Promote your site correctly.
If your program’s (and your members) focus is mostly in promoting your affiliate program and your commission structure, then you will be seen to be promoting your program as an MLM program.
But, if your program’s (and your members) focus is mostly in promoting your advertising services, then you will be seen to be promoting your program as an advertising program.
And the reason that the payment processors have a problem with MLMs? While an MLM is legal, it is very easy to cross the fine line that makes it illegal. And that makes all MLMs ‘high risk’.
From mlmlaw.com –
“Whether a program is a legitimate multilevel marketing plan or an illegal pyramid depends principally on:
(1) the method by which the products or services are sold; and
(2) the manner in which participants are compensated.
Essentially, if a marketing plan compensates participants for sales by their “”enrollees,” “recruits,” and/or their downline enrollees and recruits, that plan is multilevel. If a program compensates participants, directly or indirectly, merely for the introduction or enrollment of other participants into the program, it is a pyramid.”
And if you have to buy your way in (Pro sites for example) and you are not very careful with how you promote your site, it can start to smell very much like a Ponzi.
We all know that we have to have listed in our policies the type of products/services that we will allow our members to advertise. And we know that we are not allowed to let them advertise anything illegal. But it gets better than that –
“The law always looks to substance over form. If a program uses all of the right buzz words in its marketing literature, but fails to enforce its policies which guard against pyramiding dangers, the program faces the same risks as a program which does not incorporate appropriate safeguards into its plan.”
Effectively, the owner is required to monitor all material relating to their site and must be seen to be actively ensuring that no boundaries be crossed. That’s not just any material advertised on their site, but also any members’ material advertising their site (including social media).
“It’s very clear that the FTC is monitoring and gathering evidence from social media outlets, and direct sellers MUST take this message to heart. Understand that social media is indeed a communications phenomenon, but you must not let it go unchecked. Your company is responsible for the statements that your sales force posts, so be clear with your field about the rules they must follow. But that’s not enough. In addition, as part of your regular compliance efforts it’s critical that you also actively monitor social media posts made by your sales force and take proper measures when improper posts are discovered.”