The FTC Says They Promised $40,000 a Year. Amway Just Agreed to Pay $225 Million.

There is a number buried in the government's complaint against Amway that should make anyone selling a business-opportunity course put down their coffee: $40,000.

That was the income figure allegedly dangled in front of recruits. The complaint alleges the companies falsely promised income above $40,000 a year or a path to replace a full-time job, when most independent business owners who joined after 2020 spent more on products and training than they earned.

Spent more on products and training than they earned. Hold that phrase.

On September 17 the Federal Trade Commission and the State of Washington filed the complaint and proposed settlement in the U.S. District Court for the Western District of Washington. It is the largest monetary recovery obtained in an FTC action against an MLM, nearly all of which will be used to provide relief to consumers harmed by the deceptive tactics of Amway and its affiliates, Spokane Valley-based World Wide Group and North Carolina-based Leadership Team Development.

$225 million. Amway, WWG and LTD neither admit nor deny the allegations.

The mechanic the FTC actually attacked

Strip away the soap and the supplements and the case is about a distribution model that will feel uncomfortably familiar to anyone who has run an affiliate-driven launch.

The complaint reveals that over three-quarters of U.S. product volume was sold to IBOs themselves rather than retail customers, with fabricated sales reporting masking the recruitment-driven model. The buyers were the sellers. The revenue line looked like demand. It was inventory moving sideways into people's garages.

The pricing didn't help. The prices of Amway products are high, making it more difficult to sell to the general public — until recently, Amway sold a case of 24 bottles of water (16.9 oz) for $52, according to the complaint.

"Amway and its affiliates misled prospective workers with false earnings claims and then pressured them to buy Amway products," said Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection.

Washington Attorney General Nick Brown put it in plainer language, saying the companies "profited by taking advantage of regular people's hopes and ambitions." His office described the outcome for many recruits as winding up "with cabinets full of products they don't want or need."

The training clause is the one to read twice

Here is the provision that makes this a course-industry story rather than a soap story.

Amway must require approved providers, including WWG and LTD, to not charge new IBOs for any training or services during their first year.

Read that as a regulator's verdict on paid education sold into a network you control. World Wide Group and Leadership Team Development are training organizations. They sold the systems, the seminars, the materials. The FTC's remedy was not to improve the training. It was to make it free for twelve months, because the cost of the education was part of what put new participants underwater.

If your business model involves selling a program, then selling that program's buyers a higher-tier program, then rewarding them for bringing in people who will do the same, this is the closest thing to a published regulatory opinion you are going to get.

The rest of the order, as a pricing document

The injunctive terms are more interesting than the money.

Participants will be required to resell at least 70% of the products they purchase from Amway each month to avoid stockpiling inventory and thereby artificially inflating Amway's sales. Recruiters will receive substantially reduced compensation if the people they recruit buy products but do not resell them. Customer sales would have to be reported promptly and at their actual sales price, and Amway would send receipts to customers.

Translated out of MLM: prove the end customer exists, prove what they actually paid, and stop paying people for recruitment dressed as sales.

One advertising lawyer reading the order flagged a broader signal for anyone using earnings claims to recruit sellers — that the FTC expects these claims to be tied to what typical, recent participants actually experienced, not to the best outlier or an aspirational average. The same post noted that the order's insistence on prompt, verifiable, third-party audited reporting signals that self-reported performance data is losing credibility with the agency generally, not just in the MLM context.

Self-reported performance data. Screenshots. Stripe dashboards. Student testimonials collected by the person selling the course.

This is the second one this year

The Amway number is enormous, but the template was already tested on a pure course business. Publishing.com and its principals, CEO Christian Mikkelsen and Chief Product Officer Rasmus Mikkelsen, will pay $1.5 million and be required to substantiate earnings claims in the future under an order the Commission finalized in July. The FTC's complaint alleges the company typically charged $1,995 for AI Publishing Academy and $9,800 for the Publishing Accelerator add-on. At the center of the complaint were claims that consumers could replicate the success of the company's founders and students, with some marketing materials pointing to earnings of $1,000 to $3,000 per month.

$1.5 million was a rounding error next to $225 million. The legal theory was identical.

What Amway says

The company is not conceding the story. "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 as part of their contract.

The settlement is a proposed order awaiting the court, and thousands of Washingtonians may be eligible for compensation that the FTC will administer.

Go open your own sales page. Find the income number on it. Then ask what you would hand a regulator if they asked you where it came from.