Direct Selling Association (DSA) today released a new economic analysis prepared by NERA Economic Consulting (NERA) that indicates flaws among often-used criteria to distinguish legitimate direct selling businesses from pyramid schemes.
The study disputes an assertion that internal consumption, where direct selling consultants purchase products or services for their own use, is illegitimate or sufficient to indicate a pyramid scheme.
“Everyone agrees that pyramid schemes should be prosecuted to the fullest extent of the law,” said Joseph N. Mariano, DSA President. “However, consumers lose when scarlet letters are placed on legitimate companies. The issue is not whether schemes should be put out of business, but how regulators and the courts determine what constitutes unlawful behavior. The NERA study calls into question a flawed conclusion that a key indicator of a scheme exists when direct