Mary Kay Makes the FTC’s Penalty Offense List
I think we have Truth in Advertising to thank for this one! This week the Federal Trade Commission (FTC) sent a letter to over 1,100 multi-level marketing companies notifying them that future false claims about their money-making opportunities could result in fines of up to $43,792 per violation. And our favorite company, Mary Kay Inc. made the list!
The FTC has something called “Penalty Offense Authority,” and it used that to remind these 1,100 businesses that they can be in big trouble if their reps are making income claims that are prohibited. I love the language in one of the press releases:
As the pandemic has left many people in dire financial straits, money-making pitches have proliferated and gained special attention. From multi-level marketing companies offering the dream of owning a business, to investment “coaches” with promises of secrets on how to beat the odds, to ubiquitous “gigs” that pitch a steady second income, Americans are bombarded by offers that often prove to be less than advertised.
And also:
“Preying on consumers and workers with bogus promises of big earnings should never be profitable,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s announcement helps ensure that companies that cheat struggling Americans will pay a heavy price.”
Of course the notice and the list include disclaimers that say that being on the list doesn’t mean the company “engaged in deceptive or unfair conduct.” The list is supposedly just to tell those companies that if they do break the law in the future, they’re going to be in big trouble.
What kind of conduct is prohibited?
- Making false, misleading, or deceptive representations of profits or earnings (like when they say $1 million in sales?)
- Representations that participants will make a profit (hmmmm… you mean like that 50% profit lie we hear so often in MK????)
- Falsely telling consumers they do not need experience to earn income
- Telling consumers they must act immediately to participate
- Using testimonials to mislead customers about the rewards of participating in a money-making opportunity (kind of like all those MK ladies who say they make six figures but really don’t)
I think we’ve documented plenty of violations of these rules here, haven’t we?
Visit the
How can Mary Kay Inc. be on a multi-level marketing list when it’s “dual-marketing”?
FTC waiting in the tall grass for anyone to slip up. Love it!
$14 Million Commission Earner and Harvard Graduate Gloria Mayfield Banks!
https://www.facebook.com/100063593499716/posts/224413636355085/
It looks like the post was deleted, or the link doesn’t work.
https://i.imgur.com/zuGJ3xk.jpg
Copied and shared by several consultants
That is the most fake looking award I have ever seen.
Finally, some accountability. I particularly like how the FTC names the companies AND their representatives. For too long reps have been getting away with making claims because they’re independent contractors. This new leader at the FTC isn’t here for the BS.
And, what about MK Corp. And their highly coveted Court of “Sales”? They don’t need to change the wording to reflect it has nothing to do with sales? Or, perhaps the Consultant can no longer tout that “achievement” anymore publicly as there is zero basis to that award having anything to do with sales? SMH
I never understood why they didn’t just call it the court of ordering. 100% accurate.
We should have a single thread on the board where we can post every social media income-claim violation that our best undercover investigators (parsonsgreen for the win) turn up. Just keep it a stickied thread, maybe titled Mary Kay Income Claim Violations or similar. Then just add the examples we find, whether IG, FB, maybe YouTube. All in one spot so the FTC can access it easily (I hope)!
If you’re on Twitter, you can tweet links of violations directly to @FTC or @FTCPhillips. They are currently reviewing the Business Opportunity Rule for possible changes. I’ve been recommending the simple change to eliminate the $500 exemption and apply the Rule to all business opportunities.
Recently, a MLM attorney, stated (anonymously) that applying the business rule “would be ‘disastrous’ for MLMs and likely ‘decimate’ the industry.”
Disastrous for #MLM, but not other biz ops… why would that be?
🤔
Does the FTC wonder about that?
https://www.vox.com/the-goods/22732586/ftc-mlm-rohit-chopra-business-opportunity-rule