FTC Takes Action Against MLM Participants That Allegedly Deceived Workers About the Amount of Money They Could Earn
In April 2026, the Federal Trade Commission announced that it is taking action against high-level participants in a multilevel marketing company over allegations they used false or baseless earning claims to recruit workers, most of whom did not earn any money.
The FTC alleged in a complaint that senior-level participants in a MLM called LifeWave, deceived consumers about the amount of money they could earn from selling products and recruiting new participants for the company, which sells health and wellness products.
“The [participants] used inflated earnings claims to entice potential participants to join LifeWave when in reality most people did not earn any money,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC has been very clear that if you tell consumers they will make lots of money, you need to back up the claims.”
The FTC alleged that the participants repeatedly claimed people could earn substantial income from selling LifeWave products and recruiting new members. For example, in a video posted to their YouTube page in May 2025 from a recruiting meeting, a participant allegedly said, “We’re going to make you a – can I say buttload – a buttload of money…I cannot wait to help you guys get to the top rank and make $25,000 or more a week.”
The other participant allegedly said at that same meeting, “The money keeps coming, even if you don’t show up, and you can’t stop it. It’s like a spigot of water but a spigot full of $100 bills throwing at you, coming at you. You can’t stop it. Anybody want that?”
Despite these income claims, according to the complaint, LifeWave’s own income disclosure statements show that most people make little or no money. LifeWave’s 2024 income disclosure statement stated that 79% of active participants earned nothing in commission payments in 2024, and that, at most, only 0.035% of active participants earned more than $25,000 a week in 2024, according to the FTC.
In an order settling the FTC’s allegations, the two participants will be prohibited from misrepresenting or assisting others in misrepresenting how much money others can earn from various business ventures. This includes prohibiting them from misrepresenting:
- Expressly or by implication, including through images of homes, vehicles, purchases, or travel, earnings that participants will or are likely to make;
- The amount of earnings that they or other participants have actually earned;
- The reason participants do not earn substantial compensation; and
- Any other fact material to consumers concerning the business venture.
In addition, they are prohibited from making any representation, expressly or by implication, regarding the amount of earnings that a participant can expect to earn unless: it is not misleading, they can substantiate in writing the earnings claim when it is made, and they provide evidence upon request to any individual who expresses an interest in becoming a participant. The participants also will be required to notify their downline participants about the FTC’s allegations and the order’s prohibition on making deceptive and unsubstantiated earning claims.
This is the second case in the past month where the Commission has taken action against high-level MLM participants for allgedly making deceptive earnings claims.
Richard B. Newman is an FTC advertising practices attorney at Hinch Newman LLP.
Informational purposes only. Not legal advice. This article is not intended to and should not be construed as legal advice. May be considered attorney advertising.
