Kugler v. Koscot

Were Koscot's marketing practices inherently deceptive?

more+
less-

The court held that Koscot's structure was inherently fraudulent under the New Jersey Consumer Fraud Act. The State attorney general alleged that the marketing practices used by Koscot were deceptive. Koscot overstated potential compensation during recruitment meetings and failed to disclose to potential distributors all of the fees and commissions that they would have to pay to the company to remain in good standing. Koscot defended on the grounds that all of the distributors who made the deceptive statements were independent contractors, not employees, and because of this Koscot could not be held liable for their statements. The court, stating that it could find not general rule of law that independent contractors who were acting under the direction of their principle could not make the principle liable through the contractor’s actions, categorically rejected this argument. To hold so would allow Koscot to use its independent distributors as a shield against liability, while continuing to direct their fraudulent activities.

Case and case summary are also available online at: http://www.mlmlegal.com/legal-cases/Kugler_v_Koscot.php

LOADING PDF: If there are any problems, click here to download the file.

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

Reference Info:State, 3rd Circuit, New Jersey | 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.

© Babener & Associates | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

CONNECT

Welcome to MLM Legal - a valuable resource to the Multi-Level Marketing and Direct Sales Industry. ... View Profile »


Follow Babener & Associates:

Reporters on Deadline