DSSRC Administrative Closure #309

The Direct Selling Self-Regulatory Council (DSSRC) contacted, a direct selling company (Company”) that sells wine and spirits, regarding three Facebook posts and one YouTube video that communicated earnings claims. DSSRC expressed concern about the posts conveyed claims regarding the potential income that a typical salesforce member could earn from the Company's business opportunity, including the possibility of earning “unlimited income” and that the typical Company salesforce members could earn “full-time income.”

Upon initiating the inquiry, the Company promptly took corrective action to address the identified social media posts, successfully removing all four posts brought to its attention 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.

More specifically, Section 6 of DSSRC's Guidance on Earnings Claims for the Direct Selling Industry states that some words or phrases, such as "full-time income" and “unlimited income,” carry a high risk of being misleading when communicated in a general context. Moreover, Section 7 of DSSRC's Guidance on Earnings Claims for the Direct Selling Industry states that all earnings claims should be supported by substantiation demonstrating that the earnings communicated in the claim are accurate as to the individual or individuals depicted in the claim. Accordingly, a statement like the one at issue, asserting that a salesforce member "has been earning thousands of dollars every month," necessitates evidence indicating that the typical company salesforce members can generally expect receiving comparable monthly earnings from the business opportunity.

Conversely, atypical earnings claims should also be accompanied by a clear and conspicuous disclosure regarding the income that can be generally expected by the typical salesforce member in the depicted scenario.

In conclusion, DSSRC found that the Company made a bona fide, good-faith effort to address its concerns by promptly removing the four 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 #309, closed on 3/11/24)
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