DSSRC Administrative Closure #284

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

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 generate passive income, attain six-figure annual income, and achieve financial freedom.

The Company promptly responded to DSSRC’s inquiry and began contacting the salesforce members responsible for the claims at issue to have the posts removed. All nine claims identified by DSSRC were 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 actions of the Company to address DSSRC’s concerns, the inquiry was administratively closed.

(Administrative Closure #284, closed on 7/27/23)

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