The Federal Trade Commission and the state of Washington have accused Amway, the multilevel marketing company, of luring independent business owners with income promises the agency says most recruits could never come close to reaching. Under a proposed court order the two sides filed together on September 17, 2026, Amway would have to resell at least 70% of what its distributors buy before it counts as a real sale, and it would have to stop charging new distributors for training during their first year. The order still needs a federal judge’s signature before either change takes effect.
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What the FTC Says Amway Told Recruiters
The FTC’s complaint alleges Amway and its affiliated training companies told independent business owners, known inside the company as IBOs, that they were likely to earn substantial income, exceeding $40,000 a year, or that the business could replace a full-time job or let someone retire early. The agency says most IBOs instead spent more money on Amway products and training than they ever received back from the company.
The complaint also accuses Amway of deceptively instructing IBOs to falsely report that they had sold products they had not actually sold, inflating the appearance of a functioning retail business built on repeat customers rather than one where distributors were mainly buying from each other or from Amway itself.
A New 70% Resale Requirement
Going forward, the proposed order would require IBOs to sell to others at least 70% of the products they purchase from Amway each month. The rule targets what regulators call inventory loading, distributors buying far more product than they or genuine customers actually use, so a distributor’s own purchases can no longer be counted as evidence that the business is working. The FTC’s guidance on multilevel marketing has long flagged that pattern as one of the clearest signs a program is rewarding recruitment over actual retail sales.
For an existing IBO, the change would mean tracking actual customer sales in a way the business may never have required before. A distributor whose garage holds several months of unsold nutritional supplements or cleaning products, bought to hit a monthly purchase target rather than to fill orders from real customers, would no longer be able to count that inventory as part of a working sales record once the rule takes effect.
No Charge for a New Distributor’s First Year
The order would also require Amway to make sure its approved training providers, including the two named in the case, World Wide Group and Leadership Team Development, do not charge new IBOs for any training or services during their first year in the business. The FTC ties that provision directly to its finding that many new recruits spent more on training than they earned from sales, the same gap that made the $40,000-a-year promise false for most of them.
A $225 Million Judgment, Nearly All Set Aside for Redress
The order includes a $225 million monetary judgment, which the FTC describes as the largest monetary recovery it has ever obtained in an action against a multilevel marketing company, with nearly all of it set aside as redress for the IBOs the agency says were harmed by the deceptive recruiting tactics. The complaint names Amway Corp. alongside World Wide Group, L.L.C. and Leadership Team Development Inc. as the parties bound by the proposed terms.
Amway has operated its multilevel structure for decades, and the FTC’s complaint treats the $40,000-a-year figure and the false sales reports as long-running features of how the company and its affiliated trainers recruited new IBOs, not an isolated incident. That history is part of why the agency frames the $225 million figure, and the resale and training rules that come with it, as a structural fix rather than a one-time penalty.
Why This Is Still a Proposed Order
The FTC and the state of Washington filed the case together on September 17, 2026, in the U.S. District Court for the Western District of Washington, alongside a stipulated order the commission’s members approved by a 2-0 vote. The FTC’s own case record lists the matter’s status as pending, meaning a federal judge still has to review and sign the order before Amway is bound by the new resale and training rules. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the action shows the commission “will not tolerate any company deceiving workers.”
The FTC’s press release describes the $225 million judgment as nearly all earmarked for the IBOs it says were misled, and its case record for the matter, filed jointly with Washington state, still shows the order awaiting a judge’s signature. Until that signature happens, the 70% resale rule and the free first-year training requirement remain proposed terms rather than enforceable obligations, even though Amway agreed to them as part of the stipulated filing.
The Gap an MLM Income Promise Leaves Behind
A recruiting pitch built on income promises regulators later called false leaves anyone who joined and paid for starter inventory or training with little more than a legal filing and a promise of future rule changes. Nothing in that filing refunds a specific person’s training fees or explains how to document what was actually promised at the time of signing up.
The Senior Fraud Defense & First-Hour Recovery Kit’s fraud evidence and report log and first-hour recovery plan are built for exactly that kind of documentation gap, whether the pitch came from a multilevel marketing recruiter or another high-pressure seller.
See how the evidence log organizes a recruiting pitch’s promises and receipts in The Senior Fraud Defense & First-Hour Recovery Kit.
This article was written with AI assistance and checked by a human editor before it was published.
