The FTC Just Fined Amway $225 Million: How to Spot an MLM Income Promise That Rarely Pays Off

What regulators found

In September, the Federal Trade Commission and the state of Washington took action against Amway, one of the largest multilevel marketing (MLM) companies in the country, along with two affiliates: World Wide Group (WWG) and Leadership Team Development (LTD).

Under the proposed order, the companies will pay $225 million. That is the largest amount ever collected from an MLM in an FTC action. Nearly all of it is set aside to repay consumers who were harmed.

The FTC says the companies used false earnings claims and pressure to get people to buy products they did not want and could not easily sell. This is money going back to real people, not a program you sign up for.

How the pitch usually works

MLM recruiters call it a chance to own your own business. In this case, people were called Independent Business Owners, or IBOs. The pitch sounds like flexible income and freedom.

But according to the complaint, most people who joined WWG or LTD after 2020 spent more money on products and training than they earned back from Amway. In plain terms, most lost money.

The complaint also says people were told to buy a set amount of products every month whether they could sell them or not, and to focus on recruiting others to do the same.

The red flags to watch for

You do not need to know every detail of a company to protect yourself. Watch for these warning signs in any moneymaking offer:

Promises that you are likely to earn a specific big income, replace your full time job, or retire early. The FTC alleges Amway falsely told people they were likely to earn more than $40,000 a year.

Pressure to buy inventory every month, whether or not you can sell it. Claims that success comes mostly from recruiting other people. And talk of an exclusive opportunity or special mentors that turns out to be open to anyone.

If income depends on recruiting more than on real product sales, be very careful. That is a classic sign of a losing setup.

The free and safe way forward

You never have to pay a company to find honest information about a business opportunity. Checking a company with the FTC is free.

If you already lost money to Amway, WWG, or LTD, watch for official refund news from the FTC. Real FTC redress is free. Anyone who asks you to pay a fee to get your refund is running a scam.

Before joining any MLM or side gig that asks for money up front, slow down and read the company's income disclosure. If they cannot show you what typical members actually earn, treat that as your answer.

Frequently asked questions

Will I get money back if I lost money with Amway?

The proposed order sets aside nearly all of the $225 million to repay harmed consumers. Refund details come from the FTC. Watch ftc.gov for official news, and remember that real FTC refunds are always free.

How can I tell if an MLM is a bad deal?

Look for pressure to buy monthly inventory, income that depends on recruiting, and big earnings promises without proof. Ask for a written income disclosure showing what typical members earn.

Does anyone charge to help me get an FTC refund?

No legitimate service does. If someone asks you to pay a fee to receive an FTC refund, it is a scam. Reporting and refunds through the FTC are free.

Where do I report a company that misled me?

You can report it for free at reportfraud.ftc.gov. Your report helps regulators spot patterns and protect others.