19 {{ upvoteCount | shortNum }}
19 {{ upvoteCount | shortNum }}

Is it legal to guarantee income?

by gwpmike
17 replies
I've seen a few MLMs and programs that say they cannot legally guarantee income. However, I have also seen some programs that do you have a guarantee that you will make money using the system or program. Is it legal to guarantee income? Please include some references regarding this.
#guarantee #income #legal
  • Profile picture of the author GuruGazette
    Good Starting Spot is the FTC

    Business Opportunities

    The Franchise and Business Opportunity Rule requires franchise and business opportunity sellers to give consumers a detailed disclosure document at least 10 days before the consumer pays any money or legally commits to a purchase. The document must include:
    • the names, addresses, and telephone numbers of other purchasers;
    • a fully-audited financial statement of the seller;
    • the background and experience of the business's key executives;
    • the cost of starting and maintaining the business; and
    • the responsibilities of the seller and purchaser once the purchase is made.
    In addition, companies that make earnings representations must give consumers the written basis for their claims, including the number and percentage of owners who have done at least as well as claimed.
    See Franchising and Business Opportunity Ventures.
    {{ DiscussionBoard.errors[8673586].message }}
  • Profile picture of the author Slickity
    Most likely any Biz Opp. that guarantees Income is probably a scam. Its up to you to make money and their are no guarantees or we would all be rich.
    {{ DiscussionBoard.errors[8673611].message }}
    • Profile picture of the author gwpmike
      Originally Posted by Slickity View Post

      Most likely any Biz Opp. that guarantees Income is probably a scam. Its up to you to make money and their are no guarantees or we would all be rich.
      Hypothetically if a system had extremely high conversion, did the follow-up for you, had a high commission rate and built in traffic like an advertising co-op, I don't see why a system couldn't guarantee income unless of course it's simply not legal to guarantee income.
      {{ DiscussionBoard.errors[8673709].message }}
      • Profile picture of the author essmeier
        Sure, you can legally guarantee income, provided that you're willing to guarantee it. That means that if someone makes less than the amount you specify, you will personally make up the difference.

        That's the meaning of "guarantee."

        Charlie
        Signature
        Work Online From Home
        {{ DiscussionBoard.errors[8673752].message }}
      • Profile picture of the author tpw
        Originally Posted by gwpmike View Post

        Hypothetically if a system had extremely high conversion, did the follow-up for you, had a high commission rate and built in traffic like an advertising co-op, I don't see why a system couldn't guarantee income unless of course it's simply not legal to guarantee income.

        Unless you are ready to turn over all of your assets to the FTC, I would not recommend trying to "guarantee specific income".
        Signature
        Bill Platt, Oklahoma USA, PlattPublishing.com
        Publish Coloring Books for Profit (WSOTD 7-30-2015)
        {{ DiscussionBoard.errors[8673763].message }}
        • Profile picture of the author gwpmike
          Originally Posted by tpw View Post

          Unless you are ready to turn over all of your assets to the FTC, I would not recommend trying to "guarantee specific income".
          Okay thank you. It was just a question, like I said I've seen some people offer the guarantee and that's why I was asking.
          {{ DiscussionBoard.errors[8674313].message }}
      • Profile picture of the author Slickity
        Originally Posted by gwpmike View Post

        Hypothetically if a system had extremely high conversion, did the follow-up for you, had a high commission rate and built in traffic like an advertising co-op, I don't see why a system couldn't guarantee income unless of course it's simply not legal to guarantee income.
        I don't live in a Hypothetical world I live in reality.
        {{ DiscussionBoard.errors[8673818].message }}
        • Profile picture of the author gwpmike
          Originally Posted by Slickity View Post

          I don't live in a Hypothetical world I live in reality.
          What's the difference? We create our reality through our thoughts words and actions, do we not?
          {{ DiscussionBoard.errors[8674310].message }}
      • Profile picture of the author RanD
        Originally Posted by gwpmike View Post

        Hypothetically if a system had extremely high conversion, did the follow-up for you, had a high commission rate and built in traffic like an advertising co-op, I don't see why a system couldn't guarantee income unless of course it's simply not legal to guarantee income.
        Your answer was here:

        Originally Posted by essmeier View Post

        Sure, you can legally guarantee income, provided that you're willing to guarantee it. That means that if someone makes less than the amount you specify, you will personally make up the difference.

        That's the meaning of "guarantee."

