DSSRC Administrative Closure #286

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding ten earning claims disseminated on Facebook and Instagram and which included terms such as “financial freedom”, “unlimited earnings potential” and “debt free.” Two posts also made unqualified references to “free vacations.” DSSRC expressed concern that these social media posts could be reasonably interpreted by consumers to mean that the Company’s business opportunity provides salesforce members with significant income and that the typical Company salesforce member could generally expect to receive free vacations from participating in the Company’s direct selling business opportunity.

The Company promptly responded to DSSRC’s inquiry and removed all ten social media posts. 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 (the “DSSRC Guidance”) 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. Moreover, the “DSSRC Guidance” also notes 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 but are not limited to “financial freedom,” and “time freedom.”

Finally, DSSRC concluded that the “free vacation” claims were not appropriate in their unqualified context and that any future advertising should present such incentive-based claims in concert with a clear and conspicuous disclosure which highlights the number of salesforce members who typically earn free company incentive trips.

Based upon the Company’s good faith actions to address DSSRC’s concerns, the inquiry was administratively closed.

(Administrative Closure #286, closed on 8/18/23)
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