I wasn’t in Network Marketing very long before I knew the name Kevin Thompson. Known as the MLM Attorney, he’s become the go-to expert on legalities and ethics of the industry – sometimes to the chagrin of the leaders and company owners — especially, if your company is the one falling under his scrutiny.
The first time I had heard his name was when a company mentioned they hired him to be their legal expert and many of the distributors of said company breathed a sigh of relief. Kevin Thompson was on their side so all would be well. He had become like the doctor that would come to save the small village falling into disarray and disease. So, when I sat down to interview him, I had a slue of questions and really wanted to get inside his head.
Network Marketing isn’t an easy industry to be objective about and somehow he’s managed to remain objective and critical, yet supportive.
One of the first topics we broached was just that attitude which clouds the network marketing industry. Thompson brings up ‘responsible evolution’ and when asked to expound on it, his answer was quick. Company’s and leaders fail to acknowledge the problems that arise. Vemma, a health and wellness nutritional company based out of Tempe, Arizona, recently went through a very spotlighted court battle with the FTC.
It was there that I finally had a chance to meet Kevin Thompson in person and asked what he thought was in store for Vemma at that time. He was hopeful it would bring about some change for the better. So, when discussing it again in our recent interview, it was that lack of acknowledgement that he found disappointing. Very little was heard from the leadership, the executive team, and the owners following the court case. It was a great opportunity for change and again – the industry fell short.
“The industry has fought hard for lack of regulations.”
He predicts that this isn’t the end of the legal battles and network marketing still has a major hump to get over. Thompson believes a lawsuit will be filed in the very near future, possibly by the FTC, which will bring more regulations to MLM’s. It will force network marketing into a market correction, one that doesn’t necessarily need to come through litigation – but due to the lack of improvement, is inevitable.
Avon, one of the oldest network marketing companies in the world, and famous for “The Avon Lady is Calling”, has been seriously struggling with sales in recent years. When they publically announced leaving the DSA, and not without scrutiny from either side, many attributed it to their loss of sales as well as desperation and others, like Kevin Thompson, thought they had a valid point.
Avon, tired of being associated with the DSA due to the amount of companies that are members being pyramid schemes, left. They attributed the DSA’s loose code of ethics to being the problem and Kevin Thompson doesn’t disagree. So I asked what are some things that can be done to help tighten the integrity of the industry and he brought up several obtainable and feasible concepts.
Increase on education. Not the type of education that is seen in conventions that entices making a high income or growing a large team. But the type of education that really drills down on compliance, making proper income claims, and not making inappropriate medical claims.
A complete income disclosure statement. One that refrains from inflating numbers or averages and is up-to-date.
Retail sales training. There’s plenty of training on recruiting, Thompson says, but not enough on selling the product or service.
Restricting confidential deals. A dirty little secret of the network marketing industry known to very few are contracts made with top leaders behind closed doors. Thompson wasn’t hesitant to call it cheating and indeed, when a company signs 6 and 7-figure contracts to bring a top leader over without disclosing it with their sales force, how can it not be cheating?
Prohibiting monthly volume requirements. The volume requirements cause distributors to front-load products, buy in excess to get promoted, and purchase products to get a check when they otherwise wouldn’t. Eliminating volume requirements would create a more ethical buying environment.
Bearing witness to the FTC vs. Vemma case, this issue was continuously brought up by the FTC. It isn’t only a Kevin Thompson concern, it’s a concern all the way up to our government and one which will continually be a challenge until regulations are in place or until a company decides to be proactive in addressing this challenge.
Overall, Thompson believes the industry is improving regardless of the challenges presented and believes it will continue to improve. I asked what can be done to continue the improvements without litigation and he said a bill could be brought to Congress to increase regulations.
The benefits? It would be proactive. Legislation by litigation can turn the regulations unfavorable for MLM and by bringing a bill to Congress, the MLM industry can still be in control. Besides, lawsuits are reactive and further puts a darkened shadow over the industry – one that’s slowly been diminishing over the years.
In speaking with Thompson it’s obvious it’s more than just being an attorney for the industry. He seems to genuinely care about helping people out and making sure they’re not taken advantage of. He knows what it’s like to struggle and started from nothing, just as many of the top leaders in network marketing have. He has his own growing practice with plans to expand. He’s stopped true schemes from entering U.S. soil and continues to advocate behind closed doors – things that never make it to the media’s attention.
Finally, when I asked if he overall liked the industry, he was quick to say he did. He’s met many people who genuinely care about their team and making a difference. With Kevin Thompson in the MLM corner, the industry is bound to improve for the better, as long as people are willing to listen and – as he said – acknowledge their short-comings. Advice I believe we can all walk away with, MLM or not.
Interview By Tina Williams