Hi Huns!
Keep up the good work, exposing these MLM scammers!
News from the USA - The FTC has just released a detailed document examining MLM bullsh*t. You know the story, of course, but more real data, and I hope the FTC take action.
Report at: https://www.ftc.gov/system/files/ftc_gov/pdf/mlm-ids-report.pdf
The "earnings" breakdown charts are brutally detailed...
Hat tip: Consumer Health Digest (https://lists.quackwatch.org/mailman/listinfo/chd_lists.quackwatch.org)
FTC staff says most MLM earnings disclosures are misleading
The Federal Trade Commission (FTC) has issued a 95-page staff report detailing findings from a February 2023 review of income-disclosure statements. The statements were available on the websites of 70 different multi-level marketing (MLM) companies that ranged from large, household names to smaller, less well-known companies. Such statements are often provided to consumers who are considering joining MLM companies. Multi-level marketing income disclosure statements: An FTC staff report. Federal Trade Commission, Sept 2024] The report notes that many or most of the statements:
- do not disclose that displays of earnings omit participants with low or no earnings
- don’t account for the expenses faced by participants, which can exceed their income
- emphasize the high earnings of a few participants
- entirely omit or only inconspicuously disclose key information about the limited earnings made by most participants
- present earnings information in a potentially confusing way, such as by giving average earnings amounts for groups that could have very different actual incomes, or using annual income figures that aren’t based on what an actual group of participants made for the year
The report also notes that many MLM participants received no payments from the MLM companies, and the vast majority received $1,000 or less per year.
FTC staff issue report on multi-level marketing income disclosures. FTC press release, Sept 4, 2024] Consumers have been found to expect more supplemental income from MLM participation than they are likely to earn.