Case #98-2022: Monitoring Inquiry – Ruby Ribbon, Inc.

BBB NATIONAL PROGRAMS

The Direct Selling Self-Regulatory Council

Case Number 98-2022: Monitoring Inquiry – Ruby Ribbon, Inc.

I. Company Description

Ruby Ribbon, Inc. (“Ruby Ribbon” or the “Company”) is a multi-level marketing company headquartered in Burlingame, California founded in 2011. The Company markets women’s apparel, handbags, and other accessories.

II. Basis of Inquiry

The Direct Selling Self-Regulatory Council (“DSSRC”) is a national advertising self-regulation program administered by BBB National Programs. This inquiry was commenced by DSSRC pursuant to its ongoing independent monitoring of advertising and marketing claims in the direct selling industry.

This inquiry included 13 earnings claims, all but two of which were communicated on Facebook. The two remaining earnings claims were identified on the Company website. The subject claims are set forth below:

“I’m trying to help people think about not just trading time for money but building this asset that provides the potential for passive income…Some people just make $500, $1000, or $2,000 per month…but $500 or $1000 per month can change someone’s life”
“Now is the best time to start a Ruby Ribbon business. Our Boutique-in-a-Box and New Stylist Success Plan puts new Stylists on the track to achieve her goals, her way, on her time! Our income opportunity is UNLIMITED!!!”
“Unlimited income potential”
“…you can still earn unlimited 40% commission on your personal sales, bonuses, incentive trips, etc., from Day One. You can sell sell sell and make UNLIMITED income”
“We are hiring right now!! No earning cap! The sky is the limit! Our starter kit is just $69!! Our company is still a baby, but we are about to explode and now is the time to STEP IN! I'm looking for a few women that want to be their own boss, create their own schedule and live life on THEIR TERMS!”
“…there are NO LIMITS on earning. Work hard and you can earn big. This is a fact”
“Earn up to 40% commission on all sales with unlimited potential when you sponsor and lead a team.”
“Decide where and when you work and how much you will earn.”
“Physical, emotional, financial FREEDOM! Welcome to the sisterhood of Ruby Ribbon”
“I have a full time day job! I always needed to supplement my income! Before Ruby Ribbon I owned Ruby Ribbon I owned a jewelry business. Not in my wildest dreams did I imagine this business could provide the financial freedom and success that it has!...$200,000 career sales in 4 years could be you too! Interested?”
“I went from “Fibrocystic Disease” to “no evidence of cysts” in my mammograms. I have helped countless (almost $600K in sales) ladies ditch the wires and find a more comfortable, healthy alternative that also gives her confidence to wear items in her own closet that have been shoved in “that corner”. Are you curious yet???? For the love….just message me! So much FREEDOM! So many people on my team have paid off 10’s of thousands in debt, quit day jobs, paid cash for cars, remodeled houses ….not to mention just ditching those KILLER wires that try to stab us!!!! Whatever you are looking for…financial freedom, wire freedom, comfort, confidence, sisterhood….I know the answer!!!!”
“We are about giving women the confidence to dream big and to reach those dreams to be their own boss and empower them to know that they can have financial freedom and do big things for their family……Plus the money is unbelievable too! Who wouldn’t want to get 3 paychecks a month? Some of my plans are to attend Runway next year in Atlanta and to also earn an all expense paid trip to Panama!!!!”
“Are you looking for financial freedom?? Check out my sponsor's testimony: ‘…plus a way to truly gain financial freedom; In a years time I hit Director which put me in the 1% of the company, I’ve earned 2 trips to Mexico and just about to earn my 3rd, paid off a ton of debt, taken my family on 2 vacations, plus a ton more. I’m not saying this to brag, I’m saying it to tell you that with Ruby Ribbon financial freedom is possible, earning trips is possible, buying that new car, going on that vacation you’ve dreamt of, paying for college, etc. is all possible and I’d love to help you.”

