DSSRC Administrative Closure #307

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company ("Company") headquartered in Europe that markets magnetic jewelry products regarding 12 product performance claims (including hashtags) that were disseminated on Facebook. DSSRC was concerned that the claims at issue communicated the message that the Company’s products could prevent or treat health-related conditions including, but not limited to, arthritis, migraine headaches and fibromyalgia.

The Company was very diligent in responding to DSSRC’s concerns. More specifically, the Company was successful in immediately removing two of the posts at issue and had its salesforce members modify two additional posts to remove the claims that were the subject of the inquiry. With respect to the remaining posts, the Company informed DSSRC that almost all of the posts originated from countries in Europe that are outside of its legal authority. It noted that two of the posts identified by DSSRC make no reference to the Company or its products.

Three of the remaining posts were made by a former Company salesforce member who has not been active since 2020. Notwithstanding, the Company provided DSSRC with copies of correspondence that was sent to the former salesforce member and included a statement in the comment feed below the post stating that health claims are not permitted by the Company and that the information in the post is false. One other post was disseminated in 2020 by an individual located outside the Company’s legal purview and for whom the Company has no contact information. The Company did provide the same comment noted above on the individuals’ social media feed indicating that health claims are prohibited by the Company.

Regarding the remaining two posts that were the subject of the DSSRC inquiry and which remain publicly available, the Company’s stated that both of the claims were disseminated by retail shops in the UK and the Company confirmed that it attempted to contact the entities but was unsuccessful in its efforts.

DSSRC appreciated the good faith efforts of the direct selling company to address its concerns regarding the social media posts at issue and its willingness to provide copies of its attempts to contact the individuals and other entities responsible for the posts at issue and for indicating in the comment section of the posts that the health-related claims in question were unauthorized. DSSRC also confirmed that two of the posts at issue pertained to products that were not related to the Company. DSSRC determined that the Company’s actions were necessary and appropriate.

As DSSRC has noted in previous self-regulatory inquiries, when a direct selling company is made aware of improper claims that were made by an individual who was an active salesforce member when such claim was made but has since become an inactive salesforce member of the company, DSSRC acknowledges that the direct selling company may not be able to require such individual to remove a social media post. In that instance, DSSRC nonetheless recommends that the direct selling company make a bona fide good faith effort to have the improper claim removed. Similarly, DSSRC recognizes the challenges of a direct selling company to facilitate the removal of unsupported claims in social media posts that originated beyond its geographical purview or are disseminated by entities that are outside of the legal authority of the company. In such situations, DSSRC recommends that the direct selling company make a genuine attempt to reach out to both the individuals disseminating the post and their cross-border supervisors in an effort to reconcile the claim. The purpose is to notify them that the claims they are making are being seen by potential salesforce members in the United States and are not in compliance with state and federal regulations. Lastly, If the subject claim by a former salesforce member is communicated on a website or platform without a reporting mechanism, DSSRC recommends that the company should also contact the website or platform in writing and request removal of the subject claim or post.

Considering the proactive steps taken by the Company to resolve DSSRC's concerns in good faith, this inquiry was closed administratively.

(Administrative Closure 307, closed on 2/7/24)
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