Multilevel marketing giant Amway Corp and two of its affiliate organizations will pay $225 million to the Federal Trade Commission and the state of Washington to resolve allegations they deceived hundreds of thousands of potential recruits with false promises of high income — the largest settlement in FTC history against an MLM company.
The settlement, announced Thursday, covers Amway and two recruitment organizations that operate within its network: World Wide Group LLC and Leadership Team Development Inc.
What the FTC Alleged
The FTC alleged that Amway’s affiliate organizations told potential recruits they could earn $40,000 or more per year by joining the Amway network and building their own downline of distributors.
The reality for most recruits was starkly different. According to the FTC, the majority of people who joined World Wide Group and Leadership Team Development after 2020 ended up spending more money than they made — paying for mandatory training materials, events, and Amway products they did not personally want or need in order to qualify for commissions.
The FTC said recruits were actively encouraged to buy products they did not want simply to hit the purchase thresholds required to earn compensation from Amway — a practice known in the industry as “inventory loading.”
The Historic Settlement
The $225 million settlement is the largest the FTC has ever secured against a multilevel marketing company, surpassing previous enforcement actions.
The vast majority of the funds will go directly to compensate Amway members who were harmed by the deceptive practices — people who spent money on training, products, and events based on income promises that proved false.
Beyond the financial payment, Amway agreed to change its business practices to reduce incentives for members to make purchasing products and recruiting others their primary activity rather than actually selling products to real customers outside the network.
Amway’s Response
Amway pushed back firmly on the FTC’s characterization.
“We fundamentally disagree with the agencies’ characterization of our business,” an Amway spokesperson said, adding that Amway members are required to follow robust standards of conduct under their contracts.
The company agreed to the settlement without formally admitting wrongdoing.
Why MLM Income Claims Are Legally Dangerous
The Amway case highlights a longstanding legal tension around multilevel marketing companies and the income claims they make to potential recruits.
The FTC has long held that income claims in MLM recruiting must reflect what typical participants actually earn — not what top performers make. When companies or their affiliated recruitment organizations present exceptional earners as representative of typical results, the FTC considers that deceptive under federal consumer protection law.
In practice, the FTC’s own data shows that the vast majority of MLM participants earn little to no money — and many lose money after accounting for required purchases and fees. Companies are required to disclose this reality clearly in their income disclosure statements, which many bury in fine print.
What Former Amway Recruits Should Know
If you joined Amway, World Wide Group, or Leadership Team Development after 2020 and spent money on:
- Training packages or events
- Amway products you purchased to hit commission thresholds
- Tools or materials required for your Amway business
You may be eligible for compensation from the $225 million settlement fund. Watch for notices from the FTC with information on how to file a claim. The FTC typically distributes settlement funds through a claims process that it publicizes at ftc.gov/refunds.
InjuryWatch News will continue tracking FTC enforcement actions against deceptive business practices.