FTC Continues to Target MLMs and Other “Money-Making Opportunity Sellers”

The U.S. Federal Trade Commission (FTC) is one of several federal agencies tasked with protecting consumers and investors in the United States. Among several priorities, the FTC has recently been targeting multi-level marketers (MLMs) and other “money-making opportunity sellers.” As recently as January 13, 2025, the FTC wrote: 

“It’s a persistent problem the FTC’s aggressive enforcement program’s been fighting for decades . . . companies and programs that lure in entrepreneurs, investors, or participants with promises of significant earnings, and then fail to deliver. Today the FTC announced proposed rulemakings to strengthen the agency’s tools to curb deceptive earnings claims in industries where reports indicate they are pervasive: money-making opportunities and multi-level marketing (MLM) programs. If finalized, the proposals would allow the FTC to seek stronger relief – like money back for consumers or civil penalties – from covered companies making deceptive claims.”

While the Trump administration placed a freeze on new regulations a week later (and more recently placed additional restrictions on the adoption of new regulations going forward), it is important to note that the FTC has already been going after MLMs and other money-making opportunity sellers for years. As a result, while new Earnings Claim Rule could potentially strengthen the FTC’s ability to pursue cases involving suspected fraudulent earnings claims and other similar types of issues, it is clear that the FTC can (and does) rely on the enforcement tools it already has at its disposal.

Examples of Recent FTC Enforcement Priorities in This Area

The FTC views MLMs and other money-making opportunity sellers as potential risks to consumers and investors who may be lured into high-risk investments and other fraudulent opportunities. While the FTC works to protect consumers and investors generally, over the past few years it has placed particular emphasis on pursuing enforcement in cases involving: 

Multi-Level Marketing and Direct Sales Earnings Claims

Multi-level marketing and direct sales schemes are fundamentally lawful. There is nothing wrong with offering business opportunities to individuals—provided that the individuals and organizations involved play by the rules. 

In years past, the FTC has targeted MLM companies and direct sales companies with allegations of operating Ponzi schemes and pyramid schemes—and these allegations remain a concern. More recently, however, the FTC has focused on scrutinizing direct sales companies’ and MLM earnings claims. Federal laws and regulations, such as the Proposed Earnings Claim Rule, prohibit all types of companies from falsely representing the financial prospects of business opportunities to consumers and investors, and the FTC has adopted regulations to deter deceptive earnings claims, specifically MLM earning claims. 

Network Marketing Schemes 

The FTC’s efforts to target network marketing schemes mirror its efforts to target MLMs and direct sales companies. In a typical scenario, the FTC will allege that the individuals or organization behind a network marketing scheme are using false and misleading earnings claims to lure victims who have unreasonable and unrealistic expectations based on the information they have been provided. 

Coaching and Mentoring Schemes 

The FTC has also specifically raised concerns with coaching and mentoring schemes. This includes programs offered online and heavily promoted on social media, often giving the appearance that making money through these programs is “easy” and that they offer a “fool-proof” strategy or “guaranteed” profits if students or mentees follow the plan. In these cases, the FTC has focused on a variety of direct and indirect false and misleading representations, from appearing to give presentations at prestigious universities and sitting in luxury cars to claiming to offer a multi-step strategy for building a successful business or generating sizable investment returns. 

Education, “Gig,” and Job Scams 

While many of the FTC’s enforcement actions in this area involve alleged “scam artists,” the FTC has also targeted academic institutions and major companies accused of fraudulently promoting education, “gig,” and job opportunities. Here too, the FTC has recently prohibit misrepresentations relating to the money-making potential of the opportunities involved. 

Debt Traps

Debt traps are another enforcement priority for the FTC in this area. In some cases, the FTC alleges, not only do purported money-making opportunities prove unprofitable, but they also leave consumers and investors in debt. The FTC alleges that in many cases this is intentional, and the ultimate goal is to drive consumers and investors into unmanageable debt that then facilitates collection efforts that target their remaining property. 

