DSSRC Administrative Closure #277
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding twelve earning claims disseminated on social media by Company salesforce members. The claims at issue were disseminated on Facebook and YouTube.
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 earn residual or career-level income and 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 all twelve of the social media posts that were identified by DSSRC.
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.”
Accordingly, based upon the Company’s good faith actions to remove the earnings claims at issue, the inquiry was administratively closed.
(Administrative Closure #277, closed on 6/14/23)
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