The Three Kinds Of Income Claim That Can Sink Everything You’ve Built

You want people to believe you when you tell them this business works. That’s the whole engine behind every post, every screenshot, every story you tell about your own results. But belief built on a claim you can’t back up doesn’t just risk your reputation. It risks the company you’re building on top of, and everyone else’s income along with yours. Andrea, Empower Network’s director of compliance, has spent more than twenty years watching exactly what happens when that discipline slips, first inside SEC compliance, then a decade inside a shopping channel’s compliance department after regulators came after it twice for claims that weren’t true.

What actually happens to a company that lets a claim slide?

Andrea’s origin story is a warning dressed as a resume. In the early nineties, a spray vitamin was pitched on air with a claim about curing cancer. A few years later, an acne product on the same shopping channel made promises that weren’t true either. Regulators investigated both times. The first time barely registered as a consequence. The second time carried a fine large enough that the channel brought Andrea in specifically to rebuild its compliance program from the ground up, because a third violation would have shut the whole operation down. During her decade there, the channel wasn’t investigated again, not because the rules got easier, but because someone was finally making sure every claim on air could actually be backed up.

She’s direct about why that discipline matters here, not just legally but practically. When people trust what you tell them, they buy from you, they stay with you, and they do what you suggest, because you’ve shown them you tell the truth. Andrea points to a real example inside the direct-to-consumer nutritional space, a company investigated over problems specifically in how it handled income claims. Regulators, she says, don’t treat multi-level businesses gently. They look for a reason to make an example, even when most of what a company does is legitimate.

What counts as an income claim, even when you never mention a specific number?

This is the part most people get wrong, because they assume only a stated dollar figure counts. Andrea breaks it into three categories, and two of them have nothing to do with numbers at all.

• Express claims: directly stating how much money you personally made in a specific window of time.
• Implied claims: saying something like this business let you quit your job, which lets the listener draw their own conclusion about how much you must be earning.
• Lifestyle claims: standing in front of a mansion or a sports car in a way that implies it’s yours and that this business paid for it.

Every affiliate is responsible for all three, whether the claim is about their own results or someone else’s. Andrea is specific that you shouldn’t describe what someone else in the company is earning unless you actually know it’s accurate and can back it up. And she’s seen people manufacture a number entirely, inflating a screenshot of their own back office to look bigger than it is. The compliance team checks. A disclaimer doesn’t protect a claim that was never true in the first place.

Why does a disclaimer need to be seen, not just technically present?

Andrea’s rule here is unambiguous.

The FTC says any advertisement that we do cannot be misleading, cannot be deceptive, and has to be truthful.

A disclaimer buried in tiny type, or set in a color nobody can read against the background, doesn’t count as a disclosure. “The claim has to be in close proximity, the disclaimer, close proximity to the triggering claim.” In other words, if you’re going to reference income at all, the reminder that results aren’t typical has to sit right next to it, visible, not technically present somewhere on the page for the sake of appearances.

What do you actually owe the people who trust what you tell them?

Andrea closes her segment on a point that has nothing to do with paperwork. This business isn’t easy, and pretending otherwise to make a sale is its own kind of dishonesty. Nobody joins, sits at home scrolling Facebook, and watches money appear. It takes real, consistent work, and a sponsor’s job is to mentor and support, not to do the work for you. The honesty runs both directions: don’t oversell what the business will hand you, and don’t undersell what it will actually take.

That honesty is also what protects everyone’s ability to keep earning at all. A culture where affiliates flag their own uncertain claims, where sponsors correct their downline directly, and where the compliance team is treated as a resource instead of an obstacle, is the same culture that keeps regulators from ever having a reason to look twice. Protecting that is not a side detail bolted onto the business. It’s the foundation the whole income opportunity sits on.

The full session goes further into exactly how to phrase and place a compliant disclaimer, plus what the customer support team does behind the scenes to support you. Watch it in full, free, when you Create your free account.

The full session transcript follows below.

