The Business Inside: FTC Send Warning Letters to MLM Companies Over Claims Related to COVID-19

In the recent few years, multi-level marketing has seen a huge surge in the market. Especially the companies that deal with health-related products are changing the way people live in terms of wellness and earnings. Commonly known as network marketing, you can become a distributor and sell products in your network of acquaintances.

As we know that the whole world is severely affected by the coronavirus pandemic, but some of the MLM companies have been reported making COVID-19 related claims. To address this issue, the FTC has targeted the multi-level marketers for claims related to COVID-19. In the recent warning letters batch issued by the Federal Trade Commission, they clearly stated that multi-level marketers are not allowed to commingle any income opportunity or product promotion with COVID. 

The FTC said that some companies and their distributors are crossing the line with their false claims during the COVID-19 global pandemic. They had already issued warning letters to over 31 Multi-level Marketers of essential oils, nutritional supplements, and other products. FTC has asked these companies to remove the claims that their products can prevent or treat coronavirus. The claims made by marketers included statements such as:

  • High-dose Vit. C protects against coronavirus.”
  • Build-up your immune system against coronavirus.”
  • Claiming their consumers that people infected with COVID-19 have been “cured with ozone” and stem cell therapy has “successfully treated ” the patient.

But, according to the FDA (U.S. Food and Drug Administration), there are currently no products that can scientifically prevent or treat the coronavirus. The FTC in their letter reminded marketers that under the FTC Act, if you want to advertise that your product can treat, cure, or prevent any human disease, you must have a “reliable and competent scientific proof with appropriate and detailed human clinical studies, stating that the claims are true at the time they are made.

The FTC also highlighted issues regarding earning opportunities that included claims such as:

  • Lot of us are concerned about getting infected with the virus and since there’s no vaccine for its treatment, we have to rely on our good-old immune system to keep ourselves healthy” and so, “it’s a great income opportunity because, with a great stimulus package, you can teach somebody how they can earn thousands of dollars in their first 10 days by joining the business.

In their warning letters, the Federal Trade Commission warned MLM companies to not issue false or misleading claims about the potential to achieve a wealthy lifestyle, significant income, or career-level income in a short span. They have asked the companies to address these issues before someone files a legal complaint against them.

You will find an entire section dedicated to pyramid schemes and multi-level marketing businesses and how you can spot one on FTC website. You can also learn how to research a company and what to look for before you join any business. MLM or Networking Marketing businesses are legal, it’s the claim made by distributors or companies that are making this industry sound so bad. So before you join, do an independent investigation, without bothering with the hype.

Do proper research on unproven health claims. Fact check beauty and health claims via FDA site, or other independent sources. Be cautious about the claims that you can make huge income within a few months, days, or in a year. Do the calculation and find out how you can make that money so you’ll have a realistic expectation of the income you can generate compared to the money and time you have to invest.

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