FTC Testimonial & Blogging Changes For MLM Distributors

On Monday, the United States Federal Trade Commission (known as the FTC) released a press release providing guidance for advertisers who make endorsements and testimonials. I already knew this was coming, which is why for my longtime readers on this blog, you saw that I added the disclosure that I do get paid on many of the links on my blog.

Today I want to share with you my opinion on how this effects you as a MLM distributor. Keep in mind this is my opinion. I am not an attorney or a legal expert of any type. In fact, I recommend that you consult with an attorney if you are concerned that you could be in violation of these guidelines. That is why I am a member and independent associate of Pre-Paid Legal Services, so when issues like this happen, I can get the legal consultation that I want and I can get paid to share these services with others.

Here is a link to the guidelines:

FTC Publishes Final Guides Governing Endorsements, Testimonials

Here is my commentary on how I believe this affects MLM distributors. I am purposely writing this prior to my conversation with my attorney because I do not want this to be construed as legal advice.

The first area of these guidelines deal with endorsements. If you make a positive statement about a product or service, it is likely that this is considered an endorsement if you are compensated in any way, shape or form by the company that produces that product or service.

Here is a statement found in the guide regarding determining whether someone is making an endorsement...

"The Commission does not believe that all uses of new consumer-generated media to discuss product attributes or consumer experiences should be deemed “endorsements” within the meaning of the Guides. Rather, in analyzing statements made via these new media, the fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered “sponsored” by the advertiser and therefore an “advertising message.” In other words, in disseminating positive statements about a product or service, is the speaker: (1) acting solely independently, in which case there is no endorsement, or (2) acting on behalf of the advertiser or its agent, such that the speaker’s statement is an “endorsement” that is part of an overall marketing campaign?"

For example, let's say you are a distributor for MonaVie and I am not. You write on your blog "MonaVie Pulse is the best tasting health drink that I have ever had!" I also write the same thing on my blog.

In my case, I am acting solely independently because I have no affiliation whatsoever with MonaVie. I am not making an endorsement. I am just sharing my opinion on the product.

In your case, you are an independent distributor with the company. That means you are acting on behalf of MonaVie, as well as your own independent distributorship. What you are doing is making an endorsement that is a part of your marketing campaign to get people to sign up for MonaVie.

So the bottom line is do you get some type of benefit from the company, whether it is you are paid money or you receive free products

In fact, look what it says here...

'For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests. If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be “endorsements,” as are postings by participants in network marketing programs." (emphasis mine)

So how does this affect you as a MLM distributor? If you make a positive statement online about your company's products and services and you are a distributor with that company, you must disclose that fact to your audience. Failure to do so could put you in violation of the FTC guidelines.

The other part of this deals with testimonials. Any testimonial that illustrates a performance or result that is attributed to the product or service falls under these guidelines. For example, let's say you use the Herbalife Shapeworks product and you lost 25 pounds on that program. You cannot just post in an ad or on your blog that you lost 25 pounds on the Herbalife program and leave it at that.

In order to use a performance based testimonial, you must do one of the following:

a) Provide information on what the "typical" customer using the product would experience. For example, you can do a trial where you have a certain number of people try the Herbalife Shapeworks program for a specific period of time. At the end of the time, you can ask the customers how much weight they loss and then establish the average as what the typical customer can expect to experience.

b) Limit the circumstances depicted in the advertisement. For example, if you disclose in the ad that in addition to Herbalife, you were exercising for 90 minutes a day and that you made specific changes to your diet, you can then use that testimonial.

Otherwise, it is best that you avoid specific performance based testimonials and stick to testimonials that do not make a specific performance claim. So for instance you can say that Herbalife Shapeworks is the "best diet program you have ever been on."

Based on my understanding of these guidelines, my assumption is that the testimonial rule also applies to the live opportunity meetings and live company overview calls that we as MLM distributors have. So for instance, if at an opportunity meeting, you have a distributor come up and say "In my first 30 days I was able to make an extra $1000." that would be considered a performance based testimonial and would have to be backed up with supporting information in order to not be in violation with FTC guidelines.

As you see, these rulings have a major impact on the way we do business as MLM distributors. I highly recommend that you take a look at the guidelines produced by the FTC on the website I linked to above. On that website, there is a guide in PDF format that you can click on to read and receive more clarification on these guidelines.

I know of a person who got into trouble with the FTC. It wasn't pretty, but he learned a lot from it. He's not a MLM distributor, but his story does offer insights that we as distributors can learn from. To read the story check out Frank Kern FTC: What's it's like to get sued by the FTC. I will warn you Frank is a "colorful" character to put it lightly so if you are easily offended, you may not want to visit his blog and read his story.