Have you seen or heard a direct selling company say something like, “Make $10,000 a month!” or “Guaranteed income of $2,000 weekly!”? Well, these are a couple of examples of unauthorized earnings claims. So, what is legal to tell your distributors about how much income they’ll make? Read (or watch!) what expert MLM Attorney Jeff Babener has to say in this video:

MLM companies and direct sellers are among the biggest sellers of health and cosmetics products in the world. Some of the largest companies are traded on the NYSE. Because of concerns about safety of its customers, as well as FDA and FTC regulatory scrutiny of labeling and product claims, MLM companies expend tremendous financial and professional resources to remain compliant with rules promulgated by the FDA for marketing of health, cosmetic and personal care products. The FDA publishes extensive guidelines for product claims. In the dietary supplement area, Congress has instructed the FDA on such guidelines with DSHEA, the Dietary Supplement Health Education Act of 1994. And, even, with DSHEA exemptions for substantiated “structure function claims”, any claims in the nature of therapeutic treatment of actual medical conditions, are prohibited. And if such claims are made, the products may be removed from the over the counter market as unapproved “drugs”. In addition, the FTC and most states, under deceptive claims laws, prohibit unsubstantiated or misleading claims about products.   MLM companies, in turn, publish extensive compliance guidelines for distributors as to what may be represented or prohibited, by way of “unauthorized product claims” in the marketing of products. Companies take this issue quite seriously, as inappropriate product claims that trigger regulatory action create a risk for the opportunities of all distributors as well as companies.

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Consultants are given replicated websites by established companies.

Many companies require their consultants to use replicated websites because they are rightfully concerned about unauthorized medical and earnings claims as well as confusion in the search engines. Therefore, many leading companies provide authorized replicated websites to distributors and prohibit individual-created websites.

There are three primary reasons for this, which include:
1. To avoid unauthorized medical and earnings claims
2. To assert control over the company’s trademark
3. And, to avoid distributor websites competing against the primary company website in a way that the company website gets lost or is displaced from the top of search results for the company or its products.

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Our next Starting and Running the Successful MLM Company Conference takes place May 15th & 16th, 2014 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register. If you’d like to see how you can get free tickets to the next MLM Startup Conference, visit our Innovation Campaign page.

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