California MLM agrees to police disease claims made by associates

By Hank Schultz

- Last updated on GMT

©Getty Images - serggn
©Getty Images - serggn

Related tags product claims disease claims MLM

A California-based MLM has agreed to remove disease treatment claims made by associates after a challenge from a self regulation group.

The company, known as Daxen, Inc., is based in Walnut, CA. Daxen sells a wide variety of dietary supplements, foods and personal care products.  The company claims to have distributors active in more than 180 countries.

The Direct Selling Self Regulatory Council, a division of BBB National Programs, had take the company to task for some posts made by distributors selling into the Philippines market, and posted in the Filipino language.

Laundry list of claims

The posts claimed that certain Daxen products could be useful for a wide variety of disease conditions including:

  • Alzheimer’s disease
  • Anxiety
  • Arthritis
  • Cancer
  • Cirrhosis
  • Dementia
  • Depression
  • Gastritis

In addition, a number of products were claimed to be effective in treating or preventing COVID-19.

The DSSRC statement said Daxen had cooperated with the inquiry.

“Daxen did not dispute that the social media posts that DSSRC brought to its attention were inappropriate and a violation of its Policy & Procedures. The Company was responsive to DSSRC’s inquiry and took immediate steps to address the claims at issue,”​ the DSSRC said.

“DSSRC determined that the removal of such product performance claims was necessary and appropriate and will continue to monitor claims being disseminated by Daxen and its salesforce members and will commence a compliance inquiry with the Company should there be a determination that unsupported product performance continue to be disseminated by the Company or its salesforce members,” ​the statement said.

Smaller MLM

DSSRC inquiries also include policing earnings claims made by MLMs. 

Daxen has not been ranked in the annual list of top MLMs by reported revenue maintained by industry publication Direct Selling News​.  The list now includes only MLMs that have more than $100 million in annual revenue.  In 2019, the last year the list ran to 100 entries regardless of revenue, the cutoff to make the grade was $60 million in annual sales.  Another caveat connected to the list is that it only includes those MLMs (many of which are private companies) that agree to report their revenue.  For example, long-time leading MLM Mary Kay, which had been ranked on the list for many years but which had been reporting steadily declining sales, no longer participates.

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