Direct Sellers Update: Regulation, Law & Policy

The lawsuits, filed by the Department of Justice, on behalf of the Federal Trade Commission, alleged that the distributors, who styled themselves as “wellness advocates” and touted their expertise as medical practitioners, made numerous claims during webinars conducted in 2022 that doTERRA’s products could prevent, treat, or cure COVID-19.

In 2020, the Federal Trade Commission (“FTC”) sent letters to a number of direct sellers, alleging that they or members of their sales force had made false or misleading health and earnings claims related to COVID-19. Then in 2021, Congress enacted the COVID-19 Consumer Protection Act (the “Act”), providing for civil penalties of up to $46,517 for every misleading claim about the treatment, cure, prevention, or mitigation of COVID-19. And just recently, many of our direct selling clients received letters from the FTC reminding them of the FTC’s authority under the Act.

COVID-19 continues to impact much about our daily lives – from the way business is conducted to how we communicate with friends and family. As a result of COVID-19, companies must adapt to and remain mindful of the shifting environment in which they conduct business. Indeed, the COVID-19 pandemic has created a complicated and risky compliance environment for companies. That is certainly true for direct selling companies, who remain on the radar of the Federal Trade Commission (FTC).