DSSRC Administrative Closure #330

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company ("Company") that sells a wide range of kitchen tools, cookware, and food products regarding fifteen earnings claims that appeared on various social media platforms including Facebook, Instagram, Tiktok and LinkedIn. DSSRC expressed concern that the posts conveyed claims regarding the potential income a typical salesforce member could earn from the Company's business opportunity, including, but not limited to, “unlimited income,” “financial freedom” and “full time corporate salary.”

Shortly after its receipt of the DSSRC Notice of Inquiry, the Company took corrective action to address the social media posts at issue, successfully removing all fifteen social media posts that were identified in the inquiry. DSSRC determined that the Company’s actions were both necessary and appropriate.

More specifically, Section 6 of DSSRC's Guidance on Earnings Claims for the Direct Selling Industry (the “DSSRC Guidance”) states that some words and phrases are prohibited when made to a general audience of prospective or current salesforce members. Such words and phrases include statements such as “quit your job,” “be set for life,” “make more money than you ever have imagined or thought possible,” “unlimited income,” “full-time income,” “replacement income,” “career-level income,” or any substantially similar statements or representations. The DSSRC Guidance additionally notes that terms 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 its concerns by promptly removing all fifteen of the identified posts. Based upon the actions taken by the Company in the spirit of voluntary self-regulation, the inquiry was administratively closed.

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