Many high school and college students may recall friends who spent their summers going door to door to sell Cutco knives to their parents. Such employees of Vector Marketing Corp. have become notorious.
Now, a group of students who feel deceived by the company decided last June to try to force Vector into reforming its ways.
Students Against Vector Exploitation, an online organization comprised of members from all over the United States and Canada, feels that Vector is unethical both in the way it recruits sales representatives and in the way that it encourages them to sell their products.
According to SAVE, Vector entices potential new sales representatives with advertisements that are intentionally vague and inaccurate. They say that the advertisements say little about the job itself but instead provide only a phone number to call. Those who call are told that the job is a customer service job and does not require going door to door or telemarketing, but “the job has almost nothing to do with customer service and [has] elements of both telemarketing and door-to-door sales,” stated Chad Hasselius, a student at Minnesota State University at Mankato, a moderator for SAVE’s message board and its head of press relations.
Hasselius said that although Vector tells its potential representatives that “they will be their own boss …, they have to go through training, work under a manager, make sales reports and make meetings.”
Legally, students who work for Vector have independent contractor status, which means that they are not formally employed by the company. Sales representatives work for themselves and are contracted to sell Cutco products. They are paid either on commission or by a base rate — whichever is greater.
Representatives are only paid the base amount they are promised per appointment if that appointment meets Vector’s standards. Appointments, during which the sales representative pitches Cutco’s products, must be one-on-one with someone who is at least 25 and employed.
Kay Bible, a third-year doctoral student at the University of Missouri in Kansas City, says on her website that some information Vector gives its representatives during training is false. For instance, Vector tells its representatives that the grade of steel it uses in its knives is the best available, but Bible says it is not. The website also says that Vector lists one of its competitor’s prices as much higher than they are.
According to a SAVE press release, a Wisconsin state survey of 940 Vector recruits in 1992 found that almost half earned nothing or lost money working for the company.
SAVE does not only want to tell others what it feels about Vector. They are also lodging complaints with the Better Business Bureau, Federal Trade Commission, attorney generals and consumer protection bureaus. Hasselius said that similar complaints have been brought up in the past and Vector has been sued several times. He said that Vector admitted in 1999 to misleading recruits in Austria.
Sarah Andrus, director of academic programs and spokesperson at Vector, says that the case in Australia was an isolated incident in which one manager broke agreements that Vector had made concerning advertising. She added that the manager was immediately fired and that Vector was commended by the Australian Consumer and Competition Commission.
Lauren Katz, co-founder of SAVE, wrote in a post on SAVE’s message board that she had won a settlement against Vector with the New York Department of Labor, but Andrus denies this. She said that Katz never filed a suit against Vector and that “in cases where there is no wrongdoing on [Vector’s] part, [it] will sometimes provide a small amount in compensation because someone was disgruntled.”
Andrus noted that Katz got a letter from Vector saying that there was no admission of guilt on the company’s part. Katz, who is currently studying abroad, was not available for comment.
Andrus does not agree that Vector’s recruitment policies are especially misleading.
“All advertisements, whether for work opportunities or for products or services, are designed to attract attention,” she said.
She also said that the independent contractor status is one that builds many skills which lead to success in the business world.
“Most of our representatives work with a great deal of independence and responsibility,” she said. “We wouldn’t change that. It’s one of the things that makes our programs so strong.”
Andrus also said that the independent contractor status draws in many college-age students because it allows them to make their own schedules and even take a break for a few months.
Austin Sands ’06, who worked for Vector over the summer of 2002 and made $1,500, also thinks that Vector misleads its sales representatives.
“They tell you that it’s not telemarketing, but I think it might be,” he said.
He explained that while he was not allowed to make sales over the phone, he did call up people he did not know in order to set up appointments with them. He said that although he enjoyed the position at first, he did feel that his manager pushed him too hard to make appointments.
“I’d say, in a word, it was educational,” Sands said. “It’s a pyramid scheme. That’s what it is, to sum it up.”
Archived article by Yuval Shavit