DSSRC Administrative Closure #74

The Company informed DSSRC that it engages in two types of wholesale transactions: (i) selling products in bulk directly to some end retailers and (ii) selling to other distributors, who in turn resell the products to end retailers. The Company confirmed that, based on its investigation of its records, all five of the representations identified by the DSSRC were made by wholesale purchasers. The Company stated that it only sold directly to two of the five companies identified in the social media posts and that it has no relationship with the other three companies. In addition, the Company noted that none of these five retailers were members of the Company’s affiliate program nor were they subject to the Terms & Conditions of that program. The Company stated that it has adopted a conservative approach of making no claims about health and wellness benefits related to its products and it not only applies this approach to its direct selling website, but it also requires the same commitment from members of its affiliate program.

According to the DSSRC Policy & Procedures, DSSRC shall consider matters related to earnings claim (including income or lifestyle representations) and product claims made by any direct selling company (i.e. companies who sell their products and services directly to consumers through an independent salesforce) and their salesforces. Here, the Company confirmed that the claims brought to its attention by DSSRC were not disseminated by the Company itself nor by any members of its independent salesforce. Accordingly, it was determined that DSSRC did not have jurisdiction over the health-related product performance claims communicated by independent retailers who purchased the product at wholesale directly from the Company and that the Company had no editorial control of message disseminated by those independent retailers.

Notwithstanding this conclusion, because of the gravity of the claims, the Company informed DSSRC that it would be reaching out to the independent retailers responsible for the claims to inform them that the health-related claims that they are making about the Company’s products are not supported by competent and scientific evidence and will request that they remove the posts at issue and refrain from making similar representations in the future. DSSRC expressed its appreciation to the Company for exercising a good faith effort to address these problematic posts.

For the aforementioned reasons, the inquiry was administratively closed pursuant to the DSSRC Policy & Procedures. 

(closed on 9/17/2020)