Suppose you have a marketing program such as My Lead System Pro (MLSP) to get you free leads for your network marketing business on the internet but have no clue which multi-level marketing company is the best for you to join. This article will provide you tips on how to recognize network marketing scams from legitimate multi-level companies.
Here is what to look for with regard to MLM scams:
- Make promises of huge money or guaranteed income
- Require that you pay up front money that outweighs the value of the profits, distributor kits, and training provided to you
- Make claims that big money is easily attainable.
- Pressure you into signing up as a distributor.
Be sure to know what you are getting yourself into before you sign on the dotted line to become a distributor.
The Direct Seller’s Association has a Code of Ethics that specifies the following:
- No member of the Association shall knowingly engage in any deceptive, illicit, or unethical recruiting practice.
- Pyramid or Ponzi schemes are considered a violation of this Code.
- The network marketing company shall buy back on reasonable terms any marketable products in the possession of the distributor within 12 months from the distributor’s date of purchase at a price of nothing less than 90 percent of his/her original cost.
- No network marketing company shall misrepresent or disclose the actual or potential sales or earnings of its independent distributors. Any earnings or sales representations shall be backed up by documented facts.
If you have a problem with a particular seller, the U.S. Federal Trade Commission’s Division of Marketing Practices may help you by contacting its toll-free phone number at 1-877-382-4357. Unlike franchises and business opportunities, there are no specific federal regulations involving network marketing. However, it is the responsibility of the FTC to investigate claims using general regulations against unethical or unfair trade practices. In some cases, the Securities and Exchange Commission (SEC) can also be contacted to investigate problems against a company.
The National Fraud Information Center is another good source to check up on a particular MLM company you want to join. They record complaints on a daily basis. You can reach them at 1-800-876-7060.
As the old saying goes, “Investigate before you invest.” Know what you will be doing as a network marketer before you do it.