DSSRC Administrative Closure #234
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding certain earnings claims and product performance claims that were disseminated on social media by the Company’s salesforce members. The claims at issue included nine (9) posts that were disseminated on Facebook, YouTube, and Twitter and included residual income (e.g., “… work on your own terms and create a residual income”) and financial freedom income claims (e.g., “Financial freedom […] change your life forever”). DSSRC expressed its concern to the Company that these posts communicated statements of atypical earnings regarding the amount of income that could be generally expected by the typical salesforce member participating in the Company’s business opportunity.
The inquiry also included product performance claims that DSSRC determined may be reasonably interpreted as conveying an unsupported message that Company’s products are effective in treating eczema and psoriasis.
The Company promptly responded to DSSRC’s inquiry and agreed that the earnings and product claims at issue in this inquiry were unsupported and should not have been made. The Company was able to have six (6) of the social media posts taken down shortly after DSSRC commenced this inquiry.
As for the three (3) remaining posts, the Company informed DSSRC that the accounts of the salesforce members responsible for the posts were terminated before its receipt of the DSSRC Notice of Inquiry. The Company informed DSSRC that it has made several unsuccessful attempts to contact the salesforce members and will continue to follow up and will pursue available legal measures to ensure that these three posts are removed.
Notwithstanding, based upon the good faith efforts exercised by the company to address DSSRC’s concerns, DSSRC administratively closed the inquiry and indicated to the Company that it will continue to monitor the product and income claims being disseminated by the Company and its salesforce members, including the status of the remaining posts.
(Administrative Closure #234, closed on April 11, 2022)
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