An investigation by Oklahoma’s Department of Securities resulted in a recommendation Family First Life be issued with a cease and desist.

As per a series of August 20th filings from ODS, the Enforcement Division’s investigation found:

  • an Oklahoma resident who lost their job during the pandemic enquired about Family First Life in late 2020;
  • the resident was pitched on insurance leads generating “upwards of $30,000 a month in profit, and was told they could “discontinue the purchase of sales leads at any time”;
  • based on these representations, the resident signed up as a Family First Life agent in December 2020;
  • between May 2021 and June 2022 the resident purchased $17,865 in leads from Family First Life;
  • at some point into the Agency, the resident realized they were only breaking even;
  • upon contacting Family First Life in regards to their promised income marketing, the resident was encouraged “to purchase larger quantities of sales leads to reach the full potential income advertised”;
  • marketing supplied to the resident depicted Family First Agents “making upwards of $40,000 per month using their leads and training”; and
  • at no point has Family First Life’s MLM business opportunity been registered under Oklahoma’s Business Opportunity Sales Act

Asserting violation of Section 806 of Oklahoma’s Business Opportunity Sales Act, ODS has recommended Family First Life be issued a cease and desist.

For reference, Section 806 of Oklahoma’s Business Opportunity Sales Act states;

It is unlawful for any person to offer or sell any business opportunity, as defined in Section 802 of this title, in this state unless the business opportunity is registered under the provisions of the Oklahoma Business Opportunity Sales Act or is exempt under Section 803 of this title.

Specific caveats that must be met by an MLM company to be classified as a “business opportunity” in Oklahoma include (Section 802, 3.a.):

(1) The seller or a person recommended by the seller will provide or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases or other similar devices, on premises neither owned nor leased by the purchaser or seller;

(2) The seller or a person recommended by the seller will provide or assist the purchaser in finding outlets or accounts for the purchaser’s products or services;

(3) The seller or a person specified by the seller will purchase any or all products made, produced, fabricated, grown, bred or modified by the purchaser;

(4) The seller guarantees that the purchaser will derive income from the business which exceeds the price paid to the seller;

(5) The seller will refund all or part of the price paid to the seller, or repurchase any of the products, equipment or supplies provided by the seller or a person recommended by the seller, if the purchaser is dissatisfied with the business; or

(6) The seller will provide a marketing plan.

I’m not really clear on how Family First Life satisfied criteria 1, and this isn’t explained in OSC’s filings. Perhaps they’ve adopted a particularly broad interpretation of FFL selling leads.

Either way, Family First Life has fifteen days from August 20th to request a hearing to challenge OSC’s findings and recommendation.

If those challenges are overruled or no response is filed, OSC’s cease and desist would see Family First Life’s MLM opportunity outlawed in Oklahoma.

Pending further developments, we’ll keep you posted.

 

Update 5th September 2024 – A reader has pointed out that only one criteria of Oklahoma’s “business opportunity” law must be satisfied.

This appears to be the case from the use of “or” in the law (I missed this originally).