DSSRC Administrative Closure #343
The Direct Selling Self-Regulatory Council (DSSRC) initiated an inquiry into twelve online earnings claims disseminated by and on behalf of a direct selling company that markets fragrances, cosmetic, skin care and wellness products. The inquiry included claims pertaining to unlimited earnings, full time income and financial freedom that were communicated on the Company website, Facebook and Instagram.
In response to the inquiry, the Company reported that it reached out to its business partners in the USA, as well as individuals not directly associated with its branch, to address the issues identified by DSSRC and ensure compliance with the relevant guidelines. Additionally, the Company mentioned that it has taken the necessary steps to remind all members of its network about the importance of adhering to advertising regulations. The Company informed DSSRC that, as part of its ongoing efforts, it updated its website with a notice clearly stating that any accounts found to be making misleading income claims, or failing to include the required disclosures, will face suspension or termination. The Company expressed confidence that these measures align with the regulatory standards outlined by DSSRC and the Federal Trade Commission.
As a result of its efforts, the Company was successful in removing 11 of the 12 claims/posts at issue. With respect to the one Instagram post that remains publicly available, the Company informed DSSRC that the post was previously used by a business partner located overseas who no longer has an active account with the Company. The Company provided DSSRC with correspondence confirming that it attempted to contact the individual responsible for the post and documentation of its request to Instagram to have the post removed.
DSSRC appreciated the Company’s voluntary, good faith actions to address its concerns and determined that the Company’s efforts were necessary and appropriate. Pursuant to the DSSRC Guidance on Earnings Claims for the Direct Selling Industry (“the DSSRC Guidance”), DSSRC cautions direct selling companies and their independent salesforce members against the use of any words or images communicating that a direct selling business opportunity will result in earnings beyond what can be generally expected by the typical salesforce member in the depicted circumstances. Moreover, section 6(c) of the DSSRC Guidance, notes 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 … ‘unlimited income,’ ‘full-time income,’ ‘replacement income,’ ‘career-level income,’ or any substantially similar statements or representations.” Moreover, the DSSRC Guidance also states that some words and 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."
Based upon the Company’s expeditious and good faith actions taken to address DSSRC’s concerns, the inquiry was administratively closed.
(Administrative Closure #343, closed on 12/20/2024)
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