Operation Income Illusion: A Positive Step by the FTC to Curb Deceptive Income Claims

Dec 23, 2020 by BBB National Programs

The Federal Trade Commission (FTC)’s December 14 Operation Income Illusion initiative is a crackdown by the FTC and 19 federal, state, and local law enforcement partners against the operators of work-from-home and employment scams, pyramid schemes, investment scams, bogus coaching courses, and other nefarious operations that purport to offer significant income opportunities but that end up costing consumers thousands of dollars.

In this effort, the FTC and its partners are opening new law enforcement actions that focus on scams targeting consumers with fake promises of income and financial independence that have no basis. 

The Direct Selling Self-Regulatory Council (DSSRC) has long cautioned direct selling companies about the dissemination of business opportunity claims that communicate unrealistic earnings claims. One of the greatest challenges for direct selling companies is ensuring that the earnings claims communicated by their salesforce members comply with legal and self-regulatory standards.

In fact, earlier this year the DSSRC published its Earnings Claims Guidance for the Direct Selling Industry, which was intended to reinforce the fundamental principles of advertising claim dissemination with a particular emphasis on earnings claims communicated in social media posts. 

In general, direct selling companies are encouraged to refrain from communicating any claims that can be construed as communicating that consumers and potential salesforce members can generally expect to earn anything beyond modest or supplemental income from the direct selling business opportunity. Since the release of this guidance, companies have been very receptive and the announcement by the FTC of Operation Income Illusion is consistent with this ongoing effort to ensure that income claims in the direct selling industry are communicated truthfully and accurately.

DSSRC remains concerned about the continued proliferation of exaggerated income claims and will continue to monitor the advertising messages of the direct selling industry to make sure they adhere to appropriate and ethical advertising standards. 

If you think you have found a false business opportunity claim in the direct selling industry, file a challenge with the DSSRC. 

Suggested Articles

Blog

Case Study: Getting to Compliance with CARU and COPPA

In a recent case, CARU worked with TickTalk to help them achieve compliance with CARU’s Privacy Guidelines and the Children’s Online Privacy Protection Act (COPPA). CARU sat down with TickTalk once the case had closed to discuss their experience as well as some of the privacy challenges many companies face in the children’s space.
Read more
Blog

What to Know About the Georgia Lemon Law

BBB AUTO LINE provides an overview of each state’s lemon laws. In our ongoing blog series, we offer further insights on the laws for select states, and how BBB AUTO LINE can support consumers with lemon law disputes. Florida, California, and Texas have been covered. This post reviews the nuances of the lemon law in the Peachtree State – Georgia.
Read more
Blog

The TAPP Roadmap: Helping U.S. Companies Responsibly Collect and Manage Teenager Data

Even as data privacy and safety practices that work for adult consumers provide a firm foundation for teens, they simultaneously run the risk of being insufficient to respond to the unique needs of teens. The TeenAge Privacy Program (TAPP) Roadmap was designed to assist any business that wishes to engage proactively with teen consumers, providing an operational framework to map the broad spectrum of potential harms impacting teens onto a concrete set of operational considerations.
Read more
Blog

Pursuing Best Practices For Representation In Advertising

As advertising volume increases, so too do people’s expectations of representation in advertising. Unfortunately, advertising collectively is still falling short, and consumer perceptions reflect that. Why answer this call from consumers? And what is being done about it?
Read more