{"id":7070146,"date":"2026-09-30T11:29:22","date_gmt":"2026-09-30T11:29:22","guid":{"rendered":"https:\/\/peraltafinancing.com\/?p=7070146"},"modified":"2026-09-30T11:29:22","modified_gmt":"2026-09-30T11:29:22","slug":"amway-mlm-225m-ftc-deceptive-business-practices-settlement-lessons-my-money-blog","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7070146","title":{"rendered":"Amway MLM $225M FTC Deceptive Business Practices Settlement Lessons \u2014 My Money Blog"},"content":{"rendered":"


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In this current low-regulatory environment, I was surprised to see that the Federal Trade Commission (FTC), the State of Washington, and Amway just announced a $225 million settlement over \u201cUnfair and Deceptive Business Practices\u201d<\/a>.<\/p>\n

Multilevel Marketing (MLM) firms, sometimes called \u201cpyramid schemes\u201d, have a common set of criticisms and the settlement details offered some detailed examples of those criticisms. If you have thought about joining an MLM, you should definitely read the entire thing.<\/p>\n

Most Amway \u201cIndependent Business Owners\u201d (IBOs) lost money.<\/strong> Amway promises you an easy, ready-to-go business opportunity. $40,000+ a year on the side sounds great, right? In fact, the majority of IBOs spent more money purchasing Amway products and paid training materials than they ever made back from Amway. Not really a great side hustle when most people joining ended up losing more money than if they did nothing at all. At least if you deliver for DoorDash, you\u2019ll get paid for your time.<\/p>\n

The primary goal is to recruit more IBOs (build the pyramid).<\/strong> You end up getting the most commission when you recruit another person as an Amway IBO (who then buys the products), not actually selling products to customers. The products are nothing special. The \u201cbusiness owners\u201d themselves are the source of profit. <\/p>\n

Amway pressured IBOs to buy product themselves and then pretend those were real sales.<\/strong> The settlement states Amway and its affiliates deceptively instructed IBOs to falsely report product sales that never happened. This was designed to create the illusion that Amway\u2019s revenue came from legitimate retail sales rather than internal recruitment purchases. This in turn makes the next recruit think it\u2019s a great business.<\/p>\n

Expensive paid training materials and seminars.<\/strong> Another significant source of revenue for people who actually made money at Amway was by selling proprietary training materials and seminars to new IBOs. Many are pitched as \u201crequired\u201d for success.<\/p>\n

Beyond the $225 million judgement amount, which mostly goes to past Amway IBOs, the settlement will enforce the following new rules to try and counter the above dangers for future Amway IBOs:<\/p>\n