(WASHINGTON, DC) –The announcement by the Federal Trade Commission and state of Arkansas accusing the “Blessing Loom” of being a pyramid scheme highlights the value of and need for strong anti-pyramid laws and enforcement.
The anti-pyramid statute used by the state of Arkansas was passed in 2019 and supported by the Direct Selling Association (DSA). This action further demonstrates that a statute clearly distinguishing between pyramid schemes and legitimate direct selling companies is a vital tool for law enforcement. It also demonstrates the importance of truthful income and earnings claims in the marketplace.
DSA President Joseph N. Mariano said, “The Direct Selling is Association remains committed to working with state legislatures and Attorney Generals on anti-pyramid consumer protection legislation, which is now law in 27 states. Pyramid schemes prey on participants, promise rewards for the mere recruitment of other participants without regard to real product sales to actual consumers, and misrepresent potential earnings. DSA wholeheartedly supports prosecution of entities which violate these laws. Legitimate direct selling companies compensate salespeople for real sales to real users and don’t overpromise. DSA works to protect consumers from misrepresentations and deceptive practices through its own DSA Code of Ethics and third-party regulatory organizations like the Direct Selling Self-Regulatory Council of the BBB National Programs.” See www.dsa.org for more information about these important safeguards.
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