Distributors have been notified that Dot Dot Smile’s MLM opportunity “no longer makes sense for us to retain as a viable company.” Dot Dot Smile’s MLM activities will end on June 30th, according to a statement published last Friday.
Despite acknowledging that “there have been a lot of issues and questions regarding the present condition of DotDotSmile,” the company’s pay was solely reliant on the recruitment of other people as LuLaRoe MLM members.
I highlighted parallels between it and LuLaRoe’s business strategy in BehindMLM’s mid-2019 Dot Dot Smile evaluation – notably the lottery distribution methodology, which completely incentivized affiliate inventory stacking (“wholesaling”).
Dot Dot Smile has not declared whether or not they are under regulatory investigation. Returning to Dot Dot Smile’s MLM opportunity, the firm states that distributors will still be able to buy items. Customers will be able to buy from them “on a separate platform with different needs.”
Dot Dot Smile, to their credit, does not filter distributor comments on their social media platforms.
Dot Dot Smile will stop operations as an MLM firm on June 30th, pending any future upgrades, which are doubtful.
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Non-Participation in the DSSRC Process by the Company.
DSSRC first alerted the Company to the above-mentioned representative allegations and concerns by issuing DDS a Notice of Inquiry on September 20. The CEO of the company reacted and left DSSRC a voicemail. However, DSSRC made multiple following efforts to engage with the Company via phone, email, and overnight mail but was unsuccessful. Unfortunately, the Company did not react to DSSRC’s email.
According to section (II)(4) of the DSSRC Policies and Procedures, the Company was given 15 business days to reply to the DSSRC investigation.
DSSRC attempted to contact the Company many times after it failed to respond within 15 business days. After getting no answer, the Company received a 10-Day notice by UPS 2-Day mail on October 19, stating that if the Company did not respond to DSSRC addressing the allegations and problem within 10 business days, the case will be submitted to the relevant government agency.
Despite having another chance to answer DSSRC’s inquiry, the Company once again failed to do so. All of the subject wage claims are still live and open to the public, according to DSSRC.
Government referral
DSSRC discovered that the Company’s salesforce members are making a number of aggressive earnings claims on social media, including claims that participants in the Company’s business opportunity can expect to earn significant income, allowing them to buy homes and take vacations (e.g., “Maybe you need a business that’s going to pay the bills” and “I initially thought I’d sell a few items here and there and pay some bills but”). Such assertions seem to be without merit.
According to the DSSRC Guidance on Earnings Claims for the Direct Selling Industry, it is misleading for a direct selling company and/or its salesforce members to make any earnings claims unless the direct selling company and/or its salesforce members have a reasonable basis for the claim at the time of the claim and have documentation that substantiates the claim at the time of the claim.
The Company has failed to furnish DSSRC with any proof that salesforce members may expect to make money at the levels stated in the Company’s an advertising and marketing materials.
Despite DSSRC’s best efforts to reach DDS multiple times, the company has yet to reply to this self-regulatory inquiry. If a corporation whose marketing is the subject of a DSSRC investigation fails to engage in the self-regulatory process, DSSRC may report the problem to an appropriate government agency for examination and potential law enforcement action, according to section (II)(9) of the DSSRC Policies and Procedures.
DSSRC reported this case to the Federal Trade Commission because DDS failed to reply to this self-regulatory investigation.
