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The Use of Networking Tools in Compliance to Build a Fair Business Environment

Peggy had recently joined NU SKIN as a distributor, because she believed that NU SKIN products are very good. She hoped to use an effective platform to allow more people to get to know NU SKIN’s products. She had opened a fan page on Facebook to promote and sell NU SKIN’s products. On her fan page, Peggy used before-and-after photographs and exaggerated that NU SKIN products have magical effects on breast enhancement, detoxification, weight-loss, skeletal pain reliever. In order to attract more customers, Peggy used eye-catching advertisements, like “SPA machine, improved lymphatic circulation and say bye-bye to fat face“, “Within 14 days , A cup to D cup”, “ acne anti-inflammation, Q elastic skin reproduction” etc. In addition, Peggy also posted unauthorized testimonial from unconfirmed cases. Shortly after that, more people wanted to buy NU SKIN products from her. Her fan page therefore had reached a smash hit. However, when Peggy planned to add more product photos to Facebook one day, she received a call from NU SKIN, indicating that her acts by promoting NU SKIN products and making product claims had violated the company's policies and procedures, and the laws in Hong Kong. Hence, the infringing contents should be removed immediately.


Peggy’s Facebook fan page aimed to promote and sell NU SKIN products. Unauthorized advertisement postings of NU SKIN products with before-and-after photos, as well as exaggerated product claims. This practice violates Product Claims and Internet of Section 2 and 7 Chapter 3 Advertising of Policies and Procedures. Specific analysis as follows:


1, Peggy was involved in unauthorized advertising of company’s products which can only be sold on the company’s websites and may not be sold through distributor’s websites of any kind or any other form of internet use. (E.g., Facebook, YouTube, Twitter, Wikipedia, Flickr). Distributors can use social networking sites engaged in the following activities:
(1) communicate preliminary information about the company or your involvement with the company.
(2) is a direct users to a company internet marketing site or a registered Blue Diamond internet marketing site.
(3) post company produced business support materials that have been approved by the company for posting on personal blogs or social networking sites.
However, the content of this website cannot be for the purpose of internet marketing, and the content cannot be primarily devoted to NU SKIN. Meanwhile, the network should also avoid using NU SKIN trademarks or pictures as an avatar, background, registered name as NU SKIN, ageLOC® etc. It is important not to make product over claims, use celebrity portraits to broadcast false information.


2, The product claims that Peggy posts on the Facebook page. For example, breast enhancement, detoxification, weight loss , pain treatment , as well as [ SPA machine, lymphatic circulation and say bye-bye to fat face], [ 14 days , A cup to D cup ], [ acne anti-inflammation] are product over-claims which violated Section 2 No Medical Claims of Chapter 3 Advertising of Policies and Procedures ( summarized as below ) , also Section 7 of the Trade Descriptions Ordinance ( summarized as below ) .
Section 2: No Medical Claims of Chapter 3 Advertising, of Policies and Procedures:
"You may not, personally or through any third party, make medical claims, or state or imply that any Product is formulated, designed or approved by the Company or any regulatory authority to treat any disease or medical condition. These representations imply that the Products are drugs rather than cosmetics or nutritionals. You also may not, personally or through any third party, compare Products to drugs, or make drug or medical claims. Any such representations, claims or comparisons by you, personally or through any third party, may result in your personal liability."


Section 7 :Offences in respect of trade descriptions of goods, of the Trade Descriptions Ordinance :
Subject to the provisions of this Ordinance, any person who-
(a) in the course of any trade or business-
(i) applies a false trade description to any goods; or
(ii) supplies or offers to supply any goods to which a false trade description is applied; or
(b) has in his possession for sale or for any purpose of trade or manufacture any goods to which a false trade description is applied. Commits an offense,
(2) A person exposing goods for supply or having goods in his possession for supply shall be deemed to offer to supply them.
(3) Subject to the provisions of this Ordinance any person who disposes of or has in his possession any die, block, machine, or other instrument for the purpose of making, or applying to goods a false trade description commits an offence unless he proves that he acted without intent to defraud. (Amended L.N. 272 of 1990 )


Dear business partners, people who have used NU SKIN products can experience its excellence; it is unnecessary to promote our products by exaggerating the efficiency. Product over-claim or effect exaggeration not only anti-promote NU SKIN , also disrupts NU SKIN’s branding image which may cause legal obligations. Good marketing environment relies on your self-discipline and compliance with national laws and company policies. Network marketing is a shared resources’ platform, so smart-use may add momentum to your success. Let us remember five success motivations: to act as a role model, to act with motivation, to believe persistently, to set up a solid goal and to dream big. Let’s work hard to make NU SKIN a bigger and stronger company!

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