For an industry like direct selling, compliance training for distributors holds a lot of importance considering its complex legal structure. The industry goes through stringent scrutinization for the number of false allegations and fraud happening on and off the industry. Direct sales companies have even been penalized for the actions of their distributors which the companies were unaware of. This ultimately affects the credibility of the company leaving their dignity at stake.

Such instances can be avoided if direct selling companies give their employees mandatory training modules including legal, tax, and industry-compliant practices. Direct selling companies and their independent sales forces have been given strict guidance by BBB National Program’s Direct Selling Self Regulatory Council in partnership with DSA to follow strict regulations while making earning claims. The FTC has also made several mandates in this regard considering a lot of people losing money through various companies.

Staying compliant with industry standards and practices not only prevents you from falling into allegations or scams but also helps build trust and loyalty among customers and distributors. While distributor training is done, it is important to keep them updated with compliance policies to avoid legal and monetary penalizations.

Some of the key regulations to keep in mind are -
1. DSSRC guidance on earning claims - It throws light on various regulatory standards that a company and its distributors should follow while
making claims.
2. FTC Mandates - The Federal Trade Commission has put forward various mandates like notice of penalty offense, The ROSCA act, the
business of opportunity rule, etc to strictly monitor MLM companies and their claims.
3. GDPR - General Data Protection Regulation
4. CCPA - California Consumer Privacy Act
5. DSA Code of Ethics