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Direct Selling Association

Risks to the Channel—Year in Review
ComplianceLegalRisk Roundup

Risks to the Channel—Year in Review

Highlights from thought leaders’ Risk Roundup Columns of 2021

Regulators stayed busy in 2021, reminding direct sellers of the unique legal challenges faced by the channel throughout the year. Combined with the ever-increasing importance of addressing ESG and fraud risks facing the entire corporate landscape, we have selected the key insights and advice from our knowledgable contributors to keep SSN’s readers ahead of the curve. Please visit SocialSellingNews.com for the complete articles.

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December 1, 2021 0 comment
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2021—A Year in Social Selling News
Cover StoryDirect SellingFeaturesSpecial Report

2021—A Year in Social Selling News

A crucial Supreme Court ruling, FTC strategy shifts and social media challenges impact direct selling in an eventful year.

January Headlines

FTC Launches ‘Operation Income Illusion’

The Federal Trade Commission (FTC), along with 19 federal, state, and local law enforcement partners announced a nationwide crackdown on consumer scams promising income and financial independence. Although no direct selling companies were targeted by this operation, it marked a beginning to the COVID-19-era scrutiny of work-from-home-scams, pyramid schemes and coaching courses, among other businesses.

DSA Rolls Out New Compliance Certification Program

The Direct Selling Association (DSA) began a comprehensive compliance program to be made available to member and non-member companies. The Direct Selling Compliance Professional Certification Program (DSCP-CP) was created for individuals and does not certify an entire company. The program includes four three-hour online sessions for a total of 12 hours and is designed to be taken over several days. Modules include topics such as “Claims Substantiation and Disclosures”; “Product Claims”; “Monitoring and Removal of Claims from Social Media Platforms”; “The Role of Compliance in Your Organization”; and “Conveying the Right Marketing Message.”

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December 1, 2021 0 comment
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The DSSRC Hits Its Stride in 2021
Cover StoryDirect SellingFeatures

The DSSRC Hits Its Stride in 2021

Channel watchdog counsels companies, maintains dialogue with regulators

By:  David Bland

For the cases that get to the level of a DSSRC referral, usually there’s an issue of systemic patterns of behavior that are going on—particularly with the claims; it is rarely a one-off post, and, with respect to earnings claims, in particular, it’s often the tip of the iceberg that leads the FTC to a much deeper rabbit hole.

— Peter Marinello, Vice President at BBB National Programs and Director of DSSRC

In 2019, the direct selling channel officially became a self-regulated business sector. Two years on, and the channel is reaping the benefits. Founded by the Direct Selling Association (DSA) and administered by BBB National Programs, the Direct Selling Self-Regulatory Council (DSSRC) is an independent, non-profit organization that is continuing its mission of oversight through monitoring, investigation, and enforcement of the regulations and ethics standards that have been set in place for direct sellers by the Federal Trade Commission (FTC) and the DSA.

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October 1, 2021 0 comment
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US Remains Attractive Market for Channel Expansion
Direct SellingNewsSpecial Report

US Remains Attractive Market for Channel Expansion

Direct sellers should still be prepared for high, competitive threshold and tough regulatory landscape

By:  Stephanie Ramirez

In this new era of social selling in the United States, there is a strong focus on customers, so you need a good product. The brand and products are as important as the opportunity.

—Ray Urdaneta, CEO and Co-Founder, MONAT Global

You have to decide beforehand what you’re open to changing and what you’re not open to changing, but that’s going to drive the whole modeling process and the whole testing process.

—Jacques Mizrahi, CEO, SwissJust USA

The United States is a reliable and consistent economy with a long-standing history of growth. According to the economics research firm, Focus Economics, it will most likely retain the title as the world’s largest economy, with a forecasted GDP of $25.3 trillion (USD) in 2024. In addition to the favorable economic climate, in comparison to many other countries, the U.S. is a wealthy nation with over 320 million people, many of whom like to shop. 

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October 1, 2021 0 comment
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How Pending Legislation Could Affect Your Company’s Compliance Strategy
Cover StoryDirect SellingFeaturesVoices

How Pending Legislation Could Affect Your Company’s Compliance Strategy

By:  Larry Steinberg and William Miller

For companies that use web-monitoring services to identify possible policy violations, is it a reasonable business practice to limit the search parameters to only go back a certain number of years?

When it reversed 40 years of appellate precedent by ruling that Section 13(b) does not authorize the Federal Trade Commission to seek monetary relief, the Supreme Court relied not only on the language of Section 13(b), but also on the presence of other provisions in the FTC Act, which expressly allow the FTC to obtain monetary relief for consumers. 

