FTC and Amway propose $225m settlement, redrawing lines on MLM recruitment

Under the proposed order, if goods bought by a recruit go unsold, the pay of the person who recruited them is sharply reduced. Of all the rules in the proposed settlement between the US Federal Trade Commission (FTC) and Amway, this is the one that bears most directly on the business of recruiting.

On 17 September 2026, US time, the FTC and the State of Washington announced action against Amway Corp. and two affiliates, World Wide Group, L.L.C. (WWG) and Leadership Team Development Inc. (LTD). They filed a complaint and a proposed stipulated final order in the US District Court for the Western District of Washington. Under the proposed order, the three companies would pay $225 million in monetary relief, which the FTC says is the largest monetary recovery in any of its actions against a multilevel marketing company. The Commission voted 2-0 to authorise staff to file the papers.

The order has legal effect only once a district court judge approves and signs it. According to Checkbook.org/KOMO on 3 October 2026, the court had not yet approved it at that point, and the defendants do not admit wrongdoing.

The allegations in the complaint

Everything below is an allegation in the complaint, not a court finding.

• Most independent business owners (IBOs) who joined WWG or LTD after 2020 spent more on Amway products and training than they earned.
• The defendants made false income claims, including that IBOs could earn more than $40,000 a year, replace a full-time job or retire early.
• The defendants falsely claimed that IBOs were likely to recruit many participants and advertised "exclusive" coaching from successful leaders, when the opportunity was in fact open to anyone who followed the recruiter's instructions.
• IBOs were pressured to buy a fixed quantity of products each month regardless of resale potential or personal need, and were told to report sales that had not in fact been made.

According to Checkbook.org/KOMO, the complaint says that in recent years more than three-quarters of Amway's US product sales were to its own IBOs. RecordingLaw, relaying the complaint, reports that in 2023 IBOs bought about 77% of the products sold, the median bonus was $139, and fewer than 1,600 of more than 241,000 IBOs received $40,000 or more.

Four new rules in the proposed order

• 70% resale: each month, an IBO must sell at least 70% of the products bought from Amway to other people.
• Unsold goods cut upline pay: where a recruited IBO buys products but does not resell them, the recruiter's pay is sharply reduced. RecordingLaw, relaying the order, says a recruit's unsold purchases in the first six months do not count towards upline pay; that detail is still to be checked against the official text of the order.
• Reporting and outside audit: IBOs must report all customer sales and the actual selling prices promptly, and Amway will send receipts to customers; IBOs who fabricate sales or teach others to do so must be terminated. An independent outside auditor will audit Amway's sales records regularly; RecordingLaw reports that the auditor must be appointed within 120 days and serve for 10 years.
• Training before recruiting: IBOs must be trained on these rules before they can recruit others; approved providers, including WWG and LTD, may not charge a new IBO for training or services in the first year.

How the $225 million is divided

The FTC says nearly all of the money will go to compensating victims, mainly IBOs who lost money after being recruited through WWG and LTD; details of the redress programme will be announced later. According to RecordingLaw, the sum is split into $154.7 million for Amway, $39.78 million for which WWG and Amway are jointly and severally liable, $26.52 million for which LTD and Amway are jointly and severally liable, and $4 million for Washington State's costs and expenses; the order carries no civil penalty.

What the regulators and Amway say

Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said Amway and its affiliates misled prospective workers with false income claims, and that the FTC will not tolerate any company deceiving workers. According to Checkbook.org/KOMO, Washington Attorney General Nick Brown said the companies profited by taking advantage of ordinary people's hopes and ambitions, and that many state residents lost money and were left with cabinets full of products they did not want or need.

According to NutraIngredients on 22 September 2026, Amway said it fundamentally disagrees with the regulators' characterisation of its business and called the settlement a "required compromise".

Analysis: what it means for recruiting teams

The order targets one company and still awaits court approval. Even so, it sets out specific rules on several matters: the monthly resale ratio, the effect of unsold goods on upline pay, sales reporting and outside audit, and limits on training charges in a new IBO's first year. Whether you are on a recruiting team or considering joining one, you can use these angles to examine the opportunity in front of you. The checklist below is editorial advice, not the wording of the order.

1. Are income figures accompanied by the median, rather than only top performers?
2. Are claims such as "replace a full-time job" or "retire early" backed by actual distribution data?
3. Is there a minimum monthly purchase requirement, and how much of what is bought is really sold to outside customers?
4. Does upline pay come from customer sales or from downline self-purchases?
5. What training, event or tool fees must a newcomer pay in the first year?
6. Is "exclusive" coaching genuinely gated, or open to everyone who joins?
7. Is every sale backed by a receipt and a record that can be checked?

If any of these questions goes without a clear answer, ask for one before deciding whether to join.

Compiled by the F50 Editorial Team from public sources, for general reference only and not professional advice. Details are correct as of the publication date and may change.