Companies offering work, training, business opportunities, investments, or other money-making opportunities often try to grab your attention by talking about how much money you can make. But all too often, the potential earnings they describe are exaggerated or even flat-out phony, and people who take the plunge instead lose significant time — and money.
The FTC is ramping up its efforts to stop companies from using false or misleading earnings claims to draw people into their business ventures. The agency sent notices to more than 1,100 multi-level marketing companies, business opportunities, franchises, investment coaching companies, and “gig” companies. The notices remind the businesses they must follow well-settled law when making earnings claims to potential participants, workers, and buyers.
Among other things, the notices tell the companies that they:
- can’t make false, misleading or deceptive claims about the earnings you can expect
- can’t misrepresent that you don’t need experience to earn income
- can’t misrepresent that you must act immediately to buy or be considered for a money-making opportunity, and
- can’t misrepresent that buying a money-making opportunity is risk-free or involves little risk.
The FTC’s cover letter makes clear to recipients that merely receiving a notice does not mean that a company did something wrong. But it also makes clear that the recipients are now on notice that if they use the illegal practices in the future, they can face penalties of up to $43,792 per violation.
Before acting on claims about potential earnings:
- Do your research. For example, before starting a new “gig,” search for information about the company online, like how it pays its workers and any other conditions of the offer.
- Question claims about future riches. Promises that you’ll be able to quit your job, work from home, and live lavishly often are false.
- Steer clear of companies that use high-pressure sales tactics. Any company that says you must act immediately or discourages you from taking time to study the company is one to avoid.
For more information, check out When a Business Offer or Coaching Program Is a Scam and Multi-Level Marketing Businesses and Pyramid Schemes. If you spot an income scam, please tell us at ReportFraud.ftc.gov.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
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- We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
- We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to ReportFraud.ftc.gov.
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In reply to Where can the list of by Darlene White …
Click on the blue highlighted words in the blog saying the "agency sent notices." That connects to our press release, which has more information about the notices to more than 1,100 multi-level marketing companies, business opportunities, franchises, investment coaching companies, and “gig” companies. A recipient’s presence on the list does not in any way suggest that it has engaged in deceptive or unfair conduct.
In reply to I get about 10 phone calls a by TEETOTALER8
You can help the FTC and other law enforcement agencies by reporting income scams to the FTC at ReportFraud.ftc.gov. The information you provide goes into a secure database that is used by law enforcement agencies across the country for investigations and to bring cases.
In reply to This is a disgrace to read!! by Melissacaves71
The FTC sent notices to more than 1,100 multi-level marketing companies, business opportunities, franchises, investment coaching companies, and “gig” companies. This press release tells you more about the list of companies that got the notices. If a business is on the list, it does not suggest that the business has engaged in deceptive or unfair conduct.