H.R. 3409 Will Protect African-American Entrepreneurs

Harry Alford, president and CEO of the National Black Chamber of Commerce: Many African-Americans aspire to own a business but don’t have the necessary capital. For them, direct selling is an affordable option that doesn’t saddle them with unrecoverable inventory costs. Pyramid fraud is a threat to direct sellers and their customers; by masquerading as direct sellers, perpetrators of pyramid fraud deceive aspiring entrepreneurs into assuming costs that can’t be recouped. The law should protect [all those involved with direct selling] from the predations of swindlers who would rob their finances and their dreams. Twenty-one states have passed model legislation proposed in 2004 by the Council of State Governments, one of the nation’s pre-eminent, bipartisan public policy organizations. That model legislation clearly defines the differences between a direct selling company and a pyramid scheme. It protects the integrity of the direct selling model — a vehicle of opportunity for millions of American entrepreneurs, including many aspiring black business owners. Despite these important protections in state law, there is not yet a federal statute defining pyramid fraud. The lack of clarity is exposing many minority entrepreneurs to the financial and reputational costs threatened by pyramid fraud. But hope is at hand. Reps. Marsha Blackburn and Marc Veasey recently introduced H.R. 3409, the Anti-Pyramid Promotion Scheme Act of 2017. Their bill provides a definition of pyramid fraud that makes it easier to identify and prosecute these illicit schemes. Read more in the Morning Consult.

Urge your Member of Congress to co-sponsor H.R. 3409 today — it’s easy through the DSA Advocacy Center!

Direct Selling Association

Direct Selling Association

Direct Selling Association (DSA) is the national trade association for companies that manufacture and distribute goods and services sold directly to consumers.