Direct Selling Association Announces Support for Critical Consumer Protection Legislation to Combat Pyramid Schemes

August 7, 2017

Legislation would prevent fraud and protect consumers from pyramid schemes

Washington, DC – The Direct Selling Association (DSA) announces its support for the Anti-Pyramid Promotional Scheme Act of 2017, H.R. 3409, bipartisan consumer protection legislation introduced by Reps. Marsha Blackburn (R-TN) and Marc Veasey (D-TX). The legislation will help consumers avoid illegal scams, and provide definitive guidance to direct selling companies in the industry on acceptable, ethical business practices.

“DSA is committed to continually enhancing the industry’s self-regulation and transparency, and has long worked to promote strong consumer protection legislation at the state and federal level,” said DSA President Joseph N. Mariano.

H.R. 3409 would define a pyramid scheme in federal statute as it is in all 50 states. The legislation uses a similar definition as codified by dozens of states and in numerous court decisions. It would also require all direct selling companies to adopt the same gold standard buy back policy as required under DSA’s Code of Ethics. DSA member companies must buy back unused inventory at 90 percent or more of the original cost—an unparalleled consumer protection that is not seen outside of the industry.

“At the end of the day, this is all about protecting American consumers,” Mariano said. “DSA strongly supports a federal statute to provide a definition of a pyramid scheme as all states have done. DSA will continue to have conversations to strengthen support for and help shape this critical legislation with a goal of securing its final passage.”

As the voice of direct selling companies in the U.S., DSA sets high ethical standards, grounded in a rigorous set of standards in a Code of Ethics that its member companies abide by. The DSA Code’s requirements far exceed the minimum standards imposed by applicable laws and regulations. It is enforced by an independent administrator, who is responsible for resolving complaints made against member companies.

In addition to strengthening its Code of Ethics, DSA conducts a top-to-bottom review of its members to ensure they abide by the DSA Code of Ethics and meet the highest ethical and business standards.

DSA is the national trade association for companies who sell products and services through an independent salesforce away from a fixed retail location. In 2016, 20.5 million Americans were involved in direct selling in every state, congressional district, and community in the United States. For more information, visit www.dsa.org.

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I have additional questions, who can I contact?

You may contact David Riddy, DSA's Director of Communications & Marketing, at (202) 416-6408.