DSSRC Administrative Closure #248
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 included five posts disseminated on Facebook, Pinterest, and Twitter. DSSRC contacted the Company and expressed concern that the posts could be reasonably interpreted as meaning that individuals could earn “unlimited income” and achieve “financial freedom” through participation in the Company’s the business opportunity.
In response to DSSRC’s inquiry, the Company took prompt action and contacted the individuals responsible for the posts. The Company determined that all five salesforce members responsible for the posts were no longer active salesforce members.
Two of the posts included in DSSRC’s inquiry were immediately removed by the Company, while three other posts remained active. All three remaining posts were published and disseminated in 2017. In addition to advising the Company to attempt to contact the inactive salesforce members responsible for the posts that were still publicly available, DSSRC also advised the Company that should it be unsuccessful in contacting those inactive salesforce members, it should attempt to contact the social media platforms on which the posts appeared to request removal of the remaining posts.
As demonstration of its good faith attempts to effectuate the removal of the remaining three posts, the Company provided DSSRC with documentation of its correspondence to the inactive salesforce members requesting that the unauthorized posts be taken down. DSSRC concluded that the Company’s actions were necessary and appropriate. Pursuant to section 6 of DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry (the “DSSRC Guidance”), words and phrases commonly used in earnings claims carry a particularly high risk of being misleading to consumers and, thus, should be avoided. These words include the term “unlimited income.” It is further noted in this section of the DSSRC Guidance that some words or phrases carry a particularly high risk of being misleading to consumers when communicated in a general context. Such words and phrases include the term “financial freedom.”
Given the Company’s bona fide efforts to address DSSRC’s concerns, the inquiry was administratively closed. DSSRC will continue to evaluate the remaining active posts and any other inappropriate earnings claims disseminated by the Company’s salesforce members.
(Administrative Closure #248, closed on July 26, 2022)
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