Why there are Consumer Protection Laws and how they Affect Distributors

Millions of individuals who are going into network marketing are doing so part time. Generally, they are amateurs. They are not professional sales people. They are not manufacturer’s representatives. They are not going to be employed by the company, and therefore, they are viewed as the vulnerable purchasers of an opportunity. And that’s why the opportunity, the business, is regulated by consumer protection statutes; to protect the distributor, the amateur, who is about to be involved in a business.

Making Unauthorized Medical Claims and the FDA – Why Distributors Cannot Make Unauthorized Medical Claims

This product can be used for cancer. Or, use this for Alzheimer’s disease. Use this for fibromyalgia. Use this for your skin cancer. When this sort of claim is made, particularly in an anecdotal way and particularly with pictures of shrunken tumors and the like, the distributors who are making these claims are endangering the franchise of the company. And, they’re endangering the livelihood of all the other distributors who are selling the product.

Earnings claims and unauthorized product claims that have been made by distributors in the past and have threatened the business opportunities of both the company and its distributors. Many government agencies hold the company responsible for the statements of its distributors and at the very least expect the company to regulate such advertising.

Expert MLM Attorney Jeff Babener has just released a new video titled Unauthorized Medical Claims and FDA Issues. In the video, which took place at an MLM company compliance training event, Attorney Babener discussed the harm that can come from distributors who make unauthorized medical claims about the products that they sell.

Unauthorized medical claims, such as selling a product based on its ability to “cure cancer” is harmful to customers, the company and other distributors. Mr. Babener discusses the FDA’s perspective and the ramifications of making false claims, one of which is bringing harm to oneself and others. Watch this video to learn what claims you can and cannot make about the products you sell.

For additional information on the FDA and product statements, read the following articles, “FDA Health Claims: The Final Rules” and “FDA and Health Claims.” Also, the video What is the relationship between MLM and the FDA? offers more information about direct selling and the FDA.

Or, the following blog posts:

If I’m an independent contractor, why are there rules regarding my conduct?

MLM and the FDA

What Differentiates a Legitimate Direct Selling/Network Marketing Company from an Illegal Pyramid Scheme?

New Video – Unauthorized Medical Claims and FDA Issues

PR: The Direct Selling Association Responds to Questions about the Purchase of Products by Direct Salespeople

Explaining Your MLM Company to the Public: Answering the Hard Questions

Why do companies restrict the type of advertising carried on by their distributors?

As always, to learn more about the direct selling industry, it’s always fun to Run, Learn and Get Lost at www.mlmlegal.com.

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