III. Company’s Position

Upon its receipt of the DSSRC inquiry, Ruby Ribbon informed DSSRC that it would take all necessary actions to remove the claims that were brought to its attention. The Company did not attempt to substantiate the claims at issue and, instead, took action to facilitate the removal of the social media posts. Accordingly, Ruby Ribbon contacted each of the salesforce members responsible for the social media posts in question and was able to effectuate the removal of all the Facebook posts at issue.

In response to DSSRC’s concerns regarding the two earnings claims identified on the Ruby Ribbon website, the Company advised DSSRC that it would make necessary modifications to the Company website.

IV. Analysis

DSSRC appreciated the good faith actions taken by Ruby Ribbon to remove all earnings claims disseminated on Facebook that were the subject of this inquiry. DSSRC determined that the Company’s actions were necessary and appropriate.

As stated in DSSRC’s Guidance on Earnings Claims for the Direct Selling Industry, while 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, 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. Moreover, other terms, such as “passive income” and “residual income,” are prohibited when they convey that income can be continuously earned by salesforce members with little or no ongoing effort. Some words or phrases carry a particularly high risk of being misleading to consumers when communicated in a general context. Such words and phrases include but are not limited to “financial freedom,” and “time freedom.”¹

While recognizing the efforts of Ruby Ribbon to address the social media posts that were brought to its attention in this inquiry, DSSRC remained concerned that the Company did not take similar action to modify or discontinue the two earnings claims that appeared on the Company website, more specifically the claims stating “Earn up to 40% commission on all sales with unlimited potential when you sponsor and lead a team” and “Decide where and when you work and how much you will earn.” Although Ruby Ribbon did provide assurances to DSSRC that these claims were in the process of being removed from the website, the two claims remain publicly accessible.²

It is a fundamental principle of advertising law that an advertiser has the burden to support any claims, express or implied, that may be reasonably interpreted by consumers.³ In its evaluation of the two earnings claims disseminated on the Ruby Ribbon website, DSSRC first determined that it would be reasonable for consumers to understand the term “unlimited potential” as pertaining to the income opportunity as the claim appears in the paragraph captioned “Shape Your Income” on the “Stylist-Perks” page of the Company website and is also included within the sentence that describes the commission percentage that Ruby Ribbon salesforce members earn from product sales.

DSSRC also determined that the statement “Decide …how much you will earn” constituted an express earnings claim that could reasonably be interpreted by potential salesforce members as meaning that a typical Ruby Ribbon salesforce member can earn significant (e.g., career-level) income depending on how much time they dedicate to the endeavor. However, there has been no evidence provided by Ruby Ribbon showing that a typical Company salesforce member, including those salesforce members that make a full-time commitment to selling Ruby Ribbon products, can earn as much money as they choose.

DSSRC concluded that the claims appearing on the Ruby Ribbon website that expressly convey or imply that salesforce members can earn unlimited income form the Company’s business opportunity should be modified or discontinued.

V. Conclusion

DSSRC expressed appreciation to Ruby Ribbon for its good faith actions in removing all of the earnings claims disseminated on social media that were the subject of this inquiry. DSSRC determined that the Company’s efforts were necessary and appropriate.

DSSRC also concluded that the claims appearing on the Ruby Ribbon website that expressly convey or imply that salesforce members can earn unlimited income from the Company’s business opportunity should be modified or discontinued.

VI. Company Statement

Ruby Ribbon acknowledged receipt of the DSSRC determination and stated that the Company is “working through a new join flow with new language that is soon to launch.” Ruby Ribbon noted that it resolved all other issues in the inquiry and agreed to remove the “Decide …how much you will earn” claim from the Company website.

[1] See section 6 of the Direct Selling Self-Regulatory Council’s Guidance on Earnings Claims for the Direct Selling Industry at https://bbbprograms.org/programs/all-programs/dssrc.

[2] Ruby Ribbon did not respond to DSSRC’s subsequent attempts to reaffirm the Company’s commitment to remove or modify the two claims.

[3] Substantiation Policy Statement, appended to Thompson Medical Co., 104 F.T.C. 648 (1984)

Share on LinkedIn