Proposed Amendments to the FTC’s Negative Option Rule and Potential Impact on Direct Sellers

On March 23,2023 the FTC published a notice to amend the Negative Option Rule (16C.F.R. §425). At first blush, the proposed amendments to the Rule seem reasonable and fair. But direct sellers must BEWARE! There’s a seemingly innocuous element to the proposed amendments that negates a defendant’s ability to contest injunctive relief and damages.

MoCRA - A Not So Tasty Treat for Cosmetic Manufacturers & Distributors

If you are involved in the manufacture or distribution of cosmetic products in the U.S., you may have recently heard of MoCRA. If you haven't, read on. (Hint: It’s not some tasty new drink at Starbucks.) [...]

Dietary Supplement Marketing - Rethinking The use of 3rd Party Material - The Sequel

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Environmental Marketing

This issue of SalesWatch will examine the history and status of environmental marketing claims, and the enforcement activities of the Federal Trade Commission ("FTC") in this arena [...]

Customer Programs

Securities Law and MLM - What's the Deal

No one will claim that the application of securities law in the multilevel marketing field is anything new. Securities laws have been regularly applied to the MLM industry at both the state and federal levels since the early 1970s, and many MLM programs have been found to cross the line into the realm of unregistered securities since that time [...]

The Preminence of Value

The FTC's Proposed Business Opportunity Rule

There has been a lot of chatter in direct sales circles about the FTC's new proposed business opportunity rule.

Income and Earnings Representations

Let's face it - distributors are out there waiving checks and 1099s, telling prospects what they and others have made, and presenting hypothetical (i.e., astronomical) examples of the phenomenal incomes that can be earned with your company [...]

Door-to-Door Sales

This article will address the legal issues surrounding "door-to-door" sales in the United States. Lest you think that the activities of your distributors do not involve "going door-to-door," you should be aware that the federal definition (as well as most state definitions) of a "door-to-door" sale encompasses [...]

Training Camp

Several very visible companies have successfully incorporated training bonus programs into their plans. They are typically presented as a second compensation structure dedicated to training. As a result [...]

Double Trouble

Binary compensation plans have become the darling of startup multilevel marketing companies. From the distributors’ standpoint, binaries have a lot of sizzle. They are relatively simple to understand and offer fast-paced growth opportunities [...]

Seeing The Forest For The Trees

"Is my plan legal?" Not a week goes by that I'm not asked this question.

Intellectual Property - What is it?

To the law, property is commonly considered a “bundle of rights.” This “bundle” is [...]

FDA Promulgates New Standard for Dietary Supplement Health Claims

Get Your Hands Off My Downline!!!

If God had been running an MLM rather than delivering the Jews from Egypt, the first of the Ten Commandments given to Moses would have been "thou shalt not steal thy neighbors downline." [...]

Bigsmart Not So Smart

Dietary Supplement Marketing - Rethinking The use of 3rd Party Material

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