Legal and compliance issues now dominate strategic planning
In the spring of 2018, as we contemplated what to put on the cover of Social Selling News’ launch edition, I felt strongly that our channel was moving into a new era, one dominated by compliance issues and regulatory scrutiny.
As a result, our very first cover story presented the Federal Trade Commission’s (FTC) shifting focus from pyramid scheme allegations to income claim allegations in order to tame unruly direct selling companies.
Though the FTC apparently has not abandoned its pyramid scheme approach, as clearly indicated in the recent AdvoCare enforcement action, I believe we have been correct in stressing the importance of paying attention to the regulatory landscape.
In the past, the sales and marketing teams of direct selling companies have taken the lead over all other departments, forging ahead with new promotions, programs and products. Sure, the team was required to run everything by the legal department, but it often felt more like an irritating obligation than anything else. My, how times have changed.
I feel very strongly that over the last 18 to 24 months, the legal and compliance departments of direct selling companies should join sales and marketing in the driver’s seat and become equal partners in strategic planning and implementation.
If you haven’t noticed yet, the world in which we operate is changing. In our cover story this month, we cover the AdvoCare enforcement action in detail. In that article, attorney John Villafranco very rightly states, “Those who proceed without observing what the FTC is saying do so at their own peril.” I could not agree more.
We’ve written quite a lot about the FTC over the past year, even going so far as to ask our readers to consider the FTC’s point of view in protecting consumers. We are not defending “attacks on our model,” but we are taking the position that some things in our channel need to change, and we need to get on board with making that happen so that we can preserve all of the great things we do offer people who are seeking an entrepreneurial approach to their lives.
Please join us in January in Salt Lake City at the Direct Selling Legal and Compliance Summit, Jan. 19-21, as we discuss the most important issues facing the channel today. Find out more at dslcsummit.org. SSN is the media sponsor of this event, and I hope to see many of you there!