Iowa v. Koscott Interplanetary Inc.

Are Iowa statutes prohibiting referral sales programs constitutional?

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The Iowa Supreme Court held that the statutes prohibiting referral sales programs were constitutional. The legislature is free to enact statues that protect the public welfare and suppress fraud, and may constitutional regulate legitimate business that is detrimental to the public. The sales practices of referral sales programs, like those promoted by Koscott, were deemed to be fraudulent, and could be either prohibited or regulated by the legislature without violating the State or Federal Constitutions.

The full case and case summary are also available at: http://www.mlmlegal.com/legal-cases/Iowa_v_KoscottInterplanetaryInc.php

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Published In: Consumer Protection Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 8th Circuit, Iowa | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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