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The Legal Ins and Outs of Marketing Discount Services
By Jeffrey A. Babener
Excerpted from Network Marketing: What You Should Know, Jeffrey Babener, Legaline Publications
MLM consultant practice tips. MLM Raiding issues are a continuous challenge for MLM Companies.   Many problems may be avoided by appropriate MLM Legal language in MLM distributor agreements and MLM Policies. Guidelines for activity during the MLM distributorship and after the MLM distributorship are imperative.   MLM Legal and MLMLegal.com and Babener and Associates provides expert MLM Consultant and MLM Consulting advise on MLM corporate, MLM software, MLM Compensation, MLM Taxes, etc. MLM Consulting is an important component for MLM startup.  Careful Choice of MLM Software is another component of MLM Corporate.  An MLM Consultant and MLM Law and MLM Legal is part of the MLM Startup Team.  MLM Compensation must be reviewed by an MLM Consulting standpoint by a MLM Consultant and MLM Legal and MLM Law professional and programmed by a MLM Software and MLM Technology provider.

Rules You Don't Want to Break

So far, more than a dozen states have adopted statutes regulating discount buying organizations, and more are likely to follow.  

Don't play around with these regulations!   The penalties for violation may bring treble damage fines and have criminal consequences.   In South Dakota, for example, violation of statute can result in a felony conviction.

The requirements of most of these statutes is fairly straightforward.   Most of the states require discount buying organizations to post a bond to safeguard consumers.   For instance, in California, discount buying organizations must post a $30,000 bond.  

In addition, some of the legislation requires that discount buying organizations establish trust accounts or escrow accounts for the prepayments of fees collected from buyers S also to protect the interests of the consumers.   The typical legislation prohibits discount buying club contracts from exceeding specified time periods, such as a year and a half or two years.

Most of the states have followed the Federal Trade Commission's approach to the cancellation rights of consumers.   The FTC has adopted a rule on door-to-door sales which requires a three-day cooling-off period or right of rescission by consumers.   Similarly, most discount buying statutes provide that subscribers are entitled to cancel participation in the program within a three-day period.  

The typical legislation also gives the consumer statutory rights to sue for damages, including treble damages and attorney fees, or to make a claim against the company's bond.

It is interesting to note that various states have chosen different regulating agencies to monitor this area.   In some states, buying organizations are regulated by consumer protection divisions, and in others by corporation commissioners.   One state even regulates this area through the insurance commissioner's office.

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