Consumer protection advocates are fighting two legislative proposals supported by the Direct Selling Association that critics allege would curtail the federal government's authority to take action against pyramid schemes and other multilevel marketing programs, O'Dwyers PR News reported Friday.

The first is a proposed bill in the U.S. House of Representatives that would define what activities constitute a pyramid scheme or multilevel marketing scam. Critics contend the language in the bill is so narrow the Federal Trade Commission would have its hands tied when trying to enforce the proposed law.

The second is a House amendment to the 2018 appropriations bill that zeroes out agency funding for enforcement actions against pyramid operations.

DSA reportedly crafted the first bill and has endorsed the amendment. http://bit.ly/2zKeLy8

The association has been the target of harsh criticism for its alleged role in pushing forward the legislation.

The House bill "gives cover to pyramid schemes. If enacted, bad operators will be emboldened," Frank VanderSloot, CEO of health products manufacturer Melaleuca, said in a Sept. 9 op-ed in The Hill newspaper. "This will lead to more consumers being harmed, more lives being ruined, and more financial devastation to those who fall prey to yet another scheme. We know that is not what Blackburn intended." http://bit.ly/2zJOoZd

DSA has largely left defense of the bill to lawmakers and legal experts. However, the group issued a "myth vs. fact" document in August stating the reason the legislation was needed was to define pyramid schemes at the federal level, given the issue has largely been left to states.

"All fifty states have codified laws banning pyramid schemes, and numerous court decisions have used the same definition of a scheme that (the House bill) seeks to enact at the federal level," DSA said. "In addition, 21 states have anti-pyramid statutes that explicitly sanction personal use. This pro-consumer measure extends protection of consumers and direct sellers at the federal level as a natural next step." http://bit.ly/2z2ff5C

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