Burnlounge NoOpen 2 from Direct Selling Association on Vimeo.

The Direct Selling Association applauds today’s decision by the Ninth Circuit court of Appeals in the case of FTC v. Burnlounge, ridding the marketplace of this fraudulent scheme. DSA is gratified by the court’s affirmation of long-standing legal principles, including the legitimacy of compensation to direct sellers based on their consumption and use of products, and a prohibition on such compensation based primarily on recruitment. As a strong supporter of clear, effective consumer protection standards with regard to pyramid schemes, DSA believes the Court's decision will further consumer interests by eliminating misinformation and misunderstanding of these standards as raised by the recent actions of stock market manipulators. We are optimistic that today's decision will assist consumers by reaffirming what constitutes a pyramid scheme. We applaud the court's thoughtful analysis regarding who is an "ultimate consumer," the acceptance of DSA's position on these issues as expressed in its friend of the court brief filed in this case, and the clear reliance on established standards, including  the 1979 in re Amway decision and the FTC’s 2004 Staff Advisory letter to DSA.