The issue of levels has not been the focus of the Federal Trade Commission (FTC) or state attorneys general in the enforcement of pyramid laws.

The issue of levels has not been the focus of the Federal Trade Commission (FTC) or state attorneys general in the enforcement of pyramid laws.

The issue of depth of levels seemed to be a major focus prior to the internet and other non-postal (mail) means of communication. In the late 1980’s the United States Postal Service (USPS) examined numbers of levels to make a determination of whether or not, in its opinion, the depth of levels created a “lottery” element under U.S. Postal lottery laws that forbid payment based on chance. Various cases and consents sorted out a safe harbor (at least from the U.S. Postal Office standpoint) for at least four levels (not necessarily agreed to by the direct selling industry). Separately, the Postal Service looked for evidence of “supervisory requirements.” Most companies adopted specific supervisory requirements of sponsors to demonstrate some managerial activity by distributors. For the past 25 years, little recruitment activity is conducted by U.S. mail and it has been a long time since the U.S. Postal Service has expressed a serious interest in this subject. The issue of levels has not been the focus of the Federal Trade Commission (FTC) or state attorneys general in the enforcement of pyramid laws. Instead, the focus for the last two decades has been on the whether or not product/service

Continue reading »

MLMLegal.com Releases Comprehensive Analysis on Landmark Case on Pyramid Guidance and the Role of “Personal Use” in Pyramid Analysis

PORTLAND, OR–(Marketwired – June 26, 2014) -

Click for the full article analysis and actual BurnLounge case at BurnLounge Appeal Decision: Guidance on Pyramid v. Legitimate MLM and the Role of Personal Use in Pyramid Analysis

Excerpt of the BurnLounge Analysis Article:

On June 2, 2014, in the case of FTC v. BurnLounge, the U.S. Court of Appeals for the Ninth Circuit issued a seminal decision, affirming a lower court finding that the BurnLounge MLM (multilevel marketing) program was an illegal pyramid scheme, in violation of section 5(a) of the Federal Trade Commission (FTC) Act, a decision that will dramatically impact the landscape of direct selling to provide guidance on two fundamental legal issues:

(1) What activity constitutes a “pyramid scheme?”

(2) What is the role of “personal use” (by distributors) in pyramid case analysis?

Stakeholders: “We Won!!” Proxy Wars…

Victory has 100 fathers and defeat is an orphan. – John Kennedy (1961)

As with any inconclusive war, the stakeholders offered immediate statements of victory or vindication.

That is, other than BurnLounge. BurnLounge lost, and a permanent injunction was affirmed.

However, BurnLounge was a proxy war on the tests for “pyramid” and the role of “personal use” in pyramid analysis, among the interested parties, short sellers of publicly traded direct selling companies, publicly traded direct selling companies, industry spokespersons such as the DSA, the FTC, MLM critics, etc.

Each, in turn, issued press releases or statements claiming victory and validation of their respective positions.

The BurnLounge decision offered guidance for all stakeholders and a clear message for “going forward.”

Continue reading »

It depends on which hat you are wearing that day as to whether they are to be considered MLM professionals or MLM junkies.

It depends on which hat you are wearing that day as to whether they are to be considered MLM professionals or MLM junkies.

The answer here is somewhat “tongue and cheek” and should be taken with a “grain of salt.” This question is often asked of people who are starting network marketing companies. The majority, if not all of them, respond that they want to recruit MLM professionals to their companies. An industry observer once commented wryly that, too often, “junkies” and “professionals” are merely flip sides of a coin. The commentator said, “A MLM junkie is someone who will raid your distributors and take them to another company while a MLM professional is someone who leaves their company, raids the distributors and brings them to your company!” It depends on which hat you are wearing that day as to whether they are to be considered MLM professionals or MLM junkies.

In all seriousness, the above comment too often contains more than a kernel of truth.

Lastly, companies that pay people to bring recruits with them to the new company are not conducting good business strategy. They will often claim to recruit thousands of individuals and only bring a few, yet still get their money. Unfortunately, this happens time and again and it is not an ethical way to do business.

