Stop Making Product Claims in your MLM business; The FDA will catch up with you.
I want to talk about compliance this week. Like most of you, I have people in my Facebook feed that are in other network marketing companies, so I see their product posts.
Now this discussion is focused on people who are in the nutrition, wellness, supplement or other health type companies, but since this is a big chunk of the industry, I think this post can help a lot of people.
I am beginning to see a lot of product claims by people in one company in particular. I see these all the time, but this company’s distributors have been doing this a lot and it’s not just one person. I see multiple people actually sharing videos (which I honestly don’t watch), but the title and description is enough to tell me a couple of things:
1) They don’t understand the rules.
2) They know them and are just breaking them.
This was what is on most companies have on their website to comply with the FDA guidelines:
“Product Disclaimer: These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.”
Without getting into a big legal analysis (drawing from my legal days), I will say that free speech (1st Amendment) doesn’t protect you from saying whatever you want in order to get sales.
Commercial speech is more limited and that is the area you are working in. The courts have said that the government has the right to regulate what you say in commercial speech situations.
The FDA makes it very clear: we cannot say anything that communicates that we diagnose, treat, cure or prevent any disease. I am seeing posts on a consistent basis that are violating these rules.
Now, I’ll be the first to tell you that if someone asked my opinion on my products, I know in my heart that the product has made a difference in the treating and preventative sense, but that statement is a violation. I am telling you this, because I want to play by the rules and I also am trying to tell you I understand how passionate you are about your products. I get it, but you cannot do this.
When I started with my company, there was another company (another big nutritional company that was publicly traded in the network marketing industry). They were a thorn in my side, because many of my prospects would compare that company to my company before joining my company. The reason? Because they used the sexy, risky statements: “our products do this, our products do that.” I can see why some people are impressed by that.
I never would make claims like that, because well it’s trouble and I am not going there.
Well, since I am not mentioning names, I just give you numbers loosely (I might be off slightly on the numbers, but the point is to learn from the story.) I think they were close to 700 million in sales before an FDA problem (because of their distributor base making claims and the company wasn’t doing anything about it), they got nailed by the FDA. Last I heard, they are below 300 million in sales and I don’t hear their name anymore in comparisons.
I would hate to have an organization disappear after something like that in my company.
Here is my point: we all have a responsibility to each other to not make product claims. It isn’t good for your fellow distributors in your company, it isn’t good for the network marketing community, and it’s not good for the nutrition / wellness movement.
So, knock it off. If you have to make claims like this to get sales, then you doing the business wrong and someone needs to get you the proper training.
If you cannot sell your products with making claims, then you need to purchase our Complete Networker and Customer Package which includes our Communication course and our Personal Endorsement Customer course.
You will sell products and you won’t have to make product claims.
If you keep doing this and don’t listen to me, then I hope you compliance department catches you, calls you, and stops you, because it’s best thing that can happen to you and your company.