In today’s open meeting, the FTC voted unanimously to issue an Advance Notice of Proposed Rulemaking (ANPR) considering expansions to and revisions of the FTC’s existing Business Opportunity Rule (“BOR”). This will be the first review of the BOR since it was promulgated back in December 2011. In her statement announcing the ANPR, Chair Khan
TINA.org Lobbies FTC to Use Penalty Offense Authority against Direct Sellers
TINA.org continues to aggressively beat the enforcement drum. Today, its leaders sent a letter to Acting Director of the Bureau of Consumer Protection Samuel Levine encouraging the FTC “to implement a penalty offense program targeting the direct selling industry and its market-wide practice of utilizing deceptive earnings representations and false health claims.”
As we discussed
FTC Announces “Operation Income Illusion” to Crack Down on Deceptive Income Claims
The FTC today announced four new enforcement actions and one new settlement alleging deceptive income claims in violation of the FTC Act. The FTC noted that these actions are part of a broader initiative branded as “Operation Income Illusion,” which it described as a crackdown “against the operators of work-from-home and employment scams, pyramid schemes,
2019 Selected Top Ad Law Access Reads and Listens
In 2019, Ad Law Access published 124 stories on a wide range of topics. However, two topics stood out above the others:
- California Consumer Privacy Act (CCPA)
CCPA was far and away the most popular topic of 2019 and, as mentioned in one of our last posts of the year, “businesses and privacy professionals
Section 13 (b)log: Direct Seller Stands Its Ground: Neora Seeks Declaratory Judgment Against the FTC, Challenging the Agency’s Section 13(b) Authority
The continuing questions over the extent of the FTC’s enforcement authority to obtain monetary relief under Section 13(b) did not stop the Commission from filing a lawsuit on November 1 against multi-level marketer Neora, LLC and its CEO Jeffrey Olson for purportedly operating an illegal pyramid scheme that used deceptive marketing to sell supplements, skin
The Direct Selling Self-Regulatory Council: What it Means for Multi-Level Marketers
Earlier this week, the Direct Selling Self-Regulatory Council (DS-SRC) opened its doors for business. Its objective is to provide independent, impartial, and comprehensive monitoring of direct selling companies on an industry-wide basis, address income misrepresentations (including unsubstantiated lifestyle claims) and false product claims by companies and salesforce members, and enhance the reputation of direct selling.
What The FTC Said About Direct Selling In 2018
Earlier this year, the Federal Trade Commission released new business guidance for direct sellers and multilevel marketers describing the legal principles that it will apply when evaluating practices under the FTC Act. Law360 published the article “What The FTC Said About Direct Selling In 2018,” co-authored by partner John Villafranco and senior associate Donnelly McDowell.
FTC Releases Business Guidance on Multi-Level Marketing, Memorializing Principles from Prior Settlements on Hot Button Issues
The FTC released today Business Guidance Concerning Multi-Level Marketing, which offers answers to frequently asked questions to assist multi-level marketers in evaluating their business practices for compliance with the FTC Act. The Guidance begins by restating the general standard for pyramid schemes set forth in the FTC’s 1975 Koscot decision and then goes on
Vemma Settles Ongoing Litigation with FTC over Pyramid Charges
The FTC announced today that it had settled charges with multi-level marketer and seller of health and wellness drinks Vemma over allegations that it operated a pyramid scheme. The FTC initially filed the action in August 2015 in federal court in Arizona, alleging that Vemma encouraged participants to buy products to qualify for bonuses and
FTC Chairwoman Ramirez Addresses Direct Sales Association; Offers Compliance Recommendations for Industry and Signals that Additional Guidance is on its Way
Last week, FTC Chairwoman Edith Ramirez spoke at the Direct Sales Association (DSA) Business & Policy Conference in Washington, D.C. In her comments, Chairwoman Ramirez acknowledged that the direct selling industry was a $36 billion industry that “has the capacity to provide consumers with valuable goods and services and an opportunity to try an