DSSRC Administrative Closure #280
The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding ten earnings claims disseminated on social media by Company salesforce members. The posts at issue originated from Facebook and YouTube.
DSSRC expressed concern that the posts communicated the message 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 salesforce members could easily earn passive income, become debt-free, and achieve financial freedom.
Following commencement of the inquiry, the Company took prompt action to facilitate removal of the social media posts. Eight of the ten posts identified by DSSRC have since been removed from circulation.
DSSRC determined 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.”
Based upon the good faith effort exercised by the Company to remove eight of the ten earnings claims at issue, the inquiry was administratively closed.
(Administrative Closure #280, closed on 6/19/23)
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