Kevin Thompson, the MLM Attorney stated on his facebook:
“There have been a few calls for a true, third-party “board” to oversee the network marketing industry.
The efforts over the past several years have all stalled out for countless reasons.
Candidly, I gave up trying after concluding that as long as companies had a financial incentive to bend the rules, they would always “infiltrate” those “enhance the profession” efforts and manipulate from the inside.
Recall Zeek Rewards infiltrating the Association of Network Marketing Professionals.
The DSA just launched a third-party regulatory board. It’s a massive development in the industry, one that I’ll follow closely. I hope it’s fair.
There’s a chance that the bigger companies can effectively “take it over” and use it to narc on smaller, “annoying” (to them) startup companies.
We’ll see. There’s also a chance that it brings a level of CONSISTENT accountability for ALL companies in the industry, leading to better behaviors.
The Direct Selling Association (DSA), the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services, has announced that its Board of Directors unanimously approved the establishment of a third party self-regulatory program to be administered by the Council of Better Business Bureaus (CBBB).
The new entity, the Direct Selling Self-Regulatory Council (Direct Selling-SRC), is designed to ensure high standards of integrity and business ethics, which remain the guiding principles for all direct selling companies in the marketplace, regardless of DSA membership.
The Direct Selling-SRC will encompass active monitoring of the entire direct selling marketplace, including websites and social media of direct selling companies and their independent sales forces in the areas of income representations and product claims.
In addition to a new process of investigating and reporting potentially non-compliant companies to the appropriate government agencies, the Direct Selling-SRC program administrators will also manage consumer/company complaint resolution. The program will also include a competitive challenge process, enabling independent companies to identify issues for the Direct Selling-SRC to review.
Joseph N. Mariano, President and CEO of DSA, stated,
“We are proud to announce the creation of this program with the Council of Better Business Bureaus (CBBB). It was imperative the DSA partner with a third party, independent organization such as the CBBB to ensure the enforcement of business standards and meet our objectives for self-regulation.
Direct sellers are America’s original entrepreneurs with unique opportunities to connect with customers, as well as pursue independent businesses. Along with that unique opportunity is increased responsibility. Our salespeople perform demonstrations person-to-person frequently in the home and we have long been aware of the additional accountabilities for our companies and salespeople to ensure trustworthy, reliable experiences. Our top priorities continue to be protecting consumers and promoting our viable, time tested retail channel.”
Mariano continued, “We know that direct selling has sometimes suffered from perceived problems, occasional bad actors, and others who pretend to be legitimate. We have decided to address these issues directly, by holding companies to the highest standards with an effective third party regimen.”
Lee Peeler, executive vice president of CBBB for National Advertising Programs, described the Direct Selling SRC, “The new program is a combination of a strong legacy with the ability to evolve so that it can keep pace with marketplace dynamics, respond to consumers’ needs and expectations, and complement law enforcement as the hallmarks of successful self-regulation.
“The program is built on the same strong foundation as other CBBB-administered self -regulation programs: clear standards, independent administration, transparent decision making, and accountability for non-compliance,” stated Peeler in discussing how the program will align with existing CBBB operating units. “The Direct Selling-SRC will have all four of these components, will be backed by robust online monitoring, and will be applicable to DSA members as well as non-members. This will go a long way to ensure higher levels of compliance with best practices, and help elevate the industry’s reputation.”
Peter Marinello, vice president of CBBB, will serve as Executive Director of the Direct Selling-SRC, overseeing the program and its staff. He brings a wealth of legal and self-regulatory experience from the National Advertising Division and the Electronic Retailing Self-Regulation Program.
Marinello complimented the DSA leadership for its efforts on co-development of the Direct Selling-SRC. “Good self-regulation starts with leaders in an industry with faith in their commitment to truthful and honest advertising. I am excited to be part of this new important chapter for direct selling.”
While the DSA has had a reactive, self-regulatory program for its members for nearly five decades, the creation of this new, proactive program represents a dramatic step forward to raise the bar for all direct selling companies. The program’s foundation is based on guidance from the regulatory community including the Federal Trade Commission (FTC), CBBB, outside experts, and DSA’s leadership.
“DSA members have long ascribed to our Code of Ethics, and that program will continue to be enforced by our Code Administrator. However, the Direct Selling-SRC will allow for a more comprehensive review of the marketplace as well as to ensure truthful, accurate content and representations by members and non-members. We are in an exciting time that will eventually bring increased accountability for the entire direct selling industry,” stated Mariano when discussing the scope of the new program.
The DS-SRC launched on January 4, 2019, and more information on the new entity can be found at https://www.asrcreviews.org/ds-src-2/.
ABOUT THE DIRECT SELLING ASSOCIATION
The Direct Selling Association (DSA) is the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services, typically outside of a fixed retail establishment. In 2017, 18.6 million Americans were involved in some capacity in direct selling in every state, congressional district and community across the United States. In 2017, direct selling generated $34.9 billion in retail sales.