BBB National Programs' Direct Selling Self-Regulatory Council, along with the Direct Selling Association, released, "Guidance on Earnings Claims for the Direct Selling Industry."  According to the DSSRC, the new guidance "identifies earnings claims to ensure all representations made by direct-selling companies or members of their salesforce comply with legal and self-regulatory standards."

The DSSRC said that the guidance is "the most comprehensive ever released for direct-selling companies" and comes at a time when the FTC and the DSSRC are seeing an increase in "questionable earnings claims during the ongoing coronavirus pandemic."

The guidance covers any express or implied earnings claims made by companies and their salesforce about the level or range of potential income that people can make, including advertising "demonstrating extraordinary or lavish lifestyles of salesforce members enabled by their participation in direct selling." 

Here are some of they key principles from the new guidance: 

  • Companies and their salesforce should not make earnings claims unless they have a reasonable basis for them -- and documentation to back them up; 
  •  Earnings claims should account for mandatory costs of the direct selling product or service that participants purchase for resale; 
  • Direct selling companies are responsible for claims made by their sales force, including in social media;
  • Direct selling companies should train their sales force, monitor the claims they make, and institute enforcement procedures, "to provide reasonable assurance that claims made by salesforce members are truthful and nonmisleading";
  • Direct selling companies should not make "lavish lifestyle claims," including using statements such as, "quit your job" or "be set for life," or using visuals such as private helicopters or yachts; and
  • Certain claims present a high risk of being misleading to consumers, such as "financial freedom," "full-time income," and "career-level income."

The guidance also provided detailed information about how claims are interpreted and how to make proper disclosures. 

In releasing the guidance, Mary Engle, Executive Vice President, Policy, BBB National Programs, said, “The dissemination of truthful and accurate earnings claims is imperative for direct-selling companies.  We encourage these companies to embrace this new guidance to help shape their advertising strategies and plans for salesforce education.”