Following a review of seventy MLM income disclosures, FTC staff have concluded they are “confusing” and “ambiguous”.

Specific issues with MLM income disclosure statements cited by the FTC include:

exclusion of participants (affiliates or distributors) who “receive little or no income”;

no accounting for expenses;

unbalanced focus on high incomes earned by “small number of participants”;

presentation of data is “potentially confusing or ambiguous”;

important data that is presented is done so inconspicuously; and

claims are often made without any clear supporting source

From the FTC’s executive summary;

Staff’s review of 70 disclosure statements shows that most:

(a) present income data that excludes participants who made little or no income and often do not clearly

explain the limitation;

(b) do not account for expenses incurred by participants, and often do not clearly state the limitation, even though expenses can, and in some MLMs often do, outstrip income;

(c) emphasize high dollar amounts received by a relatively small number of participants;

(d) do not include information about the limited income that most participants receive, or provide it only inconspicuously;

and

(e) present income data in potentially confusing or ambiguous ways.

Moreover, none of the reviewed income disclosure statements clearly explains what data is being presented to consumers.

They prominently state that they are sharing information about “income” and “earnings,” but do not conspicuously explain what the terms mean.

For example, do they include data about all types of income that could be earned, or just some? Are they net of any or all expenses?

The lack of clarity on this point is confirmed by the fact that many income disclosure statements define these terms—such as “income” and “earnings”—differently, or not at all.

Additionally, Commission staff’s analysis of data in the income disclosure statements, including the data hidden in fine print, shows that many participants in those MLMs received no payments from the MLMs, and the vast majority received $1,000 or less per year—that is, less than $84 per month, on average.

The
FTC’s full ninety-five page report
(most of which is appendices), is available on the regulator’s website.

My take on MLM Income Disclosure Statements is they typically don’t accurately present a complete picture. This is primarily because, as the FTC noted, participants who don’t earn income are typically excluded.

The argument for this is that people who don’t earn income aren’t participants. I disagree on the basis if you sign up for an MLM opportunity, you are a participant regardless of your financial outcome.

Excluding people who don’t make money bumps the average income per participant, which works in favor of MLM companies who do this. It’s misleading and why you typically won’t find Income Disclosure Statements cited in BehindMLM reviews.

The broader deceptive practices the FTC observed are a problem, but I fe

🤖 Quick Answer

What did the FTC conclude after reviewing seventy MLM income disclosure statements?
FTC staff concluded that most MLM income disclosures are "confusing" and "ambiguous." The review identified several systemic issues, including the exclusion of participants earning little or no income, failure to account for business expenses, disproportionate emphasis on high earnings achieved by a small number of participants, inconspicuous presentation of important data, and unsupported claims.

What specific problems did the FTC identify in MLM income disclosures?
The FTC cited six primary deficiencies: exclusion of low-earning or non-earning participants from reported data, no accounting for participant expenses, unbalanced focus on high incomes earned by a small minority, potentially confusing or ambiguous data presentation, inconspicuous placement of important information, and income claims made without clear supporting sources.

**Why is the exclusion of low

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