MLM Directory

Is referral marketing legal?

Is referrral marketing legal? I remember bank of america offering me $20 to refer a customer, but this website below says it is illegal? http://www.mlmlaw.com/library/guides/Primer.htm#referral There must be a subtle difference that I'm missing. Can anyone point out?

Public Comments

1. no it is not. direct tv does it on tv. Tons of well known and not so well known does it. refer a friend and get 50 dollars... it's just a way to advertise and get more customers.
2. There is a difference between referral sale and what bank of america is doing. Referral sale is like an enticement to get sales whereas what bank america is doing is like buying leads(advertising cost). In other word referral sales is illegal because customer still has to spend more money before receive gift(enticement) such as discount, rebates or commission.