DSSRC Administrative Closure #300
The Direct Selling Self-Regulatory Council (DSSRC) reached out to a direct selling company ("Company") that sells home and personal fragrance products regarding seven earnings claims disseminated on social media by members of the Company's salesforce. DSSRC expressed concern about the posts conveying claims regarding the potential income that a typical salesforce member could earn from the Company's business opportunity, including the possibility of earning substantial (i.e., “6-figure”) and unlimited income. Additionally, DSSRC voiced apprehension about “financial freedom” claims that were being disseminated by several members of the Company’s salesforce on social media.
Upon initiating the inquiry, the Company promptly took corrective action to address the identified social media posts, successfully removing all seven posts highlighted by DSSRC. DSSRC acknowledged that the Company's actions were necessary and appropriate. As outlined in Section III of the DSSRC Policy and Procedures, DSSRC evaluates the truthfulness, accuracy, and substantiation of earnings and product claims made by direct selling companies and their salesforce members.
Section 6 of DSSRC's Guidance on Earnings Claims for the Direct Selling Industry specifies certain prohibited words and phrases when communicated to a general audience of prospective or current salesforce members. Prohibited expressions include "residual income," "unlimited income," "full-time income," "replacement income," "quit your job," or any substantially similar statements. The guidance also highlights that some words or phrases, such as "financial freedom," carry a high risk of being misleading when communicated in a general context.
In conclusion, DSSRC found that the Company made a bona fide, good-faith effort to address concerns by promptly removing the seven identified posts. The inquiry was administratively closed based on the Company's demonstrated good faith actions in addressing the issues brought to its attention.
(Administrative Closure #300, closed on 12/05/23)
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