FTC’s Business Opportunity Rule Doesn’t Apply to MLM

Mlm Women

Business Week:

A new Federal Trade Commission rule is supposed to protect people who buy business opportunities by requiring sellers to provide a one-page disclosure form that includes support for earnings claims, a list of previous legal actions against the company, and its cancellation or refund policy. But the FTC rule, which went into effect last month, excludes so-called multi-level marketers (MLMs) such as Amway, Avon, and Tupperware that the agency originally intended to regulate. That’s because of intense lobbying from the industry, whose revenues are some $28.5 billion in the U.S., according to the Direct Selling Association, the industry’s trade group.

Photo by Allison Hays – Allicat Photography/ShutterStock.

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