Transcript

one two three five all right enjoy lunch we got a lot for you to cover you guys ready really all right come on now are you ready all right that's what i'm talking about we got a lot for you so first what we've got for you now is our small quick section on get to know en you get to find out about the people working behind the scenes and how we actually serve you and help you so i have two amazing guests to bring on the stage i'm going to keep this short because we're running a little bit behind so give it up for our compliance director andrea and our director of customer service zach i think it got a lot uh come on guys give it up these guys work hard behind the scenes what's up you got it going on all right so hey everybody everybody having a great time awesome awesome so i know many of you know me as the director of compliance here at empower network but i decided maybe that some of you would like maybe a little bit of background who i am where i started that kind of thing and then i'm going to let kind of lead into some things that we need to know so i actually have been doing compliance since i left college and i know that's impossible to think that it may be so long because i'm so young but uh that was over 20 years ago so i've been doing compliance i actually started out in sec compliance working for an investment firm from there well actually while i was there in 1993 a woman went on the air and started making claims for a spray vitamin and how it's going to cure cancer now i'm sure many of you know not true a few years later somebody else went on air and started making claims for an acne product that weren't true this was at a shopping channel both times this shopping channel was investigated by the ftc the first time they got a little slap on the hand because after all claiming that a vitamin spray cures cancer is really not a big deal right yeah so then the acne claims started coming in and they decided okay well we gotta teach these guys a lesson here's a 1.1 million dollar fine okay well in the grand scheme of things not really a big hit they were making buku bucks however a third strike would have closed them down so i was hired to come on board and help revamp their compliance program in the 10 years i was there i'm very happy to report that we weren't investigated once woo-hoo right we got to keep the money we made um so that's a really great thing the orders that were given by the ftc the are 20 years so they were from 1993 it was 20 years so obviously that one's gone 1998 when the second one was finalized that one's uh on its way out but they had to be accountable for everything they said and did during that time.

But as you can see, when you say things that aren't true, it can affect you. It can have dire consequences. So that really leads us to integrity, right? We have to have the integrity to tell the truth.

The FTC says any advertisement that we do cannot be misleading, cannot be deceptive, and has to be truthful. What do you think that means for the people that are reviewing your content? Well, they're going to trust you. If they purchase product from you, they're going to believe you when you say something.

Your retention, of course, will be much higher because they're going to stick by you. They're going to want to do what you tell them to do. They're going to want to be a success. And because you have to be truthful, and you have integrity, and you say the right things, they're going to do the same.

So you kind of have that snowball effect, and then everybody's doing the right thing. You have a company that continues to grow. You get to keep the money that you're earning, and you get to keep the people that you're bringing in. Really important, right?

Everybody here wants to keep their money. Yeah. So that leads to the next thing. How many of you heard about Veeam?

Anybody hear about that? Yeah. Unfortunate situation. Veeam is a company that sells nutritional products.

They were also investigated by the FTC. The thing that's different about a shopping channel, for instance, and an MLM, is they don't play around with us. You know, they just want to make examples of us, even if we're doing the right thing. So Veeam, though, they had a little bit of a problem.

They had a problem in their income claim department. Well, I'm really happy to say that's not really one of our major problems, because we are really great about making disclaimers for income claims. Thank you very much. Yes, definitely.

Give you a round of applause. Now, are we perfect? No. Okay?

There's always somebody out there that's going to say something or do something that maybe shouldn't be said or done. And that's why we're here. We send out little reminders. Hey, just want to let you know, you're making a claim for income.

And does everybody know what an income claim is? There's three types. First income claim is express. I made $10,000 in three months.

That's an income claim that you're actually letting somebody know how much you've made. Then you have the claim that is implied. Because of Empower Network, I got to quit my job. You're claiming, you're implying, that you now make enough money that you can stay home.

And then the third is a lifestyle claim. And that claim is standing in front of mansions, in front of race cars, implying that this is your home, this is your car, and you make enough money to afford both. We're responsible for all three of those claims. The disclaimer can be as easy as, results not typical, for average earnings, please visit it, www.empowernetwork.com, forward slash, income.

Very easy. Now, are you allowed to bury that claim? No. What about the font type?

