Category Archives: Direct Selling Rules

FTC Sent Warning Letters to Multi-Level Marketers

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You LOVE your company. Their products have changed your life and you want to tell the wold your story. Telling your story comes naturally, because it’s your story. It’ a gathering of details that you actually experience. You are encouraged to share those experiences with the people in your lives. You share them by world of mouth, and sometime that means in print. You’re a great marketer, so your posting to you facebook page(s), your twitter account, your Instagram, Pintrest, Whatsapp, Skype, Zoom and a million other places on your computer, phone and tablet. Your company encourages you to share your story.

RIGHT?

Maybe.

Recently, the Federal Trade Commission has sent out warning letters to many multi-level marketing companies. These MLM’s have been asked to remove and address claims about their products’ ability to treat or prevent coronavirus 2019 (COVID-19) or about the earnings people who have recently lost income can make, or both. This is an ongoing efforts to protect consumers from COVID-19 scams.

The letters address specific claims made by the companies or their participants (YOU) in social media posts and videos posted online, including claims made in Spanish.

The warning letters include :

  • A Spanish-language social media post promoting Vivri USA, LLC that said, “Take care of your health, your body, avoid many diseases many viruses, since this virus and many others are here to stay, coronavirus, influenza, flu, we should nourish our cells, our immune systems, reinforce it with the best nutrition system in the world …”
  • A social media post that said, “#VIRUS_CORONA Worried? I’ve been boosting my immune system for several years with high-quality Plexus supplements. You can too! #Plexus provides excellent all-natural supplements that truly work. Be sensible –not fearful. Scientifically formulated & doctor-approved! Ask me!”
  • A video promoting The Juice Plus Company that said, “There are a lot of people out there who have lost income … You may want to build a side income, you know, make $500 a month, $1,000 a month or more. There’s no ceiling on this. It’s whatever you want it to be … What would you like this do to for you? … Maybe it could cover one of your bills, like a car payment. Or enjoy more time and financial freedom. I can tell you those are both possible at the same time because I’ve been living that for the past eight years, and it’s wonderful to be able to offer that to other people.”

Some of the FTC sent the letters are listed below. Not all of the letters are listed here. To find out if your company was sent a letter, please visit the FTC website.

Both Health and Earnings Claims:
Isagenix International LLC
The Juice Plus+ Company

Earnings Claims:
Melaleuca, Inc.

Health Claims:
Youngevity International, Inc. (this company was warned about claims in Spanish and English)
Vivri USA, LLC (this company was warned about Spanish-language claims)
Plexus Worldwide, LLC

 In these letters, alleging unsubstantiated claims, companies are warned to remove any all such claims from the internet. That includes any posts that their Independent Reps have made. That’s YOU and there are a lot YOU. 

What you are sharing with your friends, teams and the wold is really important, it’s your story, but is it endangering your company? Maybe…

When you state or assert that something is the case, you typically are defending your position with your own evidence, your story. But… according to the FTC you are making that claim without providing evidence or proof. This can put your company in jepardy.

How can you avoid getting yourself and your company in trouble?

It’s not a simple question to answer, we think that Thatcher Tech has the best advice you can find on the internet.  In NOVEMBER 20, 2019, they wrote a post called “DIRECT SELLING LAW 101: HOW TO KEEP THE REGULATORS HAPPY”. In this post, they’ve provided advise to help you navigate the current regulatory environment. We suggest you read the section of the article,  “What are some of the ways that distributors typically run afoul of FTC regulations?”

Let us know what you think.

 

 

Direct Sales Pay Check

Direct Selling Rules, , ,

Did you know that there are RULES about posting about your Direct Sales Pay Check?

 If you are in a direct sales or network marketing company, your policies and procedures forbid product and or financial claims. Don’t believe me? Go read ‘em. Trust me, it’s in there. Especially if you sell any type of product that is supposed to go in or on the body, this is HUGE for you. Companies AND their distributors (yes, you read that right…distributors too) have been fined MILLIONS of dollars for making improper product claims. This applies to all kinds of things: what you post in a blog, customer testimonials, statements on your Facebook page…all of it.

  • And… The Rules Are Even STRICTER when if comes to Financial Claims! What’s important to know…. the thing about social media is that all those regulatory bodies (FTC, FDA, etc) can easily find out when you’re making those claims. Even if you are absolutely convinced that your product cured your cancer, you can’t say it. Even if you really did make a lot of money… you can’t say it. Why not?
    WHY? Well, because if you make a statement about your product that has not been filed with the FDA, and the FDA finds out, the FDA could require your company to stop selling that product and seize all the stock of that product. Seriously. And then your product can’t help anybody.
    And… if you make a public statement (post your pay stub or show it to somebody) about your pay, the Federal Trade Commission (FTC) and the Department of Justice can both come after you.  bBoth view this as a big no no too and can, yes can, and DO fine companies millions. But…. you can be fined too…. top distributors who have ‘shared’ their pay check info online or in person have also been fined – upto $1 million. Do you have a million $?
    Shhh… don’t answer that!