DSSRC Administrative Closure #16
DSSRC opened an inquiry into a multi-level marketing company that offers travel discounts regarding several business opportunity claims including aggressive, atypical income and bonus incentive claims that did not include disclosure of generally excepted results. The claims were disseminated on Facebook, in YouTube videos and on the Company website and were communicated expressly in the posts as well as through accompanying hashtags. More specifically, posts by Company distributors claimed, among other things, that Company salesforce members “… can turn travel into a 5 figure income monthly,” receive “residual income” and could earn “Full Time income in a short time frame.”
YouTube videos were also at issue in the inquiry and included claims that “‘you don’t have to sell to make six figures,” “earning potential of up to “$2,000 per month,” and claims of working part time for full time income and replacing full time income”. The YouTube videos also included hypothetical earning scenarios which extrapolated annual income amounts of “$150,000” and “$300,000.”
Immediately upon receipt of the DSSRC inquiry, the direct selling company began an investigation and diligently located the source of these claims. The Company was able to trace all the wrongful claims made back to one individual. This individual was immediately notified of their direct violation of the Company’s Policies and Procedures, suspended, and instructed to remove all social media posts immediately. DSSRC independently confirmed that the YouTube videos had been disabled by the Company. Further, the Company explained to DSSRC that its Policies and Procedures and business operations are very clear that no statements may be made indicating any guaranteed or projected earnings while working for the Company.
DSSRC will continue to monitor the commitment of the Company and will re-open this matter if it is not satisfied that Company has used its best efforts to address future problematic representations.
(closed on 3/9/2020)