DSA Statement on The State of California v. YourTravelBiz.com

Washington, D.C. (May 20, 2009) – The Direct Selling Association (DSA), a national trade association, has issued the following statement in response to the final judgment and permanent injunction in the matter of The State of California v. YourTravelBiz.com, a subsidiary of DSA member company YTB International, Inc. (YTB):

The issues addressed in the judgment, injunction and accompanying statements made by California Attorney General Edmund Brown are serious in nature and require review by DSA with regard to possible violations of the DSA Code of Ethics.

The DSA Code of Ethics is the basis of a self-regulatory program designed by DSA to outline and enforce the use of ethical business practices by member companies of the association. Among its provisions, the Code prohibits unsubstantiated earnings claims and unfair or deceptive sales and recruiting practices. Additionally, while the judgment in this case did not identify YTB as such, the attorney general’s press release repeated that office’s original assertion that the company is pyramid scheme. Both the Code of Ethics and the law identify pyramid schemes as illegal and such operations are not permitted to be members of the Direct Selling Association. DSA’s Independent Code Administrator is currently reviewing the 23-page consent order to identify any violations of the Code not already addressed by the requirements of the judgment.

The DSA Code of Ethics provides a range of remedial options in the case of a Code violation, including expulsion from the membership.

Under the DSA membership process all companies undergo a minimum one-year pending period during which time the applicant company’s materials and practices are reviewed and a determination of compliance with the Code and applicable state and federal laws is made. Upon acceptance into membership by the DSA Board of Directors, companies are subject to periodic reviews to ensure continued compliance with the Code of Ethics. At such time as the DSA Code Administrator is made aware of any possible violations of the Code, either via a consumer complaint, a complaint by a member company’s distributor or salesperson, or an action taken by a law enforcement or regulatory agency, the complaint is reviewed and appropriate remedies are prescribed if necessary to protect consumers or salespeople. It is also significant that one goal of the Code enforcement process is to help companies examine and adjust their own internal policies and processes to better serve the interests of their field sellers and customers.

“DSA prides itself in serving as a steward of consumer and distributor protection through its efforts to create and enforce acceptable business standards that often go beyond the requirements of the law,” said Neil Offen, President and CEO of the Direct Selling Association. “This situation is a clear indication that we must redouble our efforts to make sure our processes are sound and that our members not only understand the requirements of the Code of Ethics but that they are incorporating them into every aspect of their business operations.”

Visit DSA's consumer Web site, directselling411.com, for a complete description of DSA’s membership process.

About DSAThe Direct Selling Association (DSA) is the national trade association of the leading firms that manufacture and distribute goods and services sold directly to consumers. More than 300 companies are members of the association, including many well-known brand name companies. 

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