Amway to Pay $225 Million to Settle Allegations of ‘Deceptive Tactics’
Last updated September 29, 2026
Amway, the largest multi-level marketing (MLM) company in the U.S., and two of its major affiliates, have agreed to pay $225 million to settle a joint lawsuit brought by the Federal Trade Commission (FTC) and the state of Washington, which alleges they used “unfair and deceptive tactics” to recruit members.
Recruits were told they could earn more than $40,000 a year or quit their day jobs for good. But most people who joined Amway after 2020 through its two largest “approved provider” groups—World Wide Group (WWG) and Leadership Team Development (LDT)—spent more on Amway products and training than they received from the company, according to the complaint.
The settlement, announced in mid-September, is the FTC’s largest monetary recovery from a multilevel marketing company. Nearly all the money will go to people harmed by Amway, WWG and LDT.
Amway ‘Pressured’ Recruits to Buy Products
“Amway and its affiliates misled prospective workers with false earnings claims and then pressured them to buy Amway products they were unlikely to be able to sell,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.
Amway, with reported global sales of $7.3 billion in 2025, sells supplements and household goods through people it calls Independent Business Owners, or IBOs. On its website, Amway says it has more than 290,000 IBOs. WWG and LTD are two of Amway’s largest “approved provider” groups; both sell training materials and services to IBOs that are supposedly essential to success.
Regulators allege that recruits were urged to buy a set number of products each month, regardless of whether they could resell them or wanted them, and to spend their time recruiting others to do the same.
The complaint also claims Amway sold more than three-quarters of its U.S. products to its own IBOs in recent years.
Bogus Sales
The complaint also alleges that WWG and LTD instructed IBOs to report sales that never occurred, “to create the appearance that the Amway opportunity revolves around selling products rather than attempting to recruit new IBOs to purchase Amway products.”
Recruits were told they’d be joining an exclusive program with mentoring from wealthy leaders. In fact, the opportunity was open to anyone who followed a recruiter’s instructions, and the “mentors” were typically not highly successful.
Washington State Attorney General Nick Brown said the companies “profited by taking advantage of regular people’s hopes and ambitions.” Many Washingtonians who joined lost time and money and are stuck with “cabinets full of products they don’t want or need.” Washington’s portion of the complaint alleges violations of the state’s Consumer Protection Act. (World Wide Group is headquartered in eastern Washington.)
Amway and its affiliates did not admit to any wrongdoing. In a statement, the Michigan-based company said it disagrees with how regulators characterized its business and rejects their assertion that its sales data is inaccurate. “This settlement, like all settlements, required compromise,” the company said.
Amway Agrees to Change Its Business Practices
Under the proposed settlement order, which must still be approved by the court, Amway, WWG, and LTD agreed to the following:
- IBOs must sell at least 70 percent of the products they buy from Amway to others each month.
- Recruiting affiliates will earn substantially less when their recruits buy products but don’t resell them.
- IBOs must promptly report every customer’s sale at the actual price, and Amway will send receipts to those customers, making phantom sales harder to fabricate.
- Amway must terminate IBOs who fake sales or teach others to do so, and an independent auditor will regularly review its sales records.
- Approved providers, including WWG and LTD, may not charge new IBOs for training or services in their first year.
Getting a Refund
The FTC will release information about the refund program once the court approves the settlement. Until then, keep every receipt and bank statement showing what you spent on Amway products and training.
Claiming an FTC refund is free, and the agency will never demand money or tell you to transfer funds. Anyone who claims you need to pay to get your money back is a scammer.
Is Multi-Level Marketing Legal?
Multi-level marketing (MLM), sometimes called network marketing, can be a legitimate business model. It relies on independent distributors to sell products or services directly to consumers, typically from home or online.
“The stark truth is that the majority of participants in these programs end up losing money,” said John Breyault, director of Fraud.org, a project of the National Consumers League. “Behind the glossy success stories, far too many distributors walk away with garages full of unsold inventory and suffer real financial harm.”
Unfortunately, many MLMs are illegal pyramid schemes in disguise. The key difference between a legitimate direct-selling business and an illegal pyramid scheme comes down to where the money comes from.
“In a lawful model, your earnings are driven by genuine sales to retail customers outside the network,” Breyault explained. “If distributor payouts are fueled primarily by recruiting new representatives and getting them to buy inventory, that’s the hallmark of a pyramid scheme.”
Breyault also cautions that “it’s a fantasy” when a business promises wealth with no effort. “The promise of easy money with no work is one of the oldest traps in consumer protection, and direct sales is no exception.”
High-pressure sales tactics, such as saying you’ll lose the opportunity if you don’t act now, are red flags. Avoid any company that pressures you to join. You should be able to study that business opportunity before signing up.
More Info:
- FTC: Multi-Level Marketing Businesses and Pyramid Schemes
- FTC: When a Business Offer or Coaching Program Is a Scam
- TINA.org: FTC Takes Decisive Action Against Amway
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.