DSSRC Administrative Closure #214

The Direct Selling Self-Regulatory Council (“DSSRC”) contacted a direct selling company (“Company”) regarding four social media posts disseminated on Facebook and one YouTube video that were identified pursuant to its monitoring of the direct selling industry. DSSRC expressed its concern to the Company that all five posts communicated atypical earnings claims regarding the amount of income that could be generally expected by the typical salesforce member participating in the Company’s business opportunity.

In response to DSSRC’s inquiry, immediately removed two of the four Facebook posts. The remaining two Facebook posts were disseminated by the same salesforce member and were designated as “private” in response to DSSRC concerns. In addition, the Company advised DSSRC that the remaining YouTube video was originally posted in 2012 by a salesforce member that has since become inactive and that the Company has been unsuccessful in its attempts to contact the individual. The Company informed DSSRC that it has attempted to contact this individual but has been unsuccessful and that it is in the process of contacting the platform to request that the video be removed. DSSRC agreed that the actions taken by the Company were necessary and appropriate.

With respect to the subject Facebook posts, DSSRC appreciated the Company’s good faith actions to have two of the posts removed in their entirety and make the other two posts (made by the same salesforce member) inaccessible to the public. Notwithstanding these actions, DSSRC has stated in several past matters that although videos or social media posts are no longer available on the internet to a general audience of consumers, companies are cautioned that because these videos or social media posts included claims that were unrepresentative, they should not be disseminated to even a limited audience in the context in which they were originally communicated online. The concern is that the problematic claims from posts or videos designated as “private” may easily be re-purposed to a select audience. The Federal Trade Commission has similarly expressed its concerns regarding private videos and posts. As such, DSSRC has recommended that social media posts and videos disseminating unsupported claims be disabled in their entirety. Accordingly, the Company has agreed to reach out to the induvial responsible for the two private Facebook posts and request that they be completely disabled. DSSRC will continue to communicate with the Company to follow-up on the status of its request.

With respect to the remaining 2012 YouTube video from an inactive salesforce members located overseas, DSSRC notes that when a direct selling company is made aware of an improper product (or income) claim that was made by an individual that was an active distributor when such claim was made but that has since become an inactive distributor of the company, it is understood that the direct selling company may not be able to require the former distributor to remove such claim. In that instance, if the social media platform where the subject post was made provides a mechanism for reporting trademark or copyright violations, DSSRC recommends that the direct selling company promptly utilize such mechanism and seek removal of the subject claims and posts. If the subject claim that came to the attention of the direct selling company occurred on a website or platform without a reporting mechanism, DSSRC recommends that in addition to contacting the former distributors in writing as described above, the Company contact the website or platform in writing and request removal of the subject claim or post.

Based upon the good faith efforts demonstrated by the Company to address DSSRC’s self-regulatory concerns DSSRC administratively closed this inquiry. Notwithstanding the administrative closure of this inquiry, DSSRC will remain in contact with the Company to check on the status of the Facebook posts that have been designated as private.

(Administrative Closure #214, closed on December 7, 2021)
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