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MLM Legal

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.

  • 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 5, 2015

    The FTC Wins, You Lose. The FTC Loses You Lose.

    The response across the web to the court ruling on September 18, 2015 has been mixed. Some reporters have called it a “loss,” expecting the court to eventually declare Vemma a pyramid and shut them down for good. Many have seen it as a “win” for Vemma and for the industry, given the fact that no MLM i... Read more ›

  • September 29, 2015

    Refusal to define a pyramid

    Do you remember the invitations you have received to join a multilevel marketing company? You may have experienced both relationship building tactics as well as some less effective ones. What thoughts did you have when you evaluated if the opportunity as a pyramid scheme vs a legitimate direct selling company... Read more ›

  • September 3, 2015

    FTC v. BurnLounge: Lessons Learned for MLM/Direct Selling

    FTC stated policy has been to prosecute egregious pyramid schemes as opposed to mainstream direct selling.  By and large, this has been the case since the famous 1979 FTC Amway unsuccessful prosecution. FTC and major court pyramid decisions, including FTC v. BurnLounge,  focus on front-loading, large inv... Read more ›

  • July 9, 2015

    FTC Policy Statement Regarding Advertising Substantiation

    FTC Policy Statement Regarding Advertising Substantiation On March 11, 1983, the Commission published a notice requesting comments on its advertising substantiation program.1 To facilitate analysis of the program, the notice posed a number of questions concerning the program's procedures, standards, benefits... Read more ›

  • July 8, 2015

    Third Party Marketing Materials and Product Substantiation

    Every few years, someone makes front page news with a scandal about an exaggerated or unsubstantiated claim about their product. Typically, some crisis comes first such as Swine Flu. Next, someone decides that their product will fix said crisis. Making headlines can be great for business, but not these kinds ... Read more ›