Protecting Consumers and Legitimate Businesses from Pyramid Fraud

Orville Thompson, CEO of direct selling company Scentsy: The FTC, direct selling companies, the courts, and state legislatures have worked for decades to define the difference between pyramid schemes and legitimate direct selling. One key player has been absent: Congress. H.R. 3409, recently introduced by Reps Marsha Blackburn (R-TN) and Marc Veasey (D-TX), defines and prohibits pyramid schemes consistent with thirty years of court decisions. The careful and wise assimilation of legal and regulatory precedent serves the dual purpose of guiding direct selling companies in best practices and making it a federal offense to inventory load or provide compensation for the recruitment of another into a plan. If a company must repurchase product that is unsellable by distributors because of the company’s own practices, there will no longer be profit in such tactics. Where no profit exists in loading inventories, companies are more likely to ensure distributors are purchasing products that can legitimately be consumed. Read more in The Hill.

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.