FTC sends COVID-related warnings to MLM companies

A business opportunity that promises you can work from home, earn lots of money, and enjoy a lavish lifestyle? Sounds tempting, particularly now, when so many people are out of work because of the Coronavirus pandemic. But letters the FTC sent today to ten multi-level marketing (MLM) companies are a reminder to research an MLM business before investing your money and your time.

The FTC’s letters tell the companies to immediately stop their distributors from telling people that they’re likely to get rich by investing in the business. They also demand the companies immediately stop all claims that their products can treat or prevent COVID-19, as there’s no evidence or scientific testing supporting claims that those products can help prevent or treat the disease.

According to the FTC, the MLMs’ distributors posted their unsupported ads on social media sites. Some took direct aim at the economic stimulus payments and urged people to use the money to invest in their MLMs. The messages included:

• “Need to make extra money? Find it difficult to pay your bills? Were you laid off/ #fired? Be your own Boss w/doTERRA essential oils. Msg me to achieve financial independence #laidoff #unemployed #cantpaymybills #cantpaymyrent #student #sales #sidehustle #makemoney #stayathomemom.”
• “…Living in quarantine and where 14 million people applied for unemployment just last week … I’ll stick with the opportunity to change people’s lives … turn a small investment into six figures …. #arbonne … #quarantine #2020”
• “[E]veryone’s getting stimulus checks right now… There is no better investment you could do… Take that money that you’re about to get back… figure out a way to make this happen tonight.”

If you’re thinking about joining an MLM company, get the details. Start by searching online for the name of the company and words like review, scam, or complaint. Be skeptical of portrayals of lavish lifestyles made possible by participating in the program. Most people who join legitimate MLMs make little or no money. And, if promoters emphasize recruiting as the real way to make money, head for the exit.

Visit Multi-Level Marketing Businesses and Pyramid Schemes for more tips about deciding whether an MLM company is right for you.