DSSRC Administrative Closure #338

The Direct Selling Self-Regulatory Council (DSSRC) contacted a direct selling company ("Company") that sells a wide range of products including weight loss supplements and vitamin and mineral supplements regarding seven earnings claims that appeared on Facebook and Instagram. 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 bonuses, full time income and “financial freedom.” 

Immediately following its receipt of the DSSRC Notice of Inquiry, the Company took corrective action to address the social media posts at issue, successfully removing all seven social media posts that were identified in the inquiry. The Company informed DSSRC that it insists that all of its salesforce members comply with all applicable laws, regulations, and industry principles and that the Company both monitors salesforce member claims internally and also contracts with an outside monitoring vendor with particularly expertise in the direct selling channel. The Company also described its process for handling the dissemination of inappropriate claims which includes an initial investigation of the claims, contacting the salesforce member responsible for the claim, reviewing the Company Compliance Policy and educating the salesforce member on the reason why the post was non-compliant. Subsequent violations of the Company Compliance Policy will result in the suspension or termination of the salesforce member’s account.

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 seven of the identified posts. Based upon the actions taken by the Company in the spirit of voluntary self-regulation, the inquiry was administratively closed.

(Administrative Closure #338, closed on 11/11/24)