DSSRC Administrative Closure #241
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding certain earnings claims that were disseminated on social media by the Company’s salesforce members. The claims at issue consisted of 17 social media posts disseminated on Facebook. DSSRC contacted the Company and expressed concern that these posts could be reasonably interpreted by consumers as meaning that they can expect to earn significant earnings from the Company’s business opportunity.
Specifically, DSSRC expressed its concern that the posts communicated that the Company’s business opportunity provides salesforce members with the potential to pay off significant bills, take trips, obtain financial freedom, and earn residual income.
The Company responded that it does not condone, nor allow its salesforce members to make any type of earnings claims on social media which could be considered misleading to consumers regarding the typical salesforce member’s earnings. The Company further noted that its Company manual contains terms and conditions which make clear that a salesforce member must avoid making any claims or representations relating to potential compensation, except for those representations made in Company publications.
The Company contacted all the salesforce members responsible for the social media posts identified by DSSRC and was able to have all 17 Facebook posts removed.
During the course of this inquiry, DSSRC also contacted the Company about a claim on the Company website that a Company salesforce member could “become your own boss.”
DSSRC noted that terms such as “be your own boss” carries risk and that similar language (“fire your boss”) is referenced in the FTC’s 2018 Business Guidance on Multilevel Marketing as likely being deceptive. The FTC Guidance states that “Business opportunities may also claim that participants, while not necessarily becoming wealthy, can achieve career-level income. They may represent through words or images that participants can earn thousands of dollars a month, quit their jobs, “fire their bosses,” or become stay-at-home parents. If participants generally do not achieve such results, these representations likely would be false or misleading to current or prospective participants.”
In response, the Company removed the “become your own boss” language from its website.
Based upon the Company’s good faith actions to address DSSRC’s concerns, the inquiry was administratively closed.
(Administrative Closure #241, closed on June 17, 2022)
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