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Direct Selling Association

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Direct Selling Association
Formation1910 (1910)
PurposeTrade association for direct selling (multilevel marketing) companies
HeadquartersWashington DC
Membership
130 companies[1] (approximate)
Chairman
Kevin Guest[2]
President and CEO
Joseph Mariano
Websitedsa.org

The Direct Selling Association (DSA) is a trade association in the United States that represents direct selling companies, primarily those that use multi-level marketing compensation plans. On behalf of its members' companies, the DSA engages in public relations and lobbying efforts against regulation of the multi-level marketing industry, and it funds political candidates through a political action committee.[3][4][5]

History in the US

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The American DSA, headquartered in Washington, D.C., is the national trade association of a group of firms that manufacture and distribute goods and services sold directly to consumers typically through social selling that includes a compensation model called multi-level marketing.

Founded in Binghamton, New York in 1910 as a trade group for door-to-door salesmen, the association was originally called the Agents Credit Association. It was renamed the National Association of Agency Companies (NAAC) in 1914, and briefly renamed the National Association of Agency and Mail Order Companies in 1917, before returning to the NAAC in 1920. It became the Direct Selling Association in 1968.[6] As of 1970, less than 5% of the DSA's members were multi-level marketing companies. By 2018, the DSA's membership had grown to include nearly 130 companies, more than 90% of which were multi-level marketing companies.[1]

The DSA belongs to the National Retail Federation and its member companies pledge to abide by the DSA code of ethics. [7]

In 2019, DSA helped launch the BBB National Programs Direct Selling Self Regulatory Council.[8] The Direct Selling Self-Regulatory Council (DSSRC) provides impartial monitoring, enforcement, and dispute resolution regarding product claims or income representations (including lifestyle claims) disseminated by direct selling companies and their sales force members. This program provides a robust challenge process that also includes the opportunity for a company to appeal a decision.[9]

In other countries

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As of 2011, the DSA has sister organizations in the UK (with over 40 member companies),[10] Australia (nearly 70 member companies),[11] and Israel (7 member companies),[12]

Political lobbying

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The DSA serves as a public relations and lobbying group acting on behalf of its member companies.[3][5] The DSA played a role in petitioning the Federal Trade Commission (FTC) to exempt multi-level marketing companies from consumer protection regulations outlined in the FTC's 2006 proposed Business Opportunity Rule, encouraging people to write 17,000 form letters complaining about the rule from 2006 to 2008.[4][13][14] The law was passed in 2012, with most multi-level marketing companies considered exempt.[13]

The DSA supported and allegedly drafted much of the language of the "Anti-Pyramid Promotional Scheme Act" introduced by US Representative Marsha Blackburn, and an amendment to the US House of Representatives' omnibus Financial Services and General Government Appropriations bill for fiscal year 2018 by US Representative John Moolenaar that would have limited the ability of the FTC and other agencies to classify companies as pyramid schemes and to investigate whether MLMs are pyramid schemes.[15][16] The amendment would have disbarred the Treasury Department, the Judiciary Department, the Small Business Administration, the Securities and Exchange Commission, the FTC, or any other agencies from using any monies to take enforcement actions against pyramid operations for the fiscal year.[16] The Act would blur the lines between legitimate MLM activity and pyramid schemes established under the original 1979 FTC case by deeming sales made to people inside the company as sales to an “ultimate user,” thus erasing the key distinction made in the ruling between sales to actual consumers of a product and sales made to members of the MLM network that are used for recruitment of additional members or to qualify for commissions.[17][16][18] The amendment was opposed by a coalition of consumer interest groups including Consumer Action, the Consumer Federation of America, Consumers Union (the publisher of Consumer Reports magazine), Consumer Watchdog, the National Consumers League, and the United States Public Interest Research Group (US PIRG),[17] as well as Truth in Advertising (TINA.org) in its original incarnation.[18]

