FTC Deceptive Earnings Claims Comment

In May 2022, TINA.org submitted a comment to the FTC, which was seeking public comment on whether to propose a rulemaking to address deceptive or unfair marketing using earnings claims.

In its comment, TINA.org focused on the widespread use of false, unsubstantiated and misleading earnings claims employed by the direct selling industry. Among other things, TINA.org highlighted the informational asymmetry that exists between MLM companies and consumers at large before exploring the near-universal use of deceptive earnings claims within the direct selling industry. The comment discusses issues relating to earning disclosures, arguing that no disclosure can remedy the deception of atypical earnings claims used to recruit and retain distributors. The comment further addresses the harms suffered by failed distributors that are lured into MLMs as a result of deceptive earnings claims. The comment then explains why direct selling self-regulation is not a viable substitute for a rule addressing deceptive earnings claims before turning to problems with targeted law enforcement actions. Finally, TINA.org concludes its comment by urging the FTC to initiate a rulemaking prohibiting deceptive or unfair marketing using earnings claims.

Click here to read TINA.org’s full comment.