(WASHINGTON, DC) –This week’s announcement of a $4.75 million settlement with LulaRoe by Washington Attorney General Bob Ferguson reaffirms consumer protection principles advocated for by the Direct Selling Association (DSA). LulaRoe is not and has never been a member of the DSA. If they had been, the company would have already had a similar inventory repurchase program as mandated under the settlement and consistent with the DSA Code of Ethics.
The anti-pyramid statute articulated in the settlement is consistent with the legislation passed by Washington state in 2006 and supported by 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 by direct selling companies.
DSA President Joseph N. Mariano said, “DSA members are committed to the highest level of consumer protection and requires our members to follow the Code of Ethics, which includes a mandatory buyback provision enforced by the DSA Code Administrator. We appreciate working with state legislatures and Attorney Generals on consumer protection legislation, which is now law in 26 states. Additionally, our membership worked with the BBB National Programs to create the Direct Selling Self-Regulatory Council (DSSRC), an independent self-regulatory body which monitors income and earnings claims for all direct selling businesses.”
DSA remains committed to ensuring high levels of consumer protection among all direct selling businesses and providing clarity for new, incoming, existing and exiting salesforce members.
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