DSSRC Administrative Closure #323

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company ("Company") that sells a variety of home fragrance products regarding eleven earnings claims disseminated on Facebook and TikTok. DSSRC was concerned that the claims conveyed messages suggesting that potential salesforce members could achieve significant income and luxurious incentive trips through participation in the Company's business opportunity. For example, Company salesforce members made reference to “exceptional income,” “full-time income” “double-your money back” and “financial freedom.” The inquiry also included unqualified references to incentive trips that are purportedly available to typical Company business opportunity participants. This inquiry was initiated by DSSRC as part of its continuous independent monitoring of product and income claims in the direct selling industry.

The Company responded expeditiously to the inquiry and reinforced its commitment to presenting its direct selling opportunity truthfully and accurately and informed DSSRC that it would also continue to talk about what verbiage is proper in advertisements in their ‘lives/trainings’ with consultants, and will send a reminder in their twice-a-month newsletter about proper verbiage. The Company also gave a copy of part of their Consultant Manual to demonstrate compliant and non-compliant earnings claims.

In the spirit of voluntary self-regulation, the Company informed DSSRC that immediately after receipt of the Notice of Inquiry, it contacted the individuals responsible for disseminating the claims at issue and requested that the posts be modified or discontinued. Accordingly, the Company with successful in removing or modifying all posts at issue in the inquiry.

DSSRC expressed its appreciation to the Company for its good faith actions to address the concerns in this inquiry and determined that the Company’s actions were necessary and appropriate. As noted in section 7 of the DSSRC Guidance on Earnings Claims in the Direct Selling Industry, 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. Atypical earnings claims and incentive trip claims should also be accompanied by a clear and conspicuous disclosure regarding the income that can be generally expected by the typical company salesforce member in the depicted scenario. Such claims should also be otherwise truthful and non-misleading.

DSSRC expressed its appreciation to the Company for its immediate attention to resolving the subject claims in this inquiry and, based upon the Company’s genuine, good faith efforts to adequately address DSSRC’s concerns, the inquiry was administratively closed.

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