Continue reading »

The Next MLM Startup Conference Takes Place October 23 & 24, 2014!

The Next MLM Startup Conference Takes Place October 23 & 24, 2014!

The next Starting and Running the Successful MLM Company Conference will be held October 23rd & 24th, 2014!

For more than 27 years, leading industry experts have educated the executives of starting and existing MLM, direct selling, network marketing, and party plan companies on how to structure their compensation plans, legalize their companies, recruit key employees and top-ranking distributors, develop business models, generate leads, fund their business, establish their website and technology platforms, better understand the direct selling industry, and so much more.

The next MLM Startup Conference takes place held October 23rd & 24th, 2014 in Las Vegas. View the conference flyer page at http://www.mlmlegal.com/srs2.html to learn more.

This is the original MLM Startup Conference – responsible for launching many industry-leading companies – perfected over the course of a quarter of a century to ensure the highest quality of information, the most knowledgeable experts, and the most practical advice from qualified experts.

Over the course of two days, attendees will hear from scores of industry experts, and if they choose, can sign up to meet with the speakers for individual one-on-one time. A full list of speakers and their biographies/credentials can be found at http://www.mlmlegal.com/bio.html.

Continue reading »

A full room of entrepreneurs listen to industry experts at the MLM Startup Conference in Las Vegas.

The next Starting and Running the Successful MLM Company Conference is already scheduled! On May 15th & 16th, 2014 we are hosting the MLM Conference for the 27th year! This is now our 67th annual conference (held almost consistently three times per year over the last 27 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.

WHO?

Direct Selling Attorney, Jeff Babener, Founder of Babener & Associates and Sponsor of the MLM Startup Conference, has over 25 years of experience in the industry, representing companies such as Avon, Nikken, Melaleuca, Discovery Toys, Usana, and NuSkin.

MLM Industry Consultant, Mike Sheffield, with The Sheffield Group and Co-Sponsor of the MLM Startup Conference, has helped launch over 800 companies over the last 27 years.

Over the course of two days, you will hear from many leaders in the direct selling industry, who include:

Jeffrey A. Babener, of Portland, Oregon, Conference Chair and Sponsor, www.mlmlegal.com, is the principal attorney in the law firm of Babener & Associates. He represents leading U.S. and foreign companies in the direct selling industry. He has been advisor to such companies as Avon, Discovery Toys, Nikken, Shaklee NuSkin, Excel, Usana, Fuller Brush, Cell Tech, Kaire, Sunrider, Melaleuca, etc. He is a frequent lecturer and has been interviewed on the industry, and published, in such publications as Money, Inc., Atlantic Monthly, Success, Entrepreneur, Kiplinger’s Personal Finance, Home Office Computing, Business Start-Ups, Wealth Builders and Money Maker’s Monthly. He is editor of the industry publication, Direct Sales Legaline. Mr. Babener is also the author of the books, Tax Guide for MLM/Direct Selling Distributors, Network Marketer’s Guide to Success, The MLM Corporate Handbook, Network Marketing: Window of Opportunity and Network Marketing: What You Should Know. He is editor of one of most frequented network marketing educational web sites, www.mlmlegal.com.

Continue reading »

And yet another successful network marketing Conference! In our February 2014 MLM Startup Conference we have covered such topics as recruiting, software, legal, technology, capitalization, compensation plans, lead generation, and industry news. Speakers from all across the United States have lectured to entrepreneurs from all over the world. Our attendees have enjoyed learning about the vast and extensive world of starting a network marketing company. For the curious – or perhaps for those who have considered attending in the past – we’ve compiled a few pictures of our 66th national event. Take a look at the venue and check out the room full of MLM entrepreneurs just like you! Enticing? Visit our websites to learn more about the MLM Startup Conference in Las Vegas and to learn how you can attend our next event!

Eager network marketing entrepreneurs listen to industry experts throughout the day.

Las Vegas is a great place for the MLM Startup Conference. Once the attendees are finished for the day, a quick cab ride to the Strip allows for a delicious meal with like-minded entrepreneurs and a few rounds on the slot machines.

