Amway, affiliates to pay $225 million to settle US claims they deceived recruits

Amway Corp., along with its two affiliates, World Wide Group LLC and Leadership Team Development Inc., have agreed to pay a combined $225 million to settle allegations brought forth by the U.S. Federal Trade Commission (FTC) and the state of Washington. The FTC alleges that the multilevel marketing company misled potential recruits about the income they could generate through participation.

According to the FTC, Amway and its affiliates told recruits that they could earn $40,000 or more. However, the majority of those who joined the two affiliates after the end of 2020 ended up spending more money on training and Amway products than they actually made. The FTC claims that recruits were encouraged to purchase products that they did not desire in order to earn compensation from Amway.

The $225 million settlement is primarily intended to reimburse Amway members who were affected by the deceptive practices. In addition to the monetary settlement, Amway has committed to changing its practices to discourage members from seeking financial gain through selling Amway products or by recruiting others. Instead, the company plans to incentivize members to sell products and build sales teams based on actual sales performance.

The FTC emphasized that this settlement represents the largest in an action against a multilevel marketing company. Amway did not immediately respond to a request for comment regarding the settlement.