Direct Selling Joins Self-Regulatory Program Neighborhood at CBBB

Advertising Law

The Direct Selling Association (DSA) announced the establishment of a new direct selling self-regulatory program that will be administered by the Council of Better Business Bureaus (CBBB).

Aiming to “ensure high standards of integrity and business ethics as the guiding principles for all direct selling companies in the marketplace,” the Direct Selling Self-Regulatory Council (Direct Selling – SRC) launched on January 4, 2019.

The program will apply not just to members of the DSA—the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services—but also to the websites and social media of direct selling companies and their independent sales forces in the areas of income representations and product claims.

The program will include a process to investigate and report potentially noncompliant companies to the appropriate government agencies and a competitive challenge process that will allow independent companies to identify issues for the Direct Selling – SRC to review. Program administrators will also manage the resolution of consumer/company complaints.

“We know that direct selling has sometimes suffered from perceived problems, occasional bad actors and others who pretend to be legitimate,” Joseph N. Mariano, president and CEO of the DSA, said in a statement. “We have decided to address these issues directly, by holding companies to the highest standards with an effective third party regimen.”

The Direct Selling – SRC program is built on the same foundation as other CBBB-administered self-regulation programs with “clear standards, independent administration, transparent decision making and accountability for non-compliance,” stated Lee Peeler, executive vice president of the CBBB for National Advertising Programs.

Previously, the DSA had a self-regulatory program in place for its members, but the creation of the new proactive Direct Selling – SRC based on guidance from the Federal Trade Commission, the CBBB, outside experts and DSA leadership “represents a dramatic step forward to raise the bar for all direct selling companies.

“DSA members have long ascribed to our Code of Ethics, and that program will continue to be enforced by our Code Administrator,” Peter Marinello, vice president of the CBBB and executive director of the Direct Selling – SRC, explained. “However, the Direct Selling – SRC will allow for a more comprehensive review of the marketplace as well as […] 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.”

To read the press release about the new program, click here.

Why it matters: Joining the family of CBBB self-regulatory programs—including the National Advertising Division, National Advertising Review Board, Children’s Advertising Review Unit, Electronic Retailing Self-Regulation Program and Online Interest-Based Advertising Accountability Program—the Direct Selling – SRC will feature oversight of the entire direct selling marketplace, regardless of DSA membership.



pursuant to New York DR 2-101(f)

© 2023 Manatt, Phelps & Phillips, LLP.

All rights reserved