DSSRC Administrative Closure #3

DSSRC opened an inquiry with a direct selling company regarding Instagram and Facebook posts made by the Company salesforce regarding claims of achieving “financial freedom,” a claim stating that potential recruits can “earn the income that want,” an unqualified claim of atypical earnings and an unqualified claim regarding company incentive trips.

The Company was responsive to DSSRC’s concerns and indicated that it would be modifying claims of financial freedom and explained to DSSRC that its compliance team would be advising its salesforce to include appropriate disclosures (e.g., the percentage of representatives that are eligible for bonuses and trips) when they discuss receiving company incentives. Further, the Company stated that it advises its sales representatives to refrain from making express, atypical earnings statements and informed DSSRC that they have communicated with salesforce members the necessity of clearly and conspicuously adding disclosures of general expected results when any statement of income is disseminated.

DSSRC will continue reviewing representations by the Company and its salesforce members and will initiate a compliance inquiry should it become aware of ongoing patterns of atypical income and lifestyle claims.

(closed on 4/7/19)