PayQuicker had the opportunity to participate in the Direct Selling Compliance Professional Certification Program (DSCP-CP) that is generously offered by the Direct Selling Association (DSA) every year. David Jarmusz, Iryna Kaznovska, and Nate Snow-Cornelius of PayQuicker all completed and passed the 12-hour online program and are honored to be certified as Direct Selling Compliance Professionals.
A primary focus of the program this year was to provide companies like PayQuicker with the latest tools and guidance to help develop and maintain an effective compliance program. There were also some interesting in-depth discussions on legal principles that evolve over time and reflect some unique views on the current state of law.
Key discussion topics included:
- Types of claims and associated risks
- Claim substantiation
- Case studies
All claims are divided into three main categories: advertising, product, earnings and lifestyle; and each main category has its own sub-categories that must adhere to different Compliance rules, as required by the Federal Trade Commission (FTC), the Food and Drug Administration (FDA), and other regulators. Below are some examples of each main claim type:
Advertising: Product or service promotions such as sales calls, product demonstrations, company website and social media pages, consumer or distributor testimonials, blogs, and press releases.
Product: Health and wellness products, CBD, cosmetics etc.
Earnings and Lifestyle: Income opportunities, success stories, lifestyle purchases that include images of salespeople with expensive cars, private jets, on lavish vacations.
It is important that each claim is supported by reasonable, competent, and reliable evidence. The substantiation will depend on the product or service and on the type of claim and may include, but is not limited to, the following:
- Product labeling
- Clinical trials
- Testimonials and endorsements
- Online reviews
- Historical data, etc.
Direct Selling companies also must ensure that their disclosures fulfill the regulation requirements of presentation (easy to understand), prominence (font size and contrast), placement (disclosure visibility), and proximity (near the triggering claim). Ongoing monitoring of the claims and disclosures should be based on a determined risk associated with each claim. For example, the introduction of new or improved products may result in a higher risk as they may trigger new disclosures and may require a new substantiation.
As part of the DSCP-CP Program, there were several case study discussions that revealed some real-world challenges encountered by DSA companies. For example, both FTC and FDA oversee compliance over dietary supplements marketing. While the FTC’s primary responsibility is advertising, the FDA oversees product labeling, packaging, and inserts. However, the challenge is that FTC considers that packaging may constitute advertising and the FDA may consider sales material or website claims as labeling; so, the companies must consider requirements of both agencies to be compliant.
The Certification Program was concluded with a panel discussion where lead professionals shared their extensive knowledge and personal experiences of working in the Direct Selling industry.