Operation Income Illusion: A Positive Step by the FTC to Curb Deceptive Income Claims

Dec 23, 2020 by BBB National Programs

The Federal Trade Commission (FTC)’s December 14 Operation Income Illusion initiative is a crackdown by the FTC and 19 federal, state, and local law enforcement partners against the operators of work-from-home and employment scams, pyramid schemes, investment scams, bogus coaching courses, and other nefarious operations that purport to offer significant income opportunities but that end up costing consumers thousands of dollars.

In this effort, the FTC and its partners are opening new law enforcement actions that focus on scams targeting consumers with fake promises of income and financial independence that have no basis. 

The Direct Selling Self-Regulatory Council (DSSRC) has long cautioned direct selling companies about the dissemination of business opportunity claims that communicate unrealistic earnings claims. One of the greatest challenges for direct selling companies is ensuring that the earnings claims communicated by their salesforce members comply with legal and self-regulatory standards.

In fact, earlier this year the DSSRC published its Earnings Claims Guidance for the Direct Selling Industry, which was intended to reinforce the fundamental principles of advertising claim dissemination with a particular emphasis on earnings claims communicated in social media posts. 

In general, direct selling companies are encouraged to refrain from communicating any claims that can be construed as communicating that consumers and potential salesforce members can generally expect to earn anything beyond modest or supplemental income from the direct selling business opportunity. Since the release of this guidance, companies have been very receptive and the announcement by the FTC of Operation Income Illusion is consistent with this ongoing effort to ensure that income claims in the direct selling industry are communicated truthfully and accurately.

DSSRC remains concerned about the continued proliferation of exaggerated income claims and will continue to monitor the advertising messages of the direct selling industry to make sure they adhere to appropriate and ethical advertising standards. 

If you think you have found a false business opportunity claim in the direct selling industry, file a challenge with the DSSRC. 

Suggested Articles

Blog

Top 10 Reasons to Resolve Lemon Law Disputes with BBB AUTO LINE

If your vehicle is still under warranty and you have an issue that the dealership has been unable to resolve, you may be able to reach a resolution directly with the manufacturer – at no cost to you - through BBB AUTO LINE. We have assembled a list of ten ways BBB AUTO LINE provides optimal resolution solutions.
Read more
Blog

What to Know About the New York Lemon Law

As we continue our blog series reviewing state lemon laws, we turn our attention to New York State. True to its reputation for making its own rules, New York includes some distinctive aspects within its lemon laws.
Read more
Blog

Defining The 'S' In ESG And Navigating Disclosures

For businesses interested in making robust ESG disclosures, not only can the sheer number of frameworks and standards make ESG performance reporting seem overwhelming, the frameworks themselves can be a bit fuzzy on how they define and measure the "S" of ESG.
Read more
Blog

BBB AUTO LINE Marks a Milestone: 40 Years of Lemon Law Dispute Resolution

As the largest and longest-running vehicle dispute resolution program in the United States, BBB AUTO LINE’s 40 years of experience will drive its future course. Together, automakers and BBB AUTO LINE will keep paving the way to make neutral, mutually trusted, out-of-court resolution solutions accessible to consumers.
Read more