Online Business – Is The One You Want To Join Legal?
Online Business – Is The One You Want To Join Legal?
With the number of online businesses growing everyday, many people get involved in an online business before they know what they are getting involved in. The fact is that governments from many different countries are starting to crackdown on Internet businesses that they consider being illegal. You may be an innocent, honest person hoping to make some money but if you’re involved, your part of the problem. Learn to identify what makes a MLM or online business suspicious and/or possibly illegal.
When you look at the business, check to see exactly how you will be making income. If the income source is from attaining new members it is a plan or concept based business. This means that the only way it can sustain itself is from recruiting new members. If this is the only source of income it is probably an illegal MLM.
Most of the dubious MLM schemes online are savvy enough to cover themselves by selling a product. The product itself may be just a loophole they are using. If the product is obviously over-priced and if the purchasers are only “distributors” or members, chances are good the business is going to be investigated at some point because it is a red flag for suspicious business practices.
For instance in Canada, deceptive practices of MLM and Pyramid schemes include:
Showing income representations without disclosing adequate income received by typical participants.
Paying money to members who recruit new members
Requiring or having a condition wherein new members must buy products in order to participate
Selling ridiculous amounts of product (inventory loading) to members
Having inadequate product return policies
In the United States check with The Federal Trade Commission to see guidelines.
It doesn’t seem right that so many hopeful people are misled by these kinds of schemes but it happens everyday. The only way to protect yourself and others from dishonest business practices is to be aware.