Did you know the Canadian Government recognizes that multi level marketing (Network Marketing) is a legal business in Canada and a reasonable way for Canadians to make an income?
Most people do not, so don’t feel bad. Since our government recognizes this as a way to generate income, they have laws within the Competition Act that govern how companies in our industry should operate. These laws and standards exist to protect consumers, and I feel that covering them will also answer some common questions and misconceptions about our industry.
What is a Multilevel Company (network marketing company)?
“Means a plan for the supply of a product whereby a participant in the plan receives compensation for the supply of the product to another participant in the plan who, in turn, receives compensation for the supply of the same or another product to other participants in the plan.” [55(1) Competition Act]
The important part in this definition of Multilevel Marketing is the compensation received is for the supply of a product and compensation for any other reason is a RED FLAG. Any compensation within ACN is based on the sale of a service and the subsequent monthly bill a customer pays for services like internet and energy, etc.
Can people in a Multilevel Company show their commission statements to potential participants?
“No person who operates or participates in a multi-level marketing plan shall make any representations relating to compensation under the plan to a prospective participant” [55(2) Competition Act]
In short, individuals who are participating in a network marketing company should not be enticing others with their compensation or using hypothetical examples of potential commissions. The best course of action is to factually read and describe the approved compensation plan document provided. Potential participants can then do the math themselves on what they believe their commission will be, based on the services they sell.
Although this law exists, there are many companies and individuals that don’t follow it. They post excessive, unrealistic lifestyle and income claims that entice potential participants into believing these are normal or common results for everyone. THE TEAM and ACN believe in doing business the right way and setting a high standard. This means following the law and focusing on the facts:
ACN is not a get-rich-quick opportunity.
ACN is not easy; it takes work.
ACN is not a passive income; you must continue to build and manage your customer base.
ACN does not pay you an employment or welfare income; it is 100% based on the sale of products or services.
So do Pyramid Schemes Exist and how do we spot them?
Yes, they do, and the Government of Canada has laid laws to prevent them from being created.
55.1 (1)(a) “a participant in the plan gives consideration for the right to receive compensation by reason of the recruitment into the plan of another participant in the plan who gives consideration for the same right.”
In ACN, when you recruit someone to join your team, you do not get paid any money. Once that individual sells the appropriate amount of services laid out in the compensation plan, you will then receive a bonus based on those sales. There is no compensation for recruitment in ACN.
55.1 (1)(b) “a participant in the plan gives consideration, as a condition of participating in the plan, for a specified amount of the product, other than a specified amount of the product that is bought at the seller’s cost price for the purpose only of facilitating sales.”
This is also referred to as “product loading” and is common in product-based MLMs. It happens when a participant is forced to personally purchase a massive amount of products upfront. In ACN, it’s impossible to purchase more than one internet or energy service for a home. This concept doesn’t practically exist in ACN due to the nature of the services we sell. Also, in ACN, you can make money and promote within our company without purchasing any services yourself. You can generate income and promote in the compensation plan solely based on outside sales.
55.1 (1)(c) “a person knowingly supplies the product to a participant in the plan in an amount that is commercially unreasonable.”
In this economy, selling a product or service at a price that is unreasonably expensive should be illegal. Thankfully, with ACN, we strive to offer the same pricing as our competition, and in some cases, we are even cheaper.
55.1 (1)(d) (i) “a participant in the plan who is supplied with the product does not have a buy-back guarantee that is exercisable on reasonable commercial terms or a right to return the product in saleable condition on reasonable commercial terms.”
It might shock you, but there have been Pyramid Schemes that don’t have a return policy on the products you have purchased. ACN’s terms and conditions are clearly laid out during the enrolment process for each service, and customers must confirm they have read them before the purchase of any services.
These laws are not only guidelines but they have teeth. Anyone that is operating a Pyramid Scheme can face jail time and excessive fines 55.1 (3). There can be fines and jail time for people that break laws in EVERY industry but there are still individuals that will try to break the law to make money. I’ve seen construction companies break safety laws to make higher profits. I’ve seen engineering firms pass plans that lead to a bridge failure. There are doctors that have prescribed harmful medication or treatment because it offers a benefit to them. Laws exist in every industry to prevent and prosecute the individuals that might harm the public or consumers. ACN has always operated with the highest standards of ethics and integrity within the Multilevel marketing industry. They take a proactive approach, in my 11 years with ACN, I've seen them terminate ACN Independent Business Owners for violating the above laws.
ACN is a member of the Direct Sellers Association. This is not just a title but a rigorous set of standards to ensure companies in our industry operate with integrity and character.
Few Multilevel Companies can say they also have a member that sits on the board for the DSA. Mr. David R. Merriman is the Treasurer and is also the Executive Vice President of ACN, Inc.
ACN is also a part of the Direct Selling Education Foundation. As a Washington, D.C.-based 501(c)3 organization, DSEF offers comprehensive programs that advance education about the industry and individual economic empowerment.
it is essential to understand that the Canadian Government recognizes multilevel marketing (MLM) as a legitimate business model, governed by specific laws to protect consumers and maintain ethical standards. These regulations, as outlined in the Competition Act, ensure that compensation in MLMs is based on the sale of products or services rather than recruitment, distinguishing them from illegal pyramid schemes. Companies like ACN adhere strictly to these laws, emphasizing transparency, ethical practices, and consumer protection. By operating within these guidelines, ACN and similar organizations not only uphold the integrity of the industry but also provide a viable means for individuals to earn an income through legitimate business practices.
THE TEAM
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