The move came in response to a review from the Direct Selling Self Regulatory Council (DSSRC), a division of BBB National Programs. The DSRCC review found that some social media posts implied earnings claims not supported by company data. The claims included:
- “I love that you can have freedom and flexibility – side gig or full-time business with Mary Kay.”
- “With just $30 you can earn 4-5 figure passive, residual income.”
- ‘You can make residual or passive income."
- “If you are looking for an opportunity for a potential avenue of income, a change of career…. join the MARY KAY EXPANSION and earn BIG INCOME.”
DSSRC investigated Mary Kay in 2021
The review came in the wake of a 2021 investigation initiated by DSSRC that found that Mary Kay had more than 200 posts on its social media platforms relating to the earning potential.
Specifically, the posts related to the company’s Mary Kay Pink Cadillac program, in which distributors who meet the sales criteria earn the use of one of the iconic vehicles. While some distributors have historically received vehicles, it is exceedingly rare when the total number of distributors at all levels are considered. The DSRCC investigation found that the Mary Kay messages implied that getting one of the cars was a likely outcome for participation in the company’s multi level marketing scheme.
Network marketing companies, many of which are active in the dietary supplement industry, have historically been loathe to disclose the fact that most distributors make little to no income.
The Federal Trade Commission has become more active in recent years in policing such claims.
For example, after paying a $200 million FTC fine in 2016, Herbalife, the world’s biggest MLM devoted mainly to the sales of nutritional products, began regularly disclosing that only a small minority of its distributors qualified to receive commission checks. The company went on to disclose that among that small number of distributors who did receive checks, the monthly average was about $1,800.