FTC Issues Guidance To Multi Level Marketers

Companies like Mary Kay, Amway and Herbalife will be paying close attention to recent news from the FTC.

In a series of Q&As, the FTC issued guidance to help MLMs apply core consumer protection principles to their business practices.  The Q&A addresses questions about how the FTC distinguishes between lawful and unlawful compensation structures; how the FTC views personal/internal consumption of the products by the participants in evaluating whether the compensation structure is appropriate; and how an MLM should make representations to its participants and prospective participants about the business opportunity, such as about participants' earning potential.

Now that the FTC has issued this guidance, is enforcement activity on the horizon?