Can it be a size five? Can you have a yellow disclaimer, yellow font, on a white background? Exactly. The claim has to be in close proximity, the disclaimer, close proximity to the triggering claim.

If you're doing that, you can talk about income, guys, we are not telling you you can't. Just make sure it's true. You know, Brian shouldn't be talking about income that Tracy's making without knowing that it's right, that it's factual, that he has substantiation to make that claim. So if you're gonna make claim for somebody else, make sure it's true.

And guys, guess what we've also found? People making up income. I'm gonna take a picture of the back office, and somehow I'm gonna finagle that number to show $100,000 more than what I actually make. And I'm gonna put it up there and claim that's what I make.

Guys, don't do that. We do check. It's part of the deal. Even with the disclaimer, if the claim is not true, you can be in trouble.

So we just need to make sure that everything we're saying is true. Now, is this business easy? Yes? Who said yes?

Really? Okay. Well, it's not easy for me. I can't imagine I can walk out there and, I don't know, make money overnight.

That's not something I can do. Something similar, you know, when girls are looking for guys or guys are looking for girls, you can't really hang out in your living room and expect to meet somebody, right? It doesn't work that way. Do you think that you can join Empower Network and sit at home and play games on Facebook and make money?

Absolutely not. It does take work, guys. You have to have a commitment and want to make this work. Your sponsors aren't going to be able to do it for you.

They'll be there to mentor you. They'll be there to help you. But they can't do the work for you. You have to actually go out there and do the work.

So don't play on Facebook and say, well, you know, I just didn't make any money this week. It's not going to happen. So like in the case of Veeam, they had problems with their income claims. So just remember that when you're making those claims that we're disclaiming them and we're doing the right thing that we need to do.

And I think I'm going to leave it at that because I think that if we do that, we've actually won half the battle. We're not making easy money claims, we're not telling somebody it's easy, and we're disclaiming when we make an income claim. I think we're going to be really okay. We've got a lot of great things coming up and I think if we continue to do what we're doing as a company, that you guys continue to monitor each other, that the sponsors, the leaders, they reach out to their downlines and they say, hey, you know what, you need to change this so that you're doing the right thing.

You can let us know if you don't feel comfortable doing that, we'll be happy to do it for you. But we do have a very proactive compliance department who go out there to make sure that everything is okay. So while we're doing that, I want to say thank you to all of you who get emails and attack it right away and make the changes that need to be made. Because we really appreciate that.

And we are here to help you. So keep that in mind. If you have something that you want to review, if you have a new sales page, a new landing page, anything, anything that you want reviewed, we're happy to do it. I am not one of those people that like to say no.

I'm one of those people that like to say, you know what, you can't do it that way, but how about we do it this way? Or here's some alternatives for you to choose from. So keep that in mind. The compliance department is here for you.

That's compliance.empowernetwork.com. Anytime you have a question, anytime you want help, or anytime you want something reviewed, we're here for you. So with that, Zach, take it away. Awesome.

Give Andrea a hand, everybody. That's awesome. What's up, everybody? So for those of you who don't know me, my name is Zachary Forsh.

I'm Director of Customer Support. And today I wanted to give you guys a little bit more backstory on me. And talk about one of the things that has had the greatest impact on my life. And that's my attitude.

That's attitude in general, right? To give you a good idea of where I came from, I actually started out of high school doing door-to-door sales. And has anybody here done door-to-door sales before? Raise your hand.

Okay, all right, all right. So you guys understand completely when I say that you're hopping gates, that you're getting objections, you're getting doors thrown in your face, just madness, right? So one of the toughest things for me when I started doing door-to-door was that I wasn't very good at it. I've been blessed kind of throughout high school that I was able to get really good grades on tests and finish my homework super fast, super quick.

I didn't have to spend a lot of time on it. But sales, that was a huge problem. That was a huge challenge for me. When I actually went out there for my first three weeks, you know, alone, knocking on doors, no training, no help, I actually did not make a single sale.

