FTC Cracks Down on Amway with $225 Million Settlement Over Deceptive MLM Tactics
The FTC and the state of Washington announced a $225 million settlement with Amway and two affiliates (WWG and LTD) over allegedly deceptive and unfair recruitment tactics in its multilevel marketing model, including exaggerated earnings claims and pressuring Independent Business Owners to buy products they couldn’t resell. The settlement, the FTC’s largest monetary recovery in an MLM case, imposes changes such as requiring IBOs to sell at least 70% of purchased products each month, reducing recruiters’ pay if purchases aren’t resold, mandating prompt reporting of customer sales with receipts, terminating fake-sellers, regular independent audits of sales records, mandatory pre-recruitment training, and prohibiting providers from charging new IBOs for training in the first year; most of the judgment proceeds will go to harmed IBOs under a redress program.