Labor & Employment Law Daily Wrap Up, AGENCY NEWS—FTC Labor Task Force targets deceptive earnings claims in MLM and business opportunity promotions, (Jun 17, 2026)

By Martin A. Steinberg, J.D.

MLMs, recruiters, and business-opportunity promoters must substantiate income promises and may be liable for misleading claims about what participants are likely to earn.

The FTC highlighted in its Business Blog recent Labor Task Force enforcement actions targeting deceptive earnings claims by multi-level marketing companies, recruiters, and business-opportunity promoters. The agency said companies and individual distributors must be able to substantiate claims about likely participant earnings, and that atypical success stories do not support promises that others will achieve similar results. The FTC also pointed to recent cases involving MLMs and an investment-training business scheme as examples of its renewed focus on protecting workers and prospective participants from false or baseless income claims.

FTC Chairman Andrew N. Ferguson created the Labor Task Force to use the Commission’s broad jurisdiction and interdisciplinary expertise to address practices that harm American workers. According to the FTC, the task force has produced significant benefits, including a series of cases against recruiters or leaders of several MLMs, as well as an investment training and business scheme structured as an MLM, for allegedly misleading prospective participants about potential earnings.

The blog emphasized that earnings representations can be especially influential in MLMs because participants often must invest time, money, and effort based on the promise of future income. The FTC warned that when recruiters or companies make income claims that they cannot substantiate, participants may lose not only their investment but also the opportunity to pursue legitimate income-generating work. The agency cited Wellington and Merritt as examples in which senior-level participants in separate MLMs allegedly used false or baseless earnings claims to recruit new participants. The FTC stated that although recruits were told they could earn hundreds of thousands or even millions of dollars, the MLMs’ own income disclosure statements showed that most participants earned little or no money. The agency also cited Forever Living, alleging that the health and wellness MLM and two executives made deceptive earnings claims to attract participants, most of whom allegedly made no money or lost money.

The FTC also discussed its action with the State of Nevada against International Markets Live, which it described as a broad MLM scheme that generated more than $1.2 billion since 2018. The agency alleged that the defendants used false or baseless earnings claims to persuade consumers to buy training on investing in financial markets and to join a related MLM business venture selling those training services to others. To resolve the allegations, the company and its principals agreed to a nearly $800 million judgment, with part suspended based on inability to pay, and to turn over assets estimated at nearly $90 million. The FTC stated that it intends to combine those assets with $13 million previously collected in the matter for consumer refunds.

The blog concluded with compliance guidance for MLMs, recruiters, distributors, and other business-opportunity promoters. The FTC stressed that anyone making earnings or lifestyle claims must have substantiation showing what participants are likely to earn. It cautioned that unusually successful results achieved by a small number of people do not justify claims suggesting that typical participants will achieve similar income. The agency further warned that MLM companies may be liable for deceptive marketing by their distributors, and that distributors themselves may also be liable when they recruit others using inaccurate or unsupported earnings claims. The FTC stated that it will not hesitate to act against recruiters or companies that defraud workers with false earnings promises that few, if any, participants are likely to achieve.

In FTC v. Merritt, the FTC challenged allegedly deceptive earnings claims by Steven and Gina Merritt, senior-level participants in LifeWave, Inc., a health-and-wellness MLM that sells “phototherapy patches” through Brand Partners. The FTC alleged that the Merritts used websites, social media, Zoom calls, YouTube videos, and seminars to recruit participants by claiming they could earn substantial income, including $25,000 or more per week. According to the FTC, LifeWave’s income disclosures showed that 79% of active participants earned no commissions in 2024 and that, at most, only 0.035% earned more than $25,000 per week. Under the proposed stipulated order, the Merritts would be barred from misrepresenting likely earnings, actual participant earnings, reasons participants do not earn substantial compensation, and other material facts. They also could not make earnings claims unless truthful, substantiated in writing when made, and supported by evidence provided to prospective participants upon request (FTC v. Merritt, Case No. 9:26-cv-80485-DMM, (S.D. Fla.)).

In the International Markets Live complaint, the FTC and Nevada secured a proposed settlement involving the IM Mastery Academy/iMarketsLive/IM Academy/IYOVIA financial-training and MLM operation, which allegedly used false or baseless earnings claims to sell investment training and a related business opportunity. The settlement with Chris and Isis Terry and three associated corporations would impose a $795.8 million judgment, most of which would be suspended upon turnover of assets estimated at nearly $90 million, including luxury homes, vehicles, a yacht, jewelry, and watches. The proposed order would also bar the settling defendants from selling trading-training services and investment opportunities, prohibit unsupported earnings claims and other misrepresentations, and impose requirements for negative-option sales, cancellation mechanisms, and compliance with the Telemarketing Sales Rule (FTC v. International Markets Live, Inc., No. 2:25-cv-00760-CDS-EJY (D. Nev.)).

News: AgencyNews LitigationNewsTrends TortClaims