After careful consideration, LegalShield has decided to discontinue its membership in the Direct Selling Association (DSA) and Jeff Bell, CEO, LegalShield, is resigning his board of director position.
LegalShield’s commitment to direct selling is stronger than ever; it is exiting the DSA due to concerns about the lack of enforcement of the DSA’s Code of Ethics for its members. As an example, the FTC filed lawsuits against Vemma Nutrition Company, a DSA member, and other companies, such as Fortune Hi-Tech Marketing.
The DSA failed to enforce its own Code of Ethics against either company. Furthermore, the DSA admitted to membership Nerium International, which has active litigation with LegalShield involving claims of cross-recruiting and infringement of intellectual property and trade secrets.
LegalShield feels the DSA does not stand up for or strictly enforce its Code of Ethics with these companies, therefore weakening the direct selling industry as a whole.
“Direct selling creates tremendous opportunity for individuals who may not have the opportunity to start their own businesses, or even enter into the business world,” Bell said.
“Additionally, it creates an opportunity for products that may not be able to break into traditional distribution systems due to entrenched players. It is for these reasons that we want to take every measure we can to protect the integrity of the industry and those who operate in direct selling.”
LegalShield introduced direct sales to its sales force in 1984, 12 years after it was founded, and is unique in the direct selling industry. The company and its sales associates do not sell physical products, but rather sell professional legal and identity monitoring/restoration services to retail customers.
Associates are compensated for each membership they sell. Additionally, associates do not receive compensation for recruiting new sales associates.
This structure is not only beneficial for sales associates, but ensures that LegalShield is clearly separated from some of the most troublesome issues with the direct selling industry: inventory-loading, including auto-ship of product to be compensated; paying for recruitment versus product sales; and sales only to distributors (few or no retail customers).
Currently the company has more than 30,000 active sales associates and more than 1.5 million retail members. LegalShield retains law firms across the United States and Canada with more than 5,600 lawyers in its direct and referral networks and dozens of private investigators, all committed to helping protect its members.