FTC seeks to regulate direct sales

Trenton, N.J. -- The U.S. Federal Trade Commission is seeking to place regulations on "multi-level marketing" in which employees sell company products from their homes.

Some of the biggest employers of "multi-level marketing" are household names like Avon, Tupperware and Mary Kay, The New Jersey Star-Ledger reported.

The FTC wants to require salespeople to wait seven days between pitching a business opportunity and hiring a recruit. The FTC also wants companies to disclose earnings claims, past criminal or civil actions, and cancellation and refund policies, the newspaper said.

Many salespeople who promote products are stay-at-home moms, who say they enjoy the flexibility of working from home. But some experts warn consumers about what is known as a pyramid scheme, which scams consumers.

The products sold vary widely from energy drinks to car leases to cosmetics.

Experts said about 14 million United States residents generate an estimated $30 billion a year in direct sales to customers. One trend includes shopping "parties" held in the salesperson's home, at which customers can learn about and purchase products.

Copyright 2007 by United Press International.