The Orlando Business Journal has this report on new FTC rules on Multi Level Marketing (MLM) and their potential impact on the venerable giant - Tupperware not to mention an entire industry composed of primarily of established and reputable businesses plus many start ups with questionable longevity. Some chicken little’s also predict a “recession”. That certainly sounds crazy. But here’s a blurb from the article then I’ll say my piece:
The FTC is proposing new rules that would require the nation’s estimated 1,500 multilevel marketing companies such as Orlando-based Tupperware to tell potential recruits how many sales representatives have failed to earn more than startup costs, as well as how many customers have filed lawsuits for deceptive practices, among other provisions in a 90-page filing.
I’m all for full disclosure, but I believe the government needs to lead by example. This shouldn’t be implemented until a similar disclosure is issued for every incumbent official in Congress documenting 1) their campaign promises and 2) promises actually kept.
Is that too hard?
Let’s try something simple. Let’s require that people sign a full disclosure statement about the odds of winning in a government sponsored lottery. They could also be required to receive a full warming about the dangers of gambling addiction and referral to local support groups for gambling addicts before people can buy a state sponsored lottery ticket!
Now that’d be an equal playing field.
The MLM Industry has had to change to over the years due to threats of government action. Crooks have had to be weeded out again and again… just as in every other maturing industry model.
There were many abuses and perhaps they’re creeping back in…
But instead of draconian measures, the FTC and DSA need to come up with a “model act” that companies and distributors can live with, not make individual representatives and companies government paper pushers.
As one former franchise operator said, the franchise system is so weighted down with government paperwork, the only people making money are the lawyers.
That shouldn’t have to happen to MLM.
There are people who have been hurt by their MLM involvement.
Arguably they were taken in by their own greed and/or ignorance.
If you keep joining MLM’s and keep ending up with garages full of soap, is that MLM’s problem or - after the first time - the person’s problem?
There’s a double standard here between the government’s zeal to protect people from MLM and what they do to line their own pockets. Here’s what I mean.
When people max out their credit cards to start an MLM business and end up in bankruptcy it’s MLM’s fault.
But when people buy government lottery tickets to feed their “something for nothing habit” and their kids eat out of trash cans, it’s the shiftless individual’s fault supposedly.
Do you notice the double standard?
With MLM’s though it’s easier for “victims” to go on a crusade, file lawsuits, etc. than to admit you were too dumb or lazy to check out the fact that “income” only comes before “work” in the dictionary… and a politician’s promise lottery advertisement of course.
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