Kevin Thompson (ThompsonBurton law firm), an attorney who specializes in Network Marketing law has released a video explaining the FTCs (Federal Trade Commission) latest press release about Fortune Hi-Tech Marketing, who were targeted by the FTC last year. As network marketers, this is something we should all pay attention to. A summary of four of the points is included below. Kevin provides an explanation in plain-English and has made it available on his blog here. thompsonburton/mlmattorney/2014/05/14/press-release-from-the-ftc-when-it-comes-to-pyramid-schemes-dont-be-in-denial/ • If there is income potential in your business, and as network marketers there is, be aware one FTC issue is: (1) Aggressive income claims with inadequate substantiation; • When prospecting, be aware a second FTC issue is: (2) The emphasis of the marketing pitch was on recruitment instead of product value; • When sponsoring new distributors, be aware a third FTC issue is: (3) The majority of the pay plan was driven by the volume from new participants; (start up volume vs internal consumption volume) • And when looking at your overall volume, keep in mind that the FTC is leaning more and more towards CUSTOMER VOLUME being a key indicator. A fourth FTC issue is: (4) Sale of products to ultimate users DOES NOT include sales to other participants or recruits or to the participants own accounts. You should have REAL CUSTOMERS, lots of customers, customers OUTSIDE of the pay structure. Distributor volume (internal consumption volume) does not count as customer volume. Customers who have the potential to make income because they are in the pay structure will probably not count as customers, etc.
Posted on: Wed, 14 May 2014 17:47:27 +0000
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