Today's 'Direct Selling Association,' is a lie.

Today in the USA and elsewhere, due to many factors (not least supermarkets, discount stores and the Internet) virtually no one buys consumer goods on the door-step.

Historically, door-to-door selling (or what used to be known as peddling) was a very common way of doing business in the USA, but at the start of the 20th century, its image was blighted by fly-by-night quacks and charlatans. In an age when most women did not go to work, and even the middle-class had servants to cook, clean and receive visitors, door-step products were invariably cheap and cheerful, and aimed at ordinary housewives. 

From just before WWI until the 1960s, the 'Direct Selling Association' was a national trade association in the USA that represented (and was only financed by) a number of generally-reputable commercial companies of various sizes. These used to generate profits by regularly selling everyday goods (usually perfumes, cosmetics, costume jewellery, household products, books, etc.) directly to the general public through salaried, and/or non-salaried, commission agents. Although unethical, high-pressure sales tactics were increasingly used by new, and less reputable, DSA members, in their traditional format, direct retail transactions were authentic and lawful, because they were mostly-based on value and demand. Furthermore, the DSA members originally tried to keep fly-by-night quacks and charlatans at bay, and, at one time, they agreed that, like political constituencies, commission agencies for any particular company, should be limited in given geographical/population areas. This prevented counter-productive internal disputes amongst the sales-force and enabled individual sellers to have a fair chance of finding sufficient loyal customers to make a decent living. 

Today, when examined in splendid isolation by casual observers, the self-proclaimed activities of the corporate structures still known as 'Direct Selling Associations' can appear to be the same as above, and entirely lawful. However, when the wider-evidence is rigorously examined, during the second half of the 20th century (as door-to-door selling died out in the USA and elsewhere) the membership of 'DSAs' came largely to comprise an ever-growing number of so-called 'Multi-Level Marketing' companies ('Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc.) which have been used to dissimulate vast closed-market swindles or pyramid schemes. The manipulative criminals behind these counterfeit commercial companies, have acquired their wealth by steadfastly pretending moral and intellectual authority, whilst deceiving an endless-chain of victims (now comprising many millions of individuals around the globe) into making regular losing-investments in exchange for effectively-unsaleable wampum (i.e. banal, but grossly-overpriced products, often of a dubious pseudo-scientific nature with highly-exaggerated, and/or miraculous, claimed benefits which cannot be quantified). These unlawful transactions, already totalling many billions of stolen dollars, because they were actually based on the false expectation of future reward, have been laundered as lawful retail sales based only on value and demand. 

The outrageous 'MLM direct selling' lie, has been hiding in plain view for so long: that many people now not only accept it as the truth, but they will laugh out loud at rational persons suggesting that, in reality, so-called 'MLM recruiters' are adherents of the crackpot, but nonetheless economically-suicidal fairy story that  infinite recruitment + infinite payments by the recruits = infinite profits for the recruits, 

It is, however, important for readers to distinguish between short-term and chronic, core-believers in the 'MLM income opportunity' myth. The overwhelming majority of people who have been taken-in by 'MLM,' quit within a short time, usually because they find it impossible to convert, and/or maintain, other contributing recruits, and/or they have no cash, or credit, to continue contributing themselves. Since they were invariably recruited by a friend or relative, they have little reason to complain, and they wouldn't know exactly what to say, or where to complain, anyway. 

The declared annual roll-over rate in groups like 'Amway', 'Herbalife', etc., has always been well in excess of 50%. Those who have persisted for more than 3 years, is certainly no more than 5%. However, if you ignore the insignificant number of charismatic, grinning schills at the top of the pyramids, the overall hidden roll-over/loss rate in so-called  'MLM income opportunities,' has always been effectively 100%. Thus, the constant public-proclamations by the leaders of the largest, long-established groups like 'Amway'  that their sales-force has always been expanding for decades and lately comprise 'millions of Independent Business Owners,' is a grotesque, criminal distortion of ever-shifting reality.  

There has been a significant minority of chronic 'MLM' proselytizers, with access to cash or credit, who continue as de facto slaves to the lie, sometimes for more than 10 years. In many cases, these dangerously-deluded, self-righteous persons will do, or say, anything to sign-up, and/or maintain, recruits - convinced that they will only achieve total financial freedom by helping others to achieve it . They are indoctrinated to ignore their mounting losses/debts and to commit everything they can get their hands on. Some even steal from their friends and families, and/or deprive themselves, and/or their families, of food, heating, etc. In the very worst cases, gung-ho 'MLM' adherents known as 'Road Warriors' have been indoctrinated to go without sleep and have ended up dead at the wheels of their cars - crashing whilst en route to late-night recruitment meetings. Fanatical 'MLM' addicts have generally been compared to chronic gamblers, but I have called them 'financial anorexics.'  

