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Law and Regulatory News
FDA Issues Guidance for Determining When Liquid Products are Dietary Supplements or Beverages
The FDA has issued a guidance to assist dietary supplement and beverage manufacturers and distributors determine whether a liquid product may be labeled and marketed as a dietary supplement. The guidance describes factors that can be used to identify liquid products that are excluded from being dietary supplements because they are represented as conventional foods.
FTC Charges Marketers with Making Baseless Weight-Loss Claims Despite 2006 Order
The FTC has charged Basic Research, Carter-Reed and Dynakor Pharmacal with violating a 2006 FTC order barring them from making health or weight-loss claims without a reasonable basis. The charges are detailed in the complaint filed by the Justice Department at the request of the FTC.
New FTC Guides Affect Blogger, Celebrity Testimonials
The FTC has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act. The Federal Register notice incorporates several changes to the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.
Korea FTC Cracks Down on Multilevel Marketing Firms
The Korea Fair Trade Commission (KFTC) has "declared war" on multilevel marketing firms, calling for increased investigations and criminal penalties to "make examples" of allegedly unlawful MLM firms accused of taking advantage of the unemployed, retirees, students and others having difficulty finding jobs due to the economic crisis.
Mannatech Settles Texas Lawsuit, Agrees to $5 Million in Restitution and Fines
The Texas Attorney General has announced a settlement agreement Mannatech Inc. and its former CEO, Samuel L. Caster calling for Mannatech to pay $4 million in restitution to Texas customers. Caster, the company's founder and largest shareholder, will pay a $1 million civil penalty and is prevented from serving as an officer, director, or employee of Mannatech for the next five years.
Nature's Sunshine Files Form 10 Seeking Re-Registration of Outstanding Shares
Herbs and vitamins manufacturer Nature's Sunshine Products, Inc., has filed with the U.S. Securities & Exchange Commission ("SEC") a Form 10 registration statement covering all classes of the Company's stock on February 12, 2009.
Industry News
MLMs Increasing Sales Forces Despite Falling Sales
Leading direct selling companies are actively recruiting sales representatives, even though the Direct Selling Association reports a trend of falling revenues.
Direct Selling: Working From Home
With close to 15 million direct selling companies to choose from, there are more than enough options to find the company, program and products that best suit people looking to tap into the opportunities offered.
Donald Trump's Entry Into Multi-Leval Marketing Gets Boost from Economy
An MLM vitamin supplement company recently acquired by Donald Trump and renamed "Trump Network" is getting something of a head start, in part because the economic downturn has people looking for extra income to supplement their jobs, or just new jobs to replacet ones lost.
Santa Barbara’s LMS Fragrances Sells Direct with a Twist
With a 115 percent annual growth rate over the past three years and more than 2,500 sales consultants nationwide, LMS Fragrances is flourishing and looking to expand even more. Their success, the owners feel, is due in large part to a unique direct-selling plan that allows their consultants to keep more money — up to 30 percent of their sales — and not have to pay up-front for the product.
Direct Marketing Industry Thrives In Recession
With the economy in a slump and unemployment at an all-time high, it's not unusual for people to look for opportunities in the direct selling industry. But it's not just individuals. Many companies are looking to the direct sales channel as a way to expand and grow their businesses.
Articles
MLM Startup Series
The first installment of our new a guide specifically directed to startup and young direct selling companies that utilize multilevel compensation plans. Topics will range from frequently encountered situations with industry-wide application to unique situations applicable to specific product or service genres.
The Sequel - Dietary Supplement Marketing - Rethinking the Use of Third Party Material
More on the use of the use and misuse of the Third Party Labeling Excemption in dietary supplements marketing, including coverage of the impact of the FDA's Xango Warning Letter.
Dietary Supplement Marketing - Rethinking the Use of Third Party Material
A dangerous trend has taken root in the world of dietary supplement advertising. More and more companies are using third parties ostensibly unconnected with the company to author and publish materials extolling the benefits of the generic ingredients in their products. The problem is that these materials may not pass regulatory muster, and sooner or later will come under FTC scrutiny. Here's what you need to know now to avoid problems in the future.
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