Pyramid schemes

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The DSA has said that pyramid schemes which disguise themselves as direct selling companies have caused confusion in the industry.[19] In 2013, Tupperware left the DSA citing industry changes and concerns over pyramid schemes.[20] In 2014, Avon (a founding member) left the DSA citing that its bylaws were inadequate in protecting consumers from fraud. News reports have connected Avon's quitting to pyramid scheme allegations against DSA member Herbalife, which was under investigation by the FTC at the time,[20][21][22] and has now been ordered agreed to pay two hundred million dollars in a settlement.[23] The DSA made a statement that they would look at Avon's concerns.[21]

References

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  1. ^ a b "Search Results For Company: DSA". www.dsa.org. Retrieved September 5, 2018.
  2. ^ "Press Release". www.dsa.org. Retrieved June 11, 2021.
  3. ^ a b Barrett, Stephen. "Consumer Health Digest #11-39". National Council Against Health Fraud. Retrieved June 16, 2012.
  4. ^ a b Klein, Karen E. (April 16, 2012). "The Multibillion-Dollar Direct-Selling Industry Dodges the FTC". Bloomberg News. Archived from the original on April 19, 2012. Retrieved June 16, 2012.
  5. ^ a b Taylor, Jon M. "Direct Selling Association (DSA) vs. Consumers". Consumers Awareness Institute. Archived from the original on June 13, 2012. Retrieved June 17, 2012.
  6. ^ "History - Direct Selling Association (US)". Direct Selling Association (US). Retrieved December 21, 2014.
  7. ^ "DSA Code of Ethics". Direct Selling Association (UK). Retrieved June 17, 2012.
  8. ^ "NAD's Brett: Chasing Direct Sellers' COVID-19 Product Claims".
  9. ^ "Direct Selling Self-Regulatory Council".
  10. ^ "Direct Selling Organization (UK) Member Companies". Direct Selling Association (UK). Archived from the original on August 22, 2010. Retrieved August 12, 2011.
  11. ^ "Direct Selling Association of Australia - List of Members". Direct Selling Association of Australia. Archived from the original on August 9, 2011. Retrieved August 12, 2011.
  12. ^ "Direct Selling Association (Israel) - Members" (in Hebrew). Direct Selling Association (Israel). Archived from the original on July 21, 2011. Retrieved August 12, 2011.
  13. ^ a b Stroud, Matt (April 8, 2014). "How lobbying dollars prop up pyramid schemes". The Verge. Retrieved July 31, 2015.
  14. ^ Greenberg, Herb (January 9, 2013). "How Multi-Level Marketers Dodged a Bullet". CNBC. Retrieved July 31, 2015.
  15. ^ Kosman, John (September 18, 2017). "DeVos' family seeks deregulation of Amway so it can beat Herbalife". New York Post. Retrieved May 6, 2018.
  16. ^ a b c Gingerich, Jon (October 20, 2017). "Pyramid Scheme Protection Law Pits Legal Group Against Multilevel Marketers". O'Dwyer's: The Inside News of PR & Marketing Communications. Retrieved May 6, 2018.
  17. ^ a b NCL Communications (March 2018). "Public interest groups' letter to Congress in opposition of Moolenaar pyramid scheme rider". National Consumers League. Retrieved May 6, 2018.
  18. ^ a b Vander Nat, Peter (May 23, 2016). "Why This Anti-Pyramid Scheme Bill is Outrageously Wrong for Consumers". Truth in Advertising (TINA.org). Retrieved May 6, 2018.
  19. ^ Greenberg, Herb; Frayter, Karina (January 9, 2013). "Why Spotting a Pyramid Scheme Isn't So Easy". CNBC. Retrieved July 31, 2015.
  20. ^ a b Ehrenfreund, Max (September 16, 2014). "Avon splits with trade group, citing risk of pyramid schemes". Washington Post. Retrieved July 31, 2015.
  21. ^ a b Berr, Jonathan. "Why Avon quit direct-sales group". CBS News. Retrieved July 31, 2015.
  22. ^ Smith, Ernie (September 19, 2014). "It's Not Me, It's You: Why Avon Left an Association it Helped Found". Associations Now. Retrieved July 31, 2015.
  23. ^ "Herbalife settles pyramid scheme case with regulator, in blow to Pershing's Ackman". Reuters. July 15, 2016. Retrieved July 15, 2016.
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