Reminds the court of the relevant law regarding lawful compensation models
(WASHINGTON D.C.) – On July 20, 2023, DSA filed an amicus (“friend of the court”) brief in Neora’s ongoing litigation with the FTC.
The brief was filed in response to the FTC alerting the court of the ruling in another recent enforcement action against Success by Health, in which a court in Arizona ruled the company was a pyramid scheme. DSA’s brief reminded the court of the relevant law regarding lawful compensation models, specifically that the standard is that payments must be made “primarily based on recruitment.” This also follows up to a more comprehensive brief filed by DSA before the trial.
Although outcomes in all legal cases are uncertain, the briefs filed by DSA in the past 11 months are an important reminder of how the association advocates for consistent legal standards in cases against direct selling companies.
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For more than a century, the Direct Selling Association (DSA) has served as the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services, typically outside of a fixed retail establishment. In 2022, direct selling took place across the United States, generating $40.5 billion in retail sales and 6.7 million entrepreneurs in the U.S. sold products or services through the direct selling channel, providing a personalized buying experience for 40 million customers.
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