DSSRC Administrative Closure #222
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding nine earnings claims disseminated by salesforce members of the Company on Facebook. While one of the Facebook posts conveyed only that the Company’s business opportunity could provide salesforce members with a supplemental income to help pay down a bill, others conveyed that the Company’s direct selling opportunity could afford salesforce members the ability to pay for vacations, make a significant income and/or pay off debt (the “Posts”). DSSRC expressed its concern to the Company that the Posts conveyed atypical earnings claims regarding the amount of income that could be generally expected by the typical salesforce member participating in the Company’s business opportunity.
The Company responded promptly to DSSRC’s inquiry and was able to have the Posts removed from Facebook.
In addition, the Company advised DSSRC that it will continue to educate, train, and monitor its salesforce members and develop additional safeguards to prevent them from making impermissible income claims.
Specifically, the Company informed DSSRC that it had identified certain compliance practices that were in need of improvement and that, in response to DSSRC’s inquiry, the Company implemented proactive and appropriate compliance measures to remedy outstanding issues as well as to seek to prevent
future issues. The Company noted that it would embark on a more proactive approach to monitor income (among other) claims via social media
and other forms of communication. The Company further informed DSSRC that it also will be posting an income claim disclosure for reference for its salesforce members and will send out a communication to it salesforce members through their back office reminding them of the Company’s policies regarding claim dissemination.
Accordingly, DSSRC administratively closed the inquiry based upon the Company’s good faith actions to address the earnings claims identified by DSSRC.
(Administrative Closure #222, closed on March 24, 2022)
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