FTC Sends Warning Letters to Multi-Level Marketers Regarding Health and Earnings Claims They or Their Participants are Making Related to Coronavirus
We felt we should let readers know what is going on. My guess is if you are part of the
ten companies below or any network marketing company marketing nutritional
supplements, you have heard about this from your home office.
I am sure hundreds of non-network marketing companies received letters as well, at least
I hope they did. I have seen multi nutritional companies pitching why consumers should
be taking their products, but very few from the network marketing community.
Honestly, income claims is something that concerns me more, this is something the FTC
doesn’t normally play around with too long. Anyway if your company is on the list, and
your company hasn’t got the world out to the field, I wanted to give you a heads up.
Click here to see copy of FTC Document
Ten letters target companies pitching business opportunities & supposed
health benefits in response to pandemic
April 24, 2020
The Federal Trade Commission today announced it has sent 10 letters warning multi-level marketing companies (MLMs) to remove and address claims that they or their participants are making about their products’ ability to treat or prevent coronavirus disease or about the earnings people who have recently lost income can make, or both.
According to the U.S. Food and Drug Administration (FDA), there currently are no products that are scientifically proven to treat or prevent the virus.
“MLMs and other companies that distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “During this health and economic crisis, we are on the lookout for false income claims for work-at-home opportunities, in addition to spurious health claims that products can treat or prevent COVID-19.”
The letters highlight specific claims made by the companies or their distributors in social media posts and videos posted online, including:
- A video that includes the statement, “I can tell you that there’s thousands of people that are out of work right now. They’re all looking for a way to go earn money. This is a great stimulus package, because you get to teach somebody how to go earn $1,730 literally in their first 10 days in the business.”
- A social media post that said, “Got the coronavirus heebeegeebees? Boost your immunity with this amazing deal!!!!”
The FTC sent the letters to the companies listed below. The recipients are grouped based on the type of claims made.
Both Health and Earnings Claims:
- doTERRA International, LLC
- Pruvit Ventures, Inc.
- Total Life Changes, LLC
- Modere, Inc.
- Arbonne International, LLC
- IDLife, LLC
- It Works Marketing, Inc. (this company was also itself warned to stop making earnings claims)
- Rodan & Fields, LLC
The FTC has previously sent a number of warning letters about health claims related to the coronavirus pandemic, but this group of letters is the first to also include warnings related to claims about potential earnings related to the economic fallout from the pandemic.
In letters alleging unsubstantiated health claims, the FTC states that one or more of the efficacy claims made by the companies are unsubstantiated because they are not supported by scientific evidence, and therefore violate the FTC Act. In letters alleging unsubstantiated earnings claims, the FTC reminds the companies about what constitutes a false or misleading earnings claim that would violate the FTC Act.
The letters refer the companies to the agency’s guidance for MLMs, remind them that they are responsible for the claims made by their members and representatives, and advise the recipients that they and their members must immediately cease making all claims that would be false or misleading.
The letters instruct the recipients to notify the FTC within 48 hours about the specific actions they have taken to address the agency’s concerns.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.
CONTACT FOR CONSUMERS:
Consumer Response Center
Office of Public Affairs