DSSRC Administrative Closure #244
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct-selling company (“Company”) that sells cosmetic products regarding certain earnings claims that were disseminated on social media and YouTube by the Company’s salesforce members. The ten posts which were disseminated by Company salesforce members were identified pursuant to DSSRC’s ongoing monitoring process. DSSRC determined that the posts communicated the message that by participating in the Company’s business opportunity, salesforce members could obtain “financial freedom,” earn “full time income,” and/or earn “residual income.”
In its response to DSSRC, the Company provided assurance that prompt, remedial measures had been taken to address the concerns in the inquiry, including contacting the salesforce members responsible for the identified posts and removing the posts from circulation.
The Company also expressed a commitment to ensure ongoing compliance with its salesforce team. The constructive measures taken by the Company included:
- Hiring a compliance director with extensive experience in the multi-level marketing and direct sales industry to oversee the Company’s compliance measure and guide the compliance team in expanding their abilities and capacities for marketing and selling its products.
- Staffing a larger compliance team to monitor and assist in the removal of improper earnings claims and other non-compliant materials.
- Implementing additional training to be presented at all levels of the company, management, employees, and independent distributors alike, to further shed light on industry standards.
- Continuing to incorporate and make abundantly conspicuous that it disclaims any guaranteed income and acknowledge that some salesforce members may not earn income at all from the business opportunity.
With respect to the specific posts identified in the DSSRC inquiry, the Company successfully removed all of the posts at issue. Based upon these actions, DSSRC administratively closed its inquiry.
(Administrative Closure #244, closed on June 22, 2022)
© 2022 BBB National Programs