MADISON, CONN. June 7, 2016–The Direct Selling Association (DSA), the national trade association for multi-level marketing companies, honors 22 companies that purportedly “serve as examples of direct selling at its best” at its national conference in Phoenix, Arizona tonight. However, an investigation by ad watchdog, truthinadvertising.org (TINA.org) has revealed that numerous award winners are engaged in false and deceptive advertising by using unsubstantiated health and/or income claims in marketing their business opportunities and are, in fact, violating the DSA’s own code of ethics. Other members of the industry group, both past and present, have faced accusations of operating illegal pyramid schemes, including conference sponsors Herbalife and Stream Energy.
In what appears to be par for the course, from 2012 to 2015, the DSA presented awards to companies (and their distributors) which were actively engaged in false and deceptive marketing, according to TINA.org’s analysis. In a recent high-profile example, Vemma Nutrition Company, an Arizona-based supplement and energy drink company that was declared a product-based pyramid scheme by the FTC in 2015, was lauded by the industry group in 2013 while actively violating an FTC consent order by marketing its mangosteen products with illegal health claims.
Though the DSA has consistently defended its commitment to high ethical business standards, prominent members including Tupperware and Avon have fled the group in recent years citing pyramid scheme concerns. DSA is currently pushing legislation that could, if enacted, result in the proliferation of pyramid schemes. “If the DSA is to have any credibility with the public or its own industry, it needs to put its house in order and start enforcing its own Code of Ethics,” said TINA.org Executive Director Bonnie Patten.
As a result of its findings, TINA.org sent warning letters to three DSA award-winning companies: 4Life, Nerium, and Jusuru notifying them of its findings and asking the companies to remedy the deceptive marketing immediately. If the companies fail to comply, TINA.org will notify the FTC of the MLM companies’ legal violations. To read TINA.org’s full article on the DSA awards including links to sources, click here: www.truthinadvertising.org/dsa-award-winners-ethics-code-violators/
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