Personally I think MLM regulation in the US is in a pretty good place.

Other than the host of affiliate autoship recruitment scams that still need to be cleaned up (nutrition niche, I’m looking at you), there hasn’t been any major Ponzi or pyramid scheme launches in the US since the Vemma and Herbalife busts.

With 50% or more retail sales volume the cornerstone of current regulatory enforcement (other than outright securities fraud on the Ponzi side of things), all the FTC and SEC need to do is enforce the law.

Not so according to the DSA, who for some reason believe the industry desperately needs to kill off any retail sales volume requirements.

While I don’t personally take the DSA very seriously (far too many nutrition niche autoship recruitment schemes in their member-base), it’s undeniable they have political clout.

Among others, the DSA website lists Repulican Congressman John Moolenaar as a “Direct Selling Caucus Member”. That means he can be counted on to push the DSA’s agenda as required.

As I mentioned earlier, the DSA’s current agenda is to put into law that MLM companies don’t have to generate retail sales.

And so we have the “Moolenaar Amendement”, quietly tacked onto the House Financial Services and General Government Appropriations bill.

What does the MLM industry have to do with financial services and government appropriations?

Nothing. That legislation has to be passed though, and the idea is that by attaching the Moolenaar amendment to it, a pro-pyramid scheme law might fly under the radar.

Moolenaar’s amendment
‘
proposes that direct selling does not require selling products primarily to people who are not distributors
‘.

That is to say an MLM company could generate 100% of sales revenue from recruited affiliates and ignore retail sales altogether.

This is problematic for what should be obvious reasons. Pyramid schemes and Ponzi schemes that utilize pyramid recruitment, by design have little to no retail activity taking place.

There is no distinction between a pyramid scheme and an MLM company without retail sales taking place and generating commissionable revenue.

In an attempt to justify their support of the Moolenaar amendment, DSA President Jospeh Mariano framed his response as a defense of the MLM industry as a whole.

“Direct selling is no pyramid scheme” writes Mariano, who then proceeds to
sell you on why the US needs to legalize pyramid schemes
.

Everyone who engages in or is considering engaging in direct selling, be they consumer or business builder, needs better protection from the reputational and financial harm caused by pyramid schemes that masquerade as legitimate businesses.

An amendment proposed by Rep. John Moolenaar (R-MI) to the FY 2018 Financial Services and General Government Appropriations bill, July 13, would define a pyramid scheme under federal statute for the first time and make clear that direct sellers buying products for their own personal use is a legitimate business practice.

🤖 Quick Answer

What is the Moolenaar Amendment and its relationship to MLM regulation?
The Moolenaar Amendment represents a legislative proposal that would modify current Multi-Level Marketing (MLM) regulatory requirements in the United States. It specifically addresses retail sales volume thresholds, which currently serve as a cornerstone of FTC and SEC enforcement mechanisms to distinguish legitimate direct sales operations from pyramid schemes.

Why does the DSA oppose retail sales volume requirements for MLMs?
The Direct Selling Association advocates for eliminating retail sales volume requirements, arguing such restrictions unnecessarily burden the MLM industry. The organization contends that current regulatory frameworks are overly restrictive, though critics question whether this position adequately protects consumers from deceptive recruitment-focused business models.

What enforcement standards currently protect consumers from pyramid schemes?
The FTC and SEC enforce MLM regulations primarily through retail sales volume requirements, mandating that companies maintain substantial consumer sales

🔗 Related Articles

- IM Mastery Academy Review: iMarketsLive rebooted
- PRP Life pyramid fraud warning from Russia
- Quantex securities fraud warning from QC, Canada
- AladdinBOT Review: AI trading bot ruse Ponzi scheme
- OmegaPro & OMP Money securities fraud warning by Colombia