        Charlie
        If the company is willing to reimburse you if you failed to make money, they could make a guarantee.

        The reality is, however, you are not going to see much of that. The success of the individual depends on the individual's motivation and aptitude. If they can't be bothered doing the work or can't follow directions, they are not going to succeed.

        If the stream of traffic is "built in" and the company has to come in to "follow up" and do the work for you, what do they need you for? They could likely do twice the work in half the time, for themselves, and save themselves a lot of hassle in the process. Too many underachievers would be wasting their time. It is simply not worth it for them to make that kind of guarantee.

        What they do is sell you a system that can make you money, and leave it to you to make it successful. You may or may not put the effort in, or implement it correctly. A lot of people make half-hearted attempts, and/or take short cuts and do not make the system work. They are not going to reimburse these people, or do the work for them, so they can't legally make any guarantees that they will make money.
        {{ DiscussionBoard.errors[8674379].message }}
  • Profile picture of the author Not So New
    Short answer is NOPE ...

    You need to always have a disclaimer

    -Shawn
    {{ DiscussionBoard.errors[8673616].message }}
  • Profile picture of the author paulie123
    Guarantees originally were associated with products and occasionally services. The guarantees associated with business opportunities are about "getting the order." It is supposed to give you peace of mind if the money the sales letter promised doesn't happen. What the sellers of business opportunities hope for is that you simply will not ask for one. Basically, they are guaranteeing information that will lead to the gain of money and not the performance or functionality of a product/service. The point is there is a big difference between a guarantee a retail establishment like Wal-Mart gives on any of its products and the guarantee a biz opp gives you on there information.
    {{ DiscussionBoard.errors[8674352].message }}
  • Profile picture of the author NellyColby
    When someone guarantees your income from an internet job or so, you have to be cautious. There must be something that will prevent you from getting your money back… By now, I haven't found someone to give my money back.
    {{ DiscussionBoard.errors[8675399].message }}
    • Profile picture of the author Anonymous Affiliate
      Well, fixed bank deposits guarantee a X% yield per year, so I guess it's legal? the problem is whether you're actually ready to make such a guarantee, potentially being liable to it with your own assets if the user doesnt follow through.
      {{ DiscussionBoard.errors[8675412].message }}
  • Profile picture of the author kevingiles
    For the absolute answer to any legal question, you need to consult with a good attorney.....

    That said, Guarantee income for what?

    Obviously, when you hire an employee for either a salaried or wage (hourly) job, as the employer, you guarantee them income for their work as long as they remain an employee. Any qualms about that being legal?

    However, when sharing a business opportunity, you need to be very clear on what type of person(s) you are soliciting......investors or entrepreneurs? Such offerings are regulated in the U.S. by the SEC and FTC. Personally, in these situations I would NEVER guarantee income!

    In the case of investments, who can predict the future of markets with absolute certainty? Investment principle is always at risk, with no guarantee of return.

    In the case of an entrepreneur interested in building a business, how can you guarantee income unless you KNOW with absolute certainty that the entrepreneur will execute all of the required actions to generate any income?

    In no way should the above response be construed as legal advice, it is merely my opinion on what I do.....
    Signature

    EN affiliate links/sites are not allowed.

    {{ DiscussionBoard.errors[8675731].message }}
  • Profile picture of the author dalegolden
    How can I guarantee that by using my system you will earn money? Taking action is the most important part. However, you should never try to believe in something which is too good to believe. No matter how attractive it look.
    {{ DiscussionBoard.errors[8676585].message }}
  • Profile picture of the author jaytheanalyst
    Disclaimer is always needed. If you're guaranteeing income, that puts you under the Government's scope. Keep a disclaimer handy.
    {{ DiscussionBoard.errors[8676588].message }}
  • Profile picture of the author pm1006
    Originally Posted by gwpmike View Post

    I've seen a few MLMs and programs that say they cannot legally guarantee income. However, I have also seen some programs that do you have a guarantee that you will make money using the system or program. Is it legal to guarantee income? Please include some references regarding this.
    No it's not legal at all.
    All earnings are always dependent from the Affiliate effort, work, luck, ... promising any guarantee income it's a Ponzi scheme.
    Best way to confirm legality it's to see if the company it's BBB - Better Business Bureau accredited and also DSA - Direct Selling Association.
    {{ DiscussionBoard.errors[8677381].message }}

Trending Topics