This article explores the value of industry-led self-regulation as a tool for promoting business accountability, protecting consumers, and strengthening public trust. In the direct selling sector, the Direct Selling Self-Regulatory Council exemplifies this commitment, working independently, but alongside companies, trade associations, and compliance professionals to uphold ethical standards and proactively address emerging challenges.
Industry self-regulation is an important, yet under-studied phenomenon in business. Are self-regulatory organizations truly successful at curbing marketing misbehavior? To this end, this research evaluates the effectiveness of the Direct Selling Self-Regulatory Council’s efforts and case outcomes since its inception in 2019 through February 2024.
This article provides an overview of the objectives of self-regulation. In examining the activities and components of leading self-regulatory programs, this comparative analysis offers a framework for evaluating the Direct Selling Self-Regulatory Council, the industry-wide self-regulation program for the direct selling channel.
The article discusses 2024 FTC Guidance on how direct selling companies with multilevel compensation structures should approach their income and earnings reports, commonly known as income disclosure statements.
As noted by author Dr. Chetan Sanghvi, concern about pyramid schemes has rightly focused on the victimization of consumers. But it should also be recognized that pyramid schemes damage legitimate businesses, which further damages consumers. The prevalence of fraud can create a fog of uncertainty and doubt that leads individuals to demur from participating in legitimate businesses. Dr. Sanghvi argues that the antidote is to provide clarity and assurance by establishing clear guidelines in law on what constitutes pyramid fraud.
An accurate understanding of the direct selling business model is critical as regulators, judges and policymakers make decisions and policy related to the channel. This paper by leading academics makes a significant contribution to that effort by focusing on debunking misguided assumptions as well as various logical and analytical errors in research.
