Online earnings and the law. My mother-in-law's 3-step plan to save $30, in 2 years - Business Insider


By Phil Nicolosi, J.

How to make money online and offline

Specific earnings and income claims entice the customer. These claims are often made in connection with offering business opportunities and with MLM plans online.

Misleading earnings or income claims are deceptive and illegal in general under Section 5 of the FTC Act.

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But, they pose other concerns in connection with offering business opportunities and in selling MLM type plans. The basic premise behind FTC endorsement disclosure requirements is that the advertiser cannot claim through an endorsement anything that cannot be claimed directly.

Advertisers must have a reasonable basis and must be able to back up any specific claim made. Exaggerated earnings claims are deceitful and are always deceptive. Claiming extraordinary results by making a specific earnings or income claim that is not representative of the results achieved by a substantial number of consumers is deceptive. Advertisers are not free to make such direct claims without properly qualifying them through the use of appropriate disclosures and disclaimers.

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Types of Claims 1. Not all truthful income claims are improper; the key is presenting proper disclosures to support the claim so that it is not deceptive. The problem is that usually these claims are exaggerated where the advertiser has no reasonable basis for making online earnings and the law clam. The FTC believes earnings claims are highly relevant to consumers in making their decisions and typically are the single most decisive factor. Earnings claims also include any chart, table, or calculation that demonstrates possible results.

Unfortunately, for most Internet advertisers, using proper disclosures will defeat the purpose i.

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If those claims are phrased in terms of an opportunity or possibility or a chance that can come true with hard work, maximum effort, etc. Of course the entire context of the claim will be evaluated. It is better to err on the side of caution and simply avoid using these types of claims if possible.

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They are usually made in connection with business opportunities. They will be considered income claims and the same disclosure requirements as with any other earnings or income based claim must be followed. Someone sitting on a yacht on their laptop as an image on your website is yet again an implied lifestyle claim if made in connection with an earnings claim.

These claims give off the impression of a certain hypothetical outcome. Using Specific Earnings Disclosures There are different ways to use disclosures on your website.

The disclaimer can flow naturally within the content in order not to disrupt the flow online earnings and the law your message.

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The bottom line is that income and earnings disclosures are an integral part of the underlying claim. Potential customers are likely going to purchase you product based upon their expectations created by the earnings or results claims made. The less likely potential customers online earnings and the law to notice a disclosure the greater the probability the claim will be deceptive.

Simply put, using disclosures immediately after an earnings claim will greatly increase the odds the disclosure will be effective. Using natural in-line type disclosures can be a very effective way to disclose necessary information while preserving sales. After all, bulky and awkward disclosure text may scare some people away.

Placing disclosures next to each earnings or results claim is a much smoother and easier way to transition to these types of disclosures and this method should be followed when possible. In that case, refer to the discussion on disclosure placement above to determine where to place the disclosure.

But given the nature of these types of claims, in-line disclosures should not generally be too lengthy anyways.

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It should state that not every user of the product the subject of the earnings claim will make any money, let alone any amounts claimed. Anything less will land you or your business in hot water since viewers of these types of claims may be led to believe that they too will undoubtedly achieve the same results.

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Your customers need to understand that there is a degree of risk and that there is no guarantee he or she will achieve the same earnings. If there is a chance even one single customer who purchases a product may not earn income, an income claim should not be made without an appropriate disclosure.

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Most potential customers may, in fact, earn money. But, all it takes is one to make this claim technically misleading! Ideally, reviews about binary options who trades disclaimer language should be placed on the visible portion of all pages where claims are made.

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However, it can be placed on a separate page provided that visitors notice the disclaimer link and are compelled to click on it. Using link at the bottom of the page where viewers may not scroll down and find it is not advisable.

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I suggest placing it in the top navigation bar, visible side bar or some other prominent spot on the home page and each webpage any income or earning claim, example or customer testimonial appears. Specific earnings claims or income testimonials can pose serious problems when used in conjunction with offering online earnings and the law opportunities and in connection with selling MLM programs. They pose a problem in connection with any activity, but specific earnings and income type claims mainly occur with offering business and MLM type opportunities.

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Earnings claims made in connection with an illegal pyramid scheme are deceptive. In fact, the FTC has said so and has used deceptive earnings claims as a way to go after pyramid schemes in many cases.

Enter a valid email address Telephone optional Please enter a valid phone number Yes, you may leave a message on my phone Please tick here to confirm agreement to our Privacy Policy Let us know more about your situation optional : Optional Attachment Of Earnings Order AEO What is an attachment of Earnings?

More MLM plans are likely to resemble illegal pyramid schemes then not. However, because profits primarily come from new members, it is impossible to earn large profits.

Attachment Of Earnings Order (AEO) | Debt & The Law | PayPlan

This is because of the exponential number of new members needed to sustain the profit stream. The FTC disfavors earnings claims in the connection with offering franchise and business opportunities in general. In National Dynamics Corporation vs.

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At the same time, they must be prevented from bandying about high earnings achieved by a minority of purchasers with no indication of the unrepresentativeness of such earnings. If respondents lack evidence that the high reported earnings of a few distributors are in fact representative of the earnings of large numbers of other distributors, then it is clearly deceptive for them to portray the minority results reported to them without a clear indication of their unrepresentativeness.

Some states flat out prohibit such claims.

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For example, Massachusetts and Wyoming restrict earnings claims and income testimonials by MLM companies outright. Georgia provides that an MLM company or business opportunity seller cannot represent any earning or income potential unless it has documented evidence to back up whatever earnings claims it provides.

The MLM business must provide this evidence upon request by the potential customer. Other states also condition, limit or restrict any earnings claims made in conjunction with offering any business opportunities South Carolina, North Carolina, Indiana, Virginia and Texas. Of course, any untrue or misleading earnings or income claims are also deceptive under state deceptive practices statutes as well. If specific earnings or income claims are made, they must: 1 be true; 2 be substantiated somehow-i.

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