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September 1, 2021 0 comment
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The FTC is on the Warpath — Time to Rally the Troops (Op-Ed)
Cover StoryDirect SellingOpinion

The FTC is on the Warpath — Time to Rally the Troops (Op-Ed)

As pressure mounts, what we do now as an industry matters

By:  Jonathan Gilliam, CEO, Momentum Factor

Opponents of the channel appear to have taken a war footing, and what we collectively do now as an industry will determine the future of this great business model we love.

Over the past 18 months, the Federal Trade Commission’s targeting of the direct sales channel has become increasingly aggressive and the channel may now be under the most intense regulatory and public scrutiny it has ever faced. Opponents appear to have taken a war footing, and what we collectively do now as an industry will determine the future of this great business model we love. 

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September 1, 2021 0 comment
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Channel Sales Soar in 2020, Report Finds
Cover StoryDirect SellingFeatures

Channel Sales Soar in 2020, Report Finds

DSA Survey highlights direct sellers’ resilience during pandemic year

The results are clear—a record-breaking year and an unequivocal demonstration that direct selling is dedicated to serving America.

—Joseph N. Mariano, President, DSA

Direct selling companies invested significant resources to transform their companies virtually.

—Ben Gamse, Director of Industry Insights, DSA

The Direct Selling Association (DSA) released its Growth and Outlook Survey results for 2020 showing a record level of growth for the channel in one of the most economically challenging years in U.S. history. 

Despite the onset of the COVID-19 pandemic in March 2020 and the subsequent shutdowns that ended the longest period of U.S. economic expansion on record, the DSA reported channel growth of 13.9 percent over the previous year, reaching a record $40.1 billion in 2020 retail sales. This is quadruple the growth of U.S. retail sales overall, which the U.S. Department of Commerce reported was 3.4 percent for 2020.

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July 1, 2021 0 comment
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FTC to Review Business Opportunity Rule by End of Year
Cover StoryDirect SellingFeatures

FTC to Review Business Opportunity Rule by End of Year

Commissioner Chopra pushes for removal of direct selling exemption

By:  David Bland

It is alarming that the FTC seems to have prejudged the public comment process and concluded that the scope of the Rule should be expanded to impose a new regimen of rules and regulations on the direct selling industry.

—Larry Steinberg, Chair of Multilevel Marketing Industry Group, Buchalter

The Federal Trade Commission (FTC) announced on June 14 a review of the Business Opportunity Rule by the end of the year. The Rule was first proposed in 2006 and was finalized with amendments in 2012 after direct selling companies and the Direct Selling Association (DSA) vigorously argued for, and ultimately received, a generalized exclusion from the Rule.

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July 1, 2021 0 comment
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Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference
Cover StoryDirect SellingFeatures

Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference

Organizers block channel representatives from contributing

By:  David Bland

There were a number of factors that led us to think that the timing was right for this type of conference, including indications from the Federal Trade Commission that they are tightening focus on the MLM industry.

—Douglas M. Brooks, Attorney

Anti-MLM influencers appear to be more interested in fostering a cottage industry of their own than they are to an inclusionary dialogue on how best to promote entrepreneurship.

—Direct Selling Association

For decades, direct selling’s opponents have worked to challenge the channel from the relatively confined spaces within their respective legal, academic and media circles. 

The occasional high-profile court case would generate publicity for a few news cycles, and newspaper and magazine articles would follow with passing coverage. 

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June 1, 2021 0 comment
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Legal Battle Is Brewing Over Independent Contractor Rule
Cover StoryDirect SellingFeatures

Legal Battle Is Brewing Over Independent Contractor Rule

DSA-supported lawsuit challenges President Biden’s attempt to roll back Trump’s rule

By:  Dave Rauf

The DOL’s effort to rescind the final rule runs counter to the realities of the modern economy.

—Evan Armstrong, Founding Member, Coalition for Workforce Innovation

We will continue working with the Administration and Congress to ensure direct sellers are clearly classified as independent contractors under all federal laws.

—Brian Bennett, Vice President of Government Affairs and Policy, Direct Selling Association

An array of business groups are suing the U.S Department of Labor over its decision to rescind a rule that would set parameters for when companies—including direct sellers—could classify workers as independent contractors.

At issue: a Donald Trump administration regulation published in late January, about two weeks before the White House was set to switch hands, making it easier for businesses to classify workers as independent contractors. The rule marked a major victory for the direct selling channel, along with gig economy companies specializing in ride-sharing and food delivery.

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May 1, 2021 0 comment
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