How to Comment on FTC MLM Deceptive or Unfair Earnings Claims


On March 11, 2022, the FTC is requesting comments on Deceptive or Unfair Earnings Claims, which could impact how multi-level marketing companies (MLMs) are allowed to do business in the future. They are requesting comments by May 10, 2022. It is a pretty lengthy document, so I’ve read through it and highlighted some of the important facts.

If you have personal experience with this, I highly encourage you to respond to this FTC request for comment. This is the best way to make a change.

As a reminder, I have an MBA, I am a Certified Public Accountant (CPA), and have almost 15 years working in finance and accounting. These are my opinions based on researched facts and my understanding of those facts. However, this is not legal, financial, or tax advice. This is me presenting facts and my opinions to help you decide if you think this is something you should spend your time doing. If you need legal, financial, or tax advice, you should reach out to a professional for a 1:1 chat! All opinions are my own.

How You Can Respond to FTC – Earnings Claims ANPR, R111003

Let’s skip right to the action:

  • No matter how you respond, make sure Earnings Claims ANPR, R111003 is present in the response
  • You can respond online by going to https://www.regulations.gov
  • You can respond in writing and mail it to Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 20024.

You can see the public comments that have been submitted: https://www.regulations.gov/document/FTC-2022-0020-0001/comment

No matter how you choose to respond, I encourage you to read through their request or look below at the specific items they are requesting information in, so you can make sure you hit the items they are asking for to make sure you are contributing in the most helpful way.

Also, please do not get hung up on the best way to craft your response. Any response is better than no response. Get your story out there, and provide the support if you have it. But don’t be so nervous about getting it perfect that you let it stop you from getting your thoughts there.

Background

According to their request, the FTC understands how misleading income and earnings claims can harm an individual/consumer. They can be influenced to make decisions that can cause them to lose money. The FTC is looking into the current regulations, and how new regulations could help or hurt consumers or small businesses. They are doing so by asking detailed questions to get experiences and data the public has to offer.

Questions

The FTC is asking for your help to answer 28 questions, which start in section III of PDF page 4. The first question is:

  1. How widespread is the use of false, unsubstantiated, or otherwise misleading earnings claims by entities or individuals in connection with the offer or sale of a good or service, participation in a job or other work opportunity, or in a business, investment, or another money-making opportunity? Is the practice prevalent among those who make earnings claims? Are there certain business contexts or industries in which the practice is prevalent, or certain business contexts or industries in which it is not? For example, are deceptive earnings claims prevalent among all businesses that offer work or employment, or just among those in certain industries? If so, describe the relevant industry or business context and the basis for your position. Provide any evidence, such as empirical data, consumer perception studies, or consumer complaints, that demonstrates the extent of such practices. Provide all evidence that supports your answer.

From there, all the other questions ask for different insights. On such things as:

  • What harm is done by misleading earnings claims to both consumers and other businesses
  • Are specific groups more targeted by the false earnings claims
  • Should more consumer education be done to protect people from these claims? If so, what kinds of education?
  • Should more regulations be put in place to protect consumers, if so, what kinds of regulations?
  • Provide your evidence and experience with the impacts of false earnings claims
  • What additional disclaimers should be put in place, and why?
  • What types of disclosures should be required to be published or provided to potential consumers, and what data should be included?

Should You Respond to the FTC Request?

If you have any experiences that you’d like to share with the FTC regarding MLMs and income disclosures, this would be a great time to do it. As it likely will have an impact on future regulations in the MLM and other industries.

While I have not been a part of an MLM, I will be writing a response regarding the income disclosures. I think there is a gap in the information provided on those forms, and I think the public would be much better off knowing how much product is sold to someone who is not, or never has been, a salesperson for the company. We also need better information, such as the mean income for each rank, not just the average. Better income disclosures will mean better information for people making decisions.

I’d also encourage you to check out: https://mlmchange.org/

Wrap Up

If you liked this article, you could check out all my MLM-related articles here: MLM Reviews & Info

It would mean a lot to me if you would check out my YouTube channel. You can also find me on Instagram to share any feedback you may have on the info above! Both of these pages are new, so every new follower, like comment really helps (and makes my day)!

References

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