DSSRC Administrative Closure #293

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company (“Company”) regarding seven earnings claims disseminated on social media by Company salesforce members. 

DSSRC expressed concern that the posts communicated non-representative claims regarding the amount of income that the typical salesforce member could earn from the Company’s business opportunity, including the potential to earn free travel, full-time income, or unlimited income.

Following the commencement of the inquiry, the Company took prompt action to address the social media posts. The Company was successful in removing or significantly modifying six of the seven posts identified by DSSRC. The Company further informed DSSRC that it directly contacted Facebook to remove the remaining nonresponding post.  

DSSRC agreed that the Company’s actions were necessary and appropriate.  As noted in Section III of the DSSRC Policy and Procedures, DSSRC reviews earnings claims and product claims made by any direct selling company and/or its salesforce members and evaluates the truthfulness, accuracy, and substantiation of such earnings and product claims. 

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 but are not limited to “financial freedom.”  

In addition, and as DSSRC has noted in previous inquiries, if a salesforce member who made a non-compliant post later became inactive (or, as here, was terminated by the Company), DSSRC also recommends that the Company take additional steps to remove such claims including contacting the platform directly to request removal of the post. Here, DSSRC appreciated the steps taken by the Company to contact Facebook in an effort to have the remaining social media posts removed.

In conclusion, DSSRC determined that the Company demonstrated that it made a bona fide, good-faith attempt to address DSSRC’s concerns by removing six of the posts at issue and making a good-faith effort to remove the remaining post. Accordingly, DSSRC administratively closed this inquiry.

(Administrative Closure #293, closed on 9/13/23)

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