DSSRC Administrative Closure #245
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct-selling company (“Company”) that sells several brands of weight-loss and nutritional wellness products regarding certain earnings claims and health-related product claims that were disseminated on social media by the Company’s salesforce members. The posts were identified as part of DSSRC’s ongoing monitoring process, which found three posts on Instagram and three posts on TikTok making such claims.
Two of the posts in DSSRC’s inquiry included earnings claims suggesting that salesforce members could make an income equivalent to “full time pay” or “the mortgage plus some.” Section 6 of DSSRC’s Guidance on Earnings Claims notes that “… some words and phrases are prohibited when made to a general audience of prospective or current salesforce members. Such words and phrases include statements such as “quit your job,” “be set for life,” “make more money than you ever have imagined or thought possible,” “unlimited income,” “full-time income,” “replacement income,” “career-level income,” or any substantially similar statements or representations. Additionally, DSSRC notes that it is inappropriate for direct selling companies and/or its salesforce members to communicate earnings claims which suggest that the typical company salesforce member can earn substantial income (i.e., “mortgage plus some”) through the direct selling business opportunity absent a disclosure regarding of the amount of income that could be generally expected by business opportunity participants.
Four of the posts at issue included health-related product claims, stating that the Company’s product could be used to treat headaches, anxiety, blood pressure and cholesterol, as well as provide protection against viruses, bacteria, inflammation, and different types of cancers. As DSSRC has noted in past cases, it is well established that health-related claims must be supported by competent and reliable scientific evidence. The Federal Trade Commission generally defines competent and reliable scientific evidence as: “test, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”
DSSRC reached out to the Company regarding the identified posts and requested that the Company contact the authors of the posts and request their removal. The Company did not attempt to provide support for the claims at issue and, instead, contacted the salesforce members responsible for four of the identified posts to effectuate their removal. The two remaining posts were communicated by inactive salesforce members. The Company made good faith efforts to contact those two inactive salesforce members and provided DSSRC with documentation of its attempted communication. One inactive salesforce member removed the post while the last member neither replied nor removed the content. DSSRC determined that removal of the claims and the good faith efforts taken by the Company to contact the salesforce members responsible for the posts was necessary and appropriate.
In conclusion, five of the six posts in DSSRC’s inquiry were successfully removed. Based upon these actions and the Company’s good faith efforts to contact the salesforce member and remove the final post, DSSRC administratively closed this inquiry.
(Administrative Closure #245, closed on June 22, 2022)
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