FTC aims to strengthen tools to curb deceptive earnings claimsFTC aims to strengthen tools to curb deceptive earnings claims

The Federal Trade Commission said proposed changes would enable the agency to request strong relief from firms making deceptive earnings claims. But President-elect Donald Trump’s pick to lead the agency said such policy decisions “belong to the incoming Trump Administration and not to lame-duck Biden functionaries.”

Josh Long, Associate editorial director, SupplySide Supplement Journal

January 14, 2025

3 Min Read
Federal Trade Commission

The Federal Trade Commission on Monday announced it was seeking comments on proposed changes to strengthen its tools to reduce deceptive earnings claims in industries where such claims are widespread, including multi-level marketing.

In a Jan. 13 news release, FTC noted that while deceptive earnings claims are presently unlawful, its proposed changes to the business opportunity rule and a new earnings claim rule would enable the agency to request strong relief from firms making deceptive claims, including civil penalties and consumer redress. The agency is seeking comment on two notices of proposed rulemaking (NPRM) and one advance notice of proposed rulemaking (ANPRM).

“Phony claims about likely earnings lure people looking for honest income into spending thousands, even tens of thousands, of dollars on multi-level marketing, business coaching and other schemes,” Sam Levine, director of FTC’s Bureau of Consumer Protection, said in the news release. “The proposed rules would help the FTC deter illegal conduct with civil penalties and put money back in consumers’ pockets. We look forward to getting public comment.”

President-elect Donald Trump’s pick to lead the agency, Andrew N. Ferguson — who is already an FTC commissioner and previously served as solicitor general of the Commonwealth of Virginia — proclaimed, “As I have said repeatedly, the time for the Biden-Harris FTC to issue or propose new rules ended the morning after the presidential election.”

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Ferguson, who was nominated by Trump in December to lead FTC and whose career also includes experience serving as chief counsel to U.S. Sen. Mitch McConnell (R-Ky.), dissented from the agency’s proposals. FTC Commissioner Melissa Holyoak, who previously served as solicitor general with the Utah Attorney General’s Office, joined in his statement.

“The voters decisively rejected the Biden-Harris FTC’s onerous regulatory agenda at the ballot box,” Ferguson said. “Some of these proposed rules may be in the public interest and within our legal authority. But whether they are lawful, and whether they are prudent and sound policy choices, are decisions that belong to the incoming Trump Administration and not to lame-duck Biden functionaries. Fortunately, because these are notices of future rulemaking, the Trump Administration will decide whether they will ever become final rules.”

In September, FTC staff issued a report that described findings from a review of income disclosure statements from 70 different MLMs. FTC staff identified many issues with the statements, including that most omitted important information when calculating the earnings amounts that they presented.

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“Specifically, the report notes that most of the reviewed statements do not include participants with low or no earnings in their display of earnings amounts and also don’t account for the expenses faced by participants, which can outstrip the income they make,” the agency explained in a Sept. 4 news release announcing the report. “The report notes that these omissions are often not plainly disclosed in the income statements.”

Per the report, “most statements emphasize the high earnings of a small group of participants, and many entirely omit or only inconspicuously disclose key information about the limited earnings made by most participants,” according to FTC’s news release.

FTC staff found that many participants earned no payments from MLMs, and the vast majority received $1,000 or less annually, or less than $84 per month.

Yet millions of people participate in MLMs. In 2022, for example, 14.6 million people were participants for MLMs in the U.S., according to the FTC report, which cited the Direct Selling Association. But most of these individuals do not work full-time on MLM opportunities, the agency said.

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The Direct Selling Association did not immediately respond to a request for comment from SupplySide Supplement Journal on FTC’s new proposals.

About the Author

Josh Long

Associate editorial director, SupplySide Supplement Journal , Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at SupplySide Supplement Journal (formerly known as Natural Products Insider), which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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