Question: What are some common compliance issues you see for network marketing companies?
This is a great question and one which can easily take up many pages. For that reason, I will focus on the one that I see plaguing most companies – claims. Claims are made in marketing a product whether it be on the product packaging, website, social media, and even TV commercials.
Anything that is spoken from the brand’s mouthpiece can be considered a claim.
Why is this important you ask? Claims are so important because the wrong claims can get you in some really hot water with some of the big three-letter government agencies out there.
To prove the point, let me share an example. You are a big beauty brand that uses direct marketing to push your products out to the masses. One of your newest products is an amazing revitalizing skin moisturizer. On the packaging, the product says that it, “moisturizes the skin”, “removes redness”, and “reduces age spots”. Downstream, the team is telling customers that the moisturizer can “help with redness from rosacea and treat eczema dry spots”. You now have a big problem on your hands.
It starts at the packaging because “removes redness” and “reduces age spots” are considered drug claims. It then continues down the line with the inclusion of rosacea and eczema-related disease claims.
What these claims actually do in the eyes of the FDA is essentially take your cosmetic product and make it a drug.
From their standpoint, you will need to go through the full drug approval process to make these claims. The results can be anything from a public Warning Letter to a recall simply over the words you use to market your products.
Making sure that claims are appropriate for the product category is essential and communicating the limitations downstream can mean the difference in avoiding regulatory action.
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- “Ask Heather” Claims are made in marketing a product. by Heather Bustos - December 30, 2022
- “Ask Heather” on FDA and FTC compliance questions. by Heather Bustos - November 15, 2022