DSSRC Administrative Closure #258

The Direct Selling Self-Regulatory Council (DSSRC) initiated an inquiry involving a direct selling company (“Company”) regarding four earnings claims disseminated by Company salesforce members on Facebook, LinkedIn, Pinterest, and YouTube. The inquiry pertained to the Company’s use of terms such as “a debt-free life,” “financial freedom,” and social media posts suggesting that the typical Company sales force member will receive income on an ongoing basis and can replace their previous income. One social media post referenced salesforce income as being “$500 to $2500 a month or more.”

DSSRC was concerned that these posts may be reasonably interpreted by consumers as meaning that the typical direct-selling salesforce member can generally expect to earn significant income from the direct-selling opportunity.

In section six of DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry, it is noted that while DSSRC will evaluate any claim based upon the context in which the claim appears and the potential net impression of such claim to the audience, 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. 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 but are not limited to “financial freedom” and “time freedom.”

The Company immediately responded to DSSRC and was able to discontinue all of the social media posts shortly after its receipt of the DSSRC Notice of Inquiry. Accordingly, based upon the Company’s good faith actions to address DSSRC’s concerns, the inquiry was administratively closed.

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