Case #164-2024: Monitoring Inquiry – Global Domains International, Inc.

BBB NATIONAL PROGRAMS

Direct Selling Self-Regulatory Council
Case #164-2024: Monitoring Inquiry – Global Domains International, Inc.

Company Description

Global Domains International, Inc. (“GDI” or the “Company”) is a direct-selling company based in Carlsbad, California. The Company was established in 1999 and sells domain names via an affiliate network.

Basis of Inquiry 

The Direct Selling Self-Regulatory Council (“DSSRC”) is a national advertising self-regulation program administered by BBB National Programs. This inquiry was commenced by DSSRC pursuant to its ongoing independent monitoring of advertising and marketing claims disseminated by direct selling companies and their salesforce members. 

This inquiry concerned 20 earnings claims disseminated on the Company website or on social media by Company salesforce members.¹ DSSRC was concerned that the posts communicated non-representative claims regarding the income the typical salesforce members could earn from the Company’s business opportunity. The representative earnings claims that formed the basis of this inquiry are set forth below:

• “Global Domains International (GDI).

  "INCOME FOR LIFE"
  Time Freedom and Financial Freedom.”

• “If you want to become Debt Free and reaching Financial Freedom, then GDI is for you. It's Simple, Profitable, Easy, and it will change your life forever. Just share with others who are looking for Financial Freedom and wanting to be Debt Free, this is the business for you. GDI is a Low Investment with a High Return. If you need money for education, monthly mortgage payments, saving up for a rainy day, whatever you may need extra money for, GDI is the way to go. Simply sign-up for the Free Seven Day Trial, share with others who are looking for Financial Freedom and becoming Debt Free and be on your way to reaching your goals.”
• “You can become an affiliate of Global Domains International (GDI) and start your very own online home business. You can make massive weekly bonuses and monthly commissions just by referring other people to do the same…Remember that the bonuses are UNLIMITED so if you refer 50 people, YOU GET A $1000 BONUS!”
•  “you earn hundreds to thousands of dollars in monthly income
• “#incomeforlife#”
• “Thousands Per Week in Personal Income”

  “Income for Life”

• “Earn an unlimited number of $100 bonuses each week”
• Animated luxury cars/animated check stating "unlimited earning potential”
• “Generating thousands of dollars a week”
• “Anybody can earn a lot of money without leaving home!”
• "income for life opportunity"
• YouTube video offering the chance for people all over the world to earn a significant income
• “reliable and unlimited income for life”
• Depictions of money

  “securing our future in a business than anyone can do; change your destiny; additional income; make an incredible income from other peoples efforts; longtime income opportunity; building substantial income; earn as much as little as you desire; start building your income for life”

• “unlimited income potential”
• “living their dreams and building their own income for life; whether you would like to earn an extra $1,000 a month; 1000 a week or long term 6 figure income; solid and dependable lifelong income”
• “get everything you want in life; earning terrific residual income; whole new lifestyle; potential for income is staggering; ticket to substantial lifelong income/potentially worth millions to you.”
• “earn up to $30K a month”
• “income for life”
• “1000s of people worldwide are earning quite fortunes for life...even while they sleep.”

  More specifically, DSSRC was concerned that such social media posts and website claims may be interpreted as meaning that the Company’s business opportunity will result in substantial or significant income for the typical salesforce member.

Company’s Position 

GDI acknowledged receipt of DSSRC's Notice of Inquiry and informed DSSRC that it expeditiously began working to remedy the claims at issue by contacting salesforce members to remove the posts or contacting the platforms on which the claims were disseminated to request that they be taken down. GDI also provided DSSRC with copies of its communications with the salesforce members responsible for the social media posts at issue. The Company did not attempt to substantiate the claims identified by DSSRC.

More specifically, the Company advised DSSRC that seven of the claims at issue were directly communicated by GDI salesforce members, two originated from consumer testimonials featured on the Company website, seven related to a YouTube channel impersonating GDI, three were made directly by GDI on the Company website, and one claim involved a salesforce member impersonating the GDI website.

• Claims made directly by GDI salesforce members

 The Company informed DSSRC that takedown notices were sent to all of the salesforce members who were responsible for the social media posts.

Subsequently, all seven of the posts were removed from social media.

• Claims resulting from salesforce members' testimonials displayed on the GDI website

 The Company removed the two testimonials identified by DSSRC from the GDI website immediately after receipt of the DSSRC Notice of Inquiry.

• Claims relating to a YouTube channel impersonating GDI

The Company explained that the YouTube channel in question was found to be impersonating GDI’s official company YouTube channel. This was confirmed by the Company in its review of the video's description, where the user included the text "Use Access Code: Cash4Earn" to promote their affiliate sponsor code. The owner of this channel canceled their affiliation with GDI in January 2023, but failed to remove or deactivate the channel thereafter.² GDI successfully worked with YouTube to shut down the channel and remove its contents.

Accordingly, the Company informed DSSRC that all seven of the videos in question have been disabled.

• Claims made directly on the GDI website

During the self-regulatory inquiry, the Company advised DSSRC that it was in the process of revising the GDI website. In the course of this revision, GDI removed the three claims identified by DSSRC.

• Claim involving a salesforce member impersonating the GDI website

The Company maintained that the webpage in question was an unauthorized and altered reproduction of one of GDI’s official company websites. The Company explained that, unfortunately, the screenshot that it was provided with did not include sufficient detail to identify the user responsible for impersonating the Company and, as such, GDI was unable to proceed with removing the content in question.

Analysis

DSSRC appreciated the Company’s efforts to address its concerns. GDI’s good faith actions resulted in 18 of the 20 claims at issue being removed.  It was further determined that the Company’s efforts to remove the claims identified in this inquiry were necessary and appropriate.

With respect to the remaining claims (i.e., “Thousands per week in personal income”; “part time work, full time income”) that appeared to originate from an official GDI website, DSSRC recognized that these claims were actually disseminated on a website mimicking the official GDI site. The Company explained that it was unable to locate this website and therefore could not facilitate the removal of the page in question. While DSSRC remains concerned about the aggressive, unsupported income claims on the webpage, it acknowledges that without additional information about the website URL, the Company could not take the necessary action to have the webpage disabled. DSSRC recommends that the Company continue its best efforts to locate the impersonating website and have it taken down.

DSSRC recognizes that GDI is still in the process of making revisions to its website and although it appreciates the Company’s efforts to remove the testimonial and express income claims brought to its attention in this inquiry, it recommends that GDI prioritize the removal of the animated video that can be accessed through two links from the landing page.

More specifically, after clicking on the “Learn more” hyperlink presented in the “Affiliates” box on the home page of the GDI website, a pop-up box appears on screen inviting viewers to watch a brief “animated presentation.”  The ten-minute video begins with two animated Company spokespeople leaving a mansion and driving away in a Ferrari to the GDI home office. There, the two animated characters present a “private screening” for viewers that features an animated check made to “VIP Guest” in the amount of “unlimited earning potential” along with the statement “you can have everything you want in life, if you will just help enough people get what they want.” The video also includes the claim “Long Term, Ongoing Income” and that this can be realized “with little effort or time.” Toward the end of the video a hypothetical earnings scenario is presented showing how salesforce members can earn $3,905 per month based upon the number of sales made by the salesforce member and its downline network.

Although the Company maintained that the video was intended to be a humorous, fanciful presentation for prospective salesforce members, DSSRC determined that the substantive claims communicated in the video could be perceived in a literal context by viewers and the animated presentation did not relieve the Company of its burden to support a reasonable interpretation of its claims.

As noted in DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry, DSSRC will evaluate any claim based upon the context in which the claim appears and the potential net impression of such claim to the audience. Some words and phrases, however, are prohibited when made to a general audience of prospective or current salesforce members. Such words and phrases include “unlimited income,” “full-time income,” “replacement income,” “career-level income,” or any substantially similar statements or representations. Other terms, such as “passive income” and “residual income,” are prohibited when they convey that income can be continuously earned by salesforce members with little or no ongoing effort.³

DSSRC also concluded that the video’s scenario depicting how salesforce members can easily earn $3,905 would be considered an earnings claim, as it provides a hypothetical scenario from which a current or prospective salesforce member could reasonably infer that he/she will earn the same or a similar amount of income. In the absence of the Company demonstrating that the typical GDI salesforce member can generally expect to earn $3,905 per month, it was determined that the hypothetical scenario was inappropriate and should be discontinued.

Lastly, although the animated video does include a small, fine print disclosure at the bottom of the screen stating “As with any business, your results may vary and will be based upon your capacity, business experience, expertise and level of desire. There are no guarantees concerning the level of success you may experience” and then directs viewers to a link to the Company’s Income Disclosure Statement for more information, DSSRC determined that the disclosure was insufficient to qualify the earnings claims and not clear and conspicuous.

According to the Federal Trade Commission’s (FTC) Guides on the Use of Endorsements and Testimonials in Advertising, an advertisement containing an endorsement relating the experience of one or more consumers on a central or key attribute of the product or service also will likely be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve with the advertised product or service in actual, albeit variable, conditions of use. Therefore, an advertiser should possess and rely upon adequate substantiation for this representation. If the advertiser does not have substantiation that the endorser’s experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.⁴

DSSRC also determined that the hyperlink in the disclosure to GDI’s income disclosure statement was an insufficient disclosure of generally expected results. Hyperlink disclosures may be acceptable in some circumstances (for example to compliment a disclosure of generally expected results), but disclosures necessary to prevent deception should not be hidden behind a hyperlink. Accordingly, an advertisement, including a social media post that includes an earnings claim disclosure, should clearly and conspicuously disclose any material information related to the claim (i.e., results that can be generally expected by the typical salesforce member) to ensure that the net impression is truthful and not misleading.

In sum, DSSRC recommended that as GDI continues its revisions of its Company website, it remove the animated video.

Conclusion

DSSRC appreciated the Company’s good faith actions to remove 18 of the 20 claims at issue.  It was further determined that the Company’s efforts to remove the claims identified in this inquiry were necessary and appropriate.

While DSSRC remains concerned about the income claims that remain publicly accessible on an unauthorized webpage that impersonates GDI, it acknowledges that without additional information about the website URL, the Company could not take the necessary action to have the webpage disabled. DSSRC recommended that the Company continue its best efforts to locate the impersonating website and have it taken down.

Lastly, DSSRC concluded that the animated video that can be accessed through hyperlinks on the GDI website communicated substantive and unsupported atypical earnings claims and that the disclosure at the bottom of the video was insufficient to qualify the claim and not clear and conspicuous. As such, it was recommended that the video be discontinued.

Company Statement

“Global Domains International, Inc. is committed to providing transparency, integrity, and honesty with all of its clients and affiliates. Although we may not always agree with all claims, we have chosen to abide by the DSSRC guidelines and have made every effort to address any concerns. We will continue to monitor our independent affiliates and encourage them to follow ethical business practices. We appreciate the effort of the DSSRC and will continue to work within their guidelines.”

We appreciate the patience and consideration the DSSRC has shown our company throughout the inquiry. As mentioned in our previous replies, we are currently in the process of redesigning and updating the majority of our content. As we progress with this redesign, we will give greater consideration to the DSSRC's prior claims, comments, and suggestions to ensure our future content adheres to the DSSRC's guidelines.”

(Case No.164 closed on 5/30/24) 
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