi-level marketing company. The Los Angeles Times states that Vector meets the Federal Trade Commission (FTC) definition of a multi-level marketing company which is "businesses that involve selling products to family and friends and recruiting other people to do the same" because they sell their product through person-to-person sales. The FTC has not publicly referred to Vector as an MLM (though they have fined the company for deceptive telemarketing practices[1]). Salespeople are generally young and recruited from high school or college; Vector's recruitment tactics have been described as deceptive, and they have faced numerous lawsuits over their pay structure and treatment of its salespeople, who are independent contractors instead of employees. Vector claims they are a single-level direct selling marketing company, not a multi-level marketing company or a pyramid scheme.

History

Vector Marketing Corporation was founded in 1981 by Don Freda in Glenolden, Pennsylvania, as an independent seller of Cutco Cutlery products manufactured by the Alcas Corporation.[2][3] It quickly became one of the top sellers of Cutco products, and in 1985, it was acquired by Alcas, which was struggling with sales following its split from former parent company Alcoa in 1983.[3][2]

In 2009, Alcas changed its name to Cutco Corporation, with Vector as its domestic sales subsidiary.[4]

In 2019, Vector Marketing reported $273.8 million in sales.[5]

Business model

Vector Marketing is a direct selling company that has built its sales force through advertising via newspapers, word-of-mouth, posted advertisements, letters and various media on the internet.[6][7][8][9] The Los Angeles Times claims that Vector meets the Federal Trade Commission (FTC) definition of a multi-level marketing company because they sell their product through person-to-person sales, but Vector argues that they employ single-level marketing and don't meet the FTC definition of "businesses that involve selling products to family and friends and recruiting other people to do the same"[10] because higher-level employees don't profit from the revenue of people they recruit.[11][12] Vector Marketing is also listed on the state of Hawaii’s “State Authorized Multi-Level Marketing Agreements” registry, which records companies that have entered into a tax collection agreement with the Hawaii Department of Taxation for MLM-related activity.[13] The company has paid millions of dollars in lawsuits alleging deceptive recruiting practices.[12] Cutco does sell products, but they derive a large portion of their sales from new employees, their families, and friends.

The company recruits sales representatives from high schools and college campuses in the United States and Canada, sometimes through misrepresentation of affiliation with the school.[14][15] Sales representatives are employed as independent contractors to sell Cutco products (mainly kitchen knives) to customers, typically their friends and family members, via one-on-one demonstrations.[15][16]

Some of Vector's former independent contractors have accused Vector Marketing of deceptive business practices.[17][18] The firm frequently advertises in newspapers and on fliers posted on bulletin boards at college campuses, but the advertisements are often vague without explaining the nature of the job.[19] The LA Times advised caution to potential employees, who are often young and never had a job before. The company's recruitment practices often obfuscate the actual work they do, merely offering a good paying job without noting that the pay structure is based on selling knives by commission.[12]

Vector Marketing's compensation policies have also been criticized. Vector Marketing previously required sales representatives to make a refundable security deposit to procure a set of knives for demonstrations. However, the practices have changed and representatives are no longer required to make a security deposit. Sales representatives are loaned knives as well as given some as prizes for their "Fast Start" sales achievements.[17][18][20] Those who work for Vector Marketing are independent contractors and are not reimbursed for the time they spend at training sessions.[8][17]

Lawsuits

Template:Excessive citations In 1990, Vector was sued by the Arizona Attorney General.[15] 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.[21]

In 1994, Wisconsin ordered Vector to stop deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.[21][22]

In 2003, 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).[23][24]

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.[25][26][27] In 2011, Vector settled the lawsuit, "Harris v. Vector Marketing Corporation", for $13 million.[12]

In 2014, a lawsuit alleged that a girl was violently sexually assaulted by one of her customers while working for Vector and sued the company for not providing her with adequate training to prevent the situation.[28][29]

In 2016, the company paid a $6.75 million preliminary settlement for violations of the Fair Labor Standards Act in California, Florida, New York, Illinois and Michigan when workers sued for going unpaid for their trainings.[30][31][28]

In September 2017, Vector was sued in a class-action lawsuit initiated by a division manager who alleged that the company was engaging in unfair labor practices because, despite his position, he was still classified as an independent contractor, thus denying him access to overtime pay. According to the suit, division managers are the highest-ranking class of workers who are not officially classified as Vector employees.[30][31]

References

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  5. ↑ Script error: No such module "citation/CS1".
  6. ↑ Script error: No such module "citation/CS1".
  7. ↑ Script error: No such module "citation/CS1".
  8. ↑ a b Script error: No such module "citation/CS1".
  9. ↑ Script error: No such module "citation/CS1".
  10. ↑ Script error: No such module "citation/CS1".
  11. ↑ Script error: No such module "citation/CS1".
  12. ↑ a b c d Script error: No such module "citation/CS1".
  13. ↑ Script error: No such module "citation/CS1".
  14. ↑ Script error: No such module "citation/CS1".
  15. ↑ a b c Script error: No such module "citation/CS1".
  16. ↑ Episode 10. Street Cents, January 14, 2002 Online copy at the Internet Archive
  17. ↑ a b c Script error: No such module "citation/CS1".
  18. ↑ a b Script error: No such module "citation/CS1".
  19. ↑ Script error: No such module "citation/CS1".
  20. ↑ Script error: No such module "citation/CS1".
  21. ↑ a b Script error: No such module "citation/CS1".
  22. ↑ Script error: No such module "citation/CS1".
  23. ↑ Script error: No such module "citation/CS1".
  24. ↑ Script error: No such module "citation/CS1".
  25. ↑ Script error: No such module "Citation/CS1".
  26. ↑ Script error: No such module "citation/CS1".
  27. ↑ Script error: No such module "citation/CS1".
  28. ↑ a b Script error: No such module "citation/CS1".
  29. ↑ Script error: No such module "citation/CS1".
  30. ↑ a b Script error: No such module "citation/CS1".
  31. ↑ a b Script error: No such module "citation/CS1".

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External links

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Template:Multi-level marketing

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