Continue reading »

In celebration of our 66th annual conference, we are offering two complimentary tickets* – worth $345.00! – to attend the esteemed event in Las Vegas, Nevada.

MLMLegal.com Launches the Innovation Campaign for the February 27th & 28th, 2014 MLM Startup Conference!

Fill out the short survey here to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las Vegas!**

For over 26 years MLMLegal.com and Babener & Associates has hosted the most prestigious MLM conference for executives of startup and existing direct selling companies. In celebration of our 66th conference, we are offering two complimentary tickets* – worth $345.00! – to attend the esteemed event in Las Vegas, Nevada.

In our ongoing effort to offer the absolute best network marketing conference available, we invite you to participate in our February 2014 Innovation Campaign. To receive your two free tickets, fill out our Innovation Campaign form below.

We invite the input, ideas and innovation from the very MLM company owners who are in the startup and launch phases of their companies. We strive to offer the best conference in the United States. MLMLegal.com always covers current issues and events at all of our conferences, but this time it is different! We want your input in the Innovation Campaign!

Are you an owner or executive of a startup of existing direct selling company? Do you want to attend the 66th Starting and Running the Successful MLM Company Conference for FREE?! Fill out our short survey below! Share with us your experience as a network marketing entrepreneur!

Fill out our Innovation Campaign form to receive your two free tickets today! Also visit this page for additional information on the February 27 & 28, 2014 MLM Startup Conference.

Continue reading »

Federal Trade Commission Logo

The combined total the companies are ordered to pay is approximately $34 million, which the FTC will use to refund consumers.

Early January 2014, Sensa and three other national marketers of fad weight-loss products settled charges raised by the FTC in an effort to stop “misleading claims for products promoting easy weight loss and slimmer bodies.” The weight-loss company, Sensa, will pay $26.5 million to settle charges that accused the company of exhorting consumers in their “sprinkle, eat, and lose weight” campaign. Charges were also announced against the companies L’Occitane and HCG Diet Direct for making unfounded promises to consumers. The combined total the companies are ordered to pay is approximately $34 million, which the FTC will use to refund consumers.

To read the FTC’s full press release, click HERE.

MLMLegal.com has launched the Innovation Campaign for its February 2014 MLM Startup Conference. Read how to get your two free tickets by clicking HERE!

Continue reading »

Trademark of Herbalife

A Belgian appellate court declared December 3, 2013 that Herbalife is in fact operating in compliance with Belgian law, reports Yahoo! news. This ruling is in response to previous claims by the consumer organization, Test-Aankoop, that the international nutrition company was operating as a pyramid scheme.

Herbalife was established in 1980 and operates in over 75 countries. The company is the world’s fifth top direct selling company, with 2.7 million salespeople in roughly 79 markets, reports mlmlegal.com.

For additional information, read the following articles:

Herbalife:  Belgian Appeal Court: Herbalife is No Pyramid:  Validates Legitimacy: The Next Chapter in Recognition of Personal Use

**See a translated copy of the actual Belgian Court of Appeal Herbalife ruling.

Herbalife Statement Regarding Belgian Appeal Court Ruling

Herbalife: Belgian Court Overturns Pyramid Ruling

Herbalife says Belgian appeals court reversed pyramid scheme finding

Continue reading »

Happy Holidays from MLMLegal.com!

Happy Holidays from MLMLegal.com and Babener & Associates Law Office! Keep yourself up-to-date on the network marketing industry through the busy holiday season. Watch our network marketing videos and stay inspired to launch your MLM company or grow your existing business! Request a FREE copy of the Starting and Running the Successful MLM Company manual! Stay current on multilevel marketing law in your state. Take a look at what real MLM trial looks like. Spend your Black Friday learning about hundreds of successful network marketing companies. Catch up on our educational blog posts at mlmlegal.com and mlmattorney.com. Or simply relax, sit back, and get lost at MLMLegal.com. Have a great holiday season!

Continue reading »