So I ended up getting something, and let me know if you've heard this term before, but I got something called curb ass. And whenever I went out there, and the objection would come in, and I'm like, I don't know how to deal with that, I would sit down at the edge of the curb and I'd wait to get picked up, and really I was just spending way too much time feeling sorry for myself. Has anybody ever done that? And one day, after the three weeks, week three, my mentor at the time that interviewed and hired me, he actually said, Zach, you know, what's going on?

Let me come out with you. And he came out with me, and he saw how drained I was after, you know, after the first door, you know, with a really hard, tough objection, you know, like, get off my porch, you know, that sort of thing, right? And, you know, he sat me down, and he said, Zach, listen, you know, you need to change your attitude. And I needed to hear that.

I really did. And from that point on, I looked at things in a much positive way, much more positive light. Because I changed my attitude, I started getting sales, one sale a week, two sale a week, three sales a week, four sales a week, all the way up to ten sales a week. And then I actually built my own sales team, and we were doing $5,000 a week in sales.

Now, I want you guys to realize something important, that there are going to be times where sales aren't coming in, where things do not, aren't easy. When the government, the going gets tough, the tough gets going, right guys? Right. Awesome.

So listen, I want you guys to repeat after me. Okay, you guys ready? I will never, I will never, ever, ever, have curb ass, have curb ass, again, again. One of the major things that happened when I changed my attitude is, I really started to look at myself, who I am, professionally, as a business.

Now, I'm gonna tell you guys some things that has happened to me, because I changed my attitude, and because I have a can-do attitude, and because I tackle everything aggressively and head on. Since I was 18, from 18 until now, I've more than tripled my income. We have gone through three transitions in call centers. We had a call center in Costa Rica, we had a call center in Canada, and then we actually have our own homegrown system, where I build all the processes, all the systems, and put them all in place, did all the hiring.

And now, because of that, the reason that I did that, is because it actually saved Empower Network $15,000 a month, that I know will go right back into the products that you guys sell, so you guys can be even more successful. I want you guys to know that there's many reasons why I do what I do. You know, I love working with people, I love helping people out, but most of all, is really seeing you guys succeed. I want to see each and every one of you get up on the stage, especially during the commission countdown, and hold a big fat check, right?

Who's with me? Awesome. And, you know, results not typical, but having a great attitude will certainly help in getting you to your goals, and help you build a much stronger team, a much stronger unit, and really, you know, help you guys, you know, reach, you know, the opportunities that you want to reach, right? So, with that being said, I'm actually a little bit early, which is perfect.

I actually wanted to, we're actually going to have a quick prize, a quick prize pool. Who put a ticket in the raffle? Raise your hand. Okay, perfect, perfect.

Who wants to win something? Awesome. Andrea, take it away. Okay, so we had quite a few people come over to the compliance booth this week, this weekend, and answer some questions.

And for every question they got right, they got their name in the raffle. So, we do have a pretty cool prize. And Zach, I'm going to let you do the honors. All right, all right.

Let's see here. I'm not looking, so I'm not cheating. Let's see here. Barry Solomon.

Barry Solomon, where you at? Are you in the room? Come on up. All right.

Here you go, my friend. Thank you, man. So, Barry, what was the question that you answered? Do you remember?

In top producer formula. Top producer, yep. So, he had to actually answer, what were the name of our old Lifetime products, and what are the new ones called? And you would be very surprised how many people don't know that.

So, congratulations, and we'll meet afterwards, and I'll let you know what's going on. All right? Thank you, my friend. All right, so thank you very much.

So, use the compliance booth, too, because it's free. It's free. It's free. It's free.

It's free. It's free. It's free. It's free.

So, use the compliance booth, too, guys, to learn something new, because it's amazing how much you'll learn. Awesome. So, all right. Well, thank you very much, unless you got more?

No, that's it. Okay. These next two people that are coming up are just super killer, and I mean, this one guy, he's 20. He's made a million dollars online, and I don't know.

Have you guys seen Rob and Michelle around? They're a killer. Right? So, I wanted to go ahead and bring them up on stage.

Woo! Rob. So, go ahead and please get up and welcome Michelle and Rob, who is going to be delivering some epic content for you guys.