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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 18, 2012

    Who Owns the Downline? What is Stealing?

    There are a lot of good aphorisms and jokes MLMers tell about ourselves. One that I especially like—often told by MLM.com blogger and industry attorney Jeff Babener—goes something like this: The difference between an MLM professional and an MLM crook is that a professional is someone who can get anot... Read more ›

  • September 10, 2012

    What Have We Learned from Zeek Rewards?

    The year was 1932. The Great Depression had most American's diving nose-down into a financial abyss so deep, it took a World War II economy to dig Americans out. It was also the year the musical New Americana debuted on Broadway. It's most famous song—"Buddy Can You Spare a Dime?"—went to Number One o... Read more ›

  • May 31, 2012

    Stock Plunge on Internal Consumption: Whose Fault?

    It is shame that, in one day, in May 2012, leading direct selling companies would see their stock and capitalization value shrink by billions of dollars.  And, all over a rather simple and reasonable investor question like, “what percentage of product is consumed personally by MLM distributors as oppos... Read more ›

  • February 4, 2012

    The FTC Final Business Opportunity Rule

    Although the FTC’s summary of the Rule explicitly states that it is not the intent of the Rule to apply to companies that offer opportunities in the channel of distribution alternatively referred to as MLM/Multilevel Marketing/Direct Selling/Network Marketing, the actual Rule seemingly covers many areas... Read more ›

  • May 6, 2011

    Multilevel Marketing Pyramids-“Lotteries”

    The following article is taken from the MLM Legal Primer . This article looks specifically at how lottery laws can be and are applied to MLM companies. Federal and state multilevel marketing and anti-pyramid statutes are components of a comprehensive consumer protection umbrella. These laws are designed t... Read more ›

  • December 27, 2010

    MLM Companies Training and Monthly Service Fees: Be Careful!

    I’m going to start this article with the conclusion: MLM training fees and monthly service fees, when used to beef up a company’s compensation plan, are usually an attempt to support an anemic business model operating with low margins. It’s not a disaster if you see these “pay to play” fees. However... Read more ›