The Federal Trade Commission (FTC) believes MLM income disclosures can be misleading. In its recent FTC Staff Report: Multi-level Marketing Income Disclosure Statements, the Commission emphasized that many MLM income disclosures lack clarity and present income data in confusing and ambiguous ways. After analyzing income disclosure statements from 70 companies, the FTC insists that income disclosures often do not include expenses incurred by participants and frequently emphasize high-income earning potential while minimizing instances of limited income participants.
“Most of the income disclosure statements reviewed do not depict the distribution of income across all participants, but instead present a distribution that excludes certain groups of participants,” the report stated. “The nature of this exclusion varies, but in at least some cases it excludes all participants who received no income as well as potentially others.”
