Even well-intentioned field members can post illegal claims
By Jonathan Gilliam, CEO of compliance firm Momentum Factor
“These warning letters are just the first step. We’re prepared to take enforcement actions against companies that continue to market this type of scam.”
—Joe Simon, Chairman, FTC
Coronavirus. COVID-19. A global pandemic. Whatever you want to call it, news is coming in daily with updated numbers of cases and deaths related to the quickly spreading virus. Cities and countries all over the world are shutting down. It’s a scary time for us all and, as with other crises that arrived suddenly and without warning, we are looking for answers and solutions.
From the promise of a vaccine to unsubstantiated reports of copper exposure killing the virus on contact, fear has us on the edge of our seats looking for something, anything, that will give us hope. In the direct selling channel, that can mean field reps making unfounded virus cure and prevention claims to promote their products.
In compliance departments across the channel, an inordinate amount of coronavirus and COVID-19-related claims are popping up. It seems there are those who will attempt to capitalize on a crisis, no matter the scope of it. Even well-intentioned field reps may hold false beliefs about a product and make assumptions they shouldn’t.
The FTC is hot on the heels of claims being made on various social media sites, and has already issued seven warning letters so far to promoters. Chairman Joe Simon stated: “There already is a high level of anxiety over the potential spread of coronavirus. What we don’t need in this situation are companies preying on consumers by promoting products with fraudulent prevention and treatment claims. These warning letters are just the first step. We’re prepared to take enforcement actions against companies that continue to market this type of scam.”
Direct sellers have already been under fire for unfounded health claims in recent years. With a surge of anti-MLM sites, YouTube channels, and publications, it’s a time in our history where our channel is being heavily scrutinized and criticized. A primary challenge for us is that regulators, consumer advocates and others who don’t understand what we do fully believe that there are no standards whatsoever for field representatives.
While this is not true, staying on top of your field and monitoring their communication—as well as ethics training and guidance on the right things to say—is how we will overcome many of the misperceptions of our great channel.
How can we adjust to this new normal? Rather than making dangerous claims about cures, let’s teach the field how to do it the right way:
We can lean into our advantages. On the product side, what does your company do that can help people who are working at home, who don’t really want to go out to the stores, or have needs for nutrition, food, energy, home products? We can help. We are a social-enabled, e-commerce, fast-delivery distribution channel for important products of all types. Grocery stores are barely keeping up with demand for basic needs, but we have stocks of consumables, supplements, and supplies that do not require a trip to the store or an in-person meeting.
As an opportunity, direct selling brings advantages as well. In fact, during this challenging period, I believe field reps may find the “`ultimate gig” of direct selling to be a more viable option than other gigs like Uber, which require in-person service. Unlike rideshare and delivery services, we can be virtual. We are a work-from-home business model, the original really. Can we imagine that direct selling might be a lifeline for people who are forced to stay at home? It’s possible!
Most importantly, we must focus on continuing to establish trust with the public. We must stay on top of improper behavior and outrageous product and income claims and catch them before they become dire for the channel. We should leverage our advantages to continue helping people in need.
This is how we shine.
Link to share this article: https://socialsellingnews.com/link/coronavirus-product-claims-surge-in-the-field-3147/