Amazon Prime Series Prompts DSA to Highlight its Commitment to the Importance of Consumer Protection and Self-Regulation

Washington, DC (September 24, 2021) – The Direct Selling Association, a national trade association representing direct selling companies, is committed to the highest level of business ethics, consumer and salesperson protection, and self-regulation for the entire direct selling channel and requires all DSA members to adhere to the stringent DSA Code of Ethics. The DSA Code of Ethics prohibits pyramid schemes, as well as false, misleading, or unsubstantiated income claims. LuLaRoe, the focus of the LuLaRich Amazon Prime Docuseries, is not and has never been a member of DSA. 

“The Amazon Prime Docuseries describes practices prohibited by the Direct Selling Association. Legitimate companies don’t require new salespeople to pay large upfront costs to get involved and should never require or even encourage salespeople to purchase large amounts of inventory they can’t reasonably expect to sell.  These types of practices are clear warning signs that all consumers should be aware of when pursuing an independent contractor opportunity with a direct seller,” stated Joseph N. Mariano, president of DSA.

“The DSA Code of Ethics prohibits such practices and sets out other guarantees to consumers and salespeople. Anyone interested in selling for a direct selling company should be aware of and take advantage of these protections. Member companies of the Direct Selling Association have pledged to and are obligated to offer these protections. Companies which are not members haven’t made that pledge.”

Legitimate companies, like those in the DSA membership will adhere to the following practices:

• No requirement or encouragement to purchase large amounts of inventory
• No large up-front fees or costs to get involved as a seller
• A company policy to repurchase unsold inventory when someone leaves the business
• Real products being sold to real consumers of the product
• No high-pressure techniques to get someone to buy product or sign up as a distributor
• Accurate, realistic, and substantiated descriptions of the company’s compensation plans and what a typical salesperson can reasonably expect to earn
• Truthful and accurate claims about their products

For more information on what someone interested in direct selling should look for in a company, and what to watch out for, go to How to Spot a Pyramid Scheme. 

DSA President Joseph N. Mariano continued, “We are committed to strong and effective consumer and salesperson protection.  That’s why DSA and its members support the enactment of strong anti-pyramid laws  to help distinguish between legitimate  direct selling companies and fraudulent pyramid schemes, including Washington state’s anti-pyramid law (which was cited by the Washington State Attorney General Ferguson in the recent $4.75M LuLaRoe Settlement.)   We also created the Direct Selling Self-Regulatory Council (DSSRC) in 2019, an independent self-regulatory body of the  BBB National Programs (BBB-NP), that monitors income and earnings claims for the entire direct selling channel, regardless of a company’s membership in DSA.”

The DSSRC continuously monitors the entire marketplace, accepts competitor challenges, and otherwise considers patterns of consumer salesperson complaints for DSA members and non-members alike. Working in tandem with the DSA Code, the DSSRC helps to ensure consumers are free from harm, particularly deceptive income and earnings claims cited in Attorney General Ferguson’s complaint. 

Independent contractors involved in direct selling typically share and sell goods and services they love to their neighbors, friends, and relatives on a part-time basis and earn a modest, supplemental income. The success, longevity and strength of direct selling continues, and in 2020, the DSA Growth & Outlook Survey showed 7.7 million direct sellers in the channel – an increase of 13.2% over 2019.

ABOUT DIRECT SELLING ASSOCIATION

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 2020, direct selling took place across the United States, generating $40.1 billion in retail sales and 7.7 million entrepreneurs in the U.S. that sold products or services through the direct selling channel, providing a personalized buying experience for 41.6 million preferred customers and discount buyers.