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FTC to Review Business Opportunity Rule by End of Year
Cover StoryDirect SellingFeatures

FTC to Review Business Opportunity Rule by End of Year

Commissioner Chopra pushes for removal of direct selling exemption

By:  David Bland
It is alarming that the FTC seems to have prejudged the public comment process and concluded that the scope of the Rule should be expanded to impose a new regimen of rules and regulations on the direct selling industry. —Larry Steinberg, Chair of Multilevel Marketing Industry Group, Buchalter
The Federal Trade Commission (FTC) announced on June 14 a review of the Business Opportunity Rule by the end of the year. The Rule was first proposed in 2006 and was finalized with amendments in 2012 after direct selling companies and the Direct Selling Association (DSA) vigorously argued for, and ultimately received, a generalized exclusion from the Rule.

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July 1, 2021 0 comment
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FTC Looks to Expand Civil Penalty Arsenal in Wake of AMG Loss
ComplianceLegalRisk Roundup

FTC Looks to Expand Civil Penalty Arsenal in Wake of AMG Loss

ROSCA and GLBA acts provide potential paths to monetary relief

By:  Donnelly L. McDowell (with content from John E. Villafranco)
With the FTC’s fight on the Hill for new 13(b) authority ongoing, two recent enforcement actions signal that the Commission plans to use its civil penalty authority in novel ways with significant implications for the direct selling industry.
In the wake of the Supreme Court’s unanimous decision in favor of AMG Capital Management—which stated that the FTC lacks authority to obtain monetary redress under Section 13(b) of the FTC Act—then Acting Chair Rebecca Slaughter vowed to lobby Congress in response.  Her goal was to “restore and strengthen the powers of the agency” and consider new ways to obtain money from companies through enforcement. Two months after the AMG decision, the FTC continues to make good on those promises.

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July 1, 2021 0 comment
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Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference
Cover StoryDirect SellingFeatures

Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference

Organizers block channel representatives from contributing

By:  David Bland
There were a number of factors that led us to think that the timing was right for this type of conference, including indications from the Federal Trade Commission that they are tightening focus on the MLM industry. —Douglas M. Brooks, Attorney
Anti-MLM influencers appear to be more interested in fostering a cottage industry of their own than they are to an inclusionary dialogue on how best to promote entrepreneurship. —Direct Selling Association
For decades, direct selling’s opponents have worked to challenge the channel from the relatively confined spaces within their respective legal, academic and media circles.  The occasional high-profile court case would generate publicity for a few news cycles, and newspaper and magazine articles would follow with passing coverage. 

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June 1, 2021 0 comment
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FTC-Supported Anti-MLM Conference Held in April
Headline NewsNews

FTC-Supported Anti-MLM Conference Held in April

The College of New Jersey School of Business hosted a virtual conference titled, “Multilevel Marketing; A Consumer Protection Challenge.” The two-day April 30 conference included former and current members of the FTC, along with consumer advocates, journalists, and educators. Sessions such as “How do MLMs silence critics?” and “Product and earning claims and the true number,” included anti-MLM bloggers, authors, and YouTube personalities, which set the stage for an agenda targeted at the direct selling industry. There was no information available on whether representatives or advocates from direct selling were speakers.

May 1, 2021 0 comment
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FTC Announces New Rulemaking Group
Headline News

FTC Announces New Rulemaking Group

From the FTC: On March 25th, Acting Federal Trade Commission Chairwoman Rebecca Kelly Slaughter announced the creation of a new rulemaking group within the FTC’s Office of the General Counsel. The new structure will allow the FTC to take a strategic and harmonized approach to rulemaking across its different authorities and mission areas. With this new group in place, the FTC is poised to strengthen existing rules and to undertake new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition. Especially given the risk that the Supreme Court substantially curtails the FTC’s ability to seek consumer redress under section 13(b), rulemaking is a critical part of the FTC’s toolbox to stop widespread consumer harm and to promote robust competition.

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April 6, 2021 0 comment
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DSSRC Refers RBC Life Sciences to FTC
Headline NewsNews

DSSRC Refers RBC Life Sciences to FTC

RBC Life Sciences, an Irving, Texas-based nutritional and wellness direct selling company, has been referred to the Federal Trade Commision (FTC) by the Direct Selling Self-Regulatory Council (DSSRC). The DSSRC cited earnings and health-related, product performance claims made by salesforce members, including COVID-19 claims, as well as unrealistic earnings claims. The DSSRC also noted that RBC Life Sciences falsely represented Better Business Bureau accreditation and Direct Selling Association membership. The DSSRC finalized its referral after RBC Life Sciences failed to respond to its initial inquiry from December 2020.

April 1, 2021 0 comment
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People on the Move – March
People on the Move

People on the Move – March

PEOPLE ON THE MOVE

PEOPLE ON THE MOVE – March

March 1, 2021

 

Ryan Napierski, Nu Skin

Nu Skin Enterprises has named Ryan Napierski as president and CEO. Napierski, who currently serves as the company’s president, will succeed Ritch Wood upon his retirement Sept. 1. Napierski also will presumably replace Wood on the board of directors later this year. Napierski has spent his 25-year career with Nu Skin.

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March 1, 2021 0 comment
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Getting Real with Total Life Changes CEO Jack Fallon
Getting Real Interviews

Getting Real with Total Life Changes CEO Jack Fallon

How core values and COVID-19 shaped TLC

By:  Teresa Day Craighead Company Profile: Founded: 1999 Location: Fair Haven, Michigan Website: totallifechanges.com SSN: What is your book about?  JF: I never thought our story was unusual; you start in a one-bedroom, and you work your way up. But we’re in that business model where people want to be a part of a community and a culture, and having the book helps point to that. The book talks about our journey from factory workers to entrepreneurs, to network marketing to owning a company that developed a culture we value. In Detroit, Michigan, everybody works at the Big Three (Ford, General Motors and Chrysler automobile manufacturers), in some way. And it’s that “dream” job; you get the security, the full benefits, and the pension after 30 years. John (Licari) and I met on the line there, and we quickly realized it wasn’t for us. 

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March 1, 2021 0 comment
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ComplianceLegalRisk Roundup

FTC Maintains Pressure on Compensation Plans

Direct sales companies should prepare for a new wave of regulatory actions

By:  Brent Kugler, Guest Contributor
Companies should take the time to consider if their plans hit the guardrails laid out by the most recent statements and actions of regulators.
Like it or not, the legal requirements for multi-level-marketing (MLM) compensation structures have changed in recent years. Many existing comp plans used by direct selling companies for years may now, if challenged, be considered non-compliant by the Federal Trade Commission (FTC). Indeed, comp plans considered to be compliant as recently as two years ago may today run afoul of the FTC’s latest criteria for evaluating compensation structures.

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March 1, 2021 0 comment
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