So what exactly is an "income claim"?

by marciayudkin

Posted: 12 years ago 9 replies

INTERNET MARKETING

I'm looking at a webinar handout for someone's infoproduct program and it's full of numbers totaling $514,683 in income per year, yielding profits of $266,497 a year.

The handout also contains a small-print disclaimer saying that there is no guarantee that you will earn any money using these techniques.

I am not a lawyer, just a marketer trying to stay on the right side of the law, and to me, these kind of numbers in big print do look like a description of what the typical person who follows this offer would earn. And isn't that an income claim?

Therefore, wouldn't it be risky to lay out numbers like this?

And isn't a small-print disclaimer legally meaningless in the face of the big-print numbers?

Please understand that I'm not accusing anyone, and I've changed the numbers above so they don't exactly correspond to the handout. Just trying to understand the principles involved so I don't get myself into trouble.

Thanks for any well-informed comments on this.

Marcia Yudkin

#income claim

Myles Sinclair

12 years ago

Originally Posted by marciayudkin

".....I am not a lawyer, just a marketer trying to stay on the right side of the law, and to me, these kind of numbers in big print do look like a description of what the typical person who follows this offer would earn. And isn't that an income claim?

Therefore, wouldn't it be risky to lay out numbers like this?

And isn't a small-print disclaimer legally meaningless in the face of the big-print numbers?..."

The way I see it is that the numbers represent what the seller has made using whatever system or plan they are selling. The reason for the disclaimer is that no one can guarantee what someone else will earn using the same system.

Thanks

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Lori Kelly 12 years ago

Hi Marcia. I'm not sure if you read this thread, but it's good. Hope it helps.

http://www.warriorforum.com/main-int...e-changer.html
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tpw

12 years ago

Brian Kindsvater should be around later to add to this commentary, but I am doing away with ALL claims of how much someone could earn. I won't even tell people how much I have earned using a technique.

If I had said that you could earn $20 month using my materials, in my mind, that would be an income claim.

My understanding is that we cannot legally suggest that anyone can earn anything, unless we can show proof that X number of people bought our thing and as a whole, those X people earned $X which we can divide to show Average Earnings among the whole set.

If we say, suggest or imply that "you can earn," we had better be prepared to "prove it" in an audit.

What is acceptable is saying, "I earned," but again, that number had better match your IRS income records.

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Bill Platt, Oklahoma USA, PlattPublishing.com
Publish Coloring Books for Profit (WSOTD 7-30-2015)

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Matt Duggan

12 years ago

As far as I know, you can only state how much the system earned you as the creator of the product/system, rather than saying that the buyers will earn what you earned (which is against the law). Those disclaimers are fine and indeed necessary. I see what you mean about the disclaimer compared to the large print numbers.

Section 2 of this document explains more about stating income claims.

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marciayudkin

12 years ago

The way I see it is that the numbers represent what the seller has made using whatever system or plan they are selling.

Nope, in the document I am looking at, the information is definitely presented as a "business model" and the numbers sure look like what someone could reasonably expect to make using the model. This is not stated in so many words, but my understanding is that something can still come across as an income claim even if there's no explicit promise of earnings.

Marcia Yudkin

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Myles Sinclair

12 years ago

Originally Posted by marciayudkin

In that case the figures are projected earnings of what the business might be expected to make.

I don't know how things work in the U.S. but in the U.K. if I wanted a bank loan for a business start up, the bank would require me to provide a business plan that included projected earnings.

The projected earnings for a new business is really just a guess at what can be expected if things go well. They can't be viewed as income claims, because no income has been generated.

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tpw

12 years ago

Originally Posted by Myles Sinclair

In the U.S., the lines have been drawn in a much more clear and distinct manner.

You can only make claims that you can prove to be reasonable for the average person, based on the average person who purchased your program.

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Bill Platt, Oklahoma USA, PlattPublishing.com
Publish Coloring Books for Profit (WSOTD 7-30-2015)

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Myles Sinclair

12 years ago

Originally Posted by tpw

Now that could be tricky...

# The average man is 34.4 years old.
# The average man is married with two children.
# The average man earns $36,100 per year and has $3,100 in the bank.
# The average man sleeps about 7 hours on a work night.
# Age when the average guy is in the best shape of his life: 23 years
# The average man is is about 5' 9" tall.
# He weighs 175 pounds.