Federal Trade Commission
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.
Direct sales companies should prepare for a new wave of regulatory actions
By: Brent Kugler, Guest Contributor
Companies should take the time to consider if their plans hit the guardrails laid out by the most recent statements and actions of regulators.
Like it or not, the legal requirements for multi-level-marketing (MLM) compensation structures have changed in recent years. Many existing comp plans used by direct selling companies for years may now, if challenged, be considered non-compliant by the Federal Trade Commission (FTC). Indeed, comp plans considered to be compliant as recently as two years ago may today run afoul of the FTC’s latest criteria for evaluating compensation structures.
Change is the one thing we can always count on
“The only constant is change,” said Greek philosopher Heraclitus about 2,470 years ago. Wise words that capture the reality of our times.
For the upcoming year, there are many changes we are wondering about in our channel: Will the new administration encourage more regulation of direct selling companies via the Federal Trade Commission or other regulatory bodies?
How will the pandemic influence in-person gatherings and person-to-person selling in the coming months?
Will the vaccine allow us to “get back to normal?” What is normal?
More than 50 enforcement actions taken in ‘Operation Income Illusion’
By: Jennifer Mills
On Dec. 14, the Federal Trade Commission (FTC), along with 19 federal, state, and local law enforcement partners announced a nationwide crackdown on “scams that target consumers with false promises of income and financial independence,” which, they say, have been particularly rampant during the pandemic.
The regulatory agency initiated four new enforcement actions and one new settlement alleging deceptive income claims in violation of the FTC Act and noted that these actions are part of its broader initiative “Operation Income Illusion,” intended to dramatically increase claims enforcement.
By: Peter Marinello
Because the industry made the bold decision to commit to third-party self-regulation when it did, DSSRC was able to socialize its goals and objectives with direct selling companies and familiarize the industry with the program’s jurisdictional purview and process of review before the coronavirus hit.
The direct selling industry worked diligently and cooperatively to establish and implement an industry self-regulation program that celebrates its third year this month. The BBB National Programs’ Direct Selling Self-Regulatory Council (DSSRC) administers that program, helping direct selling companies across the industry abide by the high standards first established by the Direct Selling Association (DSA) Code of Ethics.