Are You Liable For Following Bad Network Marketing Advice?
By André Vatke
Information is easy to come by in the Internet age. That’s both good and bad news for business owners and network marketers.
Around every corner, in every Google search, there’s
the promise of another solution to any question we may pose. Some of the information is good, a lot of it isn’t. As a business owner, knowing the difference is your responsibility.
Take for example the advice about “presenting yourself as an authority” on a subject. There are any number of people teaching this as a strategy to increase web traffic, for lead generation, even to
retaining downline and customers. Most of this involves some variation of the idea that readers can search on a particular subject and “take ownership” of the best content.
The problem is that “ownership” can be interpreted in a number of ways...
1) Learn the material, apply it, learn from the mistakes you make and over time you will become an expert.
2) Copy the content, maybe make a few minor modifications and post it as your own online or elsewhere.
The first of these two options is legal and good for our industry because it create strong leaders with true Tacit Knowledge. The second option actually harms us all because not only is it illegal, it usually
leaves out important steps or overstates the upside potential - often because the presenters have little personal experience to draw from. Unfortunately many people opt for the second option because they don’t know better or because it seems like less work than the first.
Think twice before picking the easiest road...
In a recent case here at Leaders Club, we found a marketer that had copied content directly from our web site in what appeared to be a bid to gain search ranking. While this marketer had taken steps to hide his identity and had even placed false contact information on his page, we were able to discover who owned the site and more importantly who was hosting it. It took nothing more than a Digital Millennium Copyright Act claim to have the hosting company remove the offending content and
censure their customer.
It turns out that the marketer was acting on advice from a popular traffic guru and was unaware of the illegal nature of his actions or the liability he had opened himself up to. The guru had led him to believe that by taking these steps he would receive a ton of traffic without even having to think about it.
He neglected to mention the legality or liability he would incur for following the advice – worst part was that the promised traffic didn’t materialize either.
In the eyes of the law, ignorance is no excuse.
Remember that legally speaking you are responsible for your own business. The FTC states that, “you are legally responsible for the claims you make about the company, its product and the business opportunities it offers. That applies even if you're repeating claims you read in a company brochure or advertising flyer.” So it’s only wise to have a basic understanding of the
laws that are applicable to you. In today’s network marketing industry too many people are opening themselves up to liability by not understanding what makes network marketing legal or not.
You need to be familiar with the business opportunity and recruiting laws of your state and what claims you can legally make about your opportunity and
product. You also need to understand basic copyright and fair competition issues which limit how you can use Trademarked names and what you can and cannot say in your ads. (information that’s available to all Leaders Club subscribers)
Just because you didn’t know that redistributing a PDF or that copying text from another site to yours
without permission violates copyright law won’t save you. Many companies will take action against you if they feel you are violating their intellectual property rights. You may get shut down by your ISP and if a company believes you are unfairly making money using their intellectual property, they may decide to sue you – making you liable for $250,000 or more per incident. (In addition to private claims, the FTC regularly pursues fraud, as do state Attorney General’s)
In a similar situation, marketers using autodialers to place prospecting phone calls open themselves up to a $500 per call liability, as this sort of marketing has been ruled illegal for marketing in the US back in the late 1990’s.
The problem is that it’s YOU the marketer that will take the heat for not being informed – not the so-called experts selling you their false propaganda.
Here’s how you can protect yourself...
First, you have to dump that "try anything" mentality and replace it with something that’s systematic and grounded in solid business principles. If you let yourself, you will find that you can follow the information trail pretty much forever. There will always be another course to buy or system to try. Unless you
understand what really makes network marketing tick, you’ll continue to leave yourself open to liabilities rather than successes.
Being a part of a long-term professional organization like Leaders Club can keep you apprised of not just the legality of various marketing strategies, but more importantly: provide you with a deeper understanding of how prospects actually prefer to be contacted. By
applying this master formula in your own business and learning from your mistakes, you won’t need to fake being an expert – over time, you’ll be the real deal!
By the way – the FTC is considering expanding advertising laws into social media and proposing changes in how we can use testimonials in advertising. Will you be ready or caught by surprise?
About the author:
Andre Vatke, is an independently certified marketing strategist and has created profitable marketing campaigns for numerous network marketing and traditional companies. He’s the founder of Leaders Club which has taught tens of thousands of network marketers how to create lasting professional businesses since 1994.
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