Legal and Compliance Part 2: Developing a Solid Strategy

Welcome back to part two of our series on creating a strong legal and compliance strategy. When it comes to protecting your company from risk, compliance should be at the top of your mind. As we discussed in part one, the federal government has made it clear that direct sales companies will be held responsible for false claims—whether those claims come from distributors or your company itself.  

Today, we want to spend some more time focusing on a topic that we mentioned in part one—that a two-pronged strategy, focused on both current technology and a strong compliance team is your best defense against false claims. 

You Need a Compliance Management Team 

Whether you’re a brand-new company or an industry legend, investing in a knowledgeable compliance team needs to be a priority. This team will be responsible for crafting compliance policies, educating your field about techniques and processes, crafting fact-checked and compliant messaging, and keeping their eyes and ears on the ground to mitigate risk. Many companies employ the tried-and-true practice of having compliance officers attend in-person events to monitor their claims. 

If you’re a fledgling company and the potential cost of hiring an entire compliance team seems out of the question, don’t worry—there are outsourcing options available. However, deciding to simply ignore the need or depend solely on technology to protect yourself could get you into trouble. So, in addition to creating policies and messaging, there are a few other essential things you’ll need your compliance team to monitor:  

• The existence of unauthorized websites or social platforms that bear your name 
• Slander on public forums by disgruntled representatives 
• The distribution of privately printed materials that provide false claims 

Pro Tip: Things Your Distributors Should Never Say 

The list of things you need to avoid saying is long, but when it comes to your opportunity, there are a few buzz phrases to look out for, even with a disclaimer. Representatives may not: 

• Suggest that the opportunity is a franchise; 
• State that sponsoring new representatives is as important as sales to customers; 

• State that a representative is required to sponsor new representatives; 
• State that it takes little or no effort to succeed; 
• Suggest that “the more you buy, the more you make,” implying that you can buy your way to success; and  
• Require a new representative to purchase products, materials, or tools other than the Starter Kit.  

Three Steps for Better Compliance 

1. You need to ensure your distributors are thoroughly trained before they begin representing your company and products. One way to effectively do this is by employing an LMS like verbLEARN. In addition, creating educational modules based on your company’s compliance policies and expectations is a great way to make sure everyone is on the same page before they begin sharing.
2. Employ training as often as possible. That means that in addition to sessions at your annual in-person conferences, you should be holding online training at least quarterly. Consider recording these courses (potentially in an interactive format that includes additional resources) and making them accessible online for even more exposure to your field.
3. Keep an eye on the law. This one seems like a no-brainer, but laws are not stagnant, and you need to keep track of what types of claims are permissible and what are not. Don’t discount the power that comes from staying ahead of changes and being willing to adapt your strategies accordingly.
   

Technology 

We went over this in more detail in Part 1, but technology can be an easy and cost-effective way to supplement your legal and compliance efforts. As we mentioned in our Masterclass on being proactive with compliance, “This technology and workflow can help put the right people in the right seats, limit the necessary headcount, and provide substantial benefits to companies when used correctly.” -- Masterclass

 For example, AI has come a long way over the past few years, and, for many, it’s considered the future of compliance. In part one, we talked about our integration with FieldCheck and how it uses artificial intelligence to prevent false claims from ever reaching the internet. Other valuable technologies include machine learning, predictive analysis tools, advanced monitoring to mobile apps, learning systems, and back-office processes.  

Whether you need one or more of these tools will depend on the size of your company, your compensation strategy, the number of products you’re selling, and the markets you’re operating in. Let us know if you’re interested in discussing how Verb can help you create an airtight compliance strategy. We’d be happy to help you determine the best solution for your organization.  

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