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MLM Scams and Legal News

MLM companies and independent contractors (distributors) must understand the local, national and international laws that regulate the MLM and direct selling industry. In the United States, the direct selling industry is regulated by Federal Trade Commission rulings that influence commission plans or income claims. The sale of products is also regulated for all industries such as the three day return rate. In international legal cases, national and local laws vary.

  • August 1, 2016

    Ackman’s crusade against Herbalife—in plain English

    The recent $200 million Herbalife settlement leaves us with some open questions about how Herbalife will do in the stock market and what Bill Ackman will do with his short position. In case you’re not entirely familiar with the concept, a short position is when a broker sells you a stock that they do not... Read more ›

  • July 21, 2016

    FTC Settlement with Herbalife—OMG!

    Network marketing is in the midst of a rapidly advancing Orwellian era. It’s been slow to develop, starting in 1996 when the Ninth Circuit Court of Appeals issued its decision in Webster v. Omnitrition, but it’s snowballed in the past two years.  Today the snowball grew exponentially with the announcemen... Read more ›

  • July 21, 2016

    Herbalife to Restructure Operations, Pay $200 Million to Settle FTC Charges

    Herbalife International of America, Inc., Herbalife International, Inc., and Herbalife, Ltd. will restructure their U.S. multi-level marketing business operations and pay $200 million to compensate consumers to settle the FTC complaint that the Herbalife companies deceived consumers into believing they could ... Read more ›

  • October 12, 2015

    The FTC playbook: What happens when a company is shut down

    I am not a lawyer. This is just one lay persons view based on my years in the industry. When the FTC decides to make a case against an MLM company, their methods follow a consistent pattern or playbook. When the FTC decides to run their “playbook” against a company, I have never seen a company survive[1].... Read more ›

  • October 7, 2015

    Avoid the FTC’s Crosshairs! The Wisdom of Jerry Garcia

    I went to a Grateful Dead concert in 1976. The band was at the height of cool at the time as they represented the counter-culture movement from the Haight-Ashbury district of San Francisco. Although I had been to a number of concerts before seeing the Dead, this concert was different because it was the first ... Read more ›