Direct Selling Self-Regulatory Council Recommends Lyconet Discontinue Salesforce Member Earnings Claims

McLean, VA – July 1, 2024 – The Direct Selling Self-Regulatory Council (DSSRC) of BBB National Programs recommended that Lyconet America, Inc. discontinue certain earnings claims made by salesforce members on YouTube and Facebook.  

The inquiry into Lyconet, an international direct selling company assisting independent marketers in establishing and managing their individual shopping networks, was commenced by DSSRC through its ongoing independent monitoring of advertising and marketing claims in the direct selling industry. 

The earnings claims that formed the basis of this inquiry include, but are not limited to:

• “How does SUCCESS, CAREER, financial FREEDOM sound to you? It's all up to you”
• “Lyconet Financial Freedom”
• “… see how we do things differently at Lyconet and enjoy financial freedom for the rest of your life .”
• “The benefits that Lyconet Marketers, including me, gain from this business are … Potential for financial independence.”
• “Ready to have TRUE residual income? I mean NOT the kind where once someone stops buying your products on auto-ship your commission ends. The kind that grows overtime with you doing ANYTHING!?
• MLM with the sky being the limit on earnings potential.”
• With Lyconet’s proven business plan and about 15 hours a week YOU can become financially independent AND help others to become as successful or even more so than yourself.”
• “This particular business model creates passive income, requiring no cash investment to start up. It can be operated on a flexible part-time basis until it generates enough cash flow for the entrepreneur to transition out of his current full-time job.”
• I am already making a full time income with this!”
• “We could all do with an extra income stream by creating a residual income. The earnings are unlimited and what you put in, is what you will get out. Also, what you put in remains yours to spend on future shopping!”
• “unlimited Passive Income”

As stated in DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry, some words and phrases commonly used in earnings claims can carry a particularly high risk of being misleading to consumers. Such words and phrases include claims such as “financial freedom,” “full-time income,” “replacement income,” “residual income,” and “career-level income.” Furthermore, earnings claims must be substantiated and representative of a level of earnings that can be generally expected by the audience. 

DSSRC appreciated the efforts of Lyconet to remove or modify five of the 16 social media posts at issue in this inquiry, however, regarding the 11 earnings claim posts that are publicly accessible, DSSRC remained concerned that the posts communicate the unsupported message that the typical Lyconet salesforce member can generally expect to receive significant income from the business opportunity. 

Although Lyconet indicated that it has contacted the individuals responsible for the posts, it did not provide DSSRC with copies of the correspondence or indicate if those salesforce members maintained active accounts with Lyconet. 

DSSRC recommended that Lyconet:

• Provide copies of its correspondence with salesforce members requesting removal of the claims and terminate the accounts of any unresponsive active salesforce members. 
• Use the reporting mechanism on Facebook to file a trademark or copyright violation.
• Contact the website or platform hosting the claims in writing and request removal of the claim or post and provide DSSRC with copies of the correspondence.

In its company statement, Lyconet stated that it “immediately took steps to address the issues highlighted… contacted the individuals responsible for the social media posts identified by DSSRC … and provided DSSRC with copies of our communications with these individuals, demonstrating our good faith efforts to comply with the DSSRC’s recommendations.”

All BBB National Programs case decision summaries can be found in the case decision library. For full text of DSSRC decisions, visit the DSSRC Cases and Closures webpage.