Once the relatively-simple, underlying modus operandi of blame-the-victim 'MLM income opportunity' fraud is clearly understood, the tightly-scripted, reality-inverting activities of the 'DSAs' form part of an overall pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act 1970). Tellingly, the 'DSAs' (which pose as rigorous and ethical self-regulators vehemently opposed to pyramid schemes), have long-since ceased to set , let alone enforce, any limit on the numbers of commission agencies being created by members.

http://www.youtube.com/watch?v=hh6z1hP4H0o

The corporate officers of the American 'DSA,' like Joe Mariano (whose salaries have been paid with stolen money), are, in fact, committing wire fraud and attempting to obstruct justice when they make the following, demonstrably false, and/or selective, and/or essentially meaningless, statements on their own Website; for even their use of the term, 'Direct Selling,' is a cruel joke:

'Washington, D.C. (Jan. 29, 2013) - Following the Jan. 28 announcement that an enforcement action against Fortune Hi-Tech Marketing (FHTM) is being initiated by the Federal Trade Commission (FTC) and several attorneys general for allegedly operating a pyramid scheme, the Direct Selling Association (DSA) has received numerous inquiries regarding whether FHTM is a member of the Association. "FHTM is not a member of DSA,” confirmed President Joe Mariano. Additionally, he stated that “the Association’s membership application process is rigorous, and is designed to ensure that only legitimate direct selling companies become members of the direct selling industry's trade association."

FHTM had applied for DSA membership, but withdrew its application in 2011. A rigorous review of each applicant’s marketing and compensation plan is conducted to ensure compliance with DSA’s self-regulatory Code of Ethics. DSA works with applicant companies to address any deficiencies in policies and procedures prior to recommending to the Board of Directors that the company be approved for full membership. Mr. Mariano explained that "the membership review process serves to identify pyramid schemes that are masquerading as legitimate direct selling companies." Mr. Mariano also stated "that well over half of the companies that apply for membership in the Association withdraw their applications for a variety of reasons including failure to come into full compliance with the requirements of the DSA Code of Ethics," thus making the company ineligible for membership. Pyramid schemes and other fraudulent scams are ineligible for DSA membership.

While DSA cannot comment on the specific allegations regarding FHTM, Mr. Mariano commended the FTC and state attorneys general "for their comprehensive, ongoing efforts to identify and prosecute illegal and fraudulent pyramid schemes, an approach that is consistent with concerns raised by DSA through its membership application process and its long-established self-regulatory efforts....."

.... The Direct Selling Association is a 102-year-old national trade association that represents companies who distribute products to customers through or with the assistance of independent salespersons who personally demonstrate and explain those products to the consumer, usually in the home or work place. Direct sellers are perhaps best known to the public as person-to-person, door-to-door, or home party plan sellers. Through the efforts of direct salespersons that provide personal demonstration, home delivery, and a variety of other sales-related services, direct-selling companies can offer quality products to consumers without substantial advertising or other barriers to entry found in other distribution systems, like brick-and-mortar stores. In 2011 there were approximately 15.6 million direct sellers in the U.S. with retail sales of nearly $30 billion.'

http://www.dsa.org/press/press_releases/?fa=view&docID=5448

If readers just stop and think for a moment, then this is obviously a fairy story; for the above document conveniently ignores the key-fact that another so-called 'Direct Selling' company, 'YourTravel Biz.com (YTB),' was a 'DSA' member that had just been 'approved as legal and ethical' only months before being successfully-prosecuted as a 'massive pyramid scheme' and shut down by the California Attorney General. In this particular case, it was found that 340,000 persons had been deceived by 'YTB' including a significant number who had bought effectively-valueless shares in it. 

Furthermore, if there really were 15.6 millions direct sellers in the USA in 2011, then how many of them remained in 2012 and where are all their customers? Readers will note that nowhere in any material published by any so-called  'DSA' anywhere in the world, is to be found a common-sense, accurate and unambiguous definition of what used to be considered a lawful direct selling company. 

i.e. a corporate structure which can prove that its revenue has largely-derived from the regular selling of significant quantities of products, and/or services, directly to the general public via commission agents: rather than from purchases made by a never-ending chain of its own losing, commission agents. 

Tellingly, in all material published by so-called 'DSAs,' instead of  'the general public,' we always find the vague, and ambiguous, terms: 'customers' and 'consumers' which obviously can be (and are) taken to mean absolutely anyone, including the commission agents themselves. Indeed, the so-called 'DSA's' own so-called 'Codes of Ethics' specifically allow so-called 'self-consumption by Direct Sellers' to 'qualify' as so-called 'Sales.'

Thus, heading the list of common-sense questions which should long-since have been put to the officers of the so-called 'Direct Selling Association' in the USA, is:

'Of your members' claimed '$ multi-billion retail sales,' exactly what percentage have been authentic, external, retail sales to the general public rather than internal transactions between your members and the millions of so-called 'direct sellers' themselves, arbitrarily, and falsely, defined as 'retail sales?'

Obviously, the officers of the so-called 'DSA' have painted themselves into the same absurd corner as the bosses of 'Herbalife', and their standard escape will be first to smile-sweetly, and steadfastly pretend that they can't be expected to have a ready answer to the above question, when the direct selling companies themselves don't monitor, or publish, this information. However, if put under pressure, they will then be obliged to claim that the questioner doesn't understand how direct selling functions, because many of the millions of persons who have always been described as 'direct sellers in the USA,' weren't actually 'direct sellers' at all, they were 'discount customers.'

Thus, I will confidently predict that, when challenged, the branch of the 'MLM' Ministry of Truth known as the 'Direct Selling Association' will cease to put forward the limp defence of ignorance. Instead, they will mount exactly the same arrogant, Orwellian offensive as the bosses of 'Herbalife (HLF)' 

In effect, they will say:


Read the word 'seller' as 'buyer,' stupid! Then fraud  is lawful.'




David Brear (copyright 2013)





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