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Caught Our Eye

Controversial "MLM" companies come to Washington

Posted by Keturah Hetrick on Jan. 22, 2018

Controversial "multi-level-marketing" businesses have spent years encouraging teams of independent "distributors" to hawk their products and recruit new sellers. As bad press finally catches up to them, many have taken their fight to Washington.

USANA Health Sciences is the latest MLM company to hire representation in Washington. While their lobbying contract with Michael Best Strategies does not specify which exact "direct-selling" issues the firm will advocate for, other MLMs have been more explicit.

Melaleuca, a personal-care and cleaning-products company, and LegalShield, which sells legal-service products, both hired their first teams of lobbyists last fall to lobby on a pair of congressional bills: the proposed Anti-Pyramid Promotional Scheme Act, which would establish a federal definition of pyramid schemes, and a Financial Services and General Government Appropriations Act amendment, which would regulate the MLM practices.

Alticor, the parent company behind Amway, stepped up its lobbying efforts this fall, signing contracts with K&L Gates and the Stanton Park Group to lobby on the Anti-Pyramid Promotional Scheme Act.

Rodan + Fields, which sells skin-care products, also hired Greenberg Traurig in November to lobby on unspecified "health-care issues."

Other MLMs with current federal lobbying representation include DoTerra (skincare and dietary products), Beachbody (exercise and weight-loss products), Counter Brands (DBA Beautycounter, skincare and cosmetics), Herbalife International of America (nutrional supplements), Mary Kay (cosmetics), Nu Skin (personal-care products), Primerica (insurance and financial services) and Southwestern Co. (textbooks).

Many recent reports allege that MLMs work similarly to pyramid schemes, with distributors only able to make substantial income if they recruit a team of other distributors beneath them. 99 percent of MLM distributors lose money, according to a report published in 2011 on the Federal Trade Commission website.