{"id":11808,"date":"2025-01-13T07:00:00","date_gmt":"2025-01-13T12:00:00","guid":{"rendered":"https:\/\/tvdelmarva.com\/?p=11808"},"modified":"2025-01-13T14:42:21","modified_gmt":"2025-01-13T19:42:21","slug":"ftc-proposes-rule-changes-and-new-rule-to-deter-deceptive-earnings-claims-by-multilevel-marketers-and-money-making-opportunity-sellers","status":"publish","type":"post","link":"https:\/\/tvdelmarva.com\/wp\/ftc-proposes-rule-changes-and-new-rule-to-deter-deceptive-earnings-claims-by-multilevel-marketers-and-money-making-opportunity-sellers\/","title":{"rendered":"FTC Proposes Rule Changes and New Rule to Deter Deceptive Earnings Claims by Multilevel Marketers and Money-Making Opportunity Sellers"},"content":{"rendered":"

The Federal Trade Commission is seeking comment on proposed changes to the Business Opportunity Rule and a proposed new Earnings Claim Rule that, taken together, would strengthen the agency\u2019s tools to curb deceptive earnings claims in industries where they are pervasive: multi-level marketing (MLM) programs and money-making opportunities.<\/p>\n

While deceptive earnings claims are already illegal, the proposed changes to the FTC\u2019s Business Opportunity Rule and the new Earnings Claim Rule would allow the FTC to seek strong relief \u2013 including money back for consumers and civil penalties \u2013 from covered companies making deceptive claims.<\/p>\n

\u201cPhony claims about likely earnings lure people looking for honest income into spending thousands, even tens of thousands, of dollars on multi-level marketing, business coaching and other schemes,\u201d said Sam Levine, Director of the Bureau of Consumer Protection. \u201cThe proposed rules would help the FTC deter illegal conduct with civil penalties and put money back in consumers\u2019 pockets. We look forward to getting public comment.\u201d<\/p>\n

The FTC is seeking comment from the public on three proposals: two Notices of Proposed Rulemaking (NRPM) and one Advance Notice of Proposed Rulemaking (ANPRM).<\/p>\n

NPRM on Business Opportunity Rule<\/strong><\/p>\n

This proposal<\/a> would expand the Business Opportunity Rule to cover money-making opportunities, such as business coaching and investment opportunities, which claim to assist consumers in building a business or otherwise earning income. Such operations proliferate, using deceptive tactics\u2014and in particular, deceptive earnings claims\u2014to take consumers\u2019 money. They cause significant financial and other harm to consumers. Under the proposed amendments, sellers of these types of opportunities would be, among other things, prohibited from making material misrepresentations, including about earnings.<\/p>\n

Sellers also would be required to have written substantiation to back up any earnings claims and make that substantiation available to consumers if they request it \u2013 in the language they used to make the earnings claim.<\/p>\n

NPRM on Rule Covering Deceptive Earnings Claims in the MLM Industry<\/strong><\/p>\n

The proposal<\/a> would create a new rule that would address false or misleading earnings claims in the MLM industry. Deceptive earnings claims are a widespread problem in this industry, and they have caused significant financial and other harm to consumers.<\/p>\n

Like the Business Opportunity Rule, the new rule, if adopted, would prohibit MLM sellers from making deceptive earnings and related claims. Similarly, this proposal would require MLM sellers to have written substantiation to back up any earnings claims and make that substantiation available to consumers if they request it \u2013 in the language they used to make the earnings claim.<\/p>\n

ANPRM on Additional Components of the Proposed Earnings Claim Rule<\/strong><\/p>\n

In addition to the NPRMs, the FTC is issuing an ANPRM<\/a> in connection with the proposed Earnings Claim Rule, seeking comment from the public on the need for additional rule requirements addressing deceptive earnings claims and related conduct. These include:<\/p>\n