Ensuring that compliance permeates all aspects of a business’s operation will certainly serve the long-term interests of a company by keeping it off the radar of regulators.Editor’s Note: The attorneys at Winston & Strawn have provided answers to the most common questions they’ve been asked about direct selling business practices by their clients during the COVID-19 pandemic. In the article below they share their insights and opinions.
Any income claim that is considered to be deceptive needs a disclosure. The FTC considers an income claim deceptive where information is misrepresented or omitted that would affect a reasonable consumer’s judgment. In most cases, distributors are simply unaware of how to promote their opportunities appropriately.The majority of income claims made by a distributor are more likely than not truthful statements, but the Federal Trade Commission (FTC) is not just concerned with the truth. Promises of riches and an opportunity to live the American Dream can cloud even the most reasonable person’s judgment. With this in mind, the FTC wants to ensure that all potential distributors make a fully informed decision before choosing to join an MLM program.