Lifestyle Claims 

Along with earnings claims, the FTC is also targeting broader “lifestyle claims” that MLMs and others use to promote money-making opportunities online. As explained in a notice of proposed rulemaking that the FTC issued in 2022, “[l]ifestyle claims are claims that participating in a money-making opportunity will lead to a material change in lifestyle—such as getting to go on expensive vacations, quitting your job, or buying a luxury car.” A subsequent notice of proposed rulemaking issued earlier this year seeks to define an “earnings claim” to include a similar reference to lifestyle claims.

Deceptive Impressions

Overall, the FTC is focused on targeting MLMs and other money-making opportunity promoters that give consumers and investors deceptive impressions about what earnings MLM participants can reasonably expect if they pursue the opportunity that is being offered. The FTC is pursuing enforcement actions under its existing regulations and the Federal Trade Commission Act, which contains a broad prohibition against “unfair or deceptive acts or practices in or affecting commerce.”

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The FTC’s Notice of Penalty Offenses Related to Money-Making Opportunities 

In 2021, the FTC issued a Notice of Penalty Offenses related to money-making opportunities. As the FTC explains, a Notice of Penalty Offenses is, “a document listing certain types of conduct that the Commission has determined, in one or more administrative orders (other than a consent order), to be unfair or deceptive in violation of the FTC Act. . . . [and c]ompanies that receive this Notice and nevertheless engage in prohibited practices can face civil penalties . . . .”

The FTC’s Notice of Penalty Offenses Concerning Money-Making Opportunities identifies all of the following as violations of the Federal Trade Commission Act:

• “[T]o misrepresent, explicitly or implicitly, that participants will be or are likely to be profitable (i.e., to earn or receive more income through the use of the money-making opportunity than the amount of any purchase price and expenses).”
• “[T]o misrepresent, explicitly or implicitly, that a substantial number of participants have made or can make the represented profits or earnings.”
• “[T]o represent, explicitly or implicitly, the earnings which may be secured by participants, when the representation is made without knowledge, or with only limited knowledge, of the actual profits or earnings usually and ordinarily received by participants.”
• “[T]o misrepresent, explicitly or implicitly, that the represented profits or earnings are the ordinary, typical, or average profits or earnings made by participants. . . .”
• “[T]o misrepresent, explicitly or implicitly, that participants do not need experience in order to earn income.”
• “[T]o misrepresent, explicitly or implicitly, that a prospective participant must act immediately to purchase or to be considered for a money-making opportunity.”
• “[T]o misrepresent, explicitly or implicitly, the position being offered to prospective participants in a money-making opportunity, such as by failing to disclose that it is a sales position when such is the case.”

This list is not exclusive. These are just examples of the offenses listed in the FTC’s Notice. Due to the breadth of the Federal Trade Commission Act’s prohibition on “unfair and deceptive acts or practices,” the FTC has the ability to pursue enforcement in an extremely wide range of scenarios involving apparent or alleged misrepresentations or omissions that cause harm to consumers or investors. 

What Should You Do if You Have Concerns?

Given the FTC’s focus on targeting MLMs and other money-making opportunity sellers, what should you do if you have questions or concerns based on what we’ve discussed above? In this scenario, it is important to take a proactive approach to risk management. In virtually all scenarios, it is far better to address potential compliance concerns proactively than to wait and see if the FTC decides to pursue enforcement. 

Among other things, this means working with experienced counsel to assess the legality of your MLM or other money-making opportunity. At Oberheiden P.C., we represent multi-level marketers, retailers, academic institutions, coaches and mentors, and other entities and individuals in all aspects of FTC compliance and defense. Our team can help you understand the risks you (and your company) are facing, and then we can help you executive a strategy focused on mitigating these risks to the fullest extent possible. If necessary, we can represent you in communications with the FTC as well, targeting a favorable resolution that avoids formal enforcement action. 

Schedule a Confidential Consultation with an FTC Compliance and Defense Lawyer at Oberheiden P.C.

Do you have questions or concerns about the FTC’s efforts to target MLMs and other money-making opportunity sellers? If so, we invite you to get in touch. To schedule a confidential consultation with an FTC compliance and defense lawyer at Oberheiden P.C., please call 888-680-1745 or tell us how we can help online today.