Features

SELDIA is keeping busy as ongoing regulation cycles continue in Europe

By:  David Bland

“The Commission is focusing on digital fairness and clarifying further environmental
claims and green product claims. There are proposals on due diligence and the circular
economy that just came out or are about to come out. This is going to impact all companies
operating in Europe, direct selling companies included.” — Laure Alexandre, Executive Director,
SELDIA.

The direct selling companies of the European Union (EU) are preparing for adjustments and adapting to new rules as the implementation of a major consumer protection directive coincides with the significant disruptions resulting from the economic downturn, the war in Ukraine, and continued fallout from the COVID-19 pandemic. 

As the EU’s member states continue the process of transposing, adopting and applying the new directives from 2020’s landmark Enforcement and Modernization Directive, known as the Omnibus Directive, the European Direct Selling Association (SELDIA) is busy working with member organizations and government representatives to ensure a smooth transition and to provide guidance for direct sellers.

Inflation, COVID-19 and Ukraine conflict continue to pose challenges

By:  Dave Rauf

Herbalife

Herbalife outperformed lowered expectations during the second quarter, and the company’s CEO says economic headwinds that hurt sales through the first six months of 2022 are stabilizing.

The Los Angeles-based direct selling giant reaffirmed projections to return to growth in the fourth quarter, following two consecutive quarters of sales declines after a record-breaking 2021. 

Throughout 2021, Herbalife reported its biggest ever sales year, reporting $5.8 billion in revenue. The company’s three largest regions—Asia-Pacific, North America and EMEA—each set annual net sales records last year. 

Federal judge reverses injunction against credit repair services direct seller, Financial Education Services Inc.

By:  Stephanie Ramirez

There is a counter story. There is a narrative on the other side, so [the judge] balanced those sorts of things saying, wait a second, this isn’t all bad. There’s obviously good out there. And if there’s good, then it’s got to be worth at least an opportunity to salvage.

— Richard Epstein, Partner, Greenspoon Marder LLP

On May 23, the Federal Trade Commission (FTC) took swift action against a Michigan-based direct selling company that offers credit repair services, when it issued a motion to shut it down and freeze all assets. Just over a month after the closure, a judge has reversed this order allowing the company to continue operating under the observation of a monitor.

Financial Education Services Inc. (FES), also doing business as United Wealth Services among others, offers services including: credit restoration, wills, living trusts, smart credit, travel, LifeLock, Debt Zero, credit builder, financial literacy, youth financial literacy, and power of attorney, according to a company LinkedIn page.

Company and distributor claims lead to reclassification of some products as drugs

By:  SSN Staff

The intended use of a product may be determined by, among other things, its labeling, advertising, and the circumstances surrounding its distribution. — FDA

On June 10, the U.S. Food and Drug Administration (FDA) sent Young Living a warning letter to advise the direct selling company of essential oils that several product claims and descriptions found on the company’s websites as well as on the social media accounts of distributors were in violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act).

Drug Classification and Intended Use

The letter, addressed to Young Living Co-Founder and CEO Mary B. Young, stated that the company’s “Essential Oil,” “Vitality,” “Ningxia,” and “Nature’s Ultra CBD” products are drugs, under section 201(g)(1)(B) of the FD&C Act because of the way they were marketed by Young Living and several of its distributors.