As a general matter, MLM companies will be very specific about what distributors can and cannot say about the company’s products. Usually, this information will appear in the company’s literature. MLM companies can find themselves in serious mess with state officials, the FTC, the FDA, and other government agencies if unauthorized product claims are being made by consultants.
In 1994, The Dietary Supplement Act enabled MLM companies and their distributors to amplify their statements on the benefits of dietary supplements. Under the 1994 Dietary Supplement Act, third-party literature and/or scientific studies, which are generic in nature, are allowed to be passed out to the public.
MLM companies that have specific data to backup their statements may make claims about ingredients in their products when the claims relate specifically to their impact on the structure and function of the human body, as opposed to medical therapeutic claims. For instance, under The Dietary Supplement Act, a direct sales company may comment that vitamin C is beneficial to connective tissue. Keep in mind, however, that this is not the same thing as claiming that a particular nutrient in a product will treat or cure a connective tissue disease.
For more information about earnings claims and unauthorized product claims, please visit the following links:
The FDA and Health Claims Article
FDA: New Health Claim Rules:
- A Historic Act
- The President Speaks
- And Congress Speaks Out
- The Impact on the Network Marketing Industry
- Why and How They Work
- Abuses Lead to Legislation
- Rules You Don’t Want to Break
- The Disclosure Issue
Find us on our social networks:
And, as always, visit MLMLegal.com, the best MLM resource on the web. The next Starting and Running the Successful MLM Company Conference will be here before you know it! On May 16th and 17th, 2013 we are hosting the MLM Conference for the 25th year! This is now our 64th annual conference (held almost consistently three times per year over the last 24 years). All executives/owners of MLM, direct selling, network marking, and party plan companies are welcome to attend. This is the original MLM Startup Conference, hosted and perfected by direct selling industry expert, MLM Attorney Jeff Babener. Call 503-226-6600 or 800-231-2162 to register. (Can’t make this event? Keep an eye out for our October and February conferences as well.)