Third Party Marketing Materials and Product Substantiation

Every few years, someone makes front page news with a scandal about an exaggerated or unsubstantiated claim about their product. Typically, some crisis comes first such as Swine Flu. Next, someone decides that their product will fix said crisis. Making headlines can be great for business, but not these kinds of headlines. I am not saying that products do not provide a benefit. I am saying that the U.S. government frowns on product claims that have not been “proven” (http://www.fda.gov/Food/IngredientsPackagingLabeling/LabelingNutrition/ucm111447.htm) and takes action against companies making such claims.

In general, food, and dietary claims fall into three categories, health claims, nutrient content claims, structure/function claims (like carrots improve your eyesight). There are also two dietary claims about general well-being and nutrient deficiency diseases. You can make such claims only if the company and you as the distributor know that there is evidence to support them. In my experience, most companies have been upfront in making and substantiating product claims. However, when companies or distributors make outlandish and unsupported claims, the entire industry looks suspicious.

The FDA does not help companies out much in this department. Natural supplements do not go through testing and approval from the FDA prior to being released. This is both a blessing and a curse. Supplement companies do not have to spend millions of dollars to get a product to market like pharmaceutical companies do. Many new and innovative products such as Aloe Vera, magnet therapy, and essential oils have first been released through the direct selling/MLM channel. This freedom to enter the market is wonderful, but it forces companies to police themselves and their distributors.

Unfortunately, some companies do choose to market products using compelling but unsubstantiated claims. One way that companies or distributors have gotten around the FDA rules is to use third party marketing materials. A third party that is supposedly not connected with the company writes some material that says the product will cure what ails you. Spencer Reese of Reese and Richards Law Group has an excellent article that explains the potential problems with third party materials (http://www.mlmlaw.com/articles/dietary-supplements-marketing/).

One would think that having a third party making claims would eliminate legal risk. However—as we have seen with big retail companies trying to say that it is not their fault that someone in their supply chain is using child labor—saying you didn’t know about the potential problem is not an excuse. Nor would we want it to be an excuse. That would lead to some really rotten behavior on the part of big business (as if they don’t have enough rotten behavior as it is).

This article should serve as a caution sign not as a stop sign. Making claims about how a product worked for you is a great selling tool, but make sure to follow the company guidelines and use approved materials.