The DSA promotes pro-MLM legislation worldwide – a WOLF IN SHEEP’S CLOTHING!
With the aid of the DSA, U.S.-based MLMs are exploiting worldwide markets, which are targeted for expansion. Based on numerous communications from many countries in Asia, Africa, and Europe, we know that US-based MLM (multi-level marketing) companies are recruiting aggressively worldwide. Their lobbying arm, the Direct Selling Association (DSA), has exercised its political muscle to gain acceptance by foreign governments, especially in Asia, of MLM as legitimate direct selling operations. As endless chain recruitment schemes, nothing could be further from the truth. Read more about it in “Direct Selling Association vs. Consumers.”
The DSA has influenced worldwide markets through the WFDSA, or World Federatio of Direct Selling Associations. For example, we have learned that the WFDSA has pressured the World Trade Organization to require that entry into the WTO by China and other nations be conditioned up on acceptance of direct selling, including MLM companies.
Legitimate Direct Selling Can Be a Good Thing – But the Typical MLM Is NOT Legitimate Direct Selling!
Legitimate direct selling can be a good thing, but few officials in these countries are prepared to clearly identify the downside of endless chain recruitment schemes, such as Amway and Nu Skin. The distinction between legitimate direct selling and MLM, or any scheme built on an endless chain of recruitment, is clearly spelled out in full “The 5 Red Flags” [PDF] report.
The DSA states well what direct selling IS -“the sale of a consumer product or service, person-to-person, away from a fixed retail location.” But it avoids mention of what legitimate direct selling is NOT – an endless chain of recruitment of distributors as primary customers.
The DSA has been successful in getting legislation passed in several states in the USA that would exempt MLM companies with legitimate products from prosecution as illegal pyramid schemes. Legislators are easily duped on such complex issues when the apparent intent of the legislation is to help consumers. But such legislation is a wolf in sheep’s clothing. Based on research reported on this web site, product-based pyramid schemes are the most harmful of all – with the highest loss rate and with aggregate losses exceeding all other types of pyramid schemes combined. (See “Shocking statistics”
In recent years, as consumers in the U.S. become weary of recruitment by MLM companies in programs that seldom pay off for anyone, the MLM industry and the DSA have been very active in lobbying to gain acceptance overseas, especially in Asia. By paying off early investors with investments (in products) by new recruits, they can keep those at the top of the hierarchy of participants happy and paid off. So they become a form of Ponzi scheme. Rank and file participants almost always lose money.
An excellent example of the effects of MLM recruitment in Asia is Nu Skin. See Nu Skin’s Naughty Numbers. Read excerpts of letters from victims and inquirers in Asia in the Report of violations of the Order by the Federal Trade Commission for Nu Skin to stop its misrepresentations regarding earnings of its distributors. You will find many quotes on page 13 and pages 30-39 (“Misrepresentations in Asia” section). See the “Index and Summary of Key Points” to find what is of greatest interest.
Read also about law enforcement in the U.S., which has been ineffective in stopping the progress of product-based pyramid schemes, or “recruitment-driven MLM’s.” Check out other reports on this web site that explain the truth about all aspects of MLM – based on 15 years of solid independent research and consumer advocacy. Check out recommended links to other sites with excellent reports to be further informed on the topic.