DSSRC Administrative Closure #308

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company ("Company") that markets nutrition, personal care, home cleaning and cosmetic products regarding two references to “financial freedom.” One reference was made by an independent contractor and disseminated on his LinkedIn page and the second reference was made on the Company website. The website also featured a short video which included various independent contractor testimonials regarding how they achieved financial freedom.

DSSRC communicated its concern to the Company that the subject posts conveyed messages suggesting potential independent contractors could achieve "financial freedom" through participation in the Company's business opportunity.

The Company responded expeditiously to the inquiry and took immediate action to contact the independent contractor with the LinkedIn account and had the page taken down. Concerning the Company website, the Company promptly took down the video in response to DSSRC's concern that consumers might perceive "financial freedom" as implying that the typical independent contractor could earn sufficient income through the Company's business opportunity to alleviate any future financial concerns.

The Company asserted that it does not make general references to “financial freedom” on its website in either a general context or in a manner that might imply to prospective independent contractors that mere participation in the business opportunity alone would yield sufficient income to attain financial security without increasing income, budgeting, eliminating debt and more.

Conversely, it was noted that references to financial freedom on the website are made in conjunction with several online resources that the Company provides for consumers, including links to budgeting/retirement planning templates, financial goal-setting workbooks, and financial calculators to help navigate everything from loan refinancing to setting up an IRA and teaches the importance of eliminating debt. The website also provides a link to purchase a booklet that teaches a plan to help readers achieve their financial goals. The Company stated that, viewed in its proper context, the website presents “financial freedom” as a process that requires goal setting, discipline, and hard work.

The Company committed to DSSRC that it would internally review the webpage in question to assure that consumers and potential independent contractors would not interpret the language on the website as guaranteeing that the Company’s business opportunity, standing alone, provides a means of achieving “financial freedom” without hard work and consistent effort.

In resolving this matter, DSSRC appreciated the Company’s good faith actions to facilitate the removal of the independent contractor’s LinkedIn page which included a claim of achieving financial freedom through the Company’s business opportunity. In addition, DSSRC agreed that the removal of the short video which included various independent contractor testimonials regarding how they achieved financial freedom significantly changed the net impression of the financial freedom references that accompanied the video on the webpage in question. DSSRC determined that the Company’s actions were necessary and appropriate.

As noted in Section 6 of the DSSRC Earnings Claim Guidance for the Direct Selling Industry, DSSRC will evaluate any claim based upon the context in which the claim appears and the potential net impression of such claim to the audience. Moreover, DSSRC states that some words such as “financial freedom” carry a particularly high risk of being misleading to consumers when communicated in a general context. Here, DSSRC concluded that the removal of the video from the webpage at issue alleviated the concern that references to financial freedom could be reasonably interpreted by potential independent contractors as meaning that they would achieve financial security through participating in the Company’s business opportunity. The webpage now simply offers consumers a range of tools and resources for setting financial goals, and financial calculators to assist with tasks such as loan refinancing and IRA setup. Additionally, the website includes other helpful resources to aid readers in reaching their financial objectives.

As such, DSSRC determined that the modified webpage does not position the concept of financial freedom in a manner that consumers would perceive as a guarantee of achieving financial security by engaging in the Company's business opportunity.

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

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