DSSRC Administrative Closure #276

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding fourteen earning claims disseminated on social media by Company salesforce members. The claims at issue were disseminated on Facebook and Pinterest.

DSSRC expressed concern that the posts communicated to consumers that prospective salesforce members could earn substantial or significant income through participation in the Company’s business opportunity. The posts included, but were not limited to, representations that prospective Company salesforce members could pay off debt, earn unlimited income achieve financial freedom.

Shortly after commencement of the inquiry, the Company began contacting the salesforce members responsible for the posts in question to have the claims removed. The Company was successful in removing thirteen out of the fourteen social media posts that were identified by DSSRC. The remaining post was edited to include a disclosure that actual earning may vary significantly.  

DSSRC determined that the actions taken by the Company were necessary and appropriate. Section 6 of the DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry states that some words and phrases are prohibited when made to a general audience of prospective or current salesforce members. Such words and phrases include “residual income,” “unlimited income,” “full-time income,” “replacement income,” “quit your job,” or any substantially similar statements or representations. 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.”

In conclusion, based upon the Company’s good faith actions to address DSSRC’s concerns and its commitment to providing further education to salesforce members regarding proper claim dissemination, the inquiry was administratively closed.

(Administrative Closure #276, closed on 6/8/23)

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