The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding three Facebook posts disseminated by its salesforce members. The subject claims and social media posts came to DSSRC’s attention pursuant to its independent monitoring of advertising in the direct selling marketplace.
DSSRC was concerned that the two health-related, product efficacy claims and one business opportunity claim conveyed unsubstantiated product, health and wellness benefits including claims that the Company’s products could protect against serious health related conditions including cancer. In addition, DSSRC was concerned that the business opportunity claim suggested that Company salesforce members can typically earn a significant amount of income.
The Company responded in writing to DSSRC and noted that the three posts originated from the Company’s salesforce in India and that its local corporate staff in India, in coordination with the Company’s United States-based compliance manager worked closely with these three members in India to remove the posts at issue. More specifically, the Company informed DSSRC that prior to receiving the self-regulatory inquiry, it had already initiated action against all three of these salesforce members as they were flagged by the Company’s compliance monitoring software.
The Company also provided further information about its internal compliance monitoring efforts as further support for the Company’s view on the importance of building a strong, healthy and sustainable business where members and customers abide by ethical and compliant business practices. More specifically, the Company: a) developed an active, daily monitoring approach to address compliance matters that not only monitors daily compliance matters, but is also dedicated to educating and enforcing the requirements of its Distributor Agreement and Policies and Procedures; b) incorporated a video compliance tool to further engage its members in compliance training; c) has all Company-produced business opportunity and product marketing materials, video content and website copy reviewed by a third-party food and drug law and regulation attorney for compliance purposes before publication; d) has its customer staff around the world conduct online, and in-person trainings on the topic of product, income and lifestyle compliance regulations, and: e) created a back-office “tool kit” that is solely designated to the topic of compliance and which contains training material, videos and presentations to educate and train its members on the dos and don’ts of product and income claims.
Accordingly, based upon the prompt actions taken by the Company to disable the overseas posts and provide DSSRC with a detailed summary of the compliance procedures that have been implemented to educate staff and salesforce members, this inquiry was administratively closed pursuant to the DSSRC Policy & Procedures.
